UMH Properties, Inc. Annual Report 2014

FY2014 Annual Report · UMH Properties, Inc.

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UMH PROPERTIES, INC.
2014
ANNUAL REPORT

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U M H P R O P E R T I E S , I N C .
Established in 1968 NYSE: UMH
3499 Route 9 North • Freehold, New Jersey 07728 • 732.577.9997

WWW.UMH.COM

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DIRECTORS

Jeffrey A. Carus
Founder and
Managing Partner
JAC Partners, LLC

Anna T. Chew
Certiﬁed
Public Accountant

Matthew I. Hirsch
Attorney-at-Law
Law Ofﬁce of
Matthew I. Hirsch

James E. Mitchell
Attorney-at-Law
General Partner
Mitchell Partners LP,
President
Mitchell Capital Management

Richard H. Molke
General Partner
Molke Family
Limited Partnership

Stephen B. Wolgin
Managing Director
U.S. Real Estate Advisors, Inc.

Eugene W. Landy
Attorney-at-Law
Chairman of the Board
Monmouth Real Estate
Investment Corporation

Michael P. Landy
President and
Chief Executive Ofﬁcer
Monmouth Real Estate
Investment Corporation

Samuel A. Landy
Attorney-at-Law

Stuart Levy
Vice President
Real Estate Finance
Helaba-Landesbank
Hessen-Thüringen

OFFICERS and management

Eugene W. Landy
Chairman
of the Board

Samuel A. Landy
President and
Chief Executive Ofﬁcer

Anna T. Chew
Vice President and
Chief Financial Ofﬁcer

Craig Koster
General Counsel

Regina Beasley
Vice President

Robert Van Schuyver
Vice President

Ayal Dreifuss
Vice President of
Rental Division

Jeffrey Wolfe
Vice President of
Operations

Brittnee sperling
Assistant Controller

Elizabeth Chiarella
Secretary

Brett Taft
Vice President of
Acquisitions and
Integration

Kristin Langley
Controller

Safe Harbor Statement

This annual report and Form 10K contains various “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and the Company
intends that such forward-looking statements be subject to the safe harbors created thereby. The words “may”, “will”, “expect”, “believe”, “anticipate”, “should”, “estimate”, and similar
expressions identify forward-looking statements. These forward-looking statements reﬂect the Company’s current views with respect to future events and ﬁnance performance, but are
based upon current assumptions regarding the Company’s operations, future results and prospects, and are subject to many uncertainties and factors relating to the Company’s operations
and business environment which may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements.

Such factors include, but are not limited to, the following: changes in the general economic climate; increased competition in the geographic areas in which the Company owns and
operates manufactured housing communities; changes in government laws and regulations affecting manufactured housing communities; the ability of the Company 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 the Company; the
ability to maintain rental rates and occupancy levels; competitive market forces; changes in market rates of interest; the ability of manufactured home buyers to obtain ﬁnancing; the level
of repossessions by manufactured home lenders; and those risks and uncertainties referenced under the heading “Risk Factors” contained in this annual report and Form 10K and the
Company’s ﬁlings with the Securities and Exchange Commission. The forward-looking statements contained in this annual report and Form 10K 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.

COrporate Information

Corporate Office
3499 Rt. 9 North
Freehold, NJ 07728

Independent Auditors
PKF O’Connor Davies
665 Fifth Avenue
New York, NY 10022

Transfer Agent &
Registrar
American Stock Transfer
& Trust Company
6201 15th Avenue
Brooklyn, NY 11219

Stock Listing
NYSE: UMH

Internet Address
www.umh.com

Email Address
umh@umh.com

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Christine Lindsey
Vice President of Sales

Jeffrey V. Yorick, P.E.
Vice President of
Engineering

Susan M. Jordan
Director of Investor
Relations

UMH ANNUAL REPORT 2014

4/20/15 3:40 PM

A message from
the Chairman of the Board

Eugene W. Landy

Dear Shareholders:
When I was a young third officer on merchant
ships, no one shipped goods by containers.
The high cost of shipping inhibited commerce.
A visionary business owner, Malcom McLean, conceived the concept
of shipping containers. Now, very large ships transport as many as
18,000 containers at a time. Most of the world’s commerce moves
by containers. Over the past sixty years, world commerce has
fueled economic growth and lifted living standards everywhere.
Just as containers revolutionized the transport of goods, so will
factory-built housing revolutionize the ability to house our citizens.
As the United States of America goes from a nation of 300,000,000
people to a nation of 450,000,000 people, housing will become an
even more critical need. The public will demand quality, safe and
affordable housing. The barriers to affordable housing that exist
today whether in regulation, zoning or finance, will be reduced.
Manufactured housing will become a major U.S. industry. UMH
has and intends to continue to position itself to be a significant
factor in this regard. UMH builds communities, sells and finances
homes and manages communities.

Since 1968, UMH has selected affordable manufactured housing
as its field of expertise. Manufactured housing can help fill
today’s and tomorrow’s need for affordable housing. The growth
and prosperity that UMH has achieved in an adverse business
climate, can be magnified in the future. UMH can excel in a
stronger climate as housing demand rises over the next decade.

sound

investment.

reinforces our confidence
Economics

The combination of rising home demand and a strong
in UMH shares as
economy
a
demographics
and
dictate a coming resurgence in housing. UMH is better
positioned for growth today than at any time in its history. UMH
has maintained a strong balance sheet and will continue its
program of acquiring valuable manufactured home communities
at prices substantially below replacement cost.

The advent of long-term low cost mortgage financing for our
communities increases our liquidity and reduces our cost
of capital. Our rental housing program provides a bridge to
increase the occupancy in our communities. Management will
recommend to the Board of Directors continuance of the current
$0.18 quarterly per share distributions because we anticipate
increases in earnings and liquidity.

TOTAL REVENUES ($mm)

$80

$60

$40

$20

2009

2010

2011

2012

2013

2014

We are intent on creating an organization with the capital and
the dedicated leaders to meet the housing needs of this decade
and future decades. We have an important task to perform.

I would like to thank the Board of Directors, the officers and staff
for working together for so many years. I know of only a few
Chairmen who have had the privilege of having a long and close
relationship with the directors, staff and shareholders as I have.

On a very personal note, I would like to thank my sons, Samuel
and Michael Landy, for assisting in building this needed enterprise.

Very truly yours,

Eugene W. Landy
Chairman of the Board
April 2015

UMH ANNUAL REPORT 2014

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A message from
the President

Samuel A. Landy

Dear Fellow Shareholders:
I am pleased to report that UMH continues to
make progress in growing the Company and
building long-term value for our shareholders.
During 2014, the Company’s accomplishments
included the following:

• Acquired 14 communities containing a total of 1,600 developed

homesites for $42.6 million;

• Entered into definitive agreements to purchase an additional
4 communities containing 623 developed homesites for
approximately $12.9 million;

• Increased same store occupancy from 81.5% to 83.2%;
• Increased
from

community

operations

income
24% to $30.3 million;

• Raised approximately $32.8 million in common equity capital;
• Increased our rental home portfolio by adding 900 homes,
representing an increase of 53% to 2,600 total rental homes;
• Maintained a high occupancy rate of 91.5% at yearend

on our rental home portfolio; and

• Realized $1.5 million in gains from our REIT securities

investments.

Following last year’s 27% growth in total homesites, in 2014
we acquired 14 communities containing approximately 1,600
developed homesites for an aggregate purchase price of $42.6
million. This represents an 12% increase in total homesites over
the prior year. We’ve been successfully executing our growth
strategy and over the past five years we have more than doubled
our portfolio by acquiring a total of 61 communities containing
over 8,300 developed homesites. Our portfolio is now comprised
of 89 communities with 15,200 developed homesites located
throughout seven states. Our acquisition focus over this period
has been to purchase communities in locations that we believe
are poised to experience strong long-term economic growth.
We have been making the appropriate capital improvements to

renovate these communities. We’ve been adding sales staff and
marketing at these communities and as a result, we are now
seeing increases in income and occupancy starting to take hold.
Our significant acquisition activity has proven to be opportunistic
as competition has recently increased and prices for manufactured
home communities have risen substantially. As a result of the
continued growth in the domestic energy sector, several of our
markets are experiencing strong demand. We believe we are
still in the early stages as fracking technology has only recently
started to unleash the abundant resources that were once thought
trapped by geology. With 57 of our 89 communities situated in
the Marcellus and Utica shale regions, we are very confident that
UMH’s future prospects have never looked better.

TOTAL GROSS ASSEtS ($mm)

$577.8

$492.6

$373.6

$249.9

$290.5

2010

2011

2012

2013

2014

$600

$450

$300

$150

Subsequent to yearend, we acquired an additional community
containing 141 developed homesites in Erie, Pennsylvania for a
purchase price of $3,800,000. We continue to seek acquisitions
in our target markets and currently have definitive agreements to
purchase three manufactured home communities in Pennsylvania,
containing a total of 482 developed homesites, for approximately
$9.1 million. While community acquisitions often require
additional capital investments in order to bring these communities
up to our high standards, we are confident that these transactions
will have a favorable impact in delivering long-term value to our
shareholders.

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As of yearend, our capital structure consisted of approximately
$260 million in debt, of which $183 million was community
level mortgage debt and $77 million were loans payable. The
weighted average interest rate on our mortgage debt is 4.8% and
the weighted average maturity is 5.3 years. 96% of our mortgage
debt is fixed rate. The Company also had a total of $92 million
in perpetual preferred equity at yearend. Our preferred stock,
combined with an equity market capitalization of $233 million and
our $260 million in debt, results in a total market capitalization of
approximately $585 million at yearend. We ended the year with
net debt to total market capitalization at 43% and with $8.1 million
in cash and cash equivalents. Using low-cost debt and perpetual
preferred equity to acquire communities, whose value can be
increased by capital investment, should prove very profitable to
long-term shareholders over time.

Overall sales of manufactured homes in the US remain muted. Total
shipments grew 6.8% year over year from 60,200 manufactured
homes to 64,300 in 2014. This level of shipments is a fraction of
what the industry experienced from the late 60’s through the late
90’s when annual shipments rarely fell below 200,000 units and
fluctuated between 15% and 25% of total new housing starts. Today,
manufactured home shipments represent just 6% of new housing
starts. Much of the excess housing that was built as the housing
bubble was inflating has now been absorbed. Homeownership rates
have fallen from 69% to 64% due to a return of conservative lending
standards. UMH, like the other manufactured housing REITS, has
recently embraced the apartment model of renting not just the
land but the home as well. This has resulted in increased occupancy
rates and we will continue with this approach until demand for
manufactured home ownership returns to normal levels.

In 2014 we raised approximately $32.8 million in common
equity through our Dividend Reinvestment and Stock Purchase
Plan (DRIP) to help fund our acquisition pipeline. Investors who
participate in our DRIP can enhance their returns by reinvesting
their dividends and achieving a compounded return. Over the
years, our DRIP has proven to be a very reliable program to help
fund our growth. Additionally, over the past five years, we have
been very successful in harnessing gains from our REIT securities
investments and redeploying that capital into our community
acquisitions. Our securities portfolio generated $1.5 million in net
realized gains in 2014 and an additional $5.1 million in unrealized
gains at yearend. While the housing sector as a whole has faced
a very difficult period since 2008, our securities investments have
greatly prospered. By generating over $16.0 million in net realized
gains since 2010, our REIT securities investments have helped to
provide the growth capital to fund our robust acquisition program.
Because this type of out-performance would be very difficult
to replicate on a recurring basis, we have been positioning the
Company to be less reliant on securities gains going forward.

84%

83%

82%

81%

80%

79%

78%

77%

SAME STORE OCCUPANCY

83.2%

82.7%

82.1%

81.2%

80.8%

80.6%

80.4%

80.0%

79.7%

4Q 12

1Q 13

2Q 13

3Q 13

4Q 13

1Q 14

2Q 14

3Q 14

4Q 14

UMH’s occupancy in 2014 showed good improvement. Our overall
occupancy rate was 82.3% at yearend as compared to 81.5% in the
prior year. Given the substantial amount of acquisitions we’ve been
doing, same store occupancy is a more meaningful metric to gauge
the demand we are seeing. Our same store occupancy increased
substantially in 2014, rising from 81.5% to 83.2%. Our occupancy
increases have been driven by demand for home rentals. Over the
past two years, we have added approximately 1,500 rental units to
our communities. At yearend, we had a total of 2,600 rental units.

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UMH ANNUAL REPORT 2014

Letter from the President (continued)

Occupancy in rental units continues to be strong and is currently
91.5%. Occupied rental units now represent approximately 20% of
total occupied sites. As a result of the economic growth that we
are seeing in several of our markets, the potential for continued
occupancy improvements is high heading into 2015.

New home sales for UMH were disappointing this year with $7.5
million in sales versus $8.7 million in 2013. Home sales are an
integral part of increasing occupancy and enhancing community
values. While the main demand driver today is rental units, we are
actively working with our tenant base to find ways of converting
some of these rental units into sales. Unfortunately, the Dodd-
Frank home financing rules that took effect this year as well as
the SAFE Act of 2008, have made it much more difficult for people
to qualify for home ownership. Even the former Chairman of the
Federal Reserve, Ben Bernanke was recently rejected for a home
mortgage. There are proposals to amend this bill being discussed so
more households can once again qualify for purchasing an
affordable home.

UMH HISTORICAL PORTFOLIO GROWTH

16,000

13,500

11,000

8,500

6,000

Developed
Sites

Number of
Communities

0
0
0
8

0
0
9
8

0
0
6

0
1

0
0
5

3
1

0
0
0

5
1

0
0
2

5
1

12/2010

12/2011

12/2012

12/2013

12/2014

CURRENT

UMH currently has approximately $20.8 million in manufactured
home loans secured by homes situated within our communities. Our
loan portfolio continues to perform well and delivers a weighted
average yield of approximately 9.5%. These loans are primarily
made with a 10% down payment and a 15 year amortization
schedule. The annual amount that we receive in principal and
interest is approximately $3.5 million.

per diluted share in the prior year, representing an increase of
23%. These increases were primarily due to the acquisition of
14 communities, the addition of rental units, and the increased
occupancy. UMH currently has approximately 2,600 vacant sites.
This 18% vacancy factor can provide us with substantial operating
leverage to organically grow our earnings as demand increases.
Filling these vacant sites would increase our gross income by
approximately $12.5 million per year and increase our net income
by approximately $7.0 million per year. Based on our current
portfolio, each 1% increase in occupancy, will result in an increase
of approximately $0.02 in earnings per share.

Housing starts in the US are currently running at an annual rate
of 1.0 million units. This rate is substantially less than the historic
average household formation rate of 1.5 million units. Single-
family homes accounted for 64 percent of all housing starts in
2014. This represents the lowest amount since 1985. Multi-family
apartment construction has been gaining market share since
2008 as a result of the tightened lending standards. Conventional
homeownership rates have continued to fall and are currently at
64%, down from a high of just under 70% in 2007. This has resulted
in continued occupancy gains and increased rental rates for the
apartment sector. Additionally, conventional single-family housing
costs have continued to rise. All of these factors should help to
continue to increase demand for our property type.

I would like to take this opportunity to thank all of the dedicated
members of the UMH team. Upgrading and integrating the
substantial amount of acquisitions that we have completed
over the past several years required great effort throughout the
organization. Our team rose to the occasion and we are now
very well-positioned for continued growth and success. We have
successfully more than doubled our portfolio in just five years and
we should all be proud of this major achievement. I would also
like to thank our directors for their hard work and commitment
to creating long-term value for UMH. Thank you to all of our loyal
shareholders for your faith and trust. We look forward to reporting
back to you in the year ahead.

Over the past five years, UMH has grown into a much larger
company. Rental revenue has risen from under $30 million
annually to now approaching $65 million. For the full year, rental
and related income was $63.9 million, as compared to $53.5
million for 2013, representing an increase of 19%. Core FFO was
$12.3 million or $0.55 per diluted share, as compared to $11.4
million or $0.61 per diluted share in 2013. This difference is mainly
due to the substantial realized gains on our securities investments
in 2013. Core FFO, excluding securities gains, was $10.8 million
or $0.48 per diluted share, as compared to $7.3 million or $0.39

Very truly yours,

Samuel A. Landy
President
April 2015

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PROPERTY PORTFOLIO AND
YEAR IN REVIEW

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UMH ANNUAL REPORT 2014

PROPERTY PORTFOLIO

UMH owns and
operates a portfolio
of 89 manufactured
home communities,
containing approximately
15,200 developed
home sites.

• Acquired Prior to 2012 (40)
• Acquired in 2012 (17)
• Acquired in 2013 (17)
• Acquired in 2014 (14)
• Acquired in 2015 (1)

Indiana
7%

Michigan
1%

New Jersey
5%

New York
8%

Tennessee
8%

Ohio
28%

Pennsylvania
43%

substantial expansion capacity

sites planned for expansion

UMH has 1,100 acres
available for future
development, with
the potential for
approximately 4 sites
per acre at an
estimated cost of
$40,000 per site.

Developable acreage
Developable acreage
Total - 1,142 acres
Total - 1,142 acres

IN - 49
IN - 49

NJ - 162
NJ - 162
14%
14%

4%
4%

PA - 301
PA - 301
26%
26%

NY- 313
NY- 313
28%
28%

8%
8%
TN - 92
TN - 92

OH - 225
OH - 225
20%
20%

400

350

300

250

200

150

100

366

186

204

2015

2016

2017

2018

FloridaTexasLouisianaMississippiArkansasTennesseeAlabamaGeorgiaSouth CarolinaNorth CarolinaVirginiaWest VirginiaKentuckyOhioIndianaIllinoisMissouriOklahomaKansasNebraskaSouth DakotaNorth DakotaMinnesotaIowaWisconsinMichiganDelawareNew JerseyPennsylvaniaNew YorkConnecticutNew HampshireVermontMaineMassachusettsRhode IslandMarylandTHE YEAR IN REVIEW

Recent Share Activity
High

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

$9.95

10.11

10.41

10.11

2014

Low

$9.01

9.57

9.31

9.01

Distribution

High

$0.18

0.18

$0.72

$10.98

11.55

11.25

10.70

2013

Low

$9.94

10.04

9.20

9.01

Distribution

$0.18

0.18

$0.72

Share
Volume

18,773,700

14,631,200

8,544,900

7,483,100

8,346,700

5,503,300
5,503,300

Opening
Price

Closing
Price

Dividend
Paid

Appreciation
(depreciation)

Total
Return

$9.42

10.33

9.31

10.20

8.48

5.95

$9.55

9.42

10.33

9.31

10.20

8.48

$0.72

0.72

1.4%

-8.8%

11.0%

-8.7%

20.3%

42.5%

9.1%

-1.8%

18.7%

-1.7%

28.8%

54.6%

2014

2013

2012

2011

2010

2009

UMH Properties, Inc., common shares are traded on the NYSE under the ticker symbol: UMH.

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UMH ANNUAL REPORT 2014

MARCELLUS AND UTICA SHALE REGION EXPOSURE

It is estimated that approximately
500 trillion cubic feet of natural gas
is contained in the Marcellus and
Utica Shale reserves. This represents
more than double the natural gas
reserves of Saudi Arabia. While it is
still early in the drilling and exploration
process, activity surrounding the
development of these reserves is
expected to accelerate over the next
few years. This will have a very favorable
and direct impact on the region and our
communities.

NY
CT

(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)(cid:31)

total acreage

NJ
WV
• Home Community (57) - Shale Region

TOTAL 4,500 ACRES

With over 2,400 acres in existing
communities within the Marcellus and
Utica Shale Regions, UMH will benefit
from the region’s economic growth.

TOTAL 4,500 ACRES

2,100
47%

2,400
53%

• Marcellus & Utica Shale Acreage
• Non Marcellus & Utica Shale Acreage

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Company 10k

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UMH ANNUAL REPORT 2014

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

[ X ]

[ ]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period ____________________ to _____________________

Commission File Number 001-12690

UMH Properties, Inc.
(Exact name of registrant as specified in its charter)

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer identification number)

Maryland

22-1890929

3499 Route 9, Suite 3C, Freehold, New Jersey

(Address of principal executive offices)

07728

(Zip code)

Registrant's telephone number, including area code (732) 577-9997

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.10 par value-New York Stock Exchange
8.25% Series A Cumulative Redeemable Preferred Stock $.10 par value per share, $25 liquidation value per share – New York Stock
Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
___Yes X No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
___Yes X No

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.
X Yes No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted 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 and post such files).
X Yes No

Indicate by check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K X .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
“accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer
Non-accelerated filer

Accelerated filer
Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes X No

Based upon the assumption that directors and executive officers of the registrant are not affiliates of the registrant, the aggregate market value
of the voting stock of the registrant held by nonaffiliates of the registrant at June 30, 2014 was $225,271,985. Presuming that such directors
and executive officers are affiliates of the registrant, the aggregate market value of the voting stock of the registrant held by nonaffiliates of
the registrant at June 30, 2014 was $201,579,890.

The number of shares outstanding of issuer's common stock as of March 2, 2015 was 24,888,499 shares.

Documents Incorporated by Reference:

- Part III incorporates certain information by reference from the Registrant’s proxy statement for the 2015 annual meeting of

stockholders, which will be filed no later than 120 days after the close of the Registrant’s fiscal year ended December 31, 2014.

Exhibits incorporated by reference are listed in Part IV; Item 15 (a) (3).

- 1 -

TABLE OF CONTENTS

PART I .......................................................................................................................................................................... 3
Item 1 – Business ..................................................................................................................................................... 3

Item 1A – Risk Factors............................................................................................................................................. 6

Item 1B – Unresolved Staff Comments ................................................................................................................. 15

Item 2 – Properties ................................................................................................................................................. 16

Item 3 – Legal Proceedings .................................................................................................................................... 23

Item 4 – Mine Safety Disclosures .......................................................................................................................... 23

PART II ...................................................................................................................................................................... 24
Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities .............................................................................................................................................. 24

Item 6 – Selected Financial Data ............................................................................................................................ 27

Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations .................. 28

Item 7A – Quantitative and Qualitative Disclosures about Market Risk ............................................................... 40

Item 8 – Financial Statements and Supplementary Data ........................................................................................ 42

Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ................... 42

Item 9A – Controls and Procedures ....................................................................................................................... 43

Item 9B – Other Information .................................................................................................................................. 45

PART III..................................................................................................................................................................... 46
Item 10 – Directors, Executive Officers and Corporate Governance ..................................................................... 46

Item 11 – Executive Compensation ........................................................................................................................ 49

Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

.............................................................................................................................................................. 60

Item 13 – Certain Relationships and Related Transactions, and Director Independence ....................................... 62

Item 14 – Principal Accounting Fees and Services ................................................................................................ 63

PART IV ..................................................................................................................................................................... 64
Item 15 – Exhibits, Financial Statement Schedules ............................................................................................... 64

SIGNATURES ......................................................................................................................................................... 112

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- 2 -Item 1 – Business

General Development of Business

PART I

In this Form 10-K, “we”, “us”, “our”, or “the Company”, refers to UMH Properties, Inc., together with its

predecessors and subsidiaries, unless the context requires otherwise.

UMH Properties, Inc. operates as a qualified real estate investment trust (REIT) under Sections 856-860 of
the Internal Revenue Code (the Code). The Company had elected REIT status effective January 1, 1992 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 was incorporated in the state of New Jersey in 1968. On September 29, 2003, the Company
changed its state of incorporation from New Jersey to Maryland by merging with and into a Maryland corporation,
with the approval of the Company’s shareholders at the Company’s annual meeting on August 14, 2003.

Narrative Description of Business

The Company derives its income primarily from real estate rental operations. Its primary business is the
ownership and operation of manufactured home communities – leasing manufactured home sites to private
manufactured home owners. The Company also leases homes to residents, and through its wholly-owned taxable
REIT subsidiary, UMH Sales and Finance, Inc. (S&F), conducts manufactured home sales in its communities.

As of December 31, 2014, the Company owns and operates eighty-eight manufactured home communities
containing approximately 15,000 developed sites. The communities are located in New Jersey, New York, Ohio,
Pennsylvania, Tennessee, Indiana and Michigan. On January 21, 2015, the Company acquired one manufactured
home community located in Pennsylvania for approximately $3,800,000. This all-age community contains 141 home
sites and is situated on approximately 40 acres. The average occupancy for this community is approximately 96%.
With this purchase, UMH now owns eighty-nine manufactured home communities consisting of approximately 15,200
developed sites.

A manufactured home community is designed to accommodate detached, single-family manufactured homes.
These manufactured homes are produced off-site by manufacturers and installed on sites within the community. These
homes are often improved with the addition of features constructed on site, including garages, screened rooms and
carports. Manufactured homes are available in a variety of designs and floor plans, offering many amenities and
custom options. Each owner of a manufactured home leases the site on which the home is located from the Company.

Manufactured homes are accepted by the public as a viable and economically attractive alternative to
common stick-built single-family housing. The affordability of the modern manufactured home makes it a very
attractive housing alternative. Depending on the region of the country, construction cost per square foot for a new
manufactured home averages anywhere from 10 percent to 50 percent less than a comparable site-built home,
excluding the cost of land. This is due to a number of factors, including volume purchase discounts and inventory
control of construction materials and control of all aspects of the construction process, which generally produce a
more efficient and streamlined process as compared to a site-built home.

Modern residential land lease communities are similar to typical residential subdivisions containing central
entrances, paved well-lit streets, curbs and gutters. The size of a modern manufactured home community is limited,
as are other residential communities, by factors such as geography, topography, and funds available for development.
Generally, modern manufactured home communities contain buildings for recreation, green areas, and other common
area facilities, which, as distinguished from resident owned manufactured homes, are the property of the community
owner. In addition to such general improvements, certain manufactured home communities include recreational
improvements such as swimming pools, tennis courts and playgrounds. Municipal water and sewer services are
available to some manufactured home communities, while other communities supply these facilities on site.

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Therefore, the owner of a home in our communities leases from us not only the site on which the home is located,
but also the physical community framework, and acquires the right to utilize the community common areas and
amenities.

Typically, our leases are on an annual or month-to-month basis, renewable upon the consent of both parties.
The community manager interviews prospective residents, collects rent and finance payments, ensures compliance
with community regulations, maintains public areas and community facilities and is responsible for the overall
appearance of the community. The manufactured home community, once fully occupied, historically tends to achieve
a stable rate of occupancy. The cost and effort in moving a home once it is located in a community encourages the
owner of the manufactured home to resell the manufactured home rather than to remove it from the community. This
ability to produce relatively predictable income streams, together with the location of the community, its condition
and its appearance, are factors in the long-term appreciation of the community.

Inherent in the operation of a manufactured home community is the development, redevelopment, and
expansion of our communities. The Company sells and finances the sale of manufactured homes in our communities
through S&F. S&F was established to potentially enhance the value of our communities. The home sales business is
operated like other homebuilders with sales centers, model homes, an inventory of completed homes and the ability
to supply custom designed homes based upon the requirements of the new homeowners.

The Company also owns a portfolio of investment securities, which the Company generally limits to no more

than approximately 15% of its undepreciated assets.

As of December 31, 2014, the Company had approximately 260 employees, of which the Company shares 1
officer (Chairman of the Board) and 2 additional employees (Controller and Director of Investor Relations) with a
related entity, Monmouth Real Estate Investment Corporation (MREIC). The Controller and the Director of Investor
Relations time was allocated 70% to MREIC and 30% to the Company. Effective January 1, 2015, the Company
reduced the number of employees it shares with MREIC to 1 officer (Chairman of the Board) and 1 additional
employee (Director of Investor Relations). Allocations of salaries and benefits are based on the amount of the
employees’ time dedicated to each company. Some general and administrative expenses, including office rent, are
allocated between the Company and MREIC based on use or services provided. Effective January 2015, MREIC
obtained a separate lease and office rent is no longer allocated between the Company and MREIC.

Investment and Other Policies of the Company

The Company may invest in improved and unimproved real property and may develop unimproved real
property. Such properties may be located throughout the United States, but the Company has concentrated on the
Northeast.

The Company may finance communities with purchase money mortgages or other financing, including first
liens, wraparound mortgages or subordinated indebtedness. In connection with its ongoing activities, the Company
may issue notes, mortgages or other senior securities. The Company intends to use both secured and unsecured lines
of credit.

The Company may issue securities for property; however, this has not occurred to date. The Company may
repurchase or reacquire its shares from time to time if, in the opinion of the Board of Directors, such acquisition is
advantageous to the Company. No shares were repurchased or reacquired during 2014 and, as of December 31, 2014,
the Company does not own any of its own shares.

The Company also invests in equity securities of other REITs. The Company from time to time may purchase
these securities on margin when the interest and dividend yields exceed the cost of funds. As of December 31, 2014,
the Company had borrowings of $19,392,382 under its margin line at 2.0% interest. The securities portfolio provides
the Company with additional income and, to the extent not pledged to secure borrowings, provides the Company with
liquidity. Such securities are subject to risk arising from adverse changes in market rates and prices, primarily interest
rate risk and market price risk relating to equity securities. From time to time, the Company may use derivative
instruments to mitigate interest rate risk; however, this has not occurred during any periods presented. At December
31, 2014 and 2013, the Company had $63,555,961 and $59,254,942, respectively, of securities available for sale.
Included in these securities are Preferred Stock of $19,045,983 and $24,536,942 at December 31, 2014 and 2013,

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respectively. The unrealized net gain on securities available for sale at December 31, 2014 and 2013 amounted to
$5,079,921 and $1,116,738, respectively.

Property Maintenance and Improvement Policies

It is the policy of the Company to properly maintain, modernize, expand and make improvements to its
properties when required. The Company anticipates that renovation expenditures with respect to its present properties
during 2015 will be approximately $7 million. It is the policy of the Company to maintain adequate insurance
coverage on all of its properties; and, in the opinion of the Company, all of its properties are adequately insured.

Number of Employees

As of March 2, 2015, the Company had approximately 260 employees, including Officers. During the year,
the Company hires approximately 30 part-time and full-time temporary employees as grounds keepers, lifeguards, and
for emergency repairs.

Financial Information

Management views the Company as a single segment based on its method of internal reporting in addition to
its allocation of capital and resources. For required financial information related to our operations and assets, please
refer to our consolidated financial statements, including the notes thereto, included in Item 8 “Financial Statements
and Supplementary Data” in this Annual Report.

Available Information

Additional information about the Company can be found on the Company’s website which is located
at www.umh.com. The Company makes available, free of charge, on or through its website, annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably
practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission
(SEC). You can also read and copy any materials the Company files with the SEC at its Public Reference Room at
100 F Street, NE, Washington, DC 20549 (1-800-SEC-0330). The SEC maintains an Internet site (http://www.sec.gov)
that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC.

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Item 1A – Risk Factors

The following risk factors address the material risks concerning our business. If any of the risks discussed in
this report were to occur, our business, prospects, financial condition, results of operation and our ability to service
our debt and make distributions to our shareholders could be materially and adversely affected and the market price
per share of our stock could decline significantly. Some statements in this report, including statements in the following
risk factors, constitute forward-looking statements. Please refer to the section entitled “Cautionary Statement
Regarding Forward-Looking Statements.”

Real Estate Industry Risks

General economic conditions and the concentration of our properties in New Jersey, New York, Ohio,
Pennsylvania, Tennessee, Indiana and Michigan may affect our ability to generate sufficient revenue. The market
and economic conditions in our current markets may significantly affect manufactured home occupancy or rental rates.
Occupancy and rental rates, in turn, may significantly affect our revenues, and if our communities do not generate
revenues sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and
ability to pay or refinance our debt obligations could be adversely affected. As a result of the geographic concentration
of our properties in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana and Michigan, we are exposed
to the risks of downturns in the local economy or other local real estate market conditions which could adversely affect
occupancy rates, rental rates, and property values in these markets.

Other factors that may affect general economic conditions or local real estate conditions include:



the national and local economic climate which may be adversely impacted by, among other factors,
plant closings, and industry slowdowns;

local real estate market conditions such as the oversupply of manufactured home sites or a reduction
in demand for manufactured home sites in an area;

the number of repossessed homes in a particular market;

the rental market which may limit the extent to which rents may be increased to meet increased
expenses without decreasing occupancy rates;

the safety, convenience and attractiveness of our properties and the neighborhoods where they are
located;

zoning or other regulatory restrictions;

competition from other available manufactured home communities and alternative forms of housing
(such as apartment buildings and single-family homes);

our ability to provide adequate management, maintenance and insurance;

increased operating costs, including insurance premiums, real estate taxes and utilities; and

the enactment of rent control laws or laws taxing the owners of manufactured homes.

Our income would also be adversely affected if tenants were unable to pay rent or if sites were unable to be
rented on favorable terms. If we were unable to promptly relet or renew the leases for a significant number of sites,
or if the rental rates upon such renewal or reletting were significantly lower than expected rates, then our business and
results of operations could be adversely affected. In addition, certain expenditures associated with each property (such
as real estate taxes and maintenance costs) generally are not reduced when circumstances cause a reduction in income
from the property.

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We may be unable to compete with our larger competitors and other alternatives available to tenants or
potential tenants of our properties, which may in turn adversely affect our profitability. The real estate business is
highly competitive. We compete for manufactured home community investments with numerous other real estate
entities, such as individuals, corporations, REITs and other enterprises engaged in real estate activities. In many cases,
the competing concerns may be larger and better financed than we are, making it difficult for us to secure new
manufactured home community investments. Competition among private and institutional purchasers of
manufactured home community investments has resulted in increases in the purchase price paid for manufactured
home communities and consequent higher fixed costs. To the extent we are unable to effectively compete in the
marketplace, our business may be adversely affected.

Our ability to sell manufactured homes may be affected by various factors, which may in turn adversely
affect our profitability. S&F operates in the manufactured home market offering homes for sale to tenants and
prospective tenants of our communities. The market for the sale of manufactured homes may be adversely affected
by the following factors:



downturns in economic conditions which adversely impact the housing market;

an oversupply of, or a reduced demand for, manufactured homes;

the difficulty facing potential purchasers in obtaining affordable financing as a result of heightened
lending criteria; and

an increase or decrease in the rate of manufactured home repossessions which provide aggressively
priced competition to new manufactured home sales.

Any of the above listed factors could adversely impact our rate of manufactured home sales, which would

result in a decrease in profitability.

Costs associated with taxes and regulatory compliance may reduce our revenue. We are subject to
significant regulation that inhibits our activities and may increase our costs. Local zoning and use laws, environmental
statutes and other governmental requirements may restrict expansion, rehabilitation and reconstruction activities.
These regulations may prevent us from taking advantage of economic opportunities. Legislation such as the
Americans with Disabilities Act may require us to modify our properties at a substantial cost and noncompliance could
result in the imposition of fines or an award of damages to private litigants. Future legislation may impose additional
requirements. We cannot predict what requirements may be enacted or amended or what costs we will incur to comply
with such requirements. Costs resulting from changes in real estate laws, income taxes, service or other taxes may
adversely affect our funds from operations and our ability to pay or refinance our debt. Similarly, changes in laws
increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on
discharges or other conditions may result in significant unanticipated expenditures, which would adversely affect our
business and results of operations.

Licensing laws and compliance could affect our profitability. We are subject to the Secure and Fair
Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), which requires that we obtain appropriate licenses
pursuant to the Nationwide Mortgage Licensing System & Registry in each state where we conduct business. There
are extensive federal and state requirements mandated by the SAFE Act and other laws pertaining to financing, and
there can be no assurance that we will obtain or renew our SAFE Act licenses, which could result in fees and penalties
and have an adverse impact on our ability to continue with our home financing activities.

Rent control legislation may harm our ability to increase rents. State and local rent control laws in certain
jurisdictions may limit our ability to increase rents and to recover increases in operating expenses and the costs of
capital improvements. Currently, rent control affects only two of our manufactured home communities, both of which
are in New Jersey, and has resulted in slower growth of earnings from these properties. However, we may purchase
additional properties in markets that are either subject to rent control or in which rent-limiting legislation exists or
may be enacted.

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Our investments are concentrated in the manufactured housing/residential sector and our business would

be adversely affected by an economic downturn in that sector. Our investments in real estate assets are primarily
concentrated in the manufactured housing/residential sector. This concentration may expose us to the risk of
economic downturns in this sector to a greater extent than if our business activities included a more significant portion
of other sectors of the real estate industry.

Environmental liabilities could affect our profitability. Under various federal, state and local laws,
ordinances and regulations, an owner or operator of real estate is liable for the costs of removal or remediation of
certain hazardous substances at, on, under or in such property, as well as certain other potential costs relating to
hazardous or toxic substances. Such laws often impose such liability without regard to whether the owner knew of,
or was responsible for, the presence of such hazardous substances. A conveyance of the property, therefore, does not
relieve the owner or operator from liability. As a current or former owner and operator of real estate, we may be
required by law to investigate and clean up hazardous substances released at or from the properties we currently own
or operate or have in the past owned or operated. We may also be liable to the government or to third parties for
property damage, investigation costs and cleanup costs. In addition, some environmental laws create a lien on the
contaminated site in favor of the government for damages and costs the government incurs in connection with the
contamination. Contamination may adversely affect our ability to sell or lease real estate or to borrow using the real
estate as collateral. Persons who arrange for the disposal or treatment of hazardous substances also may be liable for
the costs of removal or remediation of such substances at a disposal or treatment facility owned or operated by another
person. In addition, certain environmental laws impose liability for the management and disposal of asbestos-
containing materials and for the release of such materials into the air. These laws may provide for third parties to seek
recovery from owners or operators of real properties for personal injury associated with asbestos-containing materials.
In connection with the ownership, operation, management, and development of real properties, we may be considered
an owner or operator of such properties and, therefore, are potentially liable for removal or remediation costs, and also
may be liable for governmental fines and injuries to persons and property. When we arrange for the treatment or
disposal of hazardous substances at landfills or other facilities owned by other persons, we may be liable for the
removal or remediation costs at such facilities. We are not aware of any environmental liabilities relating to our
investment properties which would have a material adverse effect on our business, assets, or results of operations.
However, we cannot assure you that environmental liabilities will not arise in the future and that such liabilities will
not have a material adverse effect on our business, assets or results of operation.

Of the eighty-nine manufactured home communities we currently operate, thirty-five have their own
wastewater treatment facility or water distribution system, or both. At these locations, we are subject to compliance
with monthly, quarterly and yearly testing for contaminants as outlined by the individual state’s Department of
Environmental Protection Agencies. Currently, we are not subject to radon or asbestos monitoring requirements.

Additionally, in connection with the management of the properties or upon acquisition or financing of a
property, the Company authorizes the preparation of Phase I or similar environmental reports (which involves general
inspections without soil sampling or ground water analysis) completed by independent environmental consultants.
Based upon such environmental reports and the Company’s ongoing review of its properties, as of the date of this
Annual Report, the Company is not aware of any environmental condition with respect to any of its properties which
it believes would be reasonably likely to have a material adverse effect on its financial condition and/or results of
operations. However, these reports cannot reflect conditions arising after the studies were completed, and no
assurances can be given that existing environmental studies reveal all environmental liabilities, that any prior owner
or operator of a property or neighboring owner or operator did not create any material environmental condition not
known to us, or that a material environmental condition does not otherwise exist as to any one or more properties.

Actions by our competitors may decrease or prevent increases in the occupancy and rental rates of our
properties which could adversely affect our business. We compete with other owners and operators of manufactured
home community properties, some of which own properties similar to ours in the same submarkets in which our
properties are located. The number of competitive manufactured home community properties in a particular area
could have a material adverse effect on our ability to lease sites and increase rents charged at our properties or at any
newly acquired properties. In addition, other forms of multi-family residential properties, such as private and federally
funded or assisted multi-family housing projects and single-family housing, provide housing alternatives to potential
tenants of manufactured home communities. If our competitors offer housing at rental rates below current market
rates or below the rental rates we currently charge our tenants, we may lose potential tenants, and we may be pressured
to reduce our rental rates below those we currently charge in order to retain tenants when our tenants’ leases expire.

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As a result, our financial condition, cash flow, cash available for distribution, and ability to satisfy our debt service
obligations could be materially adversely affected.

Losses in excess of our insurance coverage or uninsured losses could adversely affect our cash flow. We
generally maintain insurance policies related to our business, including casualty, general liability and other policies
covering business operations, employees and assets. However, we may be required to bear all losses that are not
adequately covered by insurance. In addition, there are certain losses that are not generally insured because it is not
economically feasible to insure against them, including losses due to riots or acts of war. If an uninsured loss or a loss
in excess of insured limits occurs with respect to one or more of our properties, then we could lose the capital we
invested in the properties, as well as the anticipated profits and cash flow from the properties and, in the case of debt
which is with recourse to us, we would remain obligated for any mortgage debt or other financial obligations related
to the properties. Although we believe that our insurance programs are adequate, no assurance can be given that we
will not incur losses in excess of its insurance coverage, or that we will be able to obtain insurance in the future at
acceptable levels and reasonable cost.

We may not be able to integrate or finance our acquisitions and our acquisitions may not perform as
expected. We acquire and intend to continue to acquire manufactured home communities on a select basis. Our
acquisition activities and their success are subject to the following risks:

 we may be unable to acquire a desired property because of competition from other well capitalized
real estate investors, including both publicly traded REITs and institutional investment funds;



even if we enter into an acquisition agreement for a property, it is usually subject to customary
conditions to closing, including completion of due diligence investigations to our satisfaction, which
may not be satisfied;

even if we are able to acquire a desired property, competition from other real estate investors may
significantly increase the purchase price;

 we may be unable to finance acquisitions on favorable terms;



acquired properties may fail to perform as expected;

acquired properties may be located in new markets where we face risks associated with a lack of
market knowledge or understanding of the local economy, lack of business relationships in the area
and unfamiliarity with local governmental and permitting procedures; and

 we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of

portfolios of properties, into our existing operations.

If any of the above were to occur, our business and results of operations could be adversely affected.

In addition, we may acquire properties subject to liabilities and without any recourse, or with only limited
recourse, with respect to unknown liabilities. As a result, if a liability were to be asserted against us based upon
ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our
cash flow.

We may be unable to sell properties when appropriate because real estate investments are illiquid. Real
estate investments generally cannot be sold quickly and, therefore, will tend to limit our ability to vary our property
portfolio promptly in response to changes in economic or other conditions. In addition, the Code limits our ability to
sell our properties. The inability to respond promptly to changes in the performance of our property portfolio could
adversely affect our financial condition and ability to service our debt and make distributions to our stockholders.

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Financing Risks

We face risks generally associated with our debt. We finance a portion of our investments in properties and
marketable securities through debt. We are subject to the risks normally associated with debt financing, including the risk
that our cash flow will be insufficient to meet required payments of principal and interest. In addition, debt creates other
risks, including:



rising interest rates on our variable rate debt;

failure to repay or refinance existing debt as it matures, which may result in forced disposition of
assets on disadvantageous terms;

refinancing terms less favorable than the terms of existing debt; and

failure to meet required payments of principal and/or interest.

We mortgage our properties, which subjects us to the risk of foreclosure in the event of non-payment. We
mortgage many of our properties to secure payment of indebtedness. If we are unable to meet mortgage payments,
then the property could be foreclosed upon or transferred to the mortgagee with a consequent loss of income and asset
value. A foreclosure of one or more of our properties could adversely affect our financial condition, results of
operations, cash flow, ability to service debt and make distributions and the market price of our preferred and common
stock and any other securities we issue.

We face risks related to “balloon payments” and refinancings. Certain of our mortgages will have significant
outstanding principal balances on their maturity dates, commonly known as “balloon payments.” There can be no
assurance that we will be able to refinance the debt on favorable terms or at all. To the extent we cannot refinance debt on
favorable terms or at all, we may be forced to dispose of properties on disadvantageous terms or pay higher interest rates,
either of which would have an adverse impact on our financial performance and ability to service debt and make
distributions.

We face risks associated with our dependence on external sources of capital. In order to qualify as a REIT, we
are required each year to distribute to our stockholders at least 90% of our REIT taxable income, and we are subject to tax
on our income to the extent it is not distributed. Because of this distribution requirement, we may not be able to fund all
future capital needs from cash retained from operations. As a result, to fund capital needs, we rely on third-party sources
of capital, which we may not be able to obtain on favorable terms, if at all. Our access to third-party sources of capital
depends upon a number of factors, including (i) general market conditions; (ii) the market’s perception of our growth
potential; (iii) our current and potential future earnings and cash distributions; and (iv) the market price of our preferred
and common stock. Additional debt financing may substantially increase our debt-to-total capitalization ratio. Additional
equity issuance may dilute the holdings of our current stockholders.

We may become more highly leveraged, resulting in increased risk of default on our obligations and an
increase in debt service requirements which could adversely affect our financial condition and results of operations
and our ability to pay distributions. We have incurred, and may continue to incur, indebtedness in furtherance of our
activities. Our governing documents do not limit the amount of indebtedness we may incur. Accordingly, our Board
of Directors may vote to incur additional debt and would do so, for example, if it were necessary to maintain our status
as a REIT. We could therefore become more highly leveraged, resulting in an increased risk of default on our
obligations and in an increase in debt service requirements, which could adversely affect our financial condition and
results of operations and our ability to pay distributions to stockholders.

Covenants in our credit agreements could limit our flexibility and adversely affect our financial condition.
The terms of our various credit agreements and other indebtedness require us to comply with a number of customary
financial and other covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance
coverage. These covenants may limit our flexibility in our operations, and breaches of these covenants could result in
defaults under the instruments governing the applicable indebtedness even if we had satisfied our payment obligations. If
we were to default under our credit agreements, our financial condition would be adversely affected.

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We face risks associated with the financing of home sales to customers in our manufactured home
communities. To produce new rental revenue and to upgrade our communities, we sell homes to customers in our
communities at competitive prices and finance these home sales through S&F. We allow banks and outside finance
companies the first opportunity to finance these sales. We are subject to the following risks in financing these homes:
the borrowers may default on these loans and not be able to make debt service payments or pay
principal when due;



the default rates may be higher than we anticipate;

demand for consumer financing may not be as great as we anticipate or may decline;

the value of property securing the installment notes receivable may be less than the amounts owed;
and

interest rates payable on the installment notes receivable may be lower than our cost of funds.

Additionally, there are many regulations pertaining to our home sales and financing activities. There are
significant consumer protection laws and the regulatory framework may change in a manner which may adversely
affect our operating results. The regulatory environment and associated consumer finance laws create a risk of greater
liability from our home sales and financing activities and could subject us to additional litigation. We are also
dependent on licenses granted by state and other regulatory authorities, which may be withdrawn or which may not
be renewed and which could have an adverse impact on our ability to continue with our home sales and financing
activities.

Other Risks

We may not be able to obtain adequate cash to fund our business. Our business requires access to adequate
cash to finance our operations, distributions, capital expenditures, debt service obligations, development and
redevelopment costs and property acquisition costs, if any. We expect to generate the cash to be used for these purposes
primarily with operating cash flow, borrowings under secured and unsecured loans, proceeds from sales of
strategically identified assets and, when market conditions permit, through the issuance of debt and equity securities
from time to time. We may not be able to generate sufficient cash to fund our business, particularly if we are unable
to renew leases, lease vacant space or re-lease space as leases expire according to our expectations.

We are dependent on key personnel. Our executive and other senior officers have a significant role in our
success. Our ability to retain our management group or to attract suitable replacements should any members of the
management group leave is dependent on the competitive nature of the employment market. The loss of services from key
members of the management group or a limitation in their availability could adversely affect our financial condition and
cash flow.

We may amend our business policies without stockholder approval. Our Board of Directors determines our
growth, investment, financing, capitalization, borrowing, REIT status, operations and distributions policies. Although our
Board of Directors has no present intention to change or reverse any of these policies, they may be amended or revised
without notice to stockholders. Accordingly, stockholders may not have control over changes in our policies. We cannot
assure you that changes in our policies will serve fully the interests of all stockholders.

The market value of our preferred and common stock could decrease based on our performance and market
perception and conditions. The market value of our preferred and common stock may be based primarily upon the
market’s perception of our growth potential and current and future cash dividends, and may be secondarily based upon the
real estate market value of our underlying assets. The market price of our preferred and common stock is influenced by
their respective distributions relative to market interest rates. Rising interest rates may lead potential buyers of our stock to
expect a higher distribution rate, which would adversely affect the market price of our stock. In addition, rising interest
rates would result in increased expense, thereby adversely affecting cash flow and our ability to service our indebtedness
and pay distributions.

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- 11 -

There are restrictions on the transfer of our capital stock. To maintain our qualification as a REIT under the
Code, no more than 50% in value of our outstanding capital stock may be owned, actually or by attribution, by five or
fewer individuals, as defined in the Code to also include certain entities, during the last half of a taxable year. Accordingly,
our charter contains provisions restricting the transfer of our capital stock.

Our earnings are dependent, in part, upon the performance of our investment portfolio. As permitted by the
Code, we invest in and own securities of other real estate investment trusts. To the extent that the value of those investments
declines or those investments do not provide a return, our earnings and cash flow could be adversely affected.

We are subject to restrictions that may impede our ability to effect a change in control. Certain provisions
contained in our charter and bylaws and certain provisions of Maryland law may have the effect of discouraging a third
party from making an acquisition proposal for us and thereby inhibit a change in control. These provisions include the
following:

 Our charter provides for three classes of directors with the term of office of one class expiring each
year, commonly referred to as a “staggered board.” By preventing common stockholders from
voting on the election of more than one class of directors at any annual meeting of stockholders, this
provision may have the effect of keeping the current members of our Board of Directors in control
for a longer period of time than stockholders may desire.

 Our charter generally limits any holder from acquiring more than 9.8% (in value or in number,
whichever is more restrictive) of our outstanding equity stock (defined as all of our classes of capital
stock, except our excess stock). While this provision is intended to assure our ability to remain a
qualified REIT for Federal income tax purposes, the ownership limit may also limit the opportunity
for stockholders to receive a premium for their shares of common stock that might otherwise exist
if an investor was attempting to assemble a block of shares in excess of 9.8% of the outstanding
shares of equity stock or otherwise effect a change in control.

 The request of stockholders entitled to cast at least a majority of all votes entitled to be cast at such
meeting is necessary for stockholders to call a special meeting. We also require advance notice by
common stockholders for the nomination of directors or proposals of business to be considered at a
meeting of stockholders.

Our Board of Directors may authorize and issue securities without stockholder approval. Under our charter,
the Board of Directors has the power without stockholder action (i) to classify and reclassify any of our unissued shares of
capital stock into shares of capital stock with such terms, preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends and terms and conditions of redemptions as the Board of Directors may determine
and (ii) to authorize the issuance of any class or series of stock. The authorization and issuance of a new class of capital
stock could have the effect of delaying or preventing someone from taking control of us, even if a change in control were
in our stockholders’ best interests.

Maryland business statutes may limit the ability of a third party to acquire control of us. Maryland law provides
protection for Maryland corporations against unsolicited takeovers by limiting, among other things, the duties of the
directors in unsolicited takeover situations. The duties of directors of Maryland corporations do not require them to (a)
accept, recommend or respond to any proposal by a person seeking to acquire control of the corporation, (b) authorize the
corporation to redeem any rights under, or modify or render inapplicable, any stockholders rights plan, (c) make a
determination under the Maryland Business Combination Act or the Maryland Control Share Acquisition Act, (d) elect to
be subject to, or refrain from electing to be subject to, any or all of the provisions of Title 3, Subtitle 8 of the MGCL or (e)
act or fail to act solely because of the effect of the act or failure to act may have on an acquisition or potential acquisition
of control of the corporation or the amount or type of consideration that may be offered or paid to the stockholders in an
acquisition. Maryland law also contains a statutory presumption that an act of a director of a Maryland corporation satisfies
the applicable standards of conduct for directors under Maryland law.

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The Maryland Business Combination Act provides that unless exempted, a Maryland corporation may not engage
in business combinations, including mergers, dispositions of 10% or more of its assets, certain issuances of shares of stock
and other specified transactions, with an “interested stockholder” or an affiliate of an interested stockholder for five years
after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless
specified criteria are met. An interested stockholder is generally a person owning or controlling, directly or indirectly, 10%
or more of the voting power of the outstanding stock of the Maryland corporation or an affiliate or associate of the Maryland
corporation that was the beneficial owner of 10% or more of the voting power of the corporation’s outstanding stock during
the past two years. In our charter, we have expressly elected that the Maryland Business Combination Act not govern or
apply to any transaction with our affiliated company, MREIC.

We cannot assure you that we will be able to pay distributions regularly. Our ability to pay distributions in the
future is dependent on our ability to operate profitably and to generate cash from our operations and the operations of our
subsidiaries. We cannot guarantee that we will be able to pay distributions on a regular quarterly basis in the future.

Future terrorist attacks and military conflicts could have a material adverse effect on general economic
conditions, consumer confidence and market liquidity. Among other things, it is possible that interest rates may be
affected by these events. An increase in interest rates may increase our costs of borrowing, leading to a reduction in our
earnings. Terrorist acts affecting our properties could also result in significant damages to, or loss of, our properties.
Additionally, we may be unable to obtain adequate insurance coverage on acceptable economic terms for losses resulting
from acts of terrorism. Our lenders may require that we carry terrorism insurance even if we do not believe this insurance
is necessary or cost effective. Should an act of terrorism result in an uninsured loss or a loss in excess of insured limits,
we could lose capital invested in a property, as well as the anticipated future revenues from a property, while remaining
obligated for any mortgage indebtedness or other financial obligations related to the property. Any loss of these types
would adversely affect our financial condition.

We are subject to risks arising from litigation. We may become involved in litigation. Litigation can be costly,
and the results of litigation are often difficult to predict. We may not have adequate insurance coverage or contractual
protection to cover costs and liability in the event we are sued, and to the extent we resort to litigation to enforce our rights,
we may incur significant costs and ultimately be unsuccessful or unable to recover amounts we believe are owed to us.
We may have little or no control of the timing of litigation, which presents challenges to our strategic planning.

Security breaches and other disruptions could compromise our information and expose us to liability, which
would cause our business and reputation to suffer. In the ordinary course of our business, we collect and store sensitive
data, including our business information and the personal information of our residents and our employees, in our facility
and on our network. Despite our security measures, our information technology and infrastructure may be vulnerable to
attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could
compromise our network and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such
access, disclosure or other loss of information could result in legal claims or proceedings, disrupt our operations, damage
our reputation, and cause a loss of confidence, which could adversely affect our business.

If our leases are not respected as true leases for federal income tax purposes, we would fail to qualify as a
REIT. To qualify as a REIT, we must, among other things, satisfy two gross income tests, under which specified
percentages of our gross income must be passive income, such as rent. For the rent paid pursuant to our leases, to qualify
for purposes of the gross income tests, the leases must be respected as true leases for federal income tax purposes and not
be treated as service contracts, joint ventures or some other type of arrangement. We believe that our leases will be
respected as true leases for federal income tax purposes. However, there can be no assurance that the Internal Revenue
Service (“IRS”) will agree with this view. If the leases are not respected as true leases for federal income tax purposes, we
would not be able to satisfy either of the two gross income tests applicable to REITs, and we could lose our REIT status.

Failure to make required distributions would subject us to additional tax. In order to qualify as a REIT, we
must, among other requirements, distribute, each year, to our stockholders at least 90% of our taxable income, excluding
net capital gains. To the extent that we satisfy the 90% distribution requirement, but distribute less than 100% of our taxable
income, we will be subject to federal corporate income tax on our undistributed income.

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In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions (or deemed
distributions) in any year are less than the sum of:



85% of our ordinary income for that year;

95% of our capital gain net earnings for that year; and

100% of our undistributed taxable income from prior years.

To the extent we pay out in excess of 100% of our taxable income for any tax year, we may be able to carry
forward such excess to subsequent years to reduce our required distributions for purposes of the 4% nondeductible
excise tax in such subsequent years. We intend to pay out our income to our stockholders in a manner intended to
satisfy the 90% distribution requirement. Differences in timing between the recognition of income and the related cash
receipts or the effect of required debt amortization payments could require us to borrow money or sell assets to pay
out enough of our taxable income to satisfy the 90% distribution requirement and to avoid corporate income tax.

We may not have sufficient cash available from operations to pay distributions to our stockholders, and,
therefore, distributions may be made from borrowings. The actual amount and timing of distributions to our stockholders
will be determined by our Board of Directors in its discretion and typically will depend on the amount of cash available
for distribution, which will depend on items such as current and projected cash requirements, limitations on distributions
imposed by law on our financing arrangements and tax considerations. As a result, we may not have sufficient cash
available from operations to pay distributions as required to maintain our status as a REIT. Therefore, we may need to
borrow funds to make sufficient cash distributions in order to maintain our status as a REIT, which may cause us to incur
additional interest expense as a result of an increase in borrowed funds for the purpose of paying distributions.

We may be required to pay a penalty tax upon the sale of a property. The federal income tax provisions
applicable to REITs provide that any gain realized by a REIT on the sale of property held as inventory or other property
held primarily for sale to customers in the ordinary course of business is treated as income from a “prohibited transaction”
that is subject to a 100% penalty tax. Under current law, unless a sale of real property qualifies for a safe harbor, the
question of whether the sale of real estate or other property constitutes the sale of property held primarily for sale to
customers is generally a question of the facts and circumstances regarding a particular transaction. We intend that we and
our subsidiaries will hold the interests in the real estate for investment with a view to long-term appreciation, engage in the
business of acquiring and owning real estate, and make occasional sales as are consistent with our investment objectives.
We do not intend to engage in prohibited transactions. We cannot assure you, however, that we will only make sales that
satisfy the requirements of the safe harbors or that the IRS will not successfully assert that one or more of such sales are
prohibited transactions.

We may be adversely affected if we fail to qualify as a REIT. If we fail to qualify as a REIT, we will not be
allowed to deduct distributions to stockholders in computing our taxable income and will be subject to Federal income tax,
including any applicable alternative minimum tax, at regular corporate rates. In addition, we might be barred from
qualification as a REIT for the four years following disqualification. The additional tax incurred at regular corporate rates
would reduce significantly the cash flow available for distribution to stockholders and for debt service. Furthermore, we
would no longer be required to make any distributions to our stockholders as a condition to REIT qualification. Any
distributions to noncorporate stockholders would be taxable as ordinary income to the extent of our current and
accumulated earnings and profits, although such dividend distributions generally would be subject to a top federal tax rate
of 15% through 2014. Corporate distributees would in that case generally be eligible for the dividends received deduction
on the distributions, subject to limitations under the Code.

If we were considered to actually or constructively pay a “preferential dividend” to certain of our stockholders,
our status as a REIT could be adversely affected. In order to qualify as a REIT, we must distribute annually to our
stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with
U.S. GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. In order for
distributions to be counted as satisfying the annual distribution requirements for REITs, and to provide us with a REIT
level tax deduction, the distributions must not be “preferential dividends.” A dividend is not a preferential dividend if the
distribution is pro rata among all outstanding shares of stock within a particular class, and in accordance with the

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preferences among different classes of stock as set forth in our organizational documents. Currently, there is uncertainty
as to the application of the law in certain circumstances and the IRS’s position regarding whether certain arrangements
that REITs have with their stockholders could give rise to the inadvertent payment of a preferential dividend (e.g., the
pricing methodology for stock purchased under a distribution reinvestment plan inadvertently causing a greater than 5%
discount on the price of such stock purchased). There is no de minimis exception with respect to preferential dividends;
therefore, if the IRS were to take the position that we inadvertently paid a preferential dividend, we may be deemed to
have failed the 90% distribution test, and our status as a REIT could be terminated for the year in which such determination
is made if we were unable to cure such failure. While we believe that our operations have been structured in such a manner
that we will not be treated as inadvertently paying preferential dividends, we can provide no assurance to this effect.

To qualify as a REIT, we must comply with certain highly technical and complex requirements. We cannot
be certain we have complied, and will always be able to comply, with the requirements to qualify as a REIT because there
are few judicial and administrative interpretations of these provisions. In addition, facts and circumstances that may be
beyond our control may affect our ability to continue to qualify as a REIT. We cannot assure you that new legislation,
regulations, administrative interpretations or court decisions will not change the tax laws significantly with respect to our
qualification as a REIT or with respect to the Federal income tax consequences of qualification. We believe that we have
qualified as a REIT since our inception and intend to continue to qualify as a REIT. However, we cannot assure you that
we are qualified or will remain qualified.

There is a risk of changes in the tax law applicable to real estate investment trusts. Because the IRS, the United
States Treasury Department and Congress frequently review federal income tax legislation, we cannot predict whether,
when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted. Any of such legislative
action may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us
and/or our investors.

We may be unable to comply with the strict income distribution requirements applicable to REITs. To maintain
qualification as a REIT under the Code, a REIT must annually distribute to its stockholders at least 90% of its REIT taxable
income, excluding the dividends paid deduction and net capital gains. This requirement limits our ability to accumulate
capital. We may not have sufficient cash or other liquid assets to meet the distribution requirements. Difficulties in meeting
the distribution requirements might arise due to competing demands for our funds or to timing differences between tax
reporting and cash receipts and disbursements, because income may have to be reported before cash is received, because
expenses may have to be paid before a deduction is allowed, because deductions may be disallowed or limited or because
the IRS may make a determination that adjusts reported income. In those situations, we might be required to borrow funds
or sell properties on adverse terms in order to meet the distribution requirements and interest and penalties could apply
which could adversely affect our financial condition. If we fail to make a required distribution, we could cease to be taxed
as a REIT.

Notwithstanding our status as a REIT, we are subject to various federal, state and local taxes on our income
and property. For example, we will be taxed at regular corporate rates on any undistributed taxable income, including
undistributed net capital gains; provided, however, that properly designated undistributed capital gains will effectively
avoid taxation at the stockholder level. We may be subject to other Federal income taxes and may also have to pay some
state income or franchise taxes because not all states treat REITs in the same manner as they are treated for Federal income
tax purposes.

Item 1B – Unresolved Staff Comments

None

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Item 2 – Properties

UMH Properties, Inc. is engaged in the ownership and operation of manufactured home communities located
in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana and Michigan. As of December 31, 2014, the
Company owns eighty-eight manufactured home communities containing approximately 15,000 developed sites. The
following is a brief description of the properties owned by the Company. There is a long-term trend toward larger
manufactured homes. Manufactured home communities designed for older manufactured homes must be modified to
accommodate modern, wider and longer manufactured homes. These changes may decrease the number of homes
that may be accommodated in a manufactured home community. The rents collectible from the land ultimately depend
on the value of the home and land. Therefore, fewer but more expensive homes can actually produce the same or
greater rents. For this reason, the number of developed sites operated by the Company is subject to change, and the
number of developed sites listed is always an approximate number.

Name of Community

Allentown
4912 Raleigh-Millington Road
Memphis, TN 38128

Auburn Estates
919 Hostetler Road
Orrville, OH 44667

Birchwood Farms
8057 Birchwood Drive
Birch Run, MI 48415

Broadmore Estates
148 Broadmore Estates
Goshen, IN 46528

Brookside Village
89 Valley Drive
Berwick, PA 18603

Brookview Village
2025 Route 9N, Lot 137
Greenfield Center, NY 12833

Carsons
649 North Franklin St. Lot 105
Chambersburg, PA 17201

Cedarcrest
1976 North East Avenue
Vineland, NJ 08360

Chambersburg I & II
5368 Philadelphia Ave Lot 34
Chambersburg, PA 17201

Chelsea
459 Chelsea Lane
Sayre, PA 18840

City View
110 Fort Granville Lot C5
Lewistown, PA 17044

Number of
Developed
Sites

Sites
Occupied
at 12/31/14

Occupancy
Percentage Developed Acreage

Acreage

Vacant Monthly Rent Per

Site at 12/31/14

Approximate

435

400

92%

-0-

$407

93%

-0-

$335

143

107

75%

-0-

$389

389

256

66%

$391

171

137

80%

$381

128

117

91%

$445

131

116

89%

$351

283

273

96%

$556

89%

-0-

$342

96%

-0-

$394

90%

$268

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- 16 -

Name of Community

Clinton Mobile Home Resort
60 N State Route 101
Tiffin, OH 44883

Collingwood
358 Chambers Road Lot 001
Horseheads, NY 14845

Colonial Heights
917 Two Ridge Road
Wintersville, OH 43953

Countryside Estates
1500 East Fuson Road
Muncie, IN 47302

Countryside Estates
6605 State Route 5
Ravenna, OH 44266

Countryside Village
200 Early Road
Columbia, TN 38401

Cranberry Village
100 Treesdale Drive
Cranberry Township, PA 16066

Crestview
459 Chelsea Lane
Sayre, PA 18840

Cross Keys Village
259 Brown Swiss Circle
Duncansville, PA 16635

Dallas Mobile Home Community
1104 N 4th Street
Toronto, OH 43964

Deer Meadows
1291Springfield Road
New Springfield, OH 44443

D & R Village
430 Route 146 Lot 65A
Clifton Park, NY 12065

Evergreen Estates
425 Medina Street
Lodi, OH 44254

Evergreen Manor
26041 Aurora Avenue
Bedford, OH 44146

Number of
Sites
Developed Occupied Occupancy
at 12/31/14 Percentage

Sites

Acreage
Developed

Vacant Monthly Rent Per
Acreage

Site at 12/31/14

Approximate

116

100%

$344

103

84%

-0-

$390

159

125

79%

$260

150

65%

$286

144

110

76%

-0-

$283

349

258

74%

$322

190

175

92%

-0-

$516

85%

-0-

$357

132

73%

$382

145

124

86%

-0-

$250

101

73%

$280

237

224

95%

-0-

$504

96%

$295

51%

-0-

$285

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- 17 -

Name of Community

Evergreen Village
9249 State Route 44
Mantua, OH 44255

Fairview Manor
2110 Mays Landing Road
Millville, NJ 08332

Forest Creek
885 E. Mishawaka Road
Elkhart, IN 46517

Forest Park Village
102 Holly Drive
Cranberry Township, PA 16066

Frieden Manor
102 Frieden Manor
Schuylkill Haven, PA 17972

Green Acres
4496 Sycamore Grove Road
Chambersburg, PA 17201

Gregory Courts
1 Mark Lane
Honey Brook, PA 19344

Hayden Heights
5501 Cosgray Road
Dublin, OH 43016

Heather Highlands
109 Main Street
Inkerman, PA 18640

Highland
1875 Osolo Road
Elkhart, IN 46514

Highland Estates
60 Old Route 22
Kutztown, PA 19530

Hillside Estates
1033 Marguerite Lake Road
Greensburg, PA 15601

Holiday Mobile Village
201 Grizzard Avenue
Nashville, TN 37207

Hudson Estates
100 Keenan Road
Peninsula, OH 44264

Number of
Developed
Sites

Sites

Approximate

Occupied Occupancy
Percentage
at 12/31/14

Acreage
Developed

Vacant Monthly Rent Per
Acreage

Site at 12/31/14

90%

$295

318

312

98%

132

$555

167

154

92%

-0-

$401

251

205

82%

-0-

$453

193

185

96%

$398

92%

97%

-0-

$355

-0-

$542

115

106

92%

-0-

$310

404

263

65%

-0-

$383

246

211

86%

-0-

$337

318

299

94%

$480

79%

$291

274

242

88%

$432

173

55%

-0-

$260

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- 18 -

Name of Community

Independence Park
355 Route 30
Clinton, PA 15026

Kinnebrook
351 State Route 17B
Monticello, NY 12701

Lake Sherman Village
7227 Beth Avenue, SW
Navarre, OH 44662

Laurel Woods
1943 St. Joseph Street
Cresson, PA 16630

Little Chippewa
11563 Back Massillon Road
Orrville, OH 44667

Maple Manor
18 Williams Street
Taylor, PA 18517

Meadowood
9555 Struthers Road
New Middletown, OH 44442

Melrose Village
4400 Melrose Drive, Lot 301
Wooster, OH 44691

Melrose West
4455 Cleveland Road
Wooster, OH 44691

Memphis Mobile City*
3894 N. Thomas Street
Memphis, TN 38127

Monroe Valley
1 Sunflower Drive
Ephrata, PA 17522

Moosic Heights
118 1st Street
Avoca, PA 18641

Mountaintop
1 Sunflower Drive
Ephrata, PA 17522

Mountain View**
Van Dyke Street
Coxsackie, NY

Number of
Developed
Sites

Sites

Approximate

Occupied Occupancy
at 12/31/14 Percentage Developed Acreage

Acreage

Vacant Monthly Rent Per

Site at 12/31/14

66%

$320

228

191

84%

$502

237

196

83%

$378

218

151

69%

-0-

$354

84%

-0-

$307

316

236

75%

-0-

$348

125

110

88%

-0-

$341

294

234

80%

-0-

$296

97%

$300

156

-0-

$-0-

93%

-0-

$426

147

133

90%

-0-

$350

97%

$495

-0-

N/A

-0-

220

$-0-

* Community was closed due to an unusual flooding throughout the region in May 2011. We are currently working on plans for the redevelopment of this community.
** We are currently seeking site plan approvals for 253 sites for this property.

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Name of Community

Oak Ridge Estates
1201 Country Road 15 (Apt B)
Elkhart, IN 46514

Oakwood Lake Village
308 Gruver Lake
Tunkhannock, PA 18657

Olmsted Falls
26875 Bagley Road
Olmsted Falls, OH 44138

Oxford Village
2 Dolinger Drive
West Grove, PA 19390

Pine Ridge Village/Pine Manor
100 Oriole Drive
Carlisle, PA 17013

Pine Valley Estates
1283 Sugar Hollow Road
Apollo, PA 15613

Pleasant View Estates
6020 Fort Jenkins Lane
Bloomsburg, PA 17815

Port Royal Village
485 Patterson Lane
Belle Vernon, PA 15012

River Valley Estates
2066 Victory Road
Marion, OH 43302

Rolling Hills Estates
14 Tip Top Circle
Carlisle, PA 17015

Rostraver Estates
1198 Rostraver Road
Belle Vernon, PA 15012

Sandy Valley Estates
11461 State Route 800 N.E.
Magnolia, OH 44643

Shady Hills
1508 Dickerson Road #L1
Nashville, TN 37207

Number of
Developed
Sites

Sites

Approximate

Occupied Occupancy Acreage
at 12/31/14 Percentage Developed Acreage

Vacant Monthly Rent Per

Site at 12/31/14

205

199

97%

-0-

$400

92%

-0-

$381

127

122

96%

-0-

$341

224

220

98%

$582

178

146

82%

$486

218

143

66%

-0-

$338

110

65%

$353

465

272

58%

101

-0-

$389

232

161

69%

-0-

$334

81%

$315

67%

$370

364

234

64%

102

$362

210

203

97%

-0-

$404

Somerset Estates/Whispering Pines
1873 Husband Road
Somerset, PA 15501

252

200

79%

$320/$430

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- 20 -

Name of Community

Southern Terrace
1229 State Route 164
Columbiana, OH 44408

Southwind Village*
435 E. Veterans Highway
Jackson, NJ 08527

Spreading Oaks Village
7140-29 Selby Road
Athens, OH 45701

Suburban Estates
33 Maruca Drive
Greensburg, PA 15601

Summit Estates
3305 Summit Road
Ravenna, OH 44266

Sunny Acres
272 Nicole Lane
Somerset, PA 15501

Sunnyside
2901 West Ridge Pike
Eagleville, PA 19403

Trailmont
512 Hillcrest Road
Goodlettsville, TN 37072

Twin Oaks I & II
27216 Cook Road Lot 1-A
Olmsted Township, OH 44138

Twin Pines
2011 West Wilden Avenue
Goshen, IN 46528

Valley High
32 Valley High Lane
Ruffs Dale, PA 15679

Valley Hills
4364 Sandy Lake Road
Ravenna, OH 44266

Valley View I
1 Sunflower Drive
Ephrata, PA 17522

Valley View II
1 Sunflower Drive
Ephrata, PA 17522

Number of
Developed
Sites

Sites

Approximate

Occupied Occupancy
at 12/31/14 Percentage

Acreage
Developed

Vacant Monthly Rent Per
Site at 12/31/14
Acreage

118

100%

$290

250

241

96%

-0-

$387-$650

148

117

79%

$333

200

186

93%

-0-

$338

141

107

76%

207

200

97%

$289

$333

86%

-0-

$614

129

126

98%

-0-

$461

141

140

99%

-0-

$392

238

188

79%

$373

85%

$305

272

200

74%

$282

105

94%

-0-

$436

98%

-0-

$453

* Community subject to local rent control laws.

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- 21 -

Name of Community

Sites

at 12/31/14 Percentage Developed Acreage

Site at 12/31/14

Number of
Sites
Developed Occupied Occupancy

Acreage

Vacant Monthly Rent Per

Approximate

Valley View – Danboro
1081 North Easton Road
Doylestown, PA 18902

Valley View – Honey Brook
1 Mark Lane
Honey Brook, PA 19344

Waterfalls Village
3450 Howard Road Lot 21
Hamburg, NY 14075

Weatherly Estates
271 Weatherly Drive
Lebanon, TN 37087

Woodland Manor
338 County Route 11, Lot 165
West Monroe, NY 13167

Woodlawn Village*
265 Route 35
Eatontown, NJ 07724

Wood Valley
2 West Street
Caledonia, OH 43314

Youngstown Estates
999 Balmer Road
Youngstown, NY 14174

233

221

95%

-0-

$597

147

139

95%

$530

199

157

79%

-0-

$488

270

266

99%

-0-

$410

148

51%

-0-

$332

156

134

86%

-0-

$584-$665

160

53%

$322

66%

$324

Total

15,041

12,243

82%(1)

3,249

1,142

$393(2)

* Community subject to local rent control laws.

(1) Does not include vacant sites at Memphis Mobile City.
(2) Weighted average monthly rent per site.

Exclusive of the vacant sites at Memphis Mobile City, the Company’s occupancy rate has increased from

81.5% at December 31, 2013 to 82.3% at December 31, 2014.

In connection with the operation of its communities, the Company operates approximately 2,600 rental units.
These are homes owned by the Company and rented to residents. The Company engages in the rental of manufactured
homes primarily in areas where the communities have existing vacancies. The rental homes produce income on both
the home and the site which might otherwise be non-income producing. The Company sells the rental homes when
the opportunity arises.

The Company has approximately 880 additional sites in various stages of engineering/construction. Due to
the difficulties involved in the approval and construction process, it is difficult to predict the number of sites which
will be completed in a given year.

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Significant Properties

The Company operates approximately $448,000,000 (at original cost) in manufactured home properties.
These consist of eighty-eight separate manufactured home communities and related improvements. No single
community constitutes more than 10% of the total assets of the Company. Our larger properties consist of: Port Royal
Village with 465 developed sites, Allentown with 435 developed sites, Heather Highlands with 404 developed sites,
Broadmore Estates with 389 developed sites, Sandy Valley Estates with 364 developed sites, Countryside Village
with 349 developed sites, Highland Estates with 318 developed sites, Fairview Manor with 318 developed sites, and
Maple Manor with 316 developed sites.

Mortgages on Properties

The Company has mortgages on various properties. The maturity dates of these mortgages range from the
years 2015 to 2023. Interest rates vary from fixed rates of 4.0% to 12.75% and variable rates of prime plus 1.0% to
LIBOR plus 2.25%. The weighted-average interest rate on our mortgages was approximately 4.78% at December 31,
2014. The aggregate balances of these mortgages total $182,670,854 at December 31, 2014. (For additional
information, see Part IV, Item 15(a) (1) (vi), Note 5 of the Notes to Consolidated Financial Statements – Loans and
Mortgages Payable).

Item 3 – Legal Proceedings

Legal proceedings are incorporated herein by reference and filed as Part IV, Item 15(a)(1)(vi), Note 12 of the

Notes to Consolidated Financial Statements – Commitments, Contingencies and Legal Matters.

Item 4 – Mine Safety Disclosures

Not Applicable.

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- 23 -

PART II

Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities

Prior to March 2, 2012, the Company’s shares were listed on the NYSE Amex (symbol: UMH). The per
share range of high and low quotes for the Company’s stock and distributions paid to shareholders for each quarter of
the last two years are as follows:

2014

High

Low

Distribution

High

2013
Low

Distribution

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

$9.95
10.11
10.41
10.11

$9.01
9.57
9.31
9.01

$ 0.18
0.18
0.18
0.18
$0.72

$10.98
11.55
11.25
10.70

$9.94
10.04
9.20
9.01

$ 0.18
0.18
0.18
0.18
$0.72

On March 2, 2012, the Company transferred the listing of its common and preferred stock from the NYSE
Amex to the New York Stock Exchange (NYSE). The Company has retained its stock symbols (UMH) for the
common shares and (UMH-PA) for the preferred shares.

On March 2, 2015, the closing price of the Company’s stock was $9.58.

As of March 2, 2015, there were approximately 1,028 registered shareholders of the Company’s common

stock based on the number of record owners.

For the years ended December 31, 2014 and 2013, total distributions paid by the Company for common stock
amounted to $16,285,828 or $0.72 per share ($0.01114 taxed as ordinary income, $0.00265 taxed as capital gains and
$0.70621 as a return of capital) and $13,563,471 or $0.72 per share ($0.12844 taxed as ordinary income, $0.05835
taxed as capital gains and $0.53321 as a return of capital), respectively.

It is the Company’s intention to continue making comparable quarterly distributions. On January 21, 2015,
the Board of Directors declared a cash dividend of $0.18 per share to be paid on March 16, 2015 to common
shareholders of record as of the close of business on February 17, 2015. Future dividend policy will depend on the
Company’s earnings, capital requirements, REIT requirements, financial condition, availability and cost of bank
financing and other factors considered relevant by the Board of Directors.

As of December 31, 2014, the Company had outstanding 3,663,800 shares of 8.25% Series A Cumulative
Redeemable Preferred Stock, par value $0.10 per share, with an aggregate liquidation preference of $91,595,000
(Series A Preferred Stock). The Series A Preferred Stock ranks, as to dividend rights and rights upon our liquidation,
dissolution or winding up, senior to our common stock and equal to any equity securities that we may issue in the
future, the terms of which specifically provide that such equity securities rank equal to the Series A Preferred Stock.
We are required to pay cumulative dividends on the Series A Preferred Stock in the amount of $2.0625 per share each
year, which is equivalent to 8.25% of the $25.00 liquidation value per share. The Series A Preferred Stock is traded
on the NYSE.

The Series A Preferred Stock, par value $25.00, has no maturity and will remain outstanding indefinitely
unless redeemed or otherwise repurchased. The Series A Preferred Stock is not redeemable prior to May 26, 2016,
except pursuant to provisions relating to preservation of the Company’s qualification as a real estate investment trust
(REIT) or upon the occurrence of a Delisting Event or a Change of Control. On and after May 26, 2016, the Series A
Preferred Stock will be redeemable at the Company’s option for cash, in whole or, from time to time, in part, at a price
per share equal to $25.00, plus all accrued and unpaid dividends (whether or not declared), if any, to, but not including,
the redemption date, on each share of Series A Preferred Stock to be redeemed.

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- 24 -

On January 21, 2015, the Board of Directors declared a quarterly dividend of $0.515625 per share for the
period from December 1, 2014 through February 28, 2015, on the Company's 8.25% Series A Cumulative Redeemable
Preferred Stock payable March 16, 2015 to preferred shareholders of record as of the close of business on February
17, 2015. Series A preferred share dividends are cumulative and payable quarterly at an annual rate of $2.0625 per
share.

Issuer Purchases of Equity Securities

On January 21, 2015, the Board of Directors reaffirmed its Share Repurchase Program (the repurchase
program) that authorizes the Company to purchase up to $10,000,000 in the aggregate of the Company's common
stock. The repurchase program was originally created in June 2008 and is intended to be implemented through
purchases made from time to time using a variety of methods, which may include open market purchases, privately
negotiated transactions or block trades, or by any combination of such methods, in accordance with applicable insider
trading and other securities laws and regulations. The size, scope and timing of any purchases will be based on
business, market and other conditions and factors, including price, regulatory and contractual requirements or
consents, and capital availability. The repurchase program does not require the Company to acquire any particular
amount of common stock, and the program may be suspended, modified or discontinued at any time at the Company's
discretion without prior notice. There have been no purchases under the repurchase program to date.

Securities Authorized for Issuance Under Equity Compensation Plans

On June 13, 2013, the shareholders approved and ratified the Company's 2013 Stock Option and Stock Award
Plan (the 2013 Plan) authorizing the grant to officers and key employees of options to purchase up to 3,000,000 shares
of common stock. The 2013 Plan replaced the Company's 2003 Stock Option and Award Plan, as amended, which,
pursuant to its terms, terminated in 2013. The outstanding options under the 2003 Stock Option and Award Plan, as
amended, remain outstanding until exercised, forfeited or expired. See Note 6 in the Notes to the Consolidated
Financial Statements for a description of the plans.

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- 25 -

The following table summarizes information, as of December 31, 2014, relating to equity compensation plans
of the Company (including individual compensation arrangements) pursuant to which equity securities of the
Company are authorized for issuance.

Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
(a)

Weighted-average
Exercise Price of
Outstanding
Options, Warrants
and Rights

Number of Securities
Remaining Available
for Future Issuance
under Equity
Compensation Plans
(excluding Securities
reflected in column (a))

1,301,000

N/A
1,301,000

$10.34

N/A
$10.34

2,260,000

N/A
2,260,000

Plan Category

Equity Compensation Plans
Approved by Security Holders
Equity Compensation Plans not
Approved by Security Holders
Total

Comparative Stock Performance

The following line graph compares the total return of the Company’s common stock for the last five years to
the FTSE NAREIT All Equity REIT’s published by the National Association of Real Estate Investment Trusts
(NAREIT) and to the S&P 500 Index for the same period. The graph assumes a $100 investment in our common
stock and in each of the indexes listed below on December 31, 2009 and the reinvestment of all dividends. The total
return reflects stock price appreciation and dividend reinvestment for all three comparative indices. The information
herein has been obtained from sources believed to be reliable, but neither its accuracy nor its completeness is
guaranteed. Our stock performance shown in the graph below is not indicative of future stock performance.

250

200

150

100

s
r
a
l
l

o
D

216
205

161

180

170

147

164

151

136

100

130

137

128

115

127

117

2009

2010

2011

2012

2013

2014

YEAR ENDED DECEMBER 31,

UMH PROPERTIES, INC.

FTSE NAREIT ALL REIT

S & P 500

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- 26 -

Item 6 – Selected Financial Data

The following table sets forth selected financial and other information for the Company as of and for each of
the years in the five year period ended December 31, 2014. This table should be read in conjunction with all of the
financial statements and notes thereto included elsewhere herein.

Operating Data:

2014

2013

2012

2011

2010

Rental and Related Income
Sales of Manufactured Homes
Total Income
Community Operating Expenses
Loss Relating to Flood
Total Expenses
Interest Income
Dividend Income
Gain on Securities Transactions, net
Interest Expense
Gain (Loss) on Sales of Investment
Property and Equipment
Net Income
Net Income (Loss) Attributable to
Common Shareholders
Net Income Per Share
Basic
Diluted
Net Income (Loss) Attributable to
Common Shareholders Per Share
Basic
Diluted

$63,886,010
7,545,923
71,431,933
33,592,327
-0-
64,521,158
2,098,974
4,065,986
1,542,589
10,194,472

$53,477,893
8,727,214
62,205,107
29,140,920
-0-
58,009,654
2,186,387
3,481,514
4,055,812
7,849,835

$38,012,231
8,815,533
46,827,764
20,564,286
-0-
44,214,508
2,027,969
3,243,592
4,092,585
5,803,172

$32,990,219
6,323,135
39,313,354
17,758,332
984,701
36,797,740
1,991,180
2,512,057
2,692,649
5,744,567

$27,877,470
6,133,494
34,010,964
14,870,694
-0-
30,520,846
2,817,059
1,762,609
3,931,880
5,183,296

7,313
4,237,803

18,803
5,836,823

(41,481)
6,474,057

28,873
3,696,263

(8,244)
6,668,915

(3,318,785)

(1,719,765)

1,749,339

2,039,497

6,668,915

0.19
0.19

0.31
0.31

(0.15)
(0.15)

(0.09)
(0.09)

0.40
0.40

0.11
0.11

0.25
0.25

0.14
0.14

0.52
0.52

Cash Flow Data:

Net Cash Provided (Used) by:
Operating Activities
Investing Activities
Financing Activities

Balance Sheet Data:

Total Investment Property
Total Assets
Mortgages Payable
Series A Preferred Stock
Total Shareholders’ Equity

Other Information:

$11,238,088
$24,326,461
(56,033,767) (110,365,339)
95,706,570

32,174,955

$9,087,749
(66,985,675)
60,135,727

$8,410,892
(39,765,028)
34,491,139

$6,481,751
(33,894,219)
28,553,703

$448,164,459 $365,824,412 $253,490,055 $191,252,542 $168,590,072
188,780,515
300,281,215
478,268,976
90,815,777
108,871,352
182,670,854
-0-
91,595,000
91,595,000
71,927,753
174,985,248
208,827,105

223,944,536
90,282,010
33,470,000
105,877,205

407,979,974
160,639,944
91,595,000
190,585,737

Average Number of Shares Outstanding
Basic
Diluted
Funds from Operations (1)
Core Funds from Operations (1)
Cash Dividends Per Common Share

22,496,103
22,539,708
$11,837,322
$12,320,844
$0.72

18,724,321
18,789,662
$9,943,156
$11,398,698
$0.72

16,197,339
16,260,225
$9,147,978
$10,010,147
$0.72

14,506,679
14,562,018
$7,972,962
$9,218,126
$0.72

12,767,904
12,822,644
$11,193,185
$11,640,762
$0.72

-27-

- 27 -

(1) We assess and measure our overall operating results based upon an industry performance measure referred to as Funds
From Operations (FFO), 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 The
National Association of Real Estate Investment Trusts (NAREIT), represents net income (loss) attributable to common
shareholders, as defined by accounting principles generally accepted in the United States of America (U.S. GAAP), excluding
extraordinary items, as defined under U.S. GAAP, gains or losses from sales of previously depreciated real estate assets,
impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation
and amortization. NAREIT created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance. We
define Core Funds From Operations (Core FFO) as FFO plus acquisitions costs and Loss Relating to Flood. FFO and Core
FFO should be considered as a supplemental measure of operating performance used by REITs. FFO and Core FFO excludes
historical cost depreciation as an expense and may facilitate the comparison of REITs which have different cost basis. The
items excluded from FFO and Core FFO are significant components in understanding the Company’s financial performance.

FFO and Core 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 as a measure of operating performance or to Cash Flows from Operating,
Investing and Financing Activities; and (iii) are not an alternative to cash flow as a measure of liquidity. FFO and Core
FFO, as calculated by the Company, may not be comparable to similarly titled measures reported by other REITs.

The Company’s FFO and Core FFO Attributable to Common Shareholders are calculated as follows:

2014

2013

2012

2011

2010

Net Income (Loss) Attributable
to Common Shareholders
Loss (Gain) on Sales of
Depreciable Assets
Depreciation Expense
FFO Attributable to
Common Shareholders
Acquisition Costs
Loss Relating to Flood (1)

$(3,318,785)

$(1,719,765)

$1,749,339

$2,039,497

$6,668,915

(7,313)
15,163,420

(18,803)
11,681,724

11,837,322
483,522
-0-

9,943,156
1,455,542
-0-

41,481
7,357,158

9,147,978
862,169
-0-

(28,873)
5,962,338

7,972,962
260,463
984,701

8,244
4,516,026

11,193,185
447,577
-0-

Core FFO Attributable to
Common Shareholders

$12,320,844

$11,398,698

$10,010,147

$9,218,126

$11,640,762

(1) Represents loss relating to flood at Memphis Mobile City.

Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Statements

Statements contained in this Form 10-K, 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

-28-

- 28 -

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”. 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 rental rates and occupancy levels;
changes in market rates of interest;
our ability to repay debt financing obligations;
our ability to refinance amounts outstanding under our credit facilities at maturity on terms favorable to
us;
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 timely made 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; and
those risks and uncertainties referenced under the heading "Risk Factors" contained in this Form 10-K
and the Company's filings with the Securities and Exchange Commission.

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-K 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.

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 notes thereto elsewhere herein.

The Company is a self-administered, self-managed, real estate investment trust (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 a month-to-month or annual basis to private
manufactured home owners. The Company also leases homes to residents and, through its taxable REIT subsidiary,
UMH Sales and Finance, Inc. (S&F), sells and finances homes to residents and prospective residents of our
communities.

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- 29 -

Our communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana and
Michigan. UMH has continued to execute our growth strategy of purchasing well-located communities in our target
markets, including the energy-rich Marcellus and Utica shale regions. During the year ended December 31, 2014, we
have purchased fourteen manufactured home communities with ten located in Ohio and four located in Pennsylvania,
for an aggregate purchase price of $42,550,000. These acquisitions added approximately 1,600 developed sites to our
portfolio, bringing our total to eighty-eight communities containing approximately 15,000 developed sites. On
January 21, 2015, we acquired an additional community located in Pennsylvania for approximately $3,800,000. With
this purchase, we now own eighty-nine manufactured home communities consisting of approximately 15,200
developed sites.

The Company’s income primarily consists of rental and related income from the operation of its
manufactured home communities. Income also includes sales of manufactured homes. In 2014, total income has
increased 15% from the prior year and income from community operations has increased 24% from the prior year,
primarily due to the acquisitions in 2013 and 2014. Occupancy has increased from 81.5% at December 31, 2013 to
82.3% at December 31, 2014. Same site occupancy has increased from 81.5% at December 31, 2013 to 83.2% at
December 31, 2014. Sales of manufactured homes continue to be disappointing and have not yet returned to pre-
recession levels. Many of our customers still face difficulties in selling their existing homes. Despite historically low
interest rates, tight underwriting standards have kept a number of potential buyers out of the site-built market. This,
coupled with limited wage growth, has consumers gravitating toward renting versus owning. During 2014, we have
added a net of approximately 800 rental units to selected communities as well as acquired approximately 100 rental
units with fiscal 2014 community acquisitions. Rental home occupancy is at 91.5%. Occupied rental units represent
approximately 19.6% of total occupied sites. We intend to convert renters to new homeowners in the future.

Revenues also include interest and dividend income and net gain on securities transactions. The Company
holds a portfolio of securities of other REITs with a fair value of $63,555,961 at December 31, 2014. The Company
generally limits its marketable securities investments to no more than approximately 15% of its undepreciated
assets. The REIT securities portfolio provides the Company with liquidity and additional income and serves as a
proxy for real estate when more favorable risk adjusted returns are not available. The Company invests in these
securities on margin from time to time when the Company can achieve an adequate yield spread. As of December 31,
2014, the Company has borrowings of $19,392,382 under its margin line at 2.0% interest. As of December 31, 2014,
the Company’s portfolio consisted of 30% REIT preferred stocks and 70% REIT common stocks. The Company’s
weighted-average yield on the securities portfolio was approximately 6.1% at December 31, 2014. The Company
realized a net gain of $1,542,589 on sale of securities transactions in 2014 as compared to a net gain of $4,055,812
during 2013. At December 31, 2014, the Company had unrealized gains of $5,079,921 in its REIT securities
portfolio. The dividends received from our securities investments continue to meet our expectations. It is our intent
to hold these securities for investment on a long-term basis.

The Company continues to strengthen its balance sheet. During 2014, the Company raised approximately
$33 million in new capital through its Dividend Reinvestment and Stock Purchase Plan. This capital was used to
purchase communities, purchase rental homes and pay down certain loans and mortgages. The weighted average
interest rate on our mortgage debt was 4.8% at December 31, 2014 compared to 4.5% at December 31, 2013.

At December 31, 2014, the Company had approximately $8.1 million in cash and cash equivalents, and $15
million potentially available on our credit facility pursuant to an accordion feature. We also had $10.2 million
available on our revolving lines of credit for the financing of home sales and the purchase of inventory, and the ability
to finance approximately 500 rental units. In addition, we held $63.6 million in marketable REIT securities
encumbered by $19.4 million in margin loans. In general, the Company may borrow up to 50% of the value of the
marketable securities.

The Company intends to continue to increase its real estate investments. In 2013 and 2014, we have added
a total of thirty-one manufactured home communities to our portfolio, encompassing approximately 4,300 developed
sites. We have also entered into definitive agreements to purchase three manufactured home communities, including
the community which was purchased in January 2015, with a total of approximately 465 developed home sites located
in Pennsylvania for a purchase price of approximately $9.1 million. We have been positioning ourselves for future
growth and will continue to seek opportunistic investments in 2015. The growth of our real estate portfolio depends
on the availability of suitable properties which meet the Company’s investment criteria and appropriate financing.

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- 30 -

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 Company believes that funds generated from operations, funds generated from the dividend reinvestment
and stock purchase plan (DRIP), and the funds available on the credit facility and the lines of credit, together with the
ability to finance and refinance its properties will provide sufficient funds to adequately meet its obligations over the
next several years.

See PART I, Item 1- Business and Item 1A – Risk Factors for a more complete discussion of the economic
and industry-wide factors relevant to the Company, the Company's lines of business and principal products and
services, and the opportunities, challenges and risks on which the Company is focused.

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. 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.

Significant accounting policies are defined as those that involve significant judgment and potentially could
result in materially different results under different assumptions and conditions. Management believes the following
critical accounting policies are affected by our more significant judgments and estimates used in the preparation of
the Company’s consolidated financial statements. For a detailed description of these and other accounting policies,
see Note 2 in the notes to the Company’s consolidated financial statements included in this Form 10-K.

Real Estate Investments

The Company applies Financial Accounting Standards Board Accounting Standards Codification (ASC) 360-
10, Property, Plant & Equipment (ASC 360-10) to measure impairment in real estate investments. Rental properties
are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of
expected future cash flows (on an undiscounted basis without interest) from a rental property is less than the carrying
value under its historical net cost basis. These expected future cash flows consider factors such as future operating
income, trends and prospects as well as the effects of leasing demand, competition and other factors. Upon
determination that a permanent impairment has occurred, rental properties are reduced to their fair value. For
properties to be disposed of, an impairment loss is recognized when the fair value of the property, less the estimated
cost to sell, is less than the carrying amount of the property measured at the time there is a commitment to sell the
property and/or it is actively being marketed for sale. A property to be disposed of is reported at the lower of its
carrying amount or its estimated fair value, less its cost to sell. Subsequent to the date that a property is held for
disposition, depreciation expense is not recorded.

Upon acquisition of a property, the Company applies ASC 805, Business Combinations (ASC 805) and
allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist
of land, site and land improvements, buildings and improvements and rental homes. The Company allocates the
purchase price of an acquired property generally determined by internal evaluation as well as third-party appraisal of
the property obtained in conjunction with the purchase. Transaction costs, such as broker fees, transfer taxes, legal,
accounting, valuation, and other professional and consulting fees, related to acquisitions are expensed as incurred.

The Company conducted a comprehensive review of all real estate asset classes in accordance with ASC
360-10-35-21, which indicates that asset values should be analyzed whenever events or changes in circumstances
indicate that the carrying value of a property may not be fully recoverable. The process entails the analysis of property
for instances where the net book value exceeds the estimated fair value. In accordance with ASC 360-10-35-17, an
impairment loss shall be recognized if the carrying amount of a long-lived asset is not recoverable and exceeds its fair

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value. The Company utilizes the experience and knowledge of its internal valuation team to derive certain assumptions
used to determine an operating property’s cash flow. Such assumptions include lease-up rates, rental rates, rental
growth rates, and capital expenditures. The Company reviewed its operating properties in light of the requirements
of ASC 360-10 and determined that, as of December 31, 2014, the undiscounted cash flows over the holding period
for these properties were in excess of their carrying values and, therefore, no impairment charges were required.

Securities Available for Sale

Investments in non-real estate assets consist primarily of marketable securities. The Company individually
reviews and evaluates our marketable securities for impairment on a quarterly basis or when events or circumstances that
may indicate possible impairment occur. The Company considers, among other things, credit aspects of the issuer, amount
of decline in fair value over cost and length of time in a continuous loss position. The Company has developed a general
policy of evaluating whether an unrealized loss is other than temporary. On a quarterly basis, the Company makes an
initial review of every individual security in its portfolio. If the security is impaired, the Company first determines our
intent and ability to hold this investment for a period of time sufficient to allow for any anticipated recovery in market
value. Next, the Company determines the length of time and the extent of the impairment. Barring other factors, including
the downgrading of the security or the cessation of dividends, if the fair value of the security is below cost by less than
20% for less than 6 months and the Company has the intent and ability to hold the security, the security is deemed to not
be other than temporarily impaired. Otherwise, the Company reviews additional information to determine whether the
impairment is other than temporary. The Company discusses and analyzes any relevant information known about the
security, such as:

a. Whether the decline is attributable to adverse conditions related to the security or to specific conditions in

an industry or in a geographic area.

b. Any downgrading of the security by a rating agency.
c. Whether the financial condition of the issuer has deteriorated.
d. Status of dividends – Whether dividends have been reduced or eliminated, or scheduled interest payments

have not been made.

e. Analysis of the underlying assets (including NAV analysis) using independent analysis or recent

transactions.

The Company generally holds REIT securities long-term and has the ability and intent to hold securities to
recovery. If a decline in fair value is determined to be other than temporary, an impairment charge is recognized in
earnings and the cost basis of the individual security is written down to fair value as the new cost basis.

The Company’s securities consist primarily of common and preferred stock of other REITs. These securities
are all publicly-traded and purchased on the open market, through private transactions or through dividend
reinvestment plans. These securities are classified among three categories: Held-to-maturity, trading and available-
for-sale. As of December 31, 2014 and 2013, the Company’s securities are all classified as available-for-sale and are
carried at fair value based upon quoted market prices. Gains or losses on the sale of securities are based on identifiable
cost and are accounted for on a trade date basis. Unrealized holding gains and losses are excluded from earnings and
reported as a separate component of Shareholders’ Equity until realized. The change in net unrealized holding gains
and losses are reflected as comprehensive income.

Other

Estimates are used when accounting for the allowance for doubtful accounts for our rents and loans
receivable, potentially excess and obsolete inventory and contingent liabilities, among others. These estimates are
susceptible to change and actual results could differ from these estimates. The effects of changes in these estimates
are recognized in the period they are determined.

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Results of Operations

Acquisitions in 2014

On March 13, 2014, the Company acquired 8 Ohio manufactured home communities for a purchase price of
$24,950,000. These 8 all-age communities contain a total 1,018 developed home sites situated on approximately 270
acres. The average occupancy for these communities at closing was approximately 70%. The Company assumed
mortgages totaling approximately $18,100,000 in connection with this acquisition. The weighted average interest rate
on these mortgages is fixed at 6.74%. Approximately $8.9 million matures on May 1, 2016 and the remaining balance
matures on February 1, 2018.

On July 14, 2014, the Company acquired 4 Pennsylvania manufactured home communities for a purchase
price of $12,200,000. These 4 all-age communities are located in the Pittsburgh metropolitan area and contain a total
of 336 developed home sites situated on approximately 239 acres. The average occupancy for these communities at
closing was approximately 84%. The Company assumed a mortgage loan with a balance of approximately $8,600,000
in connection with this acquisition. Interest is at a fixed rate of 4.975%. This mortgage matures on July 1, 2023.

On July 28, 2014, the Company acquired 2 Ohio manufactured home communities for a purchase price of
$5,400,000. These 2 all age communities contain a total of 258 developed home sites situated on approximately 39
acres. The average occupancy for these communities at closing was approximately 91%.

Acquisitions in 2013

On March 1, 2013, the Company acquired 10 manufactured home communities for $67,500,000. These 10
all-age communities total 1,854 developed home sites situated on approximately 400 acres. There are five communities
located in Indiana, four communities located in Pennsylvania, and one community located in Michigan. The average
occupancy for these communities at closing was approximately 85%. The Company obtained a $53,760,000 mortgage
loan. The Company also included 3 additional communities in this mortgage. Interest on the mortgage loan is fixed
at 4.065%. This mortgage loan matures on March 1, 2023.

On April 2, 2013, the Company acquired Holiday Mobile Village, a 274-site manufactured home community
situated on approximately 68 acres, located in Nashville, Tennessee, for a purchase price of $7,250,000. The
occupancy for this community at closing was approximately 82%.

On October 1, 2013, the Company acquired Rolling Hills Estates, a 91-site manufactured home community
situated on approximately 32 acres, located in Carlisle, Pennsylvania, for a purchase price of $1,720,000. The
occupancy for this community at closing was approximately 91%.

On November 6, 2013, the Company acquired 5 manufactured home communities, 4 communities located in
Ohio and 1 community located in New York, for an aggregate purchase price of $11,800,000. These five all-age
communities contain a total of 519 developed home sites situated on approximately 200 total acres. The average
occupancy for these communities at closing was approximately 82%. The Company assumed a $7,700,000 mortgage
loan. This mortgage is at a fixed interest rate of 4.75% and matures on December 6, 2022.

2014 vs. 2013

Rental and related income increased from $53,477,893 for the year ended December 31, 2013 to $63,886,010
for the year ended December 31, 2014, or 19%. This increase was due to the acquisitions during 2013 and 2014, and
an increase in rental rates, occupancy and rental homes.

The Company has been raising rental rates by approximately 2% to 6% annually at certain communities.
Other communities received no increases. Occupancy, as well as the ability to increase rental rates, directly affects
revenues. Exclusive of the vacant sites at Memphis Mobile City, the Company’s occupancy rate has increased from
81.5% at December 31, 2013 to 82.3% at December 31, 2014. Same store occupancy has increased from 81.5% at
December 31, 2013 to 83.2% at December 31, 2014. Some of the Company’s vacant sites resulted from expansions

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completed before the downturn in the economy. The Company continues to evaluate further expansion at selected
communities in order to increase the number of available sites, obtain efficiencies and generate increased revenues.
In the current environment, the demand for rental homes is high. As of December 31, 2014, we had approximately
2,600 rental homes with an occupancy of 91.5%. We continue to evaluate the demand for rental homes and will invest
in additional homes as demand dictates.

Sales of manufactured homes decreased from $8,727,214 for the year ended December 31, 2013 to
$7,545,923 for the year ended December 31, 2014, or 14%. The number of homes sold decreased from 164 homes in
2013 to 134 homes in 2014. There were 69 new homes sold in 2014 as compared to 96 in 2013. Cost of sales of
manufactured homes decreased from $7,204,410 for the year ended December 31, 2013 to $5,832,540 for the year
ended December 31, 2014, or 19%. Selling expenses increased from $1,985,834 for the year ended December 31,
2013 to $2,983,376 for the year ended December 31, 2014, or 50%. Loss 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) increased from $640,019 for the year ended December 31, 2013 to $1,881,936 for the year ended
December 31, 2014. The losses on sales include selling expenses of approximately $3.0 million for the year ended
December 31, 2014. Many of these costs, such as rent, salaries, and to an extent, advertising and promotion, are fixed.
Selling expenses in 2014 also include additional costs associated with the opening of sales lots. Adverse conditions
have continued to slow the manufactured housing industry and the broader housing market in the U.S. The inability
of our customers to sell their current homes, limited wage growth new licensing laws, including the Secure and Fair
Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) and the Dodd–Frank Wall Street Reform and Consumer
Protection, have all negatively impacted our sales. However, the Company is optimistic about future sales and rental
prospects given the fundamental need for housing. The Company believes that sales of new homes produces new
rental revenue and is an investment in the upgrading of our communities.

Community operating expenses increased from $29,140,920 for the year ended December 31, 2013 to
$33,592,327 for the year ended December 31, 2014, or 15%. This increase was due to the acquisitions during 2013
and 2014. Additionally, the Company incurred additional non-recurring expenses relating to deferred maintenance at
a number of our acquisitions.

General and administrative expenses remained relatively stable for the year ended December 31, 2014 as

compared to the year ended December 31, 2013.

Acquisition costs, relating to the transaction, due diligence and other related costs associated with the
acquisitions of communities, decreased from $1,455,542 for the year ended December 31, 2013 to $483,522 for the
year ended December 31, 2014, or 67%. This decrease was due to the decrease in acquisitions in 2014 with an
aggregate purchase price of $42,550,000 as compared to 2013 with an aggregate purchase price of $88,270,000.

Depreciation expense increased from $11,681,724 for the year ended December 31, 2013 to $15,163,420 for
the year ended December 31, 2014, or 30%. This increase was primarily due to the acquisitions during 2013 and
2014.

Interest income remained relatively stable for the year ended December 31, 2014 as compared to the year

ended December 31, 2013.

Dividend income increased from $3,481,514 for the year ended December 31, 2013 to $4,065,986 for the
year ended December 31, 2014, or 17%. This increase is due to the increase in the balance of securities from
$59,254,942 at December 31, 2013 to $63,555,961 at December 31, 2014. The Company’s weighted-average yield
on the securities portfolio was approximately 6.1% and 7.0% as of December 31, 2014 and 2013, respectively.

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Gain on sale of securities transactions, net consists of the following:

Gross realized gains
Gross realized losses

Year Ended December 31,

2014

2013

$1,555,656
(13,067)

$4,284,934
(229,122)

Total Gain on Sale of Securities Transactions, net

$1,542,589

$4,055,812

The Company had an accumulated net unrealized gain on its securities portfolio of $5,079,921 as of

December 31, 2014.

Other income increased from $211,051 for the year ended December 31, 2013 to $328,888 for the year ended
December 31, 2014, or 56%. This increase was primarily due to new contracts with cable companies at a number of
communities where we received upfront fees from $75 to $125 for each occupied home site. The Company is also
eligible to receive additional amounts based on the number of new customers generated by the cable company at the
community.

Interest expense increased from $7,849,835 for the year ended December 31, 2013 to $10,194,472 for the
year ended December 31, 2014, or 30%. This increase is primarily due to the new mortgage loans for the community
acquisitions in 2014. The average balance of mortgages payable was approximately $172 million during 2014 as
compared to approximately $135 million during 2013. The weighted-average interest rate on these mortgages was
4.8% at December 31, 2014 as compared to 4.5% at December 31, 2013.

Amortization of financing costs increased from $462,362 for the year ended December 31, 2013 to $522,250
for the year ended December 31, 2014, or 13%. This increase is primarily due to the assumption of mortgages
associated with the acquisitions completed in 2013 and 2014.

Income from Community Operations (defined as Rental and Related Income less Community Operating
Expenses) increased from $24,336,973 for the year ended December 31, 2013 to $30,293,683 for the year ended
December 31, 2014, or 24%. This increase was due to the acquisitions during 2013 and 2014, and an increase in rental
rates, occupancy and rental homes.

2013 vs. 2012

Rental and related income increased from $38,012,231 for the year ended December 31, 2012 to $53,477,893

for the year ended December 31, 2013, or 41%. This increase was due to the acquisitions during 2012 and 2013.

The Company has been raising rental rates by approximately 2% to 6% annually at certain communities.
Other communities received no increases. Occupancy, as well as the ability to increase rental rates, directly affects
revenues. Exclusive of the vacant sites at Memphis Mobile City, the Company’s occupancy rate has increased from
80% at December 31, 2012 to 81% at December 31, 2013. Some of the Company’s vacant sites resulted from
expansions completed before the downturn in the economy. The Company continues to evaluate further expansion at
selected communities in order to increase the number of available sites, obtain efficiencies and generate increased
revenues.

Sales of manufactured homes decreased from $8,815,533 for the year ended December 31, 2012 to
$8,727,214 for the year ended December 31, 2013, or 1%. The number of homes sold decreased from 210 homes in
2012 to 164 homes in 2013. There were 96 new homes sold in 2013 as compared to 98 in 2012. Cost of sales of
manufactured homes decreased from $7,903,678 for the year ended December 31, 2012 to $7,204,410 for the year
ended December 31, 2013, or 9%. Selling expenses decreased from $2,152,701 for the year ended December 31,
2012 to $1,985,834 for the year ended December 31, 2013, or 8%. Loss 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) decreased from $1,425,772 for the year ended December 31, 2012 to $640,019 for the year ended December

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31, 2013. The losses on sales include selling expenses of approximately $2.0 million for the year ended December
31, 2013. Many of these costs, such as rent, salaries, and to an extent, advertising and promotion, are fixed. Adverse
conditions have continued to slow the manufactured housing industry and the broader housing market in the
U.S. Persistent high unemployment rates, the inability of our customers to sell their current homes and the decline in
consumer confidence have all negatively impacted our sales and our gross profit percentage. New licensing laws,
including the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act), have also increased
costs. However, the Company is optimistic about future sales and rental prospects given the fundamental need for
housing. We have adjusted our inventory accordingly. The Company believes that sales of new homes produces new
rental revenue and is an investment in the upgrading of our communities.

Community operating expenses increased from $20,564,286 for the year ended December 31, 2012 to
$29,140,920 for the year ended December 31, 2013, or 42%. This increase was due to the acquisitions during 2012
and 2013. Additionally, the Company incurred additional non-recurring expenses relating to deferred maintenance at
a number of our acquisitions.

General and administrative expenses increased from $5,374,516 for the year ended December 31, 2012 to
$6,541,224 for the year ended December 31, 2013, or 22%. This was primarily due to an increase in personnel and
personnel costs and directors fees. Over the past four years, the Company has doubled in size, based on total number
of home sites. Additionally, compensation costs of $150,000 relating to pension costs and a one-time charge of
$142,000 for a stock option grant of 100,000 shares to one participant who is of retirement age was recognized at time
of approval and therefore the entire amount of measured compensation cost has been recognized. In addition, the
Company granted an additional 292,000 of stock options to employees during 2013.

Acquisition costs, relating to the transaction, due diligence and other related costs associated with the
acquisitions of communities increased from $862,169 for the year ended December 31, 2012 to $1,455,542 for the
year ended December 31, 2013, or 69%. This increase was due to the increase in acquisitions in 2013 with an
aggregate purchase price of $88,270,000 as compared to 2012 with an aggregate purchase price of $47,600,000.

Depreciation expense increased from $7,357,158 for the year ended December 31, 2012 to $11,681,724 for
the year ended December 31, 2013, or 59%. This increase was primarily due to the acquisitions during 2012 and
2013.

Interest income remained relatively stable for the year ended December 31, 2013 as compared to the year

ended December 31, 2012.

Dividend income increased from $3,243,592 for the year ended December 31, 2012 to $3,481,514 for the
year ended December 31, 2013, or 7%. This increase is due to the increase in the balance of securities from
$57,325,440 at December 31, 2012 to $59,254,942 at December 31, 2013. The Company’s weighted-average yield
on the securities portfolio was approximately 7.0% and 6.5% as of December 31, 2013 and 2012, respectively.

Gain on sale of securities transactions, net consists of the following:

Gross realized gains
Gross realized losses

Year Ended December 31,

2013

2012

$4,284,934
(229,122)

$4,092,585
-0-

Total Gain on Sale of Securities Transactions, net

$4,055,812

$4,092,585

The Company had an accumulated net unrealized gain on its securities portfolio of $1,116,738 as of

December 31, 2013.

Other income decreased from $643,588 for the year ended December 31, 2012 to $211,051 for the year ended
December 31, 2013, or 67%. This decrease was due to the bonus payment received in the amount of $499,471 in 2012
for rights to drill for oil and gas in one of our communities.

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Interest expense increased from $5,803,172 for the year ended December 31, 2012 to $7,849,835 for the year
ended December 31, 2013, or 35%. This increase is primarily due to the new mortgage loans for the community
acquisitions in 2013. The average balance of mortgages payable was approximately $135 million during 2013 as
compared to approximately $100 million during 2012. The Company has reduced its weighted average interest rate
on its mortgages from 5.2% at December 31, 2012 to 4.5% at December 31, 2013.

Amortization of financing costs increased from $302,280 for the year ended December 31, 2012 to $462,362
for the year ended December 31, 2013, or 53%. This was primarily due to the deferred financing related to the Credit
Facility and the early payoff of two mortgages.

Income from Community Operations (defined as Rental and Related Income less Community Operating
Expenses) increased from $17,447,945 for the year ended December 31, 2012 to $24,336,973 for the year ended
December 31, 2013, or 39%. This increase was due to the acquisitions during 2012 and 2013.

Off-Balance Sheet Arrangements and Contractual Obligations

The Company has not executed any off-balance sheet arrangements.

The following is a summary of the Company’s contractual obligations as of December 31, 2014:

Contractual Obligations

Total

year

1-3 years

3-5 years

5 years

Less than 1

More than

Mortgages Payable
Interest on Mortgages Payable
Loans Payable
Interest on Loans Payable
Operating Lease Obligations
Purchase of Properties
Retirement Benefits

$182,670,854
42,007,985
77,439,230
6,267,006
56,000
12,892,000
600,000

$11,476,760
8,625,149
8,375,131
2,566,286
56,000
12,892,000
50,000

$55,904,088
14,336,126
45,115,156
2,049,199
-0-
-0-
100,000

$32,585,832
9,298,904
4,132,381
1,184,016
-0-
-0-
-0-

$82,704,174
9,747,806
19,816,562
467,505
-0-
-0-
450,000

Total

$321,933,075

$44,041,326

$117,504,569

$47,201,134

$113,186,046

Mortgages payable represents the principal amounts outstanding based on scheduled payments. The interest
rates on these mortgages vary from fixed rates ranging from 4.0% to 12.75% and variable rates of prime plus 1.0% to
LIBOR plus 2.25%. The weighted-average interest rate was approximately 4.78% at December 31, 2014.

Loans payable represents $35,000,000 outstanding on the Company’s unsecured line of credit with an interest
rate ranging from LIBOR plus 2.00% to 2.75% or prime plus 1.00% to 1.75%, based on the Company’s overall
leverage (interest rate of 2.91% as of December 31, 2014), $19,392,382 outstanding on its margin line with an interest
rate of 2.0% at December 31, 2014, $8,323,300 outstanding on the Company’s revolving credit agreements to finance
inventory with interest rates ranging from prime with a minimum of 6% to prime plus 2% with a minimum of 8%
after 18 months (weighted average interest rate of 6.62% as of December 31, 2014), $723,548 loans outstanding for
the finance of rental homes with an interest rate of 6.99% at December 31, 2014, $4,000,000 outstanding on its
commercial term loan with an interest rate of 4.625% at December 31, 2014, and $10,000,000 outstanding on the
Company’s revolving line of credit secured by eligible notes receivables with an interest rate of prime plus 50 basis
points (interest rate of 3.75% as of December 31, 2014).

Operating lease obligations represent a lease, with a related party, for the Company’s corporate offices. On
May 1, 2010, the Company renewed this lease for an additional five-year term with monthly lease payments of $13,600
through April 30, 2013 and $14,000 through April 30, 2015. The Company is also responsible for its proportionate
share of real estate taxes and common area maintenance. Approximately 70% of the monthly lease payment plus its
proportionate share of real estate taxes and common area maintenance was reimbursed by MREIC through 2014.
Effective January 2015, MREIC obtained a separate lease and the Company will be responsible for 100% of the
operating lease agreement.

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Purchase of Properties represents the total purchase price of four communities under contract in Pennsylvania
totaling 623 developed home sites. One acquisition of 141 home sites, with a purchase price of $3,800,000 was
completed in January 2015. The remaining acquisitions are expected to close in the second quarter of 2015.

Retirement benefits represent the total future amount to be paid, on an undiscounted basis, relating to an
executive officer. These benefits are based upon specific employment agreements. The agreements do not require
the Company to separately fund the obligation and therefore will be paid from the general assets of the Company. The
Company has accrued these benefits on a present value basis over the terms of the agreements (See Note 8 of the
Notes to Consolidated Financial Statements).

Liquidity and Capital Resources

The Company operates as a real estate investment trust deriving its income primarily from real estate rental
operations. The Company’s principal liquidity demands have historically been, and are expected to continue to be,
distribution requirements, acquisitions, capital improvements, development and expansions of properties, debt service,
purchases of manufactured home inventory, investment in debt and equity securities of other REITs, financing of
manufactured home sales and payments of expenses relating to real estate operations. The Company’s ability to
generate cash adequate to meet these demands is dependent primarily on income from its real estate investments and
securities portfolio, the sale of real estate investments and securities, refinancing of mortgage debt, leveraging of real
estate investments, availability of bank borrowings, proceeds from the Dividend Reinvestment and Stock Purchase
Plan (DRIP), and access to the capital markets.

The Company has a DRIP, in which participants can purchase stock from the Company at a price of
approximately 95% of market. During 2014, amounts received, including dividends reinvested of $1,858,491, totaled
$32,792,239. During 2014, the Company distributed to our common shareholders a total of $16,285,828, including
dividends reinvested. It is anticipated, although no assurances can be given, that the level of participation in the DRIP
in 2015 will be comparable to 2014. In addition, the Company also paid $7,556,588 in preferred dividends.

The Company intends to operate its existing properties from the cash flows generated by the properties.
However, the Company’s expenses are affected by various factors, including inflation. Increases in operating
expenses raise the breakeven point for a property and, to the extent that they cannot be passed on through higher rents,
reduce the amount of available cash flow which can adversely affect the market value of the property.

The Company has the ability to finance home sales, inventory purchases and rental home purchases. On
October 6, 2014, the Company entered into an agreement with 21st Mortgage Corporation (21st Mortgage) under
which 21st Mortgage will finance the Company’s purchase of a maximum of 500 rental units. The Company also has
a $10,000,000 revolving line of credit for the financing of homes, all of which was utilized at December 31, 2014, and
revolving credit facilities totaling $18,500,000 to finance inventory purchases, of which $8,323,300 was utilized at
December 31, 2014.

As of December 31, 2014, the Company had $8,082,792 of cash and cash equivalents and securities available
for sale of $63,555,961 encumbered by $19,392,382 in margin loans and $15 million potentially available on our
unsecured credit facility pursuant to an accordion feature. At December 31, 2014, the Company owns eighty-eight
communities of which twenty-eight are unencumbered. The Company is in the process of financing/refinancing 10
communities for a total of approximately $55,000,000. Subsequent to year-end, the Company completed the
financing/refinancing of 2 communities (See Note 15). The Company’s marketable securities, non-mortgaged
properties, and lines of credit provide us with additional liquidity. The Company has been raising equity capital
through its DRIP and through the issuance of preferred stock. The Company believes that funds generated from
operations, the DRIP and capital market, the funds available on the lines of credit, together with the ability to finance
and refinance its properties will provide sufficient funds to adequately meet its obligations over the next several years.

The Company’s focus is on real estate investments. The Company has historically financed purchases of real
estate primarily through mortgages. During 2014, total investment property increased 23% or $82,340,047. The
Company made acquisitions of fourteen manufactured home communities totaling approximately 1,612 developed
sites at an aggregate purchase price of $42,550,000. These acquisitions were funded through the assumption of
$26,670,449 of mortgages and the use of our unsecured credit facility. The Company plans to continue to acquire

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additional properties. The funds for these acquisitions may come from bank borrowings, proceeds from the DRIP,
and private placements or public offerings of common or preferred stock. To the extent that funds or appropriate
properties are not available, fewer acquisitions will be made.

The Company also invests in rental homes and owns approximately 2,600 rental homes as of December 31,
2014. During 2014, rental homes increased by $29,916,900. The Company added approximately 800 net rental
homes to selected communities to fill demand, including approximately 100 acquired with fiscal 2014 community
acquisitions. The Company actively markets these rental homes for sale to existing residents. The Company estimates
that in 2015 it will purchase approximately 500 manufactured homes to use as rental units for a total cost of
approximately $20,000,000. Management believes that these manufactured homes will each generate approximately
$300 per month in rental income in addition to lot rent.

Additionally, the Company invests in marketable debt and equity securities of other REITs. The REIT
securities portfolio provides the Company with liquidity and additional income and serves as a proxy for real estate
when more favorable risk adjusted returns are not available. The Company generally limits its marketable securities
investments to no more than approximately 15% of its undepreciated assets. The securities portfolio increased 7% or
$4,301,019 primarily due to purchases of $9,707,038, partially offset by sales of securities with a cost of $9,369,202
and an increase in the unrealized gain of $3,963,183. The Company from time to time may purchase these securities
on margin when there is an adequate yield spread. At December 31, 2014, $19,392,382 was outstanding on the margin
loan at a 2.0% interest rate.

Net cash provided by operating activities amounted to $24,326,461, $11,238,088 and $9,087,749 for the
years ended December 31, 2014, 2013 and 2012, respectively. These increases were primarily due to the increase in
income from operations generated from the acquisitions and the increased rental homes.

Net cash used by investing activities amounted to $56,033,767, $110,365,339 and $66,985,675 for the years
ended December 31, 2014, 2013 and 2012, respectively. Cash flows used by investing activities in 2014 decreased as
compared to 2013 primarily due to purchasing fewer manufactured home communities and securities available for
sale in 2014 as compared to 2013. Cash flows used by investing activities in 2013 increased as compared to 2012
primarily due to the purchases of manufactured home communities and rental homes.

Net cash provided by financing activities amounted to $32,174,955, $95,706,570 and $60,135,727 for the
years ended December 31, 2014, 2013 and 2012, respectively. Cash flows provided by financing activities in 2014
decreased as compared to 2013 primarily due to new mortgages in 2013 for the purchase of manufactured home
communities. Cash flows provided by financing activities in 2013 increased as compared to 2012 primarily due to
proceeds from the issuance of preferred and common stock, new mortgages and proceeds from short-term borrowings,
offset by principal payments of mortgages and loans and payment of preferred and common dividends.

Cash flow was primarily used for purchases of manufactured home communities, capital improvements,
payment of dividends, purchases of securities available for sale, purchase of inventory and rental homes, loans to
customers for the sales of manufactured homes, and expansion of existing communities. The Company meets
maturing mortgage obligations by using a combination of cash flow and refinancing. The dividend payments were
primarily made from cash flow from operations.

Capital improvements include amounts needed to meet environmental and regulatory requirements in
connection with the manufactured home communities that provide water or sewer service. Excluding expansions and
rental home purchases, the Company is budgeting approximately $7 million in capital improvements for 2015.

The Company’s significant commitments and contractual obligations relate to its mortgages payable,
retirement benefits, purchases of property, and the lease on its corporate offices as described in Note 8 to the
Consolidated Financial Statements.

The Company has entered into definitive agreements to purchase four manufactured home communities with
a total of approximately 623 developed home sites located in Pennsylvania for a purchase price of approximately
$12.9 million. One acquisition of 141 home sites, with a purchase price of $3,800,000 was completed in January
2015.

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The Company has approximately 1,142 acres of undeveloped land which it could develop over the next

several years. The Company continues to analyze the highest and best use of its vacant land.

As of December 31, 2014, the Company had total assets of $478,268,976 and total liabilities of $269,441,871.

The Company believes that it has the ability to meet its obligations and to generate funds for new investments.

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-08, “Reporting
Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU No. 2014-08 changes the
definition of a discontinued operation to include only those disposals of components of an entity that represent a
strategic shift that has (or will have) a major effect on an entity's operations and financial results. ASU No. 2014-08
is effective prospectively for fiscal years beginning after December 15, 2014, with earlier adoption permitted. The
Company has decided to early adopt this standard effective with the interim period beginning January 1, 2014, and it
did not have a material impact on our financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” as a new
Topic, Accounting Standards Codification ("ASC") Topic 606. The objective of ASU 2014-09 is to establish a single
comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will
supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle
is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
In applying the new standard, companies will perform a five-step analysis of transactions to determine when and how
revenue is recognized. ASU 2014-09 applies to all contracts with customers except those that are within the scope of
other topics in the FASB ASC. This ASU is effective for annual reporting periods (including interim periods within
those periods) beginning after December 15, 2016 and shall be applied using either a full retrospective or modified
retrospective approach. Early adoption is not permitted. The Company is currently evaluating the impact this standard
may have on the consolidated financial statements and the method of adoption.

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.

Item 7A – Quantitative and Qualitative Disclosures about Market Risk

The Company's principal market risk exposure is interest rate risk. The Company mitigates this risk by
maintaining prudent amounts of leverage, minimizing capital costs and interest expense while continuously evaluating
all available debt and equity resources and following established risk management policies and procedures, which
include the periodic use of derivatives. The Company's primary strategy in entering into derivative contracts is to
minimize the variability that changes in interest rates could have on its future cash flows. The Company generally
employs derivative instruments that effectively convert a portion of its variable rate debt to fixed rate debt. The
Company does not enter into derivative instruments for speculative purposes.

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The following table sets forth information as of December 31, 2014, concerning the Company’s long-term
debt obligations, including principal cash flow by scheduled maturity, weighted average interest rates and estimated
fair value.

Fixed Rate
Carrying Value

Weighted
Average Fixed
Interest Rate

Variable Rate
Carrying Value

Total
Long-Term Debt

2015
2016
2017
2018
2019
Thereafter
Total

-0-
8,796,065
19,547,578
15,500,573
3,368,978
105,000,492
$152,213,686

-0-
6.66%
5.97%
5.66%
5.56%
4.54%
4.98%

6,803,625
-0-
22,663,770
989,773
-0-
-0-
$30,457,168

6,803,625
8,796,065
42,211,348
16,490,346
3,368,978
105,000,492
$182,670,854

Estimated Fair Value

$154,848,509

$30,457,168

$185,305,677

The Company’s variable rate long-term debt consists of four mortgage loans with a total balance of $30,457,168
as of December 31, 2014. Interest rates on these mortgages range from prime plus 1.0% to LIBOR plus 2.25%. To
minimize the variability that changes in interest rates could have on its future cash flows, the Company has entered into
two separate interest rate swap agreements. These interest rate swap agreements have the effect of fixing the interest rates
relative to specific mortgage loans totaling approximately $22.7 million. The unrealized loss in fair value of the interest
rate swap agreement amounted to $39,685 for the year ended December 31, 2014. The effective fixed interest rates on
these two loans are 3.89% and 4.39%.

The Company's remaining variable rate mortgages totals approximately $7.8 million as of December 31, 2014.
Interest rates on these mortgages range from prime plus 1% to LIBOR plus 2.25%. If prime or LIBOR increased or
decreased by 1.0%, the Company believes its interest expense would have increased or decreased by approximately
$78,000, based on the balance of the variable rate long-term debt outstanding at December 31, 2014.

On March 29, 2013, the Company entered into a $35 million Unsecured Revolving Credit Facility with Bank of
Montreal (“Credit Facility”). The Company has the ability to increase the borrowing capacity by an amount not to exceed
$15 million, representing a maximum aggregate borrowing capacity of $50 million, subject to various conditions, as
defined in the agreement. The maturity date of the Credit Facility is March 29, 2016 with a one year extension available at
the Company’s option. Borrowings under the Credit Facility can be used for, among other things, acquisitions, working
capital, capital expenditures, and repayment of other indebtedness. Borrowings bear interest at the Company’s option of
LIBOR plus 2.00% to 2.75% or BMO’s prime lending rate plus 1.00% to 1.75%, based on the Company’s overall leverage.
The Company incurs a fee on the unused commitment amount of up to 0.35% per annum. The Credit Facility replaced
the Company’s previous $5.0 million unsecured line of credit. As of December 31, 2014, the balance outstanding on the
Credit Facility was $35,000,000. Based on the current leverage ratio, interest on this borrowing is at LIBOR plus 2.75%
for an interest rate of 2.91% as of December 31, 2014.

The Company also has approximately $18,300,000 in variable rate debt. This debt primarily consists of
approximately $8.3 million outstanding on our inventory financing lines with interest rates ranging from prime with a
minimum of 6% to prime plus 2% with a minimum of 8% after 18 months (weighted average interest rate of 6.62% as of
December 31, 2014) and $10 million outstanding on our revolving line of credit to finance home sales with an interest rate
of prime plus 50 basis points (interest rate of 3.75% as of December 31, 2014). The carrying value of the Company’s
variable rate debt approximates fair value at December 31, 2014. In addition, the Company has approximately $724,000
loan outstanding for the financing of rental homes with an interest rate of 6.99% at December 31, 2014 and $4,000,000
outstanding on its commercial term loan with an interest rate of 4.625% at December 31, 2014.

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The Company invests in equity securities of other REITs and is primarily exposed to market price risk from
adverse changes in market rates and conditions. The Company generally limits its marketable securities investments to no
more than approximately 15% of its undepreciated assets. All securities are classified as available for sale and are carried
at fair value. The Company obtains margin loans secured by its marketable securities. The interest rate on the margin
account is the bank’s margin rate and was 2.0% at December 31, 2014 and 2013. There was $19,392,382 outstanding on
the margin loans as of December 31, 2014. As of December 31, 2014, the value of marketable securities was $63,555,961.
In general, the Company may borrow up to 50% of the value of the marketable securities.

Item 8 – Financial Statements and Supplementary Data

The financial statements and supplementary data listed in Part IV, Item 15(a)(1) are incorporated herein by

reference and filed as part of this report.

The following is the Unaudited Selected Quarterly Financial Data:

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
THREE MONTHS ENDED

2014

March 31

June 30

September 30

December 31

$15,849,181
15,101,441
(156,907)
568,189

Total Income
Total Expenses
Other Income (Expense)
Net Income
Net Income (Loss) Attributable
to Common Shareholders
Net Income (Loss) Attributable to Common
Shareholders per Share –
Basic
Diluted

(0.06)
(0.06)

(1,320,958)

$18,148,732
16,489,825
(228,377)
1,476,725

$18,554,782
16,777,494
(1,121,174)
629,271

$18,879,238
16,152,398
(1,173,827)
1,563,618

(412,422)

(1,259,876)

(325,529)

(0.02)
(0.02)

(0.06)
(0.06)

(0.01)
(0.01)

2013

March 31

June 30

September 30

December 31

$13,426,295
12,240,957
2,977,034
4,149,511

Total Income
Total Expenses
Other Income (Expense)
Net Income
Net Income Attributable to
Common Shareholders
Net Income (Loss) Attributable to Common
Shareholders per Share –
Basic
Diluted

2,260,364

$16,097,925
14,196,653
(229,785)
1,619,439

$16,253,966
14,935,457
(600,121)
800,877

$16,426,921
16,636,587
(524,561)
(733,004)

(269,708)

(1,088,270)

(2,622,151)

0.13
0.13

(0.02)
(0.02)

(0.06)
(0.06)

(0.14)
(0.14)

Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There were no changes in, or any disagreements with, the Company’s independent registered public
accounting firm on accounting principles and practices or financial disclosure during the years ended December 31,
2014 and 2013.

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Item 9A – Controls and Procedures

Disclosure Controls and Procedures

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated
the effectiveness of our disclosure controls and procedures (as defined in Securities Exchange Act of 1934 Rule 13a-
15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to give
reasonable assurances to the timely collection, evaluation and disclosure of information that would potentially be
subject to disclosure under the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder as of December 31, 2014.

Internal Control over Financial Reporting

(a)

Management’s Annual Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining effective internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). The Company’s internal
control system was designed to provide reasonable assurance regarding the preparation and fair presentation of
published financial statements. Notwithstanding the foregoing, a control system, no matter how well designed and
operated, can provide only reasonable, not absolute, assurance that we will detect or uncover failures to disclose
material information otherwise required to be set forth in our periodic reports.

Management assessed the Company’s internal control over financial reporting as of December 31, 2014. This
assessment was based on criteria for effective internal control over financial reporting established in Internal Control
— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”) (2013 framework). Based on this assessment, management has concluded that the Company’s internal
control over financial reporting was effective as of December 31, 2014.

PKF O’Connor Davies, A Division of O’Connor Davies, LLP (“PKF O’Connor Davies”), the Company’s
independent registered public accounting firm, has issued their report on their audit of the Company’s internal control
over financial reporting, a copy of which is included herein.

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(b)

Attestation Report of the Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
UMH Properties, Inc.

We have audited UMH Properties, Inc.’s (the “Company”) internal control over financial reporting as of December
31, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (“COSO”) (2013 framework). UMH Properties, Inc.’s
management is responsible for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual
Report on Internal Control over Financial Reporting included in the accompanying Item 9A. Our responsibility is to
express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining
an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing
and evaluating the design and operating effectiveness of internal control, based upon the assessed risk, and performing
such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, (3) receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (4) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have
a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

In our opinion, UMH Properties, Inc. maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2014 based on criteria established in Internal Control-Integrated Framework issued by
COSO (2013 framework).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of UMH Properties, Inc. as of December 31, 2014 and 2013, and the related
consolidated statements of income (loss), comprehensive income (loss), shareholders’ equity and cash flows for each
of the three years in the period ended December 31, 2014 and our report dated March 10, 2015 expressed an
unqualified opinion thereon.

New York, New York
March 10, 2015

/s/ PKF O’Connor Davies,
A Division of O’Connor Davies, LLP

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There have been no changes to our internal control over financial reporting during the Company’s fourth
quarter that have materially affected, or are reasonably likely to materially affect our internal controls over financial
reporting.

Item 9B – Other Information

None.

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Item 10 – Directors, Executive Officers and Corporate Governance

PART III

The Company will file its definitive Proxy Statement for its 2015 Annual Meeting of Stockholders within
the period required under the applicable rules of the Securities and Exchange Commission. Additional information
required by this Item is included under the captions "ELECTION OF DIRECTORS" and “CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS” of such Proxy Statement and is incorporated herein by
reference.

The following are the Directors and Executive Officers of the Company as of December 31, 2014:

Name

Jeffrey A. Carus

Age

Present Position with the Company; Business
Experience During Past Five Years; Other
Directorships

Director
Since

Class
Type
(1)

Presiding Director. Founder and Managing Partner of JAC
Partners, LLC (2009 to present); Founder and Managing
Member of JAC Management, LLC (1998 to present);
Principal of Advalurem Group (2012). Mr. Carus’ extensive
experience in real estate finance and investment is the primary
reason, amongst many, why Mr. Carus serves on our Board.

2011

1995

III

Anna T. Chew

56 Vice President and Chief Financial Officer (1995 to
present), Controller (1991 to 1995) and Director. Certified
Public Accountant; Interim Chief Financial Officer (March
2012 to July 2012), Treasurer (2010 to 2013), Chief Financial
Officer (1991 to 2010) and Director (1993 to 2004, and 2007
to present) of Monmouth Real Estate Investment Corporation,
an affiliated company. Ms. Chew’s extensive public
accounting, finance and real estate industry experience is the
primary reason, amongst many, why Ms. Chew serves on our
Board.

Matthew I. Hirsch

Independent Director. Attorney at Law (1985 to present)
Law Office of Matthew I. Hirsch. Adjunct Professor of Law,
Widener University School of Law (1993 to present). Mr.
Hirsch’s experience with real estate transactions, legal issues
relating to real estate and the real estate industry is the primary
reason, amongst many, why Mr. Hirsch serves on our Board.

2013

Craig Koster

Eugene W. Landy

39 General Counsel (2015 to present), In-house Counsel (2012
to 2014). Attorney at Law (2001 to present); Assistant
Corporation Counsel at the New York City Law Department
(2007 to 2012).

N/A

81 Chairman of the Board (1995 to present), President and
Chief Executive Officer (1969 to 1995), and Director.
Attorney at Law; Founder, Chairman of the Board and Director
(1968 to present), President and Chief Executive Officer (1968
to 2013) of Monmouth Real Estate Investment Corporation, an
affiliated company. As our founder and Chairman, Mr.
Landy’s unparalleled experience in real estate investing is the
primary reason, amongst many, why Mr. Landy serves on our
Board.

1969

III

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Name

Age

Present Position with the Company; Business
Experience During Past Five Years; Other
Directorships

Director
Since

Class
Type
(1)

Michael P. Landy

2011

52 Director. Executive Vice President (2010 to 2012), Vice
President – Investments (2001 to 2010). President and Chief
Executive Officer (2013 to present), Chief Operating Officer
(2011 to 2013), Executive Vice President (2009 to 2010),
Executive Vice President – Investments (2006 to 2009), Vice
President – Investments (2001 to 2006) and Director (2007 to
present) of Monmouth Real Estate Investment Corporation, an
affiliated company. Mr. Landy’s extensive experience in real
estate finance, investment, capital markets and operations
management is the primary reason, amongst many, why Mr.
Landy serves on our Board.

Samuel A. Landy

Stuart D. Levy

James E. Mitchell

President and Chief Executive Officer (1995 to present),
Vice President (1991-1995) and Director. Attorney at Law;
Director (1989
to present) of Monmouth Real Estate
Investment Corporation, an affiliated company. Mr. Landy’s
role as our President and Chief Executive Officer and his
extensive experience in real estate investment, operations
management and REIT leadership is the primary reason,
amongst many, why Mr. Landy serves on our Board.

Independent Director. Vice President in the Real Estate
Finance Group at Helaba-Landesbank Hessen-Thuringen
(2006 to present). Mr. Levy’s extensive real estate background
is the primary reason, amongst many, why Mr. Levy serves on
our Board.

Independent Director. Attorney at Law; General Partner,
Mitchell Partners, L.P. (1979 to present); President, Mitchell
Capital Management, Inc. (1987 to present). Mr. Mitchell’s
extensive experience in real estate investment is the primary
reason, amongst many, why Mr. Mitchell serves on our Board.

1992

III

2011

III

2001

Richard H. Molke

Independent Director. General Partner of Molke Family
Limited Partnership (1994 to present). Mr. Molke’s extensive
experience as an investor and in management is the primary
reason, amongst many, why Mr. Molke serves on our Board.

1986

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Name

Age

Stephen B. Wolgin

Present Position with the Company; Business
Experience During Past Five Years; Other
Directorships

Director
Since

Class
Type
(1)

2007

Independent Director. Managing Director of U.S. Real
Estate Advisors, Inc., a real estate advisory services group
based in New York (2000 to present); Partner with the Logan
Equity Distressed Fund (2007-present); Director (2003 to
present) of Monmouth Real Estate Investment Corporation, an
affiliated company; Prior affiliations with J.P. Morgan,
Odyssey Associates, The Prudential Realty Group, Standard &
Poor’s Corporation, and Grubb and Ellis. Mr. Wolgin’s
extensive experience as a real estate and finance consultant and
experience in the real estate industry is the primary reason,
amongst many, why Mr. Wolgin serves on our Board.

(1) Class III, I and II Directors have terms expiring at the annual meetings of the Company’s shareholders to be held in 2015,

2016 and 2017, respectively, and when their respective successors are duly elected and qualify..

Family Relationships

There are no family relationships between any of the Directors or executive officers of the Company, with
the exception of Samuel A. Landy, President, Chief Executive Officer and a Director of the Company, and Michael
P. Landy, a Director of the Company, who are the sons of the Company’s founder, Eugene W. Landy, who is the
Chairman of the Board and a Director of the Company.

Audit Committee

The Company has a separately-designated standing audit committee established in accordance with section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Stephen B.
Wolgin (who serves as Chairman of the Audit Committee), James E. Mitchell, Jeffrey A. Carus and Stuart D. Levy.
The Company’s Board of Directors has determined that Mr. Mitchell, Mr. Wolgin, Mr. Levy and Mr. Carus are
“independent” as defined by the rules of the SEC and the listing standards of the NYSE, “financially literate” within
the meaning of the rules of the NYSE and “audit committee financial experts” within the meaning of the rules of the
SEC. The audit committee operates under the Audit Committee Charter which is available on the Company’s website
at www.umh.com. The charter is reviewed annually for adequacy.

Section 16(a) Beneficial Ownership Reporting Compliance

There have been no delinquent filers pursuant to Item 405 of regulation S-K, to the best of management’s

knowledge.

Code of Ethics

The Company has adopted the Code of Business Conduct and Ethics applicable to its Chief Executive Officer
and Chief Financial Officer, as well as the Company’s other officers, directors and employees (the Code of Ethics).
The Code of Ethics can be found at the Company’s website at www.umh.com. The Code of Ethics is also available
in print to any person without charge who requests a copy by writing or telephoning us at the following address and
telephone number: UMH Properties, Inc., Attention: Stockholder Relations, 3499 Route 9 North, Suite 3-C, Juniper
Business Plaza, Freehold, New Jersey 07728, (732) 577-9997. The Company will satisfy any disclosure requirements
under Item 5.05 of Form 8-K regarding a waiver from any provision of the Code of Ethics for principal officers or
directors by disclosing the nature of such amendment of waiver on our website.

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Item 11 – Executive Compensation

The Company will file its definitive Proxy Statement for its 2015 Annual Meeting of Stockholders within
the period required under the applicable rules of the Securities and Exchange Commission. Additional information
required by
the caption "ELECTION OF DIRECTORS”, “EXECUTIVE
COMPENSATION” and “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS” of such Proxy
Statement and is incorporated herein by reference.

included under

this Item

Compensation Discussion and Analysis

Overview of Compensation Program

The Compensation Committee (for purposes of this analysis, the "Committee") of the Board has been appointed
to discharge the Board's responsibilities relating to the compensation of the Company's executive officers. The
Committee has the overall responsibility for approving and evaluating the executive officer compensation plans,
policies and programs of the Company. The Committee's primary objectives include serving as an independent and
objective party to review such compensation plans, policies and programs. The Committee has not retained or
obtained the advice of a compensation committee consultant for determining or recommending the amount of
executive or director compensation.

Throughout this report, the individuals who served as the Company’s chief executive officer and chief
financial officer during fiscal 2014, as well as certain other individuals included in the Summary Compensation Table
presented below in Item 11 of this report, are sometimes referred to in this report as the "named executive officers."

Compensation Philosophy and Objectives

The Committee believes that a well-designed compensation program should align the goals of the chief
executive officer with the goals of the shareholders, and that a significant part of the executive's compensation, over
the long term, should be dependent upon the value created for shareholders. In addition, all executives should be held
accountable through their compensation for the performance of the Company, and compensation levels should also
reflect the executive's individual performance in an effort to encourage increased individual contributions to the
Company's performance. The compensation philosophy, as reflected in the Company's employment agreements with
its executives, is designed to motivate executives to focus on operating results and create long-term shareholder value
by:

• establishing a plan that attracts, retains and motivates executives through compensation that is competitive

with a peer group of other publicly-traded real estate investment trusts, or REITs;

• linking a portion of executives' compensation to the achievement of the Company's business plan by using

measurements of the Company's operating results and shareholder return; and

• building a pay-for-performance system that encourages and rewards successful initiatives within a team

environment.

The Committee believes that each of the above factors is important when determining compensation levels
for named executive officers. The Committee reviews and approves the employment contracts for the Chairman of
the Board and the President, as well as other named executive officers, including performance goals and objectives.
The Committee annually evaluates performance of these executive officers in light of those goals and objectives. The
Committee considers the Company's performance, relative stockholder return, the total compensation provided to
comparable officers at similarly-situated companies, and compensation given to named executive officers in prior
years. The Committee uses the Residential Sector of the Real Estate Compensation Survey (the survey), produced
under the guidance of the National Association of Real Estate Investment Trusts (NAREIT), as a guide to setting
compensation levels. Participant company data is not presented in a manner that specifically identifies any named
individual or company. This survey details compensation by position type and company size with statistical salary
and bonus information for each position. The Company’s salary and bonus amounts are compared to the ranges
presented for reasonableness. The Committee believes executive compensation packages provided by the Company

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to its executive officers should include both base salaries and annual bonus awards that reward corporate and
individual performance, as well as give incentives to executives to meet or exceed established goals.

Role of Executive Officers in Compensation Decisions

The Committee makes all final compensation decisions for the Company's named executive officers. The
Chairman of the Board and the President annually review the performance of the other named executive officers and
then present their conclusions and recommendations to the Committee with respect to base salary adjustments and
annual cash bonus and stock option and restricted stock awards. The Committee exercises its own discretion in
modifying any recommended adjustments or awards, but does consider the recommendations from management who
work closely with the other named executive officers.

Role of Grants of Stock Options and Restricted Stock in Compensation Analysis

The Committee views the grant of stock options and restricted stock awards as a form of long-term
compensation. The Committee believes that such grants promote the Company's goal of retaining key employees,
and aligns the key employee's interests with those of the Company's shareholders from a long-term perspective. The
number of options or shares of restricted stock granted to each employee is determined by consideration of various
factors including, but not limited to, the employee’s contribution, title, responsibilities and years of service.

Role of Employment Agreements in Determining Executive Compensation

Most of the Company's currently employed named executive officers are parties to employment agreements.
These agreements provide for base salaries, bonuses and customary fringe benefits. Other key elements of the
Company’s compensation program for the named executive officers are stock options, restricted stock awards and
perquisites and other benefits. Each of these is addressed separately below. In determining initial compensation, the
Committee considers all elements of a named executive officer’s total compensation package in comparison to current
market practices and other benefits.

Shareholder Advisory Vote

One way to determine if the Company’s compensation program reflects the interests of shareholders is
through their non-binding vote. At the Annual Meeting of Shareholders held on June 12, 2014, the Company’s
shareholders approved by their advisory vote the compensation of the named executive officers.

Consistent with both the Board of Directors’ recommendations and the results of the shareholder vote, the
Company’s Board of Directors considered the recommendation of the shareholders and has determined that the
Company (i) will not make any material changes to the manner in which executive compensation is awarded, and (ii)
will hold advisory votes on the compensation of the Company’s named executive officers every three
years. Accordingly, the next stockholder advisory vote on executive compensation will be held at the Annual Meeting
of Shareholders in June 2017.

Base Salaries

Base salaries are paid for ongoing performance throughout the year. In order to compete for and retain
talented executives who are critical to the Company's long-term success, the Committee has determined that the base
salaries of named executive officers should approximate those of executives of other equity REITs that compete with
the Company for employees, investors and business, while also taking into account the named executive officers'
performance and tenure and the Company's performance relative to its peer companies within the REIT industry using
the NAREIT Compensation Survey described above.

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Bonuses

In addition to the provisions for base salaries under the terms of their employment agreements, the President
and Chief Executive Officer is entitled to receive an annual maximum cash bonus of up to 21% of base salary, based on
the achievement of certain performance goals set by the Committee. In order to receive a bonus, FFO must have increased
3% during the year, or 9% over the three year contract period. The following are the performance goals for the President:

There shall be a minimum of 175 new home sales per year. (Bonus of 10% of base salary.)

Occupancy to increase 1%, with not more than 10% of the increase being from rentals. (Bonus of 10% of base
salary.)

Acquisition of at least 350 spaces per year. (Bonus of 7% of base salary.)

Bonuses awarded to the other named executive officers are recommended by the Chairman of the Board and
the President and Chief Executive Officer and are approved by the Committee. The Company believes that short-
term rewards in the form of cash bonuses to senior executives generally should reflect short-term results and should
take into consideration both the profitability and performance of the Company and the performance of the individual,
which may include comparing such individual’s performance to the preceding year, reviewing the breadth and nature
of the senior executives’ responsibilities and valuing special contributions by each such individual. In evaluating
performance of the Company annually, the Compensation Committee considers a variety of factors, including, among
others, Funds From Operations (FFO), Core Funds From Operations (Core FFO), net income, growth in asset size,
occupancy and total return to shareholders. The Company considers FFO to be an important measure of an equity
REIT’s operating performance and has adopted the definition suggested by the National Association of Real Estate
Investment Trusts (NAREIT), which defines FFO to mean net income computed in accordance with accounting
principles generally accepted in the United States of America (U.S. GAAP) excluding gains or losses from sales of
property, plus depreciation and amortization. The Company defines Core FFO as FFO plus acquisition costs. The
Company considers FFO and Core FFO to be a meaningful, additional measures of operating performance primarily
because it excludes the assumption that the value of its real estate assets diminishes predictably over time and because
industry analysts have accepted these as performance measures.

Other factors considered include the employee’s title and years of service. The employee’s title generally
reflects the employee’s responsibilities and the employee’s years of service may be considered in determining the
level of bonus in comparison to base salary. The Committee has declined to use specific performance formulas with
respect to the other named executive officers, believing that with respect to Company performance, such formulas do
not adequately account for many factors, including, among others, the relative performance of the Company compared
to its competitors during variations in the economic cycle, and that with respect to individual performance, such
formulas are not a substitute for the subjective evaluation by the Committee of a wide range of management and
leadership skills of each of the senior executives.

Stock Options and Restricted Stock Awards

Stock options and restricted stock awards are recommended by the Chairman of the Board and the President
and Chief Executive Officer. In making its decisions, the Committee does not use an established formula or focus on
a specific performance target. The Committee recognizes that often outside forces beyond the control of management,
such as economic conditions, changing real estate markets and other factors, may contribute to less favorable near
term results even when sound strategic decisions have been made by the senior executives to position the Company
for longer term profitability. Thus, the Compensation Committee also attempts to identify whether the senior
executives are exercising the kind of judgment and making the types of decisions that will lead to future growth and
enhanced asset value, even if the same are difficult to measure on a current basis. For example, in determining
appropriate stock option and restricted stock awards, the Compensation Committee considers, among other matters,
whether the senior executives have executed strategies that will provide adequate funding or appropriate borrowing
capacity for future growth, whether acquisition strategies have been developed to ensure a future stream of reliable
and increasing revenues for the Company, whether the selection of properties evidence appropriate risk management,

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including risks associated with real estate markets, and whether the administration of staff size and compensation
appropriately balances the current and projected operating requirements of the Company with the need to effectively
control overhead costs.

In fiscal 2014, the Compensation Committee received the recommendations from the Chairman of the Board
and the President and Chief Executive Officer for the number of options or restricted stock to be awarded. The factors
that were considered in awarding the stock options and restricted stock included the following progress that was made
by management:

 Located, acquired and integrated fourteen manufactured home communities without placing undue burden

on liquidity;

 Achieved year-over-year portfolio growth of 12%, resulting in over 15,000 developed home sites;



Increased occupancy from 81.5% to 82.3% and same store occupancy from 81.5% to 83.2%;

Increased our portfolio of rental homes by 34% year-over-year, resulting in approximately 2,600 homes with
an occupancy of 91.5%;

 Raised approximately $33 million in equity via the DRIP;

 Maintained a low weighted average interest rate at 4.8%;

 Managed general and administrative costs to an appropriate level; and

 Maintained cash distributions to shareholders;

The individual awards were allocated based on the named executive officers’ individual contributions to
these accomplishments. In addition, the awards were compared to each named officers’ total compensation and
compared with comparable real estate investment trusts (REITs) using the annual Compensation Survey published by
NAREIT as a guide for setting total compensation.

Perquisites and Other Personal Benefits

The Company's employment agreements provide the named executive officers with perquisites and other
personal benefits that the Company and the Committee believe are reasonable and consistent with its overall
compensation program to better enable the Company to attract and retain superior employees for key positions. The
Committee periodically reviews the levels of perquisites and other personal benefits provided to the named executive
officers.

The named executive officers are provided the following benefits under the terms of their employment
agreements: an allotted number of paid vacation weeks; eligibility for the executives, spouses and dependents in all
Company sponsored employee benefits plans, including 401(k) plan, group health, accident, and life insurance, on
such terms no less favorable than applicable to any other executive; use of an automobile; and, supplemental disability
insurance, at the Company's cost, as agreed to by the Company and the named executive officer. Attributed costs of
the personal benefits described above for the named executive officers for the fiscal year ended December 31, 2014,
are included in “All Other Compensation” of the Summary Compensation Table provided below under Item 11 of this
report.

Payments upon Termination or Change in Control

In addition, the named executive officers' employment agreements each contain provisions relating to change
in control events and severance upon termination for events other than for cause or good reason (as defined under the
terms of the employment agreements). These change in control and severance terms are designed to promote stability
and continuity of senior management. Information regarding these provisions is included in “Employment

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Agreements” provided below in Item 11 of this report. There are no other agreements or arrangements governing
change in control payments.

Evaluation

Mr. Eugene Landy is employed under an amended employment agreement with the Company. Based on the
Committee’s evaluation of his performance, his base compensation under his amended contract was increased from
$175,000, which had remained unchanged since January 1, 2004, to $250,000 per year, effective October 1, 2014.
Mr. Landy also received bonuses totaling $34,615 primarily based on performance, including growth of the Company.
Additionally, Mr. Eugene Landy received $43,250 in director’s fees and fringe benefits. In evaluating Mr. Eugene
Landy’s leadership performance, during 2011, the Committee awarded Mr. Eugene Landy an Outstanding Leadership
Achievement Award (Award) in the amount of $250,000 per year for three years. This Award was to recognize Mr.
Eugene Landy’s exceptional leadership as Chairman of the Board for over 40 years.

The Committee also reviewed the progress made by Mr. Samuel A. Landy, President and Chief Executive
Officer, including FFO and Core FFO. Mr. Samuel Landy is under an employment agreement with the Company.
His base compensation was $416,745 for 2014. Mr. Samuel Landy also received bonuses totaling $46,812 and
director’s fees and fringe benefits totaling $53,450. Bonuses were primarily based upon achievement of certain
performance goals.

Ms. Anna Chew is under an employment agreement with the Company. Her base compensation under this
contract is $316,841 for 2014. Ms. Chew also received bonuses totaling $37,186 and director’s fees and fringe benefits
totaling $53,450. Bonuses were based on performance, including growth of the Company, recommended by the
Chairman of the Board and the President and Chief Executive Officer and approved by the Committee.

The Committee has also approved the recommendations of the Chairman of the Board and the President and
Chief Executive Officer concerning the other named executives’ annual salaries, bonuses, option and restricted stock
grants and fringe benefits.

In addition to its determination of the executive's individual performance levels for 2014, the Committee also
compared the executive's total compensation for 2014 to that of similarly-situated personnel in the REIT industry
using the NAREIT Compensation Survey described above. The Company’s salary and bonus amounts were compared
to the ranges presented for reasonableness. The Company’s total compensation fell in the lowest range (25th
percentile) of this survey.

Risk Management

The Board of Directors does not believe that the Executive Compensation Program raises any risks that are
reasonably likely to have a material adverse effect on the Company. Executive officers are compensated on a fixed
salary basis and have not been awarded any bonuses or other compensation that might encourage the taking of
unnecessary or excessive risks that threaten the long-term value of the Company. The Board has attempted to align
the interests of the Board of Directors and the executive officers with the long-term interests of the Company and the
Shareholders through grants of stock options and restricted stock awards, thereby giving the Board and executive
officers additional incentives to protect the long-term value of the Company.

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Compensation Committee Report

The Compensation Committee (Compensation Committee) of the Board of Directors (Board) of UMH
Properties, Inc. has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of
Regulation S-K with management and, based on such review and discussions, the Compensation Committee
recommended to the Board that the Compensation Discussion and Analysis be included in this report.

Compensation Committee:

Jeffrey A. Carus
Stuart D. Levy
James E. Mitchell
Stephen B. Wolgin

Summary Compensation Table

The following Summary Compensation Table shows compensation paid by the Company for services
rendered during 2014, 2013 and 2012 to the named executive officers. There were no other executive officers whose
aggregate cash compensation exceeded $100,000:

Name and
Principal Position

Year

Salary

Bonus

Option
Awards (6)

Restricted
Stock
Awards (7)

Eugene W. Landy
Chairman of the
Board

2014 $193,750
175,000
2013
175,000
2012

$34,615 $ 98,000
142,000
331,731
-0-
250,000

Samuel A. Landy
President and Chief
Executive Officer

2014
2013
2012

416,745
385,000
378,000

46,812
180,800
89,792

2014
Anna T. Chew (4)
Vice President and
2013
Chief Financial Officer 2012

316,841
301,754
287,385

37,186
121,053
38,025

Craig Koster (5)
General Counsel

2014
2013
2012

136,592
120,000
9,231

10,077
3,808
200

49,000
71,000
-0-

4,900
7,100
-0-

$-0-
-0-
123,490

232,750
-0-
250,790

-0-
-0-
123,490

-0-
-0-
-0-

Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings (8)

All Other
Compensation

Total

$-0- $ 43,250 (1) $369,615
836,356
645,615

37,625 (1)
38,552 (1)

150,000
58,573

-0-
-0-
-0-

53,450 (2)
47,625 (2)
38,925 (2)

798,757
684,425
757,507

53,450 (2)
47,625 (2)
41,507 (2)

456,477
541,432
490,407

3,145 (3)
-0-
-0-

154,174
130,908
9,431

(1) Represents Director’s fees of $43,250, $37,625 and $29,125 for 2014, 2013 and 2012, respectively, and fringe benefits.

(2) Represents Director’s fees of $43,250, $37,625 and $29,125 for 2014, 2013 and 2012, respectively, fringe benefits and discretionary

contributions by the Company to the Company’s 401(k) Plan allocated to an account of the named executive officer.

(3) Represents discretionary contributions by the Company to the Company’s 401(k) Plan allocated to an account of the named executive

officer.

(4) Prior to July 2012, approximately 25% of her salary compensation was allocated to and reimbursed by MREIC, pursuant to a cost sharing
agreement between the Company and MREIC. Effective July 2012, 100% of her salary compensation is allocated to the Company.

(5) Mr. Koster joined the Company on November 26, 2012. Effective January 1, 2015, Mr. Koster was promoted to General Counsel.

(6) These values were established using the Black-Scholes stock option valuation model. The following assumptions were used in the model
for 2014: expected volatility of 27.12%; risk-free interest rate of 2.23%; dividend yield of 7.14%; expected life of the options of eight
years; and forfeitures of $-0-. The following assumptions were used in the model for 2013: expected volatility of 32.36%; risk-free interest
rate of 1.98%; dividend yield of 6.67%; expected life of the options of eight years; and forfeitures of $-0-. The actual value of the options

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will depend upon the performance of the Company during the period of time the options are outstanding and the price of the Company’s
common stock on the date of exercise.

(7) The grant date fair values were established based on the number of shares granted and the share prices as follows: 2014, 1/15/14 - $9.31;
2012, 1/19/12 for Mr. Samuel Landy – $9.56; and 2012, 8/31/12 for Mr. Eugene Landy and Ms. Chew - $11.23. Such shares vest over
five years.

(8) Accrual for pension benefits in accordance with Mr. Landy’s employment agreement.

Stock Compensation Plan

On June 13, 2013, the shareholders approved and ratified the Company's 2013 Stock Option and Stock Award
Plan (the 2013 Plan) authorizing the grant of stock options or restricted stock awards to Directors, officers and key
employees. The maximum number of shares that may be issued under the 2013 Plan is 3,000,000 shares. If and to
the extent that an award made under the 2013 Plan is forfeited, terminated, expires or is canceled unexercised, the
number of shares associated with the forfeited, terminated, expired or canceled portion of the award shall again become
available for additional awards under the 2013 Plan. The 2013 Plan replaced the Company's 2003 Stock Option and
Award Plan, as amended, which, pursuant to its terms, terminated in 2013. The outstanding options under the 2003
Stock Option and Award Plan, as amended, remain outstanding until exercised, forfeited or expired. Not more than
200,000 shares of the Company’s common stock may be granted as options in any one fiscal year to a participant
under the 2013 Plan. In general, each option may be exercised only after one year of continued service with the
Company. The maximum number of shares underlying restricted stock awards that may be granted in any one fiscal
year to a participant shall be 100,000.

Grants of Plan-Based Awards

The following table sets forth, for the named executive officers in the Summary Compensation Table,

information regarding individual grants of stock options made during the year ended December 31, 2014:

Number of
Shares of
Restricted
Stock

Number of
Shares
Underlying
Options (1)

Grant
Date

Name

Exercise Price of
Option Award or Fair
Value Per Share at
Grant Date of
Restricted Stock
Award

Grant
Date Fair
Value (2)

Eugene W. Landy

6/11/2014

-0-

100,000

$9.85

$98,000

Samuel A. Landy

1/15/2014
6/11/2014

25,000
-0-

Anna T. Chew

6/11/2014

Craig Koster

6/11/2014

-0-

-0-
50,000

50,000

5,000

9.31
9.85

232,750
49,000

9.85

49,000

9.85

4,900

(1) These options vest 1 year and expire 8 years from grant date.
(2) The values of the shares underlying options were established using the Black-Scholes stock option valuation model. The following
assumptions were used in the model: expected volatility of 27.12%; risk-free interest rate of 2.23%; dividend yield of 7.14%; expected life
of the options of eight years; and forfeitures of $-0-. The actual value of the options will depend upon the performance of the Company
during the period of time the options are outstanding and the price of the Company’s common stock on the date of exercise. The value of
the shares of restricted stock was based on the closing price of the shares on the grant date.

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Outstanding Equity Awards at Fiscal Year-End

The following table sets forth for the named executive officers in the Summary Compensation Table,

information regarding stock options and restricted stock outstanding at December 31, 2014:

Option Awards (1)

Restricted Stock Awards (2)

Number of
Securities
Underlying
Unexercised
Options
Exercisable

Number of
Securities
Underlying
Unexercised
Options
UnExercisable

Option
Exercise
Price

Option
Expiration
Date

100,000
-0-

-0-
100,000

$10.08
$9.85

06/26/21
06/11/22

5,800
44,200
7,700
42,300
14,000
61,000
10,900
14,100
50,000
-0-

10,000
50,000
-0-

5,000
-0-

-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
50,000

-0-
-0-
50,000

$17.06
$15.51
$12.97
$11.79
$7.12
$6.47
$9.13
$8.30
$10.08
$9.85

01/03/15
01/03/15
01/08/16
01/08/16
01/07/17
01/07/17
01/08/18
01/08/18
06/26/21
06/11/22

$14.21
$10.08
$9.85

07/16/15
06/26/21
06/11/22

-0-
5,000

$10.08
$9.85

06/26/21
06/11/22

Name

Eugene W. Landy
Eugene W. Landy
Eugene W. Landy

Samuel A. Landy
Samuel A. Landy
Samuel A. Landy
Samuel A. Landy
Samuel A. Landy
Samuel A. Landy
Samuel A. Landy
Samuel A. Landy
Samuel A. Landy
Samuel A. Landy
Samuel A. Landy

Anna T. Chew
Anna T. Chew
Anna T. Chew
Anna T. Chew

Craig Koster
Craig Koster
Craig Koster

Number
of Shares
that have
not Vested

Market
Value of
Shares that
have not Vested

16,489

$157,470

67,141

$641,197

16,489

$157,470

-0-

$-0-

(1) Stock options vest 1 year from the date of grant.

(2) Restricted stock awards vest over 5 years, 20% per year, from the date of grant. The following is the vesting schedule for the shares that
have not yet vested: Mr. Eugene Landy – 8,332 shares, 5,515 shares and 2,642 shares in 2015, 2016 and 2017 respectively; Mr. Samuel
Landy – 25,734 shares, 18,696 shares, 11,907 shares, 5,402 shares, and 5,402 shares in 2015, 2016, 2017, 2018 and 2019, respectively;
and Ms. Anna Chew, - 8,332 shares, 5,515 shares and 2,642 shares in 2015, 2016 and 2017 respectively. Market value is based on the
closing price of our common stock on December 31, 2014 of $9.55.

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Option Exercises and Stock Vested

The following table sets forth summary information concerning option exercises and vesting of restricted

stock awards for each of the named executive officers during the year ended December 31, 2014:

Option Awards

Restricted Stock Awards

Number of
Shares
Acquired on
Exercise
(#)

Value
Realized on
Exercise
($)

Number of
Shares
Acquired on
Vesting
(#)

Value realized
on
Vesting
($) (1)

-0-
-0-
20,000
-0-

$-0-
-0-
151,200
-0-

7,999
19,329
7,999
-0-

$81,027
189,940
81,027
-0-

Name

Eugene W. Landy
Samuel A. Landy
Anna T. Chew
Craig Koster

(1) Value realized based on the closing price of the shares on the NYSE as of the date of vesting.

Employment Agreements

The Company has an Employment Agreement with Mr. Eugene W. Landy, Chairman of the Board. Under
this agreement, prior to January 1, 2004, Mr. Landy received an annual base compensation of $150,000 (as amended)
plus bonuses and customary fringe benefits, including health insurance, participation in the Company’s 401(k) Plan,
stock options, five weeks’ vacation and use of an automobile. Additionally, there may be bonuses voted by the Board
of Directors. The Employment Agreement is terminable by either party at any time subject to certain notice
requirements. On severance of employment by the Company, Mr. Landy will receive severance of $450,000, payable
$150,000 on severance and $150,000 on the first and second anniversaries of severance. In the event of disability,
Mr. Landy’s compensation will continue for a period of three years, payable monthly. On retirement, Mr. Landy will
receive a pension of $50,000 a year for ten years, payable in monthly installments. In the event of death, Mr. Landy’s
designated beneficiary will receive $450,000, $100,000 thirty days after death and the balance one year after death.
The Employment Agreement automatically renews each year for successive one-year periods. Effective January 1,
2004, this agreement was amended to increase Mr. Landy's annual base compensation to $175,000. Additionally, Mr.
Landy's pension benefit of $50,000 per year has been extended for an additional three years. On April 14, 2008, the
Company executed a Second Amendment to the Employment Agreement with Mr. Landy (the second
amendment). The second amendment provides that in the event of a change in control, Eugene W. Landy shall receive
a lump sum payment of $1,200,000, provided the sale price of the Company is at least $16 per share of common stock.
A change of control shall be defined as the consummation of a reorganization, merger, share exchange, consolidation,
or sale or disposition of all or substantially all of the assets of the Company. This change of control provision shall
not apply to any combination between the Company and MREIC. Payment shall be made simultaneously with the
closing of the transaction, and only in the event that the transaction closes. During 2013, the Board of Directors
extended Mr. Landy’s pension benefit for an additional three years, through 2016. Effective October 1, 2014, the
Company amended the employment agreement with Mr. Landy, increasing his base salary from $175,000 to $250,000.

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MREIC, Mr. Samuel Landy will have the right to extend and renew this employment agreement so that the expiration
date will be three years from the date of merger, sale or change of voting control, or the employee may terminate the
employment agreement and be entitled to receive one year’s compensation in accordance with the agreement. If there
is a termination of employment by the Company for any reason, either involuntary or voluntary, including the death
of the employee, the employee shall be entitled to the greater of the salary due under the remaining term of the
agreement or one year’s compensation at the date of termination, paid monthly over the remaining term or life of the
agreement. Mr. Landy is currently negotiating a new employment agreement.

Effective January 1, 2012, the Company and Anna T. Chew entered into a new three-year employment
agreement, under which Ms. Chew receives an annual base salary of $287,385 for 2012, $301,754 for 2013 and
$316,841 for 2014, plus bonuses and customary fringe benefits. Ms. Chew will also receive four weeks of vacation,
reimbursement of reasonable and necessary business expenses and use of an automobile. The Company will reimburse
Ms. Chew for the cost of a disability insurance policy such that, in the event of the employee’s disability for a period
of more than 90 days, the employee will receive benefits up to 60% of her then-current salary. In the event of a
merger, sale or change of voting control of the Company, excluding transactions between the Company and MREIC,
the employee will have the right to extend and renew this employment agreement so that the expiration date will be
three years from the date of merger, sale or change of voting control, or the employee may terminate the employment
agreement and be entitled to receive one year’s compensation in accordance with the agreement. If there is a
termination of employment by the Company for any reason, either involuntary or voluntary, including the death of the
employee, other than a termination for cause as defined by the agreement, the employee shall be entitled to the greater
of the salary due under the remaining term of the agreement or one year’s compensation at the date of termination,
paid monthly over the remaining term or life of the agreement. Ms. Chew is currently negotiating a new employment
agreement.

Potential Payments upon Termination of Employment or Change-in-Control

Under the terms of the employment agreements of the named executive officers, such named executive
officers are entitled to receive the following estimated payments and benefits upon a termination of employment or
voluntary resignation (with or without a change-in-control). These disclosed amounts are estimates only and do not
necessarily reflect the actual amounts that would be paid to the named executive officers, which would only be known
at the time that they become eligible for payment and would only be payable if a termination of employment, or
voluntary resignation, were to occur. The table below reflects the amount that could be payable under the various
arrangements assuming that the termination of employment had occurred at December 31, 2014.

Termination
Not for Cause
or Good
Reason on
12/31/14

Voluntary
Resignation
on 12/31/14

Termination
for Cause on
12/31/14

Termination Not
for Cause or
Good Reason
(After a Change-
in-Control) on
12/31/14

Disability or
Death on
12/31/14

Eugene W. Landy
Samuel A. Landy
Anna T. Chew
Craig Koster

$450,000 (1)
416,745 (4)
316,841 (4)
-0-

$450,000 (1)
416,745 (4)

-0-
-0-

$1,650,000 (2) $750,000 (3)
416,745 (4)
316,841 (4)
-0-

416,745 (4)
316,841 (4)
-0-

(1) Consists of severance payments of $450,000, payable $150,000 per year for three years.

(2) Mr. Landy shall receive a lump-sum payment of $1,200,000 in the event of a change in control, provided that the sale price of the
Company is at least $16 per share of common stock. In addition, if Mr. Landy’s employment agreement is terminated, he receives
severance payments of $450,000, payable $150,000 per year for three years.

(3)

In the event of a disability, as defined in the agreement, Mr. Landy shall receive disability payments equal to his base salary for a period
of three years. He has a death benefit of $450,000 payable to Mr. Landy’s beneficiary.

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(4) Represents one year salary. The respective employment agreements provides for the greater of the salary due under the remaining term

of the agreement or one year. The respective employment agreements also provide for death benefits of the same amount.

The Company retains the discretion to compensate any officer upon any future termination of employment

or change-in control.

Director Compensation

Directors receive a fee of $4,000 for each Board meeting attended, $500 for each Board phone meeting
attended, and an additional fixed annual fee of $26,000 payable quarterly. Directors appointed to board committees
receive $1,200 for each committee meeting attended. Effective January 1, 2015, the fixed annual fee was increased to
$31,000 payable quarterly.

The table below sets forth a summary of director compensation for the year ended December 31, 2014:

Director

Annual Board
Cash Retainer

Meeting Fees

Committee
Fees

Jeffrey A. Carus (2) (3)
Matthew I. Hirsch
Charles Kaempffer (1)
Michael P. Landy
Stuart Levy (2)
James E. Mitchell (2)
Richard H. Molke
Eugene Rothenberg (1)
Stephen B. Wolgin (2)

$27,250
27,250
27,250
27,250
27,250
27,250
27,250
27,250
27,250

$16,000
16,000
16,000
16,000
16,000
16,000
16,000
16,000
16,000

$10,100
-0-
4,800
-0-
10,100
10,100
-0-
-0-
10,100

Total Fees
Earned or Paid
in Cash

$53,350
43,250
48,050
43,250
53,350
53,350
43,250
43,250
53,350

$ 245,250

$ 144,000

$ 45,200

$ 434,450

As of December 31, 2014, the aggregate number of unvested restricted shares of stock held by each director
was as follows: Mr. Carus - 1,237; Mr. Hirsch - 0; Mr. Kaempffer - 0; Mr. M. Landy - 16,488; Mr. Levy - 714; Mr.
Mitchell - 1,237; Mr. Molke - 1,237; Mr. Rothenberg - 1,237 and Mr. Wolgin - 1,237.

(1) Mr. Kaempffer & Mr. Rothenberg are Emeritus directors which are retired directors who are not entitled to vote on board resolutions;

however they receives directors’ fees for participation in the board meetings.

(2) Mr. Carus (Chaiman of the Compensation Committee), Mr. Levy, Mr. Mitchell and Mr. Wolgin (Chairman of the Audit Committee and
the Nominating Committee) are the current members of the Audit Committee, the Compensation Committee and the Nominating
committee.

(3) Mr. Carus is the Presiding Director whose role is to preside over the executive sessions of the non-management directors.

(4) Mr. Eugene W. Landy, Mr. Samuel A. Landy and Ms. Anna T. Chew are inside directors. As such, their director compensation is included

in the Summary Compensation Table.

Pension Benefits and Nonqualified Deferred Compensation Plans

Except as provided in the specific agreements previously described, the Company has no pension or other
post-retirement plans in effect for Officers, Directors or employees or a nonqualified deferred compensation plan. The
present value of accumulated benefit of contractual pension benefits for Mr. Eugene W. Landy is $600,000 as of
December 31, 2014. Payments made during 2014 amounted to $50,000. Mr. Eugene Landy is entitled to receive
payments of $50,000 per year through 2016. The Company’s employees may elect to participate in the Company’s
401(k) Plan.

-59-

- 59 -

Compensation Committee Interlocks and Insider Participation

The Compensation Committee consisted of Mr. Carus, Mr. Levy, Mr. Mitchell and Mr. Wolgin. No member
of the Compensation Committee is a current or former officer or employee of the Company. In 2014, none of our
executive officers served on the compensation committee of any entity, or board of directors of any entity that did not
have a compensation committee, that had one or more of its executive officers serving on our Compensation
Committee. The members of the Compensation Committee did not otherwise have any relationships requiring related-
party disclosure in this Form 10-K.

Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters

The Company will file its definitive Proxy Statement for its 2014 Annual Meeting of Stockholders within
the period required under the applicable rules of the Securities and Exchange Commission. Additional information
required by this Item is included under the caption “ELECTION OF DIRECTORS” and “SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” of such Proxy Statement and is incorporated herein
by reference.

The following table lists information with respect to the beneficial ownership of the Company’s common

stock (Shares) as of December 31, 2014 by:



each person known by the Company to beneficially own more than five percent of the Company’s
outstanding Shares;

the Company’s directors;

the Company’s executive officers; and

all of the Company’s executive officers and directors as a group.

-60-

- 60 -

Unless otherwise indicated, the person or persons named below have sole voting and investment power over
the shares indicated and that person’s address is c/o UMH Properties, Inc., Juniper Business Plaza, 3499 Route 9
North, Suite 3-C, Freehold, New Jersey 07728. In determining the number and percentage of Shares beneficially
owned by each person, Shares that may be acquired by that person under options exercisable within 60 days of
December 31, 2014 are deemed beneficially owned by that person and are deemed outstanding for purposes of
determining the total number of outstanding Shares for that person and are not deemed outstanding for that purpose
for all other shareholders.

Name and Address
of Beneficial Owner

Amount and Nature
of Beneficial Ownership (1)

Percentage
of Shares Outstanding (2)

Wells Fargo and Company
420 Montgomery Street
San Francisco, CA 94104

BlackRock, Inc.
40 East 52nd Street
New York, NY 10022

Rutabaga Capital Management LLC
64 Broad Street
Boston, MA 02109

Jeffrey A. Carus

Anna T. Chew

Matthew I. Hirsch

Craig Koster

Eugene W. Landy

Samuel A. Landy

Michael P. Landy

Stuart Levy

James E. Mitchell

Richard H. Molke

Stephen B. Wolgin

1,682,740

(3)

6.90%

1,572,576

(4)

6.45%

1,332,241

(5)

5.47%

3,484

(6)

217,032

(7)

1,326

(8)

5,228

(9)

1,247,134

(10)

643,115

(11)

323,690

(12)

1,180

182,529

(13)

5.10%

2.61%

1.33%

112,042

(14)

13,314

(15)

UMH Properties, Inc. 401(k) Plan
(UMH 401(k) Plan)

241,453

(16)

Directors and Officers as a group

2,991,527

12.06%

*Less than 1%

___________________________

-61-

- 61 -

(1) Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the Company believes that the persons named in the
table have sole voting and investment power with respect to all Shares listed. Except as indicated in the footnotes to this table, none of the share have been
pledged as collateral.

(2) Based on the number of Shares outstanding on December 31, 2014 which was 24,372,083 Shares.

(3) Based on Schedule 13G/A as of December 31, 2014, filed by Wells Fargo and Company the company owns 1,682,740 Shares. This filing with the SEC by
Wells Fargo and Company indicates that Wells Fargo has sole voting power for 1,411 Shares and sole dispositive power for 1,411 Shares. Wells Fargo also
has shared voting power for 1,614,289 Shares and shared dispositive power for 1,681,329 Shares.

(4) Based on Schedule 13G/A as of December 31, 2014, filed by BlackRock, Inc. the company owns 1,572,576 Shares. This filing with the SEC by BlackRock,

Inc. indicates that BlackRock, Inc. has sole voting power for 1,501,113 Shares and sole dispositive power for 1,572,576 Shares.

(5) Based on Schedule 13G as of December 31, 2014, filed by Rutabaga Capital Management LLC the company owns 1,332,241 Shares. This filing with the SEC
by Rutabaga indicates that Rutabaga Capital Management has sole voting power for 1,124,041 Shares and sole dispositive power for 1,332,241. Rutabaga
also has shared voting power for 208,200 Shares.

(6)

Includes 216 Shares in custodial accounts for Mr. Carus’ minor children under the NJ Uniform Transfers to Minors Act which he disclaims any beneficial
interest but has power to vote.

(7)

Includes (a) 134,693 Shares owned jointly with Ms. Chew’s husband; and (b) 60,000 Shares issuable upon exercise of stock options. Excludes 25,291 Shares
held in the UMH 401(k) Plan. Ms. Chew is a co-trustee of the UMH 401(k) Plan and has shared voting power over the Common Shares held by the UMH
401(k) Plan. She, however, disclaims beneficial ownership of all of the Shares held by the UMH 401(k) Plan, except for the 25,291 Shares held by the UMH
401(k) Plan for her benefit. See note (16) below for information regarding Shares held by the UMH 401(k) Plan. Excludes 50,000 Shares issuable upon the
exercise of a stock option, which stock option is not exercisable until June 11, 2015.

(8)

Includes 1,326 Shares owned jointly with Mr. Hirsch’s wife.

(9)

Includes 5,000 Shares issuable upon exercise of stock options. Excludes 317 Shares held in the UMH 401(k) Plan. Excludes 5,000 Shares issuable upon the
exercise of a stock option, which stock option is not exercisable until June 11, 2015.

(10) Includes (a) 99,872 Shares owned by Mr. Eugene Landy’s wife; (b) 172,608 Shares held by Landy Investments, Ltd. for which Mr. Landy has power to vote;
(c) 66,912 Shares held in the Landy & Landy Employees’ Profit Sharing Plan of which Mr. Landy is a Trustee with power to vote; (d) 57,561 Shares held in
the Landy & Landy Employees’ Pension Plan of which Mr. Landy is a Trustee with power to vote; (e) 100,000 Shares held in the Eugene W. Landy and Gloria
Landy Family Foundation, a charitable trust for which Mr. Landy has power to vote; (f) 18,106 Shares held in Windsor Industrial Park Associates for which
Mr. Landy has power to vote; (g) 23,520 Shares held in Juniper Plaza Associates for which Mr. Landy has power to vote; (h) 100,000 Shares issuable upon
exercise of stock options (i) 367,250 Shares pledged in a margin account; and (j) 277,559 Shares pledged as security for loans. Excludes 100,000 Shares
issuable upon the exercise of a stock option, which stock option is not exercisable until June 11, 2015.

(11) Includes (a) 40,024 Shares owned with Mr. Samuel Landy’s wife; (b) 6,221 Shares in the Samuel Landy Limited Partnership; (c) 48,000 Shares in the EWL
Grandchildren Fund LLC of which Mr. Landy is a co-manager; (d) 250,000 Shares issuable upon exercise of stock options; (e) 24,311 Shares pledged in a
margin account; and (j) 244572 Shares pledged as security for loans. Excludes 55,065 Shares held in the UMH 401(k) Plan. Mr. Landy is a co-trustee of the
UMH 401(k) Plan and has shared voting power over the Common Shares held by the UMH 401(k) Plan. He, however, disclaims beneficial ownership of all
of the Common Shares held by the UMH 401(k) Plan, except for the 55,065 Shares held by the UMH 401(k) Plan for his benefit. See note (16) below for
information regarding Shares held by the UMH 401(k) Plan. Excludes 50,000 Shares issuable upon the exercise of a stock option, which stock option is not
exercisable until June 11, 2015.

(12) Includes (a) 13,200 Shares owned by Mr. Michael Landy’s wife; (b) 48,843 Shares in custodial accounts for Mr. Landy’s children under the NJ Uniform
Transfers to Minors Act in which he disclaims any beneficial interest but has power to vote; (c) 48,000 Shares in the EWL Grandchildren Fund LLC of which
Mr. Landy is a co-manager; (d) 20,000 Shares issuable upon exercise of stock options; (e) 71,500 Shares pledged in a margin account; and (f) 55,000 Shares
pledged as security for loans. Excludes 20,463 Shares held in the UMH 401(k) Plan. See note (16) below for information regarding Shares held by the UMH
401(k) Plan.

(13) Includes 139,143 Shares held by Mitchell Partners in which Mr. Mitchell has a beneficial interest. In addition to the Common Shares reported, Mr. Mitchell

also holds 4,000 of the Preferred A Shares.

(14) Includes 50,563 Shares owned by Mr. Molke’s wife.

(15) In addition to the Shares reported, Mr. Wolgin’s wife owns 600 shares of the Company’s 8.25% Series A Cumulative Redeemable Preferred Stock.

(16) Includes 241,453 Shares held by the UMH 401(k) Plan. Ms. Anna T. Chew and Mr. Samuel A. Landy share voting power over the Shares held by the UMH

401(k) Plan.

___________________________

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- 62 -

Item 13 – Certain Relationships and Related Transactions, and Director Independence

The Company will file its definitive Proxy Statement for its 2015 Annual Meeting of Stockholders within
the period required under the applicable rules of the Securities and Exchange Commission. Additional information
required by this Item is included under the caption “ELECTION OF DIRECTORS” and “CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS” of such Proxy Statement and is incorporated herein by
reference.

Certain relationships and related party transactions are incorporated herein by reference to Part IV, Item

15(a)(1)(vi), Note 8 of the Notes to Consolidated Financial Statements – Related Party Transactions.

No director, executive officer, or any immediate family member of such director or executive officer may
enter into any transaction or arrangement with the Company without the prior approval of the Board of Directors. The
Board of Directors will appoint a Business Judgment Committee consisting of independent directors who are also
independent of the transaction or arrangement. This Committee will recommend to the Board of Directors approval
or disapproval of the transaction or arrangement. In determining whether to approve such a transaction or
arrangement, the Business Judgment Committee will take into account, among other factors, whether the transaction
was on terms no less favorable to the Company than terms generally available to third parties and the extent of the
executive officer’s or director’s involvement in such transaction or arrangement. While the Company does not have
specific written standards for approving such related party transactions, such transactions are only approved if it is in
the best interest of the Company and its shareholders. Additionally, the Company’s Code of Business Conduct and
Ethics, which is found at the Company’s website at www.umh.com, requires Directors, officers and employees to
notify and report a potential or apparent conflict of interest, in the case of a Director or the principal executive officer,
to the Board, in the case of an officer other than the principal executive officer, to the principal executive officer, and,
in the case of an employee, to his or her supervisor. Further, to identify related party transactions, the Company
submits and requires our directors and executive officers to complete director and officer questionnaires identifying
any transactions with the Company in which the director, executive officer or their immediate family members have
an interest.

See identification and other information relating to independent directors under Item 10 and committee

members under Item 11.

Item 14 – Principal Accounting Fees and Services

The Company will file its definitive Proxy Statement for its 2015 Annual Meeting of Stockholders within
the period required under the applicable rules of the Securities and Exchange Commission. Additional information
required by this Item is included under the caption “FEES BILLED BY INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM” of such Proxy Statement and is incorporated herein by reference.

PKF O’Connor Davies served as the Company’s independent registered public accounting firm for the years
ended December 31, 2014 and 2013. The following are fees billed by and accrued to PKF O’Connor Davies in
connection with services rendered:

Audit Fees

Audit Related Fees

Tax Fees

All other fees

Total Fees

2014

2013

$170,000

$166,000

24,907

64,580

-0-

28,918

54,315

-0-

$259,487

$249,233

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- 63 -

Audit fees include professional services rendered for the audit of the Company’s annual financial statements,
management’s assessment of internal controls, and reviews of financial statements included in the Company’s
quarterly reports on Form 10-Q.

Audit related fees include services that are normally provided by the Company’s independent auditors in
connection with statutory and regulatory filings, such as consents and assistance with and review of documents filed
with the Securities and Exchange Commission.

Tax fees include professional services rendered for the preparation of the Company’s federal and state
corporate tax returns and supporting schedules as may be required by the Internal Revenue Service and applicable
state taxing authorities. Tax fees also include other work directly affecting or supporting the payment of taxes,
including planning and research of various tax issues.

Audit Committee Pre-Approval Policy

The Audit Committee has adopted a policy for the pre-approval of audit and permitted non-audit services
provided by the Company’s independent registered public accounting firm. The policy requires that all services
provided by our principal independent registered public accounting firm to the Company, including audit services,
audit-related services, tax services and other services, must be pre-approved by the Audit Committee, and all have
been so pre-approved. The pre-approval requirements do not prohibit day-to-day normal tax consulting services,
which matters will not exceed $10,000 in the aggregate.

The Audit Committee has determined that the provision of the non-audit services described above is

compatible with maintaining PKF O’Connor Davies’ independence.

Item 15 – Exhibits, Financial Statement Schedules

(a) (1)

The following Financial Statements are filed as part of this report.

PART IV

(i)

(a) Report of Independent Registered Public Accounting Firm

(ii)

Consolidated Balance Sheets as of December 31, 2014 and 2013

(iii)

(iv)

(v)

Consolidated Statements of Income (Loss) for the years ended December 31, 2014,
2013 and 2012

Consolidated Statement of Comprehensive Income (Loss) for the years ended
December 31, 2014, 2013 and 2012

Consolidated Statements of Shareholders’ Equity for the years ended December 31,
2014, 2013 and 2012

74-75

Consolidated Statements of Cash Flows for the years ended December 31, 2014,
2013 and 2012

(vi) Notes to Consolidated Financial Statements

(a) (2)

The following Financial Statement Schedule is filed as part of this report:

(i)

Schedule III – Real Estate and Accumulated Depreciation as of December 31, 2014

105-111

All other schedules are omitted for the reason that they are not required, are not applicable, or the required

information is set forth in the consolidated financial statements or notes thereto.

-64-

Page(s)

69-70

71-72

77-104

- 64 -

(a) (3) The Exhibits set forth in the following index of Exhibits are filed as part of this Report.

Exhibit
No.

Description

(2)

2.1

(3)

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession

Agreement and Plan of Merger dated as of June 23, 2003 (incorporated by reference from the
Company’s Definitive Proxy Statement as filed with the Securities and Exchange Commission
on July 10, 2003, Registration No. 001-12690).

Articles of Incorporation and By-Laws

Articles of Incorporation of UMH Properties, Inc., a Maryland corporation (incorporated by
reference from the Company’s Definitive Proxy Statement as filed with the Securities and
Exchange Commission on July 10, 2003, Registration No. 001-12690).

Amendment to Articles of Incorporation (incorporated by reference to the 8-K as filed by the
Registrant with the Securities and Exchange Commission on April 3, 2006, Registration No. 001-
12690).

Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by
the Registrant with the Securities and Exchange Commission on May 26, 2011, Registration No.
001-12690).

Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant
with the Securities and Exchange Commission on May 26, 2011, Registration No. 001-12690).

Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by
the Registrant with the Securities and Exchange Commission on April 10, 2012, Registration No.
001-12690).

Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant
with the Securities and Exchange Commission on April 10, 2012, Registration No. 001-12690).

Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by
the Registrant with the Securities and Exchange Commission on October 31, 2012, Registration
No. 001-12690).

Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant
with the Securities and Exchange Commission on October 31, 2012, Registration No. 001-
12690).

Bylaws of the Company, as amended and restated, dated March 31, 2014 (incorporated by
reference to the Form 8-K as filed by the Registrant with the Securities and Exchange
Commission on March 31, 2014, Registration No. 001-12690).

-65-

- 65 -

Exhibit
No.

Description

(4)

4.1

4.2

(10)

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

Instruments Defining the Rights of Security Holders, Including Indentures

Specimen certificate of common stock of UMH Properties, Inc. (incorporated by reference to
Exhibit 4.1 to the Form S-3 as filed by the Registrant with the Securities and Exchange
Commission on December 21, 2010, Registration No. 333-171338).

Specimen certificate representing the Series A Preferred Stock of UMH Properties, Inc.
(incorporated by reference to Exhibit 4.2 to the Form 8-A12B filed by the Registrant with the
Securities and Exchange Commission on February 28, 2012, Registration No. 001-12690).

Material Contracts

+ Employment Agreement with Mr. Eugene W. Landy dated December 14, 1993 (incorporated by
reference to the Company’s 1993 Form 10-K as filed with the Securities and Exchange
Commission on March 28, 1994).

+ Amendment to Employment Agreement with Mr. Eugene W. Landy effective January 1, 2004
(incorporated by reference to the Company’s 2004 Form 10-K/A as filed with the Securities and
Exchange Commission on March 30, 2005, Registration No. 001-12690).

+ Second Amendment to Employment Agreement of Eugene W. Landy, dated April 14, 2008
(incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and
Exchange Commission on April 16, 2008, Registration No. 001-12690).

+ Employment Agreement with Mr. Samuel A. Landy effective January 1, 2012 (incorporated by
reference to the Form 8-K as filed by the Registrant with the Securities and Exchange
Commission on January 5, 2012, Registration No. 001-12690).

+ Amendment to Employment Agreement with Mr. Samuel A. Landy dated January 18, 2012
(incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and
Exchange Commission on January 20, 2012, Registration No. 001-12690).

+ Employment Agreement with Ms. Anna T. Chew effective January 1, 2012 (incorporated by
reference to the Form 8-K as filed by the Registrant with the Securities and Exchange
Commission on January 5, 2012, Registration No. 001-12690).

+ Third Amendment to Employment Agreement with Mr. Eugene W. Landy effective October 1,
2014 (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities
and Exchange Commission on October 8, 2014, Registration No. 001-12690).

Form of Indemnification Agreement between UMH Properties, Inc. and its Directors and
Executive Officers (incorporated by reference to the Form 8-K as filed by the Registrant with the
Securities and Exchange Commission on April 23, 2012, Registration No. 001-12690).

+ UMH Properties, Inc. 2013 Stock Option and Stock Award Plan (incorporated by reference to
the Company’s Definitive Proxy Statement (DEF 14A) as filed with the Securities and Exchange
Commission on May 1, 2013, Registration No. 001-12690).

10.10

Dividend Reinvestment and Stock Purchase Plan (incorporated by reference to the Company’s
Registration Statement filed on Form S-3D as filed with the Securities and Exchange
Commission on November 14, 2014, Registration No. 333-200227).

-66-

- 66 -

Exhibit
No.

10.11

(12)

(14)

(21)

(23)

Description

Credit Agreement by and among UMH Properties, Inc. and Bank of Montreal dated March
29,2013 (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities
and Exchange Commission on April 3, 2013, Registration No. 001-12690).

* Computation of Ratio of Earnings to Fixed Charges

Code of Business Conduct and Ethics (incorporated by reference to the Company’s 2003 Form
10-K as filed with the Securities and Exchange Commission on March 11, 2004, Registration
No. 001-12690).

Subsidiaries of the Registrant.

* Consent of PKF O’Connor Davies, A Division of O’Connor Davies, LLP.

(31.1)

* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant

to Section 302 of the Sarbanes-Oxley Act of 2002.

(31.2)

* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant

to Section 302 of the Sarbanes-Oxley Act of 2002.

(32)

* Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.

Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(99)

Audit Committee Charter, as amended January 16, 2008 (incorporated by reference to the
Company’s 2011 Definitive Proxy Statement (DEF 14A) as filed with the Securities and
Exchange Commission on May 2, 2011, Registration No. 001-12690).

(101)

Interactive Data File

101.INS
101.SCH
101.CAL
101.LAB
101.PRE
101.DEF

++ XBRL Instance Document
++ XBRL Taxonomy Extension Schema Document
++ XBRL Taxonomy Extension Calculation Document
++ XBRL Taxonomy Extension Label Linkbase Document
++ XBRL Taxonomy Extension Presentation Linkbase Document
++ XBRL Taxonomy Extension Definition Linkbase Document

*
+
++

Filed herewith.

Denotes a management contract or compensatory plan or arrangement.

Pursuant to Rule 406T of Regulation S-T, this interactive date file is deemed not “filed” or part
of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act,
is deemed not “filed” for purposes of Section 18 of the Exchange Act, and otherwise is not subject
to liability under these sections.

-67-

- 67 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders
UMH Properties, Inc.

We have audited the accompanying consolidated balance sheets of UMH Properties, Inc. and subsidiaries (the
“Company”) as of December 31, 2014 and 2013 and the related consolidated statements of income (loss),
comprehensive income (loss), shareholders' equity, and cash flows for each of the three years in the period ended
December 31, 2014. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2)(i).
These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements and schedule are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of UMH Properties, Inc. at December 31, 2014 and 2013, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended December 31, 2014, in conformity with
accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the Company’s internal control over financial reporting as of December 31, 2014 based on criteria established
in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) and our report dated March 10, 2015 expressed an unqualified opinion thereon.

New York, New York
March 10, 2015

/s/ PKF O’Connor Davies,
A Division of O’Connor Davies, LLP

-68-

- 68 -

UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2014 and 2013

-ASSETS-

2014

2013

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
Securities Available for Sale at Fair Value
Inventory of Manufactured Homes
Notes and Other Receivables, net
Unamortized Financing Costs
Prepaid Expenses
Land Development Costs
Total Other Assets

$ 39,133,514
299,776,250
17,534,698
91,719,997
448,164,459
12,242,086
460,406,545
(99,522,180)
360,884,365

$ 33,973,214
256,830,234
13,273,690
61,747,274
365,824,412
11,130,719
376,955,131
(84,655,017)
292,300,114

8,082,792
63,555,961
12,306,715
24,719,480
2,228,779
629,120
5,861,764
117,384,611

7,615,143
59,254,942
13,786,041
26,019,725
2,128,006
1,182,850
5,693,153
115,679,860

TOTAL ASSETS

$ 478,268,976

$ 407,979,974

See Accompanying Notes to Consolidated Financial Statements

-69-

- 69 -

UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
AS OF DECEMBER 31, 2014 and 2013

- LIABILITIES AND SHAREHOLDERS’ EQUITY -

2014

2013

Liabilities:
Mortgages Payable

Other liabilities:
Accounts Payable
Loans Payable
Accrued Liabilities and Deposits
Tenant Security Deposits

Total Other Liabilities

Total Liabilities

Commitments And Contingencies

$ 182,670,854

$ 160,639,944

1,824,293
77,439,230
4,757,604
2,749,890
86,771,017
269,441,871

1,628,713
49,118,996
3,852,799
2,153,785
56,754,293
217,394,237

Shareholders’ equity:
Series A – 8.25% Cumulative Redeemable Preferred
Stock, par value $.10 per share, 3,663,800 shares authorized,
issued and outstanding as of December 31, 2014 and 2013
Common Stock - $.10 par value per share, 42,000,000 shares
authorized; 24,372,083 and 20,769,892 shares issued and
outstanding as of December 31, 2014 and 2013, respectively

Excess Stock - $.10 par value per share, 3,000,000 shares
authorized; no shares issued or outstanding as of
December 31, 2014 and 2013
Additional Paid-In Capital
Accumulated Other Comprehensive Income
Accumulated Deficit
Total Shareholders’ Equity

91,595,000

2,437,208

2,076,989

-0-

110,422,454
5,040,236
(667,793)
208,827,105

-0-
96,504,643
1,076,898
(667,793)
190,585,737

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$ 478,268,976

$ 407,979,974

See Accompanying Notes to Consolidated Financial Statements

-70-

- 70 -

UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012

2014

2013

2012

INCOME:
Rental and Related Income
Sales of Manufactured Homes

$ 63,886,010
7,545,923

$ 53,477,893
8,727,214

$ 38,012,231
8,815,533

Total Income

71,431,933

62,205,107

46,827,764

EXPENSES:
Community Operating Expenses
Cost of Sales of Manufactured Homes
Selling Expenses
General and Administrative
Acquisition Costs
Depreciation Expense

33,592,327
5,832,540
2,983,376
6,465,973
483,522
15,163,420

29,140,920
7,204,410
1,985,834
6,541,224
1,455,542
11,681,724

20,564,286
7,903,678
2,152,701
5,374,516
862,169
7,357,158

Total Expenses

64,521,158

58,009,654

44,214,508

OTHER INCOME (EXPENSE):
Interest Income
Dividend Income
Gain on Sale of Securities Transactions, net
Other Income
Interest Expense
Amortization of Financing Costs

2,098,974
4,065,986
1,542,589
328,888
(10,194,472)
(522,250)

2,186,387
3,481,514
4,055,812
211,051
(7,849,835)
(462,362)

2,027,969
3,243,592
4,092,585
643,588
(5,803,172)
(302,280)

Total Other Income (Expense)

(2,680,285)

1,622,567

3,902,282

Income Before Gain (Loss) on Sales of
Investment Property and Equipment
Gain (Loss) on Sales of Investment Property
and Equipment

4,230,490

5,818,020

6,515,538

7,313

18,803

(41,481)

NET INCOME

4,237,803

5,836,823

6,474,057

Less: Preferred Dividend

7,556,588

4,724,718

NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON SHAREHOLDERS

$ (3,318,785)

$ (1,719,765)

$ 1,749,339

See Accompanying Notes to Consolidated Financial Statements

-71-

- 71 -

UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012

2014

2013

2012

Basic Income Per Share:

Net Income
Less: Preferred Dividend
Net Income (Loss) Attributable to Common
Shareholders

$0.19
(0.34)

$0.31
(0.40)

$(0.15)

$(0.09)

Diluted Income Per Share:

Net Income
Less: Preferred Dividend
Net Income (Loss) Attributable to Common
Shareholders

$0.19
(0.34)

$0.31
(0.40)

$(0.15)

$(0.09)

Weighted Average Shares Outstanding:

$0.40
(0.29)

$0.11

$0.40
(0.29)

$0.11

Basic
Diluted

22,496,103
22,539,708

18,724,321
18,789,662

16,197,339
16,260,225

See Accompanying Notes to Consolidated Financial Statements

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- 72 -

UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012

2014

2013

2012

Net Income

$4,237,803

$5,836,823

$6,474,057

Other Comprehensive Income (Loss):
Unrealized Holding Gains (Losses) Arising During the Year
Reclassification Adjustment for Net Gains Realized in Income
Change in Fair Value of Interest Rate Swap Agreements

Comprehensive Income
Less: Preferred Dividend

5,505,772
(1,542,589)
155

(1,441,406)
(4,055,812)
337,955

8,245,236
(4,092,585)
(377,795)

8,201,141
(7,556,588)

677,560
(7,556,588)

10,248,913
(4,724,718)

Comprehensive Income (Loss) Attributable to Common
Shareholders

$644,553

$(6,879,028)

$5,524,195

See Accompanying Notes to the Consolidated Financial Statements

-73-

- 73 -

UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 and 2012

Common Stock Issued
Amount
Number

Preferred

Stock

Additional
Paid-In
Capital

Balance December 31, 2011

15,252,839

$1,525,284

$33,470,000

$69,088,409

Common Stock Issued with the DRIP*

Common Stock Issued through Restricted Stock Awards
Common Stock Issued through Stock Options
Preferred Stock Issued through Underwritten Public Offering, net
Preferred Stock Issued through Direct Placement, net
Distributions
Stock Compensation Expense
Net Income
Unrealized Net Holding Gain on Securities Available
for Sale Net of Reclassification Adjustment
Interest Rate Swaps

1,780,043
75,000
4,000
-0-
-0-
-0-
-0-
-0-

178,004
7,500
400
-0-
-0-
-0-
-0-
-0-

-0-
-0-
-0-
26,875,000
31,250,000
-0-
-0-
-0-

17,880,034
(7,500)
29,840
(1,172,782)
(699,705)
(9,580,848)
573,244
-0-

-0-
-0-

Balance December 31, 2012

17,111,882

1,711,188

91,595,000

76,110,692

Common Stock Issued with the DRIP*
Common Stock Issued through Restricted Stock Awards
Common Stock Issued through Stock Options
Preferred Stock Issued through Underwritten Public Offering, net
Preferred Stock Issued through Direct Placement, net
Distributions
Stock Compensation Expense
Net Income
Unrealized Net Holding Gain on Securities Available
for Sale Net of Reclassification Adjustment
Interest Rate Swaps

3,658,010
-0-
-0-
-0-
-0-
-0-
-0-
-0-

-0-
-0-

365,801
-0-
-0-
-0-
-0-
-0-
-0-
-0-

-0-
-0-

-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-

-0-
-0-

34,826,838
-0-
-0-
-0-
-0-
(15,283,236)
850,349
-0-

-0-
-0-

Balance December 31, 2013

20,769,892

2,076,989

91,595,000

96,504,643

3,554,191
25,000
23,000
-0-
-0-
-0-
-0-
-0-

-0-
-0-

355,419
2,500
2,300
-0-
-0-
-0-
-0-
-0-

-0-
-0-

-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-

-0-
-0-

32,436,820
(2,500)
165,160
-0-
-0-
(19,604,613)
922,944
-0-

-0-
-0-

Balance December 31, 2014

24,372,083

$2,437,208

$91,595,000 $110,422,454

*Dividend Reinvestment and Stock Purchase Plan

See Accompanying Notes to Consolidated Financial Statements

-74-

- 74 -

UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 and 2012

Accumulated
Other
Comprehensive
Income (Loss)

Undistributed
Income
(Accumulated
Deficit)

Total
Shareholders’
Equity

Balance December 31, 2011

$2,461,305

$(667,793)

$105,877,205

Common Stock Issued with the DRIP*

Common Stock Issued through Restricted Stock Awards
Common Stock Issued through Stock Options
Preferred Stock Issued through Underwritten Public Offering, net

Preferred Stock Issued through Direct Placement, net

Distributions
Stock Compensation Expense
Net Income

Unrealized Net Holding Gain on Securities Available
for Sale Net of Reclassification Adjustment
Interest Rate Swaps

-0-

-0-
-0-
-0-

-0-

-0-
-0-
-0-

-0-

-0-
-0-
-0-

-0-

(6,474,057)
-0-
6,474,057

18,058,038

-0-
30,240
25,702,218

30,550,295

(16,054,905)
573,244
6,474,057

4,152,651
(377,795)

-0-
-0-

4,152,651
(377,795)

Balance December 31, 2012

6,236,161

(667,793)

174,985,248

Common Stock Issued with the DRIP*

-0-

-0-
-0-
-0-
-0-
-0-
-0-
-0-

-0-

35,192,639

-0-
-0-
-0-
-0-
(5,836,823)
-0-
5,836,823

-0-
-0-
-0-
-0-
(21,120,059)
850,349
5,836,823

(5,497,218)
337,955

-0-
-0-

(5,497,218)
337,955

Balance December 31, 2013

1,076,898

(667,793)

190,585,737

-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-

-0-
-0-
-0-
-0-
-0-
(4,237,803)
-0-
4,237,803

32,792,239
-0-
167,460
-0-
-0-
(23,842,416)
922,944
4,237,803

3,963,183
155

-0-
-0-

3,963,183
155

Balance December 31, 2014

$5,040,236

$(667,793)

$208,827,105

*Dividend Reinvestment and Stock Purchase Plan.

See Accompanying Notes to Consolidated Financial Statements

-75-

- 75 -

UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 and 2012

2014

2013

2012

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
Gain on Sale of Securities Transactions, net
(Gain) Loss on Sales of Investment Property & Equipment

$ 4,237,803 $ 5,836,823 $ 6,474,057

15,163,420
522,250
922,944
1,020,655

(1,542,589)

(7,313)

11,681,724
462,362
850,349
760,570

(4,055,812)

(18,803)

7,357,158
302,280
573,244
745,993
(4,092,585)
41,481

Changes in Operating Assets and Liabilities:
Inventory of Manufactured Homes
Notes and Other Receivables
Prepaid Expenses
Accounts Payable
Accrued Liabilities and Deposits
Tenant Security Deposits
Net Cash Provided by Operating Activities

1,479,326

279,590
553,730
195,580
904,960
596,105
24,326,461

(1,930,961)
(4,066,431)
(271,975)

558,692
581,139
850,411
11,238,088

(1,666,333)
(2,134,003)
(283,268)
381,349
985,739
402,637
9,087,749

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Manufactured Home Communities,
net of mortgages assumed
Purchase of Investment Property and Equipment
Proceeds from Sales of Investment Property and Equipment
Additions to Land Development Costs
Purchase of Securities Available for Sale
Proceeds from Sales of Securities Available for Sale
Net Cash Used by Investing Activities

(15,879,551)
(41,858,627)

768,641

(268,983)
(9,707,038)
10,911,791

(80,574,921)
(26,815,409)

915,113

(519,214)
(22,352,376)

18,981,468

(56,033,767)

(110,365,339)

(44,825,340)
(16,975,016)
1,069,516
(472,845)
(21,941,884)
16,159,894
(66,985,675)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages, net of mortgages assumed
Net Proceeds from Short-Term Borrowings
Principal Payments of Mortgages and Loans
Financing Costs on Debt
Proceeds from Issuance of Common Stock, net of reinvestments 30,933,748
Proceeds from Issuance of Preferred Stock, net of offering costs
Proceeds from Exercise of Stock Options
Preferred Dividends Paid
Common Dividends Paid, net of Reinvestments
Net Cash Provided by Financing Activities

-0-
28,320,234
(4,639,539)
(623,023)

(7,556,588)
(14,427,337)

32,174,955

167,460

-0-

53,760,000
38,677,391
(9,686,487)
(1,116,914)
33,330,652

-0-
-0-

(7,556,588)
(11,701,484)

95,706,570

25,380,000
-0-
(23,073,544)
(456,615)
16,667,139
56,996,101
30,240
(5,068,697)
(10,338,897)
60,135,727

Net Increase (Decrease) In Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year

467,649
7,615,143

(3,420,681)
11,035,824

2,237,801
8,798,023

CASH AND CASH EQUIVALENTS AT END OF YEAR

$ 8,082,792

$ 7,615,143

$ 11,035,824

See Accompanying Notes to Consolidated Financial Statements

-76-

- 76 -

UMH PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2014 and 2013

NOTE 1 – ORGANIZATION

UMH Properties, Inc., a Maryland corporation, and its subsidiaries (the Company) operates as a real estate
investment trust (REIT) deriving its income primarily from real estate rental operations. The Company, through its wholly-
owned taxable subsidiary, UMH Sales and Finance, Inc. (S&F), sells manufactured home in its communities. Inherent in
the operations of manufactured home communities are site vacancies. S&F was established to fill these vacancies and
potentially enhance the value of the communities. The Company also owns a portfolio of REIT securities which the
Company generally limits to no more than approximately 15% of its undepreciated assets. Management views the
Company as a single segment based on its method of internal reporting in addition to its allocation of capital and resources.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of the Business

As of December 31, 2014, the Company owns and operates eighty-eight manufactured home communities
containing approximately 15,000 developed sites. These communities are located in New Jersey, New York, Ohio,
Pennsylvania, Tennessee, Indiana and Michigan.

These manufactured home communities are listed by trade names as follows:

MANUFACTURED HOME COMMUNITY

LOCATION

Allentown
Auburn Estates
Birchwood Farms
Broadmore Estates
Brookside Village
Brookview Village
Carsons
Cedarcrest
Chambersburg I & II
Chelsea
City View
Clinton Mobile Home Resort
Collingwood
Colonial Heights
Countryside Estates
Countryside Estates
Countryside Village
Cranberry Village
Crestview
Cross Keys Village
Dallas Mobile Home Community
Deer Meadows
D & R Village
Evergreen Estates
Evergreen Manor
Evergreen Village

Memphis, Tennessee
Orrville, Ohio
Birch Run, Michigan
Goshen, Indiana
Berwick, Pennsylvania
Greenfield Center, New York
Chambersburg, Pennsylvania
Vineland, New Jersey
Chambersburg, Pennsylvania
Sayre, Pennsylvania
Lewistown, Pennsylvania
Tiffin, Ohio
Horseheads, New York
Wintersville, Ohio
Muncie, Indiana
Ravenna, Ohio
Columbia, Tennessee
Cranberry Township, Pennsylvania
Sayre, Pennsylvania
Duncansville, Pennsylvania
Toronto, Ohio
New Springfield, Ohio
Clifton Park, New York
Lodi, Ohio
Bedford, Ohio
Mantua, Ohio

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- 77 -

MANUFACTURED HOME COMMUNITY

LOCATION

Fairview Manor
Forest Creek
Forest Park Village
Frieden Manor
Green Acres
Gregory Courts
Hayden Heights
Heather Highlands
Highland
Highland Estates
Hillside Estates
Holiday Mobile Village
Hudson Estates
Independence Park
Kinnebrook
Lake Sherman Village
Laurel Woods
Little Chippewa
Maple Manor
Meadowood
Melrose Village
Melrose West
Memphis Mobile City
Monroe Valley
Moosic Heights
Mountaintop
Oak Ridge Estates
Oakwood Lake Village
Olmsted Falls
Oxford Village
Pine Ridge Village/Pine Manor
Pine Valley Estates
Pleasant View Estates
Port Royal Village
River Valley Estates
Rolling Hills Estates
Rostraver Estates
Sandy Valley Estates
Shady Hills
Somerset Estates/Whispering Pines
Southern Terrace
Southwind Village
Spreading Oaks Village
Suburban Estates
Summit Estates
Sunny Acres
Sunnyside
Trailmont
Twin Oaks I & II
Twin Pines
Valley High
Valley Hills
Valley View I
Valley View II
Valley View Danboro

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Millville, New Jersey
Elkhart, Indiana
Cranberry Township, Pennsylvania
Schuylkill Haven, Pennsylvania
Chambersburg, Pennsylvania
Honey Brook, Pennsylvania
Dublin, Ohio
Inkerman, Pennsylvania
Elkhart, Indiana
Kutztown, Pennsylvania
Greensburg, Pennsylvania
Nashville, Tennessee
Peninsula, Ohio
Clinton. Pennsylvania
Monticello, New York
Navarre, Ohio
Cresson, Pennsylvania
Orrville, Ohio
Taylor, Pennsylvania
New Middletown, Ohio
Wooster, Ohio
Wooster, Ohio
Memphis, Tennessee
Ephrata, Pennsylvania
Avoca, Pennsylvania
Ephrata, Pennsylvania
Elkhart, Indiana
Tunkhannock, Pennsylvania
Olmsted Falls, Ohio
West Grove, Pennsylvania
Carlisle, Pennsylvania
Apollo, Pennsylvania
Bloomsburg, Pennsylvania
Belle Vernon, Pennsylvania
Marion, Ohio
Carlisle, Pennsylvania
Belle Vernon, Pennsylvania
Magnolia, Ohio
Nashville, Tennessee
Somerset, Pennsylvania
Columbiana, Ohio
Jackson, New Jersey
Athens, Ohio
Greensburg, Pennsylvania
Ravenna, Ohio
Somerset, Pennsylvania
Eagleville, Pennsylvania
Goodlettsville, Tennessee
Olmsted Falls, Ohio
Goshen, Indiana
Ruffs Dale, Pennsylvania
Ravenna, Ohio
Ephrata, Pennsylvania
Ephrata, Pennsylvania
Doylestown, Pennsylvania

- 78 -

MANUFACTURED HOME COMMUNITY

LOCATION

Valley View Honeybrook
Waterfalls Village
Weatherly Estates
Woodland Manor
Woodlawn Village
Wood Valley
Youngstown Estates

Basis of Presentation

Honey Brook, Pennsylvania
Hamburg, New York
Lebanon, Tennessee
West Monroe, New York
Eatontown, New Jersey
Caledonia, Ohio
Youngstown, New York

The Company prepares its financial statements under the accrual basis of accounting, in conformity with
accounting principles generally accepted in the United States of America (U.S. GAAP). The Company’s subsidiaries
are all 100% wholly-owned. The consolidated financial statements of the Company include all of these subsidiaries.
All intercompany transactions and balances have been eliminated in consolidation. The Company does not have a
majority or minority interest in any other company, either consolidated or unconsolidated.

Use of Estimates

In preparing the consolidated financial statements, 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,
reserves and accruals, and stock compensation expense. Actual results could differ from these estimates and
assumptions.

Investment Property and Equipment and Depreciation

Property and equipment are carried at cost. Depreciation for Sites and Building is computed principally on
the straight-line method over the estimated useful lives of the assets (ranging from 15 to 27.5 years). Depreciation of
Improvements to Sites and Buildings, Rental Homes and Equipment and Vehicles is computed principally on the
straight-line method over the estimated useful lives of the assets (ranging from 3 to 27.5 years). Land Development
Costs are not depreciated until they are put in use, at which time they are capitalized as Sites and Land Improvements.
Interest Expense pertaining to Land Development Costs are capitalized. Maintenance and Repairs are charged to
expense as incurred and improvements are capitalized. The costs and related accumulated depreciation of property
sold or otherwise disposed of are removed from the financial statement and any gain or loss is reflected in the current
year’s results of operations.

The Company conducted a comprehensive review of all real estate asset classes in accordance with ASC
360-10-35-21. The process entailed the analysis of property for instances where the net book value exceeded the
estimated fair value. The Company utilizes the experience and knowledge of its internal valuation team to derive
certain assumptions used to determine an operating property’s cash flow. Such assumptions include lease-up rates,
rental rates, rental growth rates, and capital expenditures. The Company reviewed its operating properties in light of
the requirements of ASC 360-10 and determined that, as of December 31, 2014, the undiscounted cash flows over the

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- 79 -

expected holding period for these properties were in excess of their carrying values and, therefore, no impairment
charges were required.

Acquisitions

The Company accounts for acquisitions in accordance with ASC 805, Business Combinations (ASC 805).
ASC 805 requires that transaction costs, such as broker fees, transfer taxes, legal, accounting, valuation, and other
professional and consulting fees, related to acquisitions be expensed as incurred.

Upon acquisition of a property, the Company allocates the purchase price of the property based upon the fair
value of the assets acquired, which generally consist of land, site and land improvements, buildings and improvements
and rental homes. The Company generally allocates the purchase price of an acquired property determined by internal
evaluation as well as a third-party appraisal of the property obtained in conjunction with the purchase.

Cash and Cash Equivalents

Cash and cash equivalents include all cash and investments with an original maturity of three months or less.
The Company maintains its cash in bank accounts in amounts that may exceed federally insured limits. The Company
has not experienced any losses in these accounts in the past. The fair value of cash and cash equivalents approximates
their current carrying amounts since all such items are short-term in nature.

Securities Available for Sale

Investments in non-real estate assets consist of marketable securities of other REIT’s, which are composed
of common and preferred stock. These securities are all publicly-traded and purchased on the open market, through
private transactions or through dividend reinvestment plans. These securities are classified among three categories:
held-to-maturity, trading and available-for-sale. As of December 31, 2014 and 2013, the Company’s securities are all
classified as available-for-sale and are carried at fair value based upon quoted market prices. Gains or losses on the
sale of securities are based on identifiable cost and are accounted for on a trade date basis. Unrealized holding gains
and losses are excluded from earnings and reported as a separate component of Shareholders’ Equity until realized.
The changes in unrealized net holding gains are reflected as comprehensive income.

The Company individually reviews and evaluates our marketable securities for impairment on a quarterly basis
or when events or circumstances occur. The Company considers, among other things, credit aspects of the issuer, amount
of decline in fair value over cost and length of time in a continuous loss position. The Company has developed a general
policy of evaluating whether an unrealized loss is other than temporary. On a quarterly basis, the Company makes an
initial review of every individual security in its portfolio. If the security is impaired, the Company first determines our
intent and ability to hold this investment for a period of time sufficient to allow for any anticipated recovery in market
value. Next, the Company determines the length of time and the extent of the impairment. Barring other factors, including
the downgrading of the security or the cessation of dividends, if the fair value of the security is below cost by less than
20% for less than 6 months and the Company has the intent and ability to hold the security, the security is deemed to not
be other than temporarily impaired. Otherwise, the Company reviews additional information to determine whether the
impairment is other than temporary. The Company discusses and analyzes any relevant information known about the
security, such as:

b.
c.
d.

Whether the decline is attributable to adverse conditions related to the security or to specific conditions
in an industry or in a geographic area.
Any downgrading of the security by a rating agency.
Whether the financial condition of the issuer has deteriorated.
Status of dividends – Whether dividends have been reduced or eliminated, or scheduled interest
payments have not been made.
Analysis of the underlying assets (including NAV analysis) using independent analysis or recent
transactions.

The Company normally holds REIT securities long term and has the ability and intent to hold securities to
recovery. The Company generally limits its marketable securities investments to no more than approximately 15% of
its undepreciated assets. If a decline in fair value is determined to be other than temporary, an impairment charge is
recognized in earnings and the cost basis of the individual security is written down to fair value as the new cost basis.

-80-

- 80 -

Inventory of Manufactured Homes

Inventory of manufactured homes is valued at the lower of cost or market value and is determined by the

specific identification method. All inventory is considered finished goods.

Accounts and Notes Receivables

The Company’s accounts, notes and other receivables are stated at their outstanding balance reduced by an
allowance for uncollectible accounts. The Company evaluates the recoverability of its receivables whenever events
occur or there are changes in circumstances such that management believes it is probable that it will be unable to
collect all amounts due according to the contractual terms of the notes receivable or lease agreements. The
collectability of notes receivable is measured based on the present value of the expected future cash flow discounted
at the notes receivable effective interest rate or the fair value of the collateral if the notes receivable is collateral
dependent. Total notes receivables at December 31, 2014 and 2013 was $20,761,642 and $23,630,159,
respectively. At December 31, 2014 and 2013, the reserves for uncollectible accounts, notes and other receivables
were $1,068,465 and $1,097,387, respectively. For the years ended December 31, 2014, 2013 and 2012, the provisions
for uncollectible notes and other receivables were $1,020,655, $760,570 and $745,993, respectively. Charge-offs and
other adjustments related to repossessed homes for the years ended December 31, 2014, 2013 and 2012 amounted to
$1,049,577, $601,178 and $620,519, respectively.

The Company’s notes receivable primarily consists of installment loans collateralized by manufactured
homes with principal and interest payable monthly. The average interest rate on these loans is approximately 9.5%
and the average maturity is approximately 10 years.

Unamortized Financing Costs

Costs incurred in connection with obtaining mortgages and other financings and refinancings are deferred
and are amortized on a straight-line basis over the term of the related obligations, which is not materially different
than the effective interest method. Unamortized costs are charged to expense upon prepayment of the obligation. As
of December 31, 2014 and 2013, accumulated amortization amounted to $1,555,818 and $1,023,893, respectively.
The Company estimates that aggregate amortization expense will be approximately $596,000 for 2015, $465,000 for
2016, $281,000 for 2017, $216,000 for 2018 and $205,000 for 2019.

Derivative Instruments and Hedging Activities

In the normal course of business, the Company is exposed to financial market risks, including interest rate
risk on our variable rate debt. We attempt to limit these risks by following established risk management policies,
procedures and strategies, including the use of derivative financial instruments. The Company's primary strategy in
entering into derivative contracts is to minimize the variability that changes in interest rates could have on its future
cash flows. The Company generally employs derivative instruments that effectively convert a portion of its variable
rate debt to fixed rate debt. The Company does not enter into derivative instruments for speculative purposes. The
Company had entered into various interest rate swap agreements that had the effect of fixing interest rates relative to
specific mortgage loans.

During 2012, the Company entered into two interest rate swap agreements that have the effect of fixing

interest rates relative to specific mortgage loans as follows:

Mortgage

Due Date

Mortgage
Interest Rate

Effective
Fixed Rate

Balance
12/31/14

Allentown/Clinton
Various – 11 properties

2/1/2017
8/1/2017

LIBOR + 3.25%
LIBOR + 3.00%

4.39%
3.89%

$10,486,045
$12,177,725

The Company's interest rate swap agreements are based upon 30-day LIBOR. The re-pricing and scheduled
maturity dates, payment dates, index and the notional amounts of the interest rate swap agreements coincide with
those of the underlying mortgage. The interest rate swap agreements are net settled monthly. The Company has
designated these derivatives as cash flow hedges and has recorded the fair value on the balance sheet in accordance
with ASC 815, Derivatives and Hedging (See Note 13 for information on the determination of fair value). The
effective portion of the gain or loss on these hedges will be reported as a component of Accumulated Other

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Comprehensive Income in our Consolidated Balance Sheets. To the extent that the hedging relationships are not
effective or do not qualify as cash flow hedges, the ineffective portion is recorded in interest expense. Hedges that
received designated hedge accounting treatment are evaluated for effectiveness at the time that they are designated as
well as through the hedging period. As of December 31, 2014, the Company has determined that these interest rate
swap agreements are highly effective as cash flow hedges. As a result, the fair value of these derivatives of $(39,685)
and $(39,840) as of December 31, 2014 and 2013, respectively, was recorded as a component of Accumulated Other
Comprehensive Income, with the corresponding liability included in Accrued Liabilities and Deposits.

Revenue Recognition

The Company derives its income primarily from the rental of manufactured home sites. The Company also
owns approximately 2,600 rental units which are rented to residents. Rental and related income is recognized on the
accrual basis over the term of the lease, which is typically one year or less.

Sale of manufactured homes is recognized on the full accrual basis when certain criteria are met. These
criteria include the following: (a) initial and continuing payment by the buyer must be adequate: (b) the receivable,
if any, is not subject to future subordination; (c) the benefits and risks of ownership are substantially transferred to the
buyer; and (d) the Company does not have a substantial continued involvement with the home after the sale.
Alternatively, when the foregoing criteria are not met, the Company recognizes gains by the installment method.
Interest income on loans receivable is not accrued when, in the opinion of management, the collection of such interest
appears doubtful.

Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number
of common shares outstanding during the period (22,496,103, 18,724,321 and 16,197,339 in 2014, 2013 and 2012,
respectively). Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted-average
number of common shares outstanding plus the weighted-average number of net shares that would be issued upon
exercise of stock options pursuant to the treasury stock method (22,539,708, 18,789,662 and 16,260,225 in 2014, 2013
and 2012, respectively) (See Note 6). The common stock equivalent resulting from options in the amount of 43,605,
65,341 and 62,886 for 2014, 2013 and 2012, respectively, are included in the diluted weighted average shares
outstanding. As of December 31, 2014, 2013 and 2012, options to purchase 1,125,000, 502,000 and 586,000 shares,
respectively, were antidilutive.

Stock Compensation Plan

The Company accounts for awards of 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, which is included in General and Administrative
Expenses, of $922,944, $850,349 and $573,244 have been recognized in 2014, 2013 and 2012, respectively. During
2014, 2013 and 2012, compensation costs included a one-time charge of $98,000, $142,000, and $123,490,
respectively, for stock option grants awarded to one participant who is of retirement age and therefore the entire
amount of measured compensation cost has been recognized at grant date. Included in Note 6 to these consolidated
financial statements are the assumptions and methodology used to calculate the fair value of stock options and
restricted stock awards.

Income Tax

The Company has elected to be taxed as a REIT under the applicable provisions of Sections 856 to 860 of
the Internal Revenue Code. Under such provisions, the Company will not be taxed on that portion of its income which
is distributed to shareholders, provided it distributes at least 90% of its taxable income, has at least 75% of its assets
in real estate investments and meets certain other requirements for qualification as a REIT. The Company has and
intends to continue to distribute all of its income currently, and therefore no provision has been made for income or
excise taxes. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes
at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT
for four subsequent taxable years. The Company is also subject to certain state and local income, excise or franchise

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taxes. In addition, the Company has a taxable REIT Subsidiaries (TRS) which is subject to federal and state income
taxes at regular corporate tax rates (See Note 11).

The Company follows the provisions of ASC Topic 740, Income Taxes, that, among other things, defines a
recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim periods, disclosure, and transition. Based on its evaluation,
the Company determined that it has no uncertain tax positions and no unrecognized tax benefits as of December 31,
2014. The Company records interest and penalties relating to unrecognized tax benefits, if any, as interest expense. As
of December 31, 2014, the tax years 2011 through and including 2014 remain open to examination by the Internal
Revenue Service. There are currently no federal tax examinations in progress.

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income and other comprehensive income (loss). Other
comprehensive income (loss) consists of the change in unrealized gains or losses on securities available for sale and
the change in the fair value of derivatives.

Reclassifications

Certain amounts in the consolidated financial statements for the prior years have been reclassified to conform

to the financial statement presentation for the current year.

Recent Accounting Pronouncements

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.

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NOTE 3 – INVESTMENT PROPERTY AND EQUIPMENT

Acquisitions in 2014

On March 13, 2014, the Company acquired 8 Ohio manufactured home communities for $24,950,000. These
8 all-age communities total 1,018 sites and are situated on approximately 270 acres. The average occupancy for these
communities at closing was approximately 70%. The Company assumed mortgages totaling approximately
$18,100,000 and used its Unsecured Revolving Credit Facility with Bank of Montreal (“Credit Facility”) to finance
this acquisition.

On July 14, 2014, the Company acquired 4 Pennsylvania manufactured home communities for $12,200,000.
These 4 all-age communities are located in the Pittsburgh metropolitan area and contain a total of 336 developed
home sites situated on approximately 239 acres. The average occupancy for these communities is 84%. The
Company assumed a mortgage loan with a balance of approximately $8.6 million. In addition, the Company used
cash received from the additional borrowing from Sun National Bank for the remaining balance of the purchase price.

On July 28, 2014, the Company acquired 2 Ohio manufactured home communities for $5,400,000. These 2
all age communities contain a total of 258 developed home sites that are situated on 39 acres. The average occupancy
for these communities is 91%. The Company took down an additional $5.0 million on its Credit Facility for the
acquisition of the two communities.

Acquisitions in 2013

On March 1, 2013, the Company acquired 10 manufactured home communities for $67,500,000. These 10
all-age communities total 1,854 sites and are situated on approximately 400 acres. There are five communities located
in Indiana, four communities located in Pennsylvania, and one community located in Michigan. The average
occupancy for these communities at closing was approximately 85%. The Company obtained a $53,760,000
mortgage loan from JP Morgan Chase Bank, N.A. and paid the balance with cash on hand. The Company also
included 3 additional communities in this mortgage.

On November 6, 2013, the Company acquired 5 manufactured home communities, 4 communities located in
Ohio and 1 community located in New York for an aggregate purchase price of $11,800,000. These five all-age
communities contain a total of 519 developed home sites situated on approximately 200 total acres. The average
occupancy for these communities is approximately 82%. The Company assumed a $7,700,000 mortgage loan.

These acquisitions have been accounted for utilizing the acquisition method of accounting in accordance
with ASC 805, Business Combinations, and accordingly, the result of the acquired assets are included in the
statements of income (loss) from the dates of acquisition. The allocations of the fair value of the assets acquired is
subject to further adjustment as final costs and valuations are determined. The following table summarizes the
estimated fair value of the assets acquired for the year ended December 31, 2014 and 2013:
Fair Value at Acquisition Date

Assets Acquired:
Land
Depreciable Property
Other
Total Assets Acquired

2014
Acquisitions

2013
Acquisitions

$4,810,300
37,674,248
65,452
$42,550,000

$11,430,000
76,781,000
59,000
$88,270,000

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See Note 5 for additional information relating to loans and mortgages payable and Note 16 for the Unaudited Pro
Forma Financial Information relating to these acquisitions

Other

Many oil and gas companies compete for the opportunity to drill for oil and gas. Successful bidders pay an
upfront purchase price (“bonus payment”). On May 23, 2012, the Company received a bonus payment of $499,471
at one of its communities, which has been recorded as Other Income. This amount is not refundable and has been
earned since the Company has no further obligation relating to it. In addition to this upfront bonus payment, the
Company entered into an agreement (“Lease”) whereby the oil and gas company may remove the oil and gas from the
property, provided that it pays the Company a 20% fee (“royalty”) based on the amount of the oil and gas removed.
The Company has not earned any royalty fees to date. The initial term of the Lease is for five years, with an option
to extend for an additional five years under the same terms and conditions as contained in the original lease.

Accumulated Depreciation

The following is a summary of accumulated depreciation by major classes of assets:

Site and Land Improvements
Buildings and Improvements
Rental Homes and Accessories
Equipment and Vehicles
Total Accumulated Depreciation

December 31, 2014

December 31, 2013

$ 74,129,770
3,583,269
12,706,873
9,102,268
$ 99,522,180

$ 64,292,239
3,036,082
9,107,422
8,219,274
$ 84,655,017

NOTE 4 – SECURITIES AVAILABLE FOR SALE

The Company’s securities available for sale consist of common and preferred stock of other REITs. The
Company does not own more than 10% of the outstanding shares of any of these securities, nor does it have controlling
financial interest.

As of December 31, 2014 and 2013, the Company’s securities are all classified as available-for-sale. See

Note 13 for Fair Value Measurements.

The following is a listing of securities available for sale at December 31, 2014:

Interest Number
Of Shares

Series Rate

Cost

Market
Value

Equity Securities:
Preferred Stock:
Ashford Hospitality Trust, Inc.
Campus Crest Communities, Inc.
CBL & Associates Properties, Inc.
CBL & Associates Properties, Inc.
Cedar Realty Trust, Inc.
Chesapeake Lodging Trust
Corporate Office Properties Trust
CubeSmart
Digital Realty Trust, Inc.
Dupont Fabros Technology, Inc.
Dupont Fabros Technology, Inc.
EPR Properties
Equity LifeStyle Properties, Inc.

A
A
D
E
B
A
L
A
F
A
B
F
C

10,000
8.550%
30,000
8.000%
2,000
7.375%
65,000
6.625%
50,905
7.250%
20,000
7.750%
26,000
7.375%
2,000
7.750%
2,000
6.625%
7.875%
26,412
7.625% 10,000
6.625% 20,000
2,000
6.750%

$ 251,205
751,222
50,269
1,543,385
1,215,497
500,000
650,330
52,153
44,870
657,703
250,000
472,680
46,885

$ 257,800
766,500
50,400
1,632,800
1,337,789
526,000
678,080
53,952
51,000
672,336
255,200
504,000
52,400

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Glimcher Realty Trust
Kilroy Realty Corporation
Kilroy Realty Corporation
Kite Realty Group Trust
LaSalle Hotel Properties
Pennsylvania Real Estate Investment Trust
Pennsylvania Real Estate Investment Trust
Retail Properties of America, Inc.
Stag Industrial, Inc.
Summit Hotel Properties, Inc
Sun Communities, Inc.
Terreno Realty Corporation
Urstadt Biddle Properties, Inc.
Urstadt Biddle Properties, Inc.
Total Preferred Stock

Common Stock:
CBL & Associates Properties, Inc
Getty Realty Corporation
Gladstone Commercial Corporation
Government Properties Income Trust
Mack-Cali Realty Corporation
Monmouth Real Estate Investment Corp. (1)
Nobility Homes Inc.
Parkway Properties Inc.
Select Income REIT
Senior Housing Properties Trust
Urstadt Biddle Properties, Inc.
Weingarten Realty Investors
Total Common Stock

Interest Number
Series Rate Of Shares

Cost

Market
Value

I
G
H
A
H
A
B
A
B
B
A
A
F
G

6.875%
39,738
6.875% 34,948
10,000
6.380%
50,000
8.250%
40,000
7.500%
94,000
8.250%
40,000
7.375%
7.000% 20,000
6.625%
20,100
7.875% 20,000
7.125% 45,000
7.750% 20,300
7.125% 30,421
5,000
6.750%

964,267
844,770
235,486
1,227,138
982,589
2,350,885
1,000,000
481,949
470,007
500,000
1,117,377
507,791
756,305
125,000

1,017,690
913,436
250,000
1,304,000
1,050,800
2,467,500
1,035,460
524,000
516,110
525,400
1,155,600
520,898
798,232
128,600
$18,049,763 $19,045,983

60,000
130,000
50,000
210,000
85,000
1,995,809
20,000
10,000
373,473
20,000
10,000
40,000

$ 1,108,384
2,457,219
856,545
5,059,017
2,017,705
16,644,510
158,200
182,343
9,981,576
474,337
193,808
1,292,633
$40,426,277

$ 1,165,200
2,367,300
858,500
4,832,100
1,620,100
22,093,602
215,000
183,900
9,116,476
442,200
218,800
1,396,800
$44,509,978

Total Securities Available for Sale

$58,476,040

$63,555,961

(1) Related entity – See Note 8.

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The following is a listing of securities available for sale at December 31, 2013:

Interest Number
Of Shares

Series Rate

Cost

Market
Value

Equity Securities:
Preferred Stock:
Alexandria Real Estate Equities Inc.
American Land Lease Inc.
Ashford Hospitality Trust, Inc.
Campus Crest Communities, Inc.
CBL & Associates Properties, Inc.
CBL & Associates Properties, Inc.
Cedar Realty Trust, Inc.
Chesapeake Lodging Trust
Commonwealth Real Estate Securities
Corporate Office Properties Trust
CubeSmart
Digital Realty Trust Inc.
Digital Realty Trust Inc.
Dupont Fabros Technology, Inc.
Dupont Fabros Technology, Inc.
EPR Properties
Equity LifeStyle Properties, Inc.
General Growth Properties, Inc.
Glimcher Realty Trust
iStar Financial, Inc.
iStar Financial, Inc.
iStar Financial, Inc.

Kilroy Realty Corporation
Kilroy Realty Corporation
Kimco Realty Corporation
Kite Realty Group Trust
LaSalle Hotel Properties
LaSalle Hotel Properties
Lexington Realty Trust
Pebblebrook Hotel Trust
Pennsylvania Real Estate Investment Trust
Pennsylvania Real Estate Investment Trust
Retail Properties of America, Inc.
SL Green Realty Corporation
Stag Industrial, Inc.
Stag Industrial, Inc.
Summit Hotel Properties, Inc
Sun Communities, Inc.
Taubman Centers, Inc.
Terreno Realty Corporation
Urstadt Biddle Properties, Inc.
Vornado Realty Trust
Total Preferred Stock

Common Stock:
Getty Realty Corporation
Gladstone Commercial Corporation
Government Properties Income Trust

E
A
A
A
D
E
B
A
D
L
A
E
F
A
B
F
C
A
I
D
E
I
G
H
I
A
H
I
C
C
A
B
A
I
A
B
B
A
K
A
F
D

2,000
6.450%
31,200
7.750%
10,000
8.550%
30,000
8.000%
2,000
7.375%
65,000
6.625%
47,355
7.250%
20,000
7.750%
74,000
6.500%
26,000
7.375%
7.750%
2,000
7.000% 4,000
2,000
6.625%
7.875%
26,412
7.625% 20,000
20,000
6.625%
2,000
6.750%
10,000
6.375%
39,738
6.875%
26,600
8.000%
38,342
7.875%
59,600
7.500%
34,948
6.875%
10,000
6.380%
2,000
6.000%
50,000
8.250%
40,000
7.500%
6.375%
6,000
6.500% 6,000
19,000
6.500%
8.250% 94,000
7.375% 40,000
7.000%
20,000
20,000
6.500%
9.000% 9,000
6.625%
20,100
7.875% 20,000
45,000
7.125%
11,000
6.250%
20,300
7.750%
7.125%
30,421
7.875% 4,000

$ 45,425
275,297
251,205
751,222
50,269
1,543,385
1,127,208
500,000
1,660,828
650,330
52,153
100,000
44,870
657,703
500,000
472,680
46,885
250,000
964,267
636,609
851,903
1,325,647
844,770
235,486
43,026
1,227,138
982,589
124,984
247,860
400,742
2,350,885
1,000,000
481,949
460,169
224,885
470,007
500,000
1,117,377
228,009
507,791
756,305
96,114

$ 42,400
756,600
252,490
741,000
47,500
1,381,900
1,089,157
491,800
1,517,740
612,040
50,300
86,840
41,160
632,303
455,400
423,800
46,200
201,500
858,341
635,447
896,819
1,363,648
766,410
205,700
41,740
1,262,500
986,000
121,080
264,900
387,062
2,364,852
949,200
421,600
426,200
239,040
418,683
477,002
1,059,750
218,932
497,350
700,596
103,960
$25,057,972 $24,536,942

100,000
60,000
110,000

$ 1,886,332
1,031,950
2,664,307

$ 1,837,000
1,078,200
2,733,500

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Interest Number
Series Rate Of Shares

Cost

Market
Value

Mack-Cali Realty Corporation
Monmouth Real Estate Investment Corp. (1)
Nobility Homes Inc.
Parkway Properties Inc.
Select Income REIT
Urstadt Biddle Properties, Inc.
Total Common Stock

75,000
1,875,147
20,000
10,000
340,973
50,000

1,824,903
15,491,475
158,200
134,799
8,976,023
912,243
$33,080,232

1,611,000
17,045,082
180,200
192,900
9,117,618
922,500
$34,718,000

Total Securities Available for Sale

$58,138,204

$59,254,942

(1) Related entity – See Note 8.

As of December 31, 2014, the Company held five securities that the Company determined were temporarily
impaired investments. The Company considers many factors in determining whether a security is other than
temporarily impaired, including the nature of the security and the cause, severity and duration of the impairment. The
following is a summary of temporarily impaired securities at December 31, 2014:

Less than 12 Months

12 Months or Longer

Fair Value

Unrealized Loss

Fair Value

Unrealized Loss

Preferred Stock
Common Stock

$ -0-
16,758,076

$ -0-
(1,214,073)

$ -0-
1,620,100

$ -0-
(397,605)

Total

$16,758,076

($1,214,073)

$1,620,100

($397,605)

The following is a summary of the range of the losses:

Number of
Individual
Securities

4
1

Fair Value

Unrealized Loss

Range of Loss

$16,758,076
1,620,100

($1,214,073)
(397,605)

Less than or equal to 10%
Less than or equal to 20%

$18,378,176

($1,611,678)

The Company normally holds REIT securities long term and has the ability and intent to hold securities to
recovery. As of December 31, 2014, 2013 and 2012, the securities portfolio had net unrealized holding gains of
$5,079,921, $1,116,738 and $6,613,956, respectively.

During the years ended December 31, 2014, 2013 and 2012, the Company received proceeds of $10,911,791,
$18,981,468 and $16,159,984, on sales or redemptions of securities available for sale, respectively. The Company
recorded the following Gain (Loss) on Sale of Securities Transactions, net:

Gross realized gains
Gross realized losses

2014

2013

2012

$1,555,656
(13,067)

$4,284,934
(229,122)

$4,092,585
-0-

Gains on Sale of Securities Transactions, net

$1,542,589

$4,055,812

$4,092,585

The Company had margin loan balances of $19,392,382 and $18,574,228 at December 31, 2014 and 2013,

respectively, which were collateralized by the Company’s securities portfolio.

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NOTE 5 – LOANS AND MORTGAGES PAYABLE

Loans Payable

The Company may purchase securities on margin. The interest rates charged on the margin loans at
December 31, 2014 and 2013 was 2%. These margin loans are due on demand. At December 31, 2014 and 2013,
respectively, the margin loans amounted to $19,392,382 and $18,574,228, respectively, and are collateralized by the
Company’s securities portfolio. The Company must maintain a coverage ratio of approximately 2 times.

The Company has revolving credit agreements totaling $18,500,000 with GE Commercial Distribution
Finance Corporation (GE), Customers Bank, Northpoint Commercial Finance and 21st Mortgage Corporation to
finance inventory purchases. Interest rates on these agreements range from prime with a minimum of 6% to prime
plus 2% with a minimum of 8% after 18 months. As of December 31, 2014 and 2013, the total amount outstanding
on these lines was $8,323,300 and $5,624,509, respectively, with a weighted average interest rate of 6.62% and 6.03%,
respectively.

The Company had a revolving line of credit with Sun National Bank secured by the Company's eligible notes
receivables. As of December 31, 2013, the amount outstanding on this revolving line of credit was $4,920,199, and
the interest rate was 3.67%. During 2014, the Company borrowed an additional $5.0 million on this revolving line of
credit with Sun National Bank for the acquisition of the four manufactured home communities located in Pennsylvania.
On September 29, 2014, the Company entered into a new revolving line of credit with OceanFirst Bank (“OceanFirst
Line”) secured by the Company’s eligible notes receivable. The maximum availability on this line is $10.0 million.
Interest is at a variable rate of prime plus 50 basis points (0.5%) and matures on June 1, 2017. This line replaces the
revolving line of credit with Sun National Bank, which was fully repaid with proceeds from the OceanFirst Line. As
of December 31, 2014, the amount outstanding on this revolving line of credit was $10,000,000, and the interest rate
was 3.75%.

On October 6, 2014, the Company entered into an agreement with 21st Mortgage Corporation (21st Mortgage)
under which 21st Mortgage will finance the Company’s purchase of a maximum of 500 rental units. These loans are
at an interest rate of 6.99%, with an origination fee of 2% on new units and 3% on existing units. These loans will
have a 10 year term from the date of the borrowing. The amount outstanding on this loan was $723,548, as of
December 31, 2014.

On October 30, 2014, the Company obtained a $4,000,000 loan from Two River Community Bank, secured
by 1,000,000 shares of MREIC common stock. This loan is at an interest rate of 4.625%, with interest only payments
through October 2017, and matures on October 30, 2019.

Unsecured Lines of Credit

On March 29, 2013, the Company entered into a $35 million Unsecured Revolving Credit Facility with Bank
of Montreal (“Credit Facility”). The Company has the ability to increase the borrowing capacity by an amount not to
exceed $15 million, representing a maximum aggregate borrowing capacity of $50 million, subject to various
conditions, as defined in the agreement. The maturity date of the Credit Facility is March 29, 2016 with a one year
extension available at the Company’s option. Borrowings under the Credit Facility can be used for, among other
things, acquisitions, working capital, capital expenditures, and repayment of other indebtedness. Borrowings will bear
interest at the Company’s option of LIBOR plus 2.00% to 2.75% or BMO’s prime lending rate plus 1.00% to 1.75%,
based on the Company’s overall leverage. Based on leverage ratios, interest on this borrowing is at LIBOR plus 275
basis points or 2.91% as of December 31, 2014, and LIBOR plus 225 basis points or 2.42% as of December 31, 2013.
The Company incurs a fee on the unused commitment amount of up to 0.35% per annum. The Credit Facility replaces
the Company’s former $5.0 million unsecured line of credit, which was at an interest rate of LIBOR plus 375 basis
points. As of December 31, 2014, the amount outstanding on the Credit Facility was $35,000,000.

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The aggregate principal payments of all loans payable, including the Credit Facility, are scheduled as follows:

Year Ended December 31,
2015
2016
2017
2018
2019
Thereafter

$ 8,375,131
35,055,572
10,059,584
63,885
4,068,496
19,816,562

Total $ 77,439,230

Mortgages Payable

The following is a summary of mortgages payable:

Property

At December 31, 2014

Due Date

Interest Rate

Balance at December 31,
2013

2014

Allentown and Clinton Mobile Home Resort
Cedarcrest
D & R Village and Waterfalls Village
Fairview Manor
Heather Highlands
Highland Estates
Oxford Village
Somerset Estates and Whispering Pines
Southwind Village
Suburban Estates and Sunny Acres
Summit Estates
Twin Oaks
Various (3 properties)
Various (4 properties)
Various (5 properties)
Various (5 properties)
Various (5 properties)
Various (11 properties)
Various (13 properties)

02/01/17
04/01/21
02/27/15
02/01/17
08/28/18
09/01/17
01/01/20
02/26/19
01/01/20
06/01/18
05/01/16
12/01/19
05/01/16
07/01/23
01/01/22
12/06/22
02/01/18
08/01/17
03/01/23

Total Mortgages

Payable

LIBOR + 3.25%
5.125%
LIBOR + 2.25%
5.785%
Prime + 1.0%
6.175%
5.94%
4.89%
5.94%
4.0%
12.75%
5.75%
6.23%
4.975%
4.25%
4.75%
6.83%
LIBOR + 3.0%
4.065%

$10,486,045
8,966,785
6,803,625
10,139,450
989,773
9,408,128
7,350,261
731,900
5,871,176
6,417,395
575,021
2,637,078
8,221,043
8,495,880
14,679,583
7,554,281
9,083,178
12,177,725
52,082,527
$182,670,854

$10,799,401
9,124,838
7,089,610
10,345,239
1,288,149
9,578,574
7,527,426
891,382
6,012,690
6,711,306
-0-
2,702,771
-0-
-0-
14,964,116
7,675,595
-0-
12,909,520
53,019,327
$160,639,944

At December 31, 2014 and 2013, mortgages were collateralized by real property with a carrying value of
$294,759,460 and $235,685,401, respectively, before accumulated depreciation and amortization. Interest costs
amounting to $280,354, $247,186 and $269,891 were capitalized during 2014, 2013 and 2012, respectively, in
connection with the Company’s expansion program.

On February 27, 2015, the Company refinanced the D&R Village and Waterfalls Village mortgage (See Note

15). On March 6, 2015, the Company obtained a mortgage on Olmsted Falls (See Note 15).

Recent Transactions

2014

On March 13, 2014, the Company assumed approximately $18.1 million in mortgage loans on its 8
community acquisition. The weighted average interest rate on these mortgages is fixed at 6.74%. Approximately $8.9
million matures on May 1, 2016 and the remaining balance matures on February 1, 2018. In addition, the Company
borrowed $10.0 million on its Credit Facility to finance this acquisition.

On July 14, 2014, the Company assumed an $8.6 million mortgage loan on its 4 community acquisition. The

interest rate on this mortgage is fixed at 4.975%. This mortgage matures on July 1, 2023.

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2013

On February 27, 2013, the Company had one mortgage loan due for D&R Village and Waterfalls Village
with a balance of approximately $7,400,000. Under the terms of the loan agreement, this loan may be extended for
an additional two years. Management has extended this loan to February 27, 2015. Interest during the extension
period is at LIBOR plus 225 basis points which was 2.41% as of both December 31, 2014 and 2013.

On March 1, 2013, the Company obtained a $53,760,000 mortgage loan from JP Morgan Chase Bank, N.A.
on its 10 community acquisition. The Company also included 3 additional communities in this mortgage. Interest on
the mortgage loan is fixed at 4.065%. This mortgage loan matures on March 1, 2023.

On April 3, 2013, the Company repaid its mortgages on Cranberry Village and Forest Park Village for a total

amount of approximately $5,700,000. The interest rate on these mortgages was 6.8%.

In June 2013, the Company modified its mortgage on Sunny Acres and Suburban Estates. The interest rate
was reduced from a fixed rate of 6.5% to a fixed rate of 4.0%. The maturity date was accelerated from June 1, 2020
to June 1, 2018.

On November 6, 2013, the Company assumed a $7,700,000 mortgage on the acquisition of five manufactured

home communities. This mortgage is at a fixed interest rate of 4.75% and matures on December 6, 2022.

The aggregate principal payments of all mortgages payable are scheduled as follows:

Year Ended December 31,
2015
2016
2017
2018
2019
Thereafter

$ 11,476,760
13,294,102
42,609,986
16,524,653
16,061,179
82,704,174

Total

$ 182,670,854

NOTE 6 – STOCK COMPENSATION PLAN

On August 14, 2003, the shareholders approved and ratified the Company’s 2003 Stock Option Plan (the
2003 Plan) authorizing the grant to officers and key employees of options to purchase up to 1,500,000 shares of
common stock. On June 7, 2010, the shareholders approved and ratified an amendment and restatement of the Plan.
The amendment and restatement made two substantive changes: (1) the inclusion of Directors as participants in the
Plan, and (2) the ability to grant restricted stock to Directors, officers and key employees. The amendment and
restatement also made other conforming, technical and other minor changes. The amendment also makes certain
modifications and clarifications, including concerning administration and compliance with applicable tax rules, such
as Section 162(m) of the Internal Revenue Code. There was no change to the total number of shares subject to grant
under the Plan.

On June 13, 2013, the shareholders approved and ratified the Company's 2013 Stock Option and Stock Award
Plan (the 2013 Plan) authorizing the grant of stock options or restricted stock awards to directors, officers and key
employees of options to purchase up to 3,000,000 shares of common stock. All options are exercisable one year from
the date of grant. The option price shall not be below the fair market value at date of grant. If and to the extent that an
award made under the 2013 Plan is forfeited, terminated, expires or is canceled unexercised, the number of shares
associated with the forfeited, terminated, expired or canceled portion of the award shall again become available for
additional awards under the 2013 Plan. The 2013 Plan replaced the Company's 2003 Plan, which, pursuant to its
terms, terminated in 2013. The outstanding options under the 2003 Stock Option and Award Plan, as amended, remain
outstanding until exercised, forfeited or expired. Not more than 200,000 shares of the Company’s common stock may
be granted as options in any one fiscal year to a participant under the 2013 Plan. In general, each option may be
exercised only after one year of continued service with the Company.

The Compensation Committee determines the recipients of restricted stock awards; the number of restricted
shares to be awarded; the length of the restricted period of the award; the restrictions applicable to the award including,

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without limitation, the employment or retirement status of the participant; rules governing forfeiture and restrictions
applicable to any sale, assignment, transfer, pledge or other encumbrance of the restricted stock during the restricted
period; and the eligibility to share in dividends and other distributions paid to the Company’s stockholders during the
restricted period. The maximum number of shares underlying restricted stock awards that may be granted in any one
fiscal year to a participant shall be 100,000 shares.

Unless otherwise provided for in an underlying restricted stock award agreement, if a participant’s status as
an employee or director of the Company is terminated by reason of death or disability, the restrictions will lapse on
such date. Unless otherwise provided for in an underlying restricted stock award agreement, the Plan provides that if
an individual’s status as an employee or director is terminated by reason of retirement following an involuntary
termination (other than for “cause” as defined in the 2013 Plan), the restrictions will generally lapse, unless the
restricted stock award is intended to constitute “performance based” compensation for purposes of Section 162(m) of
the Internal Revenue Code. If a participant’s status as an employee or director terminates for any other reason, the
Plan provides that a participant will generally forfeit any outstanding restricted stock awards, unless otherwise
indicated in the applicable award agreement. Shares of restricted stock that are forfeited become available again for
issuance under the 2013 Plan. The Compensation Committee has the authority to accelerate the time at which the
restrictions may lapse whenever it considers that such action is in the best interests of the Company and of its
stockholders, whether by reason of changes in tax laws, a “change in control” as defined in the 2013 Plan or otherwise.

The Company accounts for 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).

Stock Options

During the year ended December 31, 2014, twenty-five employees were granted options to purchase a total
of 339,000 shares. During the year ended December 31, 2013, twenty-four employees were granted options to
purchase a total of 392,000 shares. During the year ended December 31, 2012, fifteen employees were granted options
to purchase a total of 94,000 shares. The fair value of these options for the years ended December 31, 2014, 2013 and
2012 was approximately $332,000, $556,000 and $87,000, respectively, based on assumptions noted below and is
being amortized over the 1-year vesting period. The remaining unamortized stock option expense was $97,594 as of
December 31, 2014, and that amount will be expensed in 2015.

The Company calculates the fair value of each option grant on the grant date using the Black-Scholes option-

pricing model which requires the Company to provide certain inputs, as follows:

• The assumed dividend yield is based on the Company’s expectation of an annual dividend rate for regular

dividends over the estimated life of the option.

• Expected volatility is based on the historical volatility of the Company’s stock over a period relevant to the

related stock option grant.

• The risk-free interest rate utilized is the interest rate on U.S. Government Bonds and Notes having the same

life as the estimated life of the Company’s option awards.

• Expected life of the options granted is estimated based on historical data reflecting actual hold periods.

• Estimated forfeiture is based on historical data reflecting actual forfeitures.

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The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing

model with the following weighted-average assumptions used for grants in the following years:

Dividend yield
Expected volatility
Risk-free interest rate
Expected lives
Estimated forfeitures

2014

2013

2012

7.14%
27.12%
2.23%
8
-0-

6.67%
32.37%
1.96%
8

-0-

7.08%
26.19%
1.11%
8
-0-

During the year ended December 31, 2014, options to two employees to purchase a total of 23,000 shares
were exercised. During the year ended December 31, 2013, no options were exercised. During the year ended
December 31, 2012, options to one employee to purchase a total of 4,000 shares were exercised. During the year ended
December 31, 2014, options to eleven employees to purchase a total of 108,000 shares expired. During the year ended
December 31, 2013, options to ten employees to purchase a total of 84,000 shares expired. During the year ended
December 31, 2012, options to eight employees to purchase a total of 55,000 shares expired.

A summary of the status of the Company’s stock option plans as of December 31, 2014, 2013 and 2012 and

changes during the years then ended are as follows:

2014

2013

2012

Weighted-
Average
Exercise
Price

1,093,000
339,000
(23,000)
(108,000)

$10.86
9.85
7.28
14.52

785,000
392,000
-0-

(84,000)

$11.71
10.08
-0-
15.51

750,000
94,000
(4,000)
(55,000)

$12.03
11.29
7.56
15.58

1,301,000

10.34

1,093,000

10.86

785,000

11.71

962,000

701,000

691,000

$0.98

$1.42

$0.92

Outstanding at
beginning of year
Granted
Exercised
Expired
Outstanding at end of
year
Options exercisable at
end of year
Weighted-average fair
value of options
granted during the year

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The following is a summary of stock options outstanding as of December 31, 2014:

Date of Grant

Number of
Employees

Number of
Shares

Option Price

Expiration
Date

01/03/07
01/03/07
07/16/07
09/20/07
01/08/08
01/08/08
09/25/08
01/07/09
01/07/09
06/22/09
01/08/10
01/08/10
07/27/10
07/05/11
08/29/12
02/28/13
06/26/13
06/11/14

* Unexercisable

1
1
12
2
1
1
11
1
1
12
1
1
12
11
14
1
23
25

44,200
5,800
51,000
7,000
42,300
7,700
33,000
14,000
61,000
43,000
10,900
14,100
80,000
74,000
88,000
10,000
376,000
339,000 *

1,301,000

15.51
17.06
14.21
13.19
11.79
12.97
7.55
7.12
6.47
7.57
9.13
8.30
11.40
11.16
11.29
10.02
10.08
9.85

01/03/15
01/03/15
07/16/15
09/20/15
01/08/16
01/08/16
09/25/16
01/07/17
01/07/17
06/22/17
01/08/18
01/08/18
07/27/18
07/05/19
08/29/20
02/28/21
06/26/21
06/11/22

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying
awards and the quoted price of the Company’s common stock for the options that were in-the-money. The aggregate
intrinsic value of options outstanding as of December 31, 2014, 2013 and 2012 was $395,243, $421,563 and $602,653,
respectively, of which $395,243, $421,563 and $602,653 relate to options exercisable. The intrinsic value of options
exercised in 2014, 2013 and 2012 was $57,250, $-0- and $18,000, respectively, determined as of the date of option
exercise. The weighted-average remaining contractual term of the above options was 4.3, 4.8 and 3.9 years as of
December 31, 2014, 2013 and 2012, respectively. For the years ended December 31, 2014, 2013 and 2012, amounts
charged to stock compensation expense relating to stock option grants, which is included in General and
Administrative Expenses, totaled $437,063, $411,017 and $69,253, respectively.

Restricted Stock

On January 15, 2014, the Company awarded 25,000 shares of restricted stock to one participant. During
2013, the Company did not award any restricted stock grants. During 2012, the Company awarded 75,000 shares of
restricted stock to nine participants. The grant date fair value of restricted stock grants awarded to participants was
$232,750, $-0- and $803,700 for the years ended December 31, 2014, 2013 and 2012, respectively. These grants vest
in equal installments over five years. As of December 31, 2014, there remained a total of $845,429 of unrecognized
restricted stock compensation related to outstanding non-vested restricted stock grants awarded and outstanding at
that date. Restricted stock compensation is expected to be expensed over a remaining weighted average period of 2.3
years. For the years ended December 31 , 2014, 2013 and 2012, amounts charged to stock compensation expense
related to restricted stock grants, which is included in General and Administrative Expenses, totaled $485,881,
$439,332 and $503,991, respectively. During 2012, compensation costs included a one-time charge of $123,490 for
restricted stock grants awarded to one participant who is of retirement age and therefore the entire amount of measured
compensation cost has been recognized at grant date.

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A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2014,

2013 and 2012, and changes during the year ended December 31, 2014, 2013 and 2012 are presented below:

2014

2013

2012

Non-vested at
beginning of year
Granted
Dividend Reinvested Shares
Vested

152,292
25,000
12,194
(52,140)

Weighted-
Average
Grant Date
Fair Value

$10.77
9.31
9.22
(10.77)

187,470
-0-
12,992
(48,170)

$10.90
-0-
9.33
(10.90)

130,974
75,000
11,470
(29,974)

$11.14
10.72
9.90
(11.10)

Non-vested at end of year

137,346

$10.37

152,292

$10.77

187,470

$10.90

As of December 31, 2014, there were 2,260,000 shares available for grant as stock options or restricted stock

under the 2013 Plan.

NOTE 7 – 401(k) PLAN

All full-time employees who are over 21 years old are eligible for the Company’s 401(k) Plan (Plan). Under
this Plan, an employee may elect to defer his/her compensation, subject to certain maximum amounts, and have it
contributed to the Plan. Employer contributions to the Plan are at the discretion of the Company. During 2014, 2013
and 2012, the Company made matching contributions to the Plan of up to 100% of the first 3% of employee salary
and 50% of the next 2% of employee salary. The total expense relating to the Plan, including matching contributions
amounted to $226,953, $162,304 and $126,224 in 2014, 2013 and 2012, respectively.

NOTE 8 – RELATED PARTY TRANSACTIONS AND OTHER MATTERS

Transactions with Monmouth Real Estate Investment Corporation

There are six Directors of the Company who are also Directors and shareholders of Monmouth Real Estate
Investment Corporation (MREIC). The Company holds common stock of MREIC in its securities portfolio. As of
December 31, 2014, the Company owns a total of 1,995,809 shares of MREIC common stock, representing 3.5% of
the total shares outstanding at December 31, 2014 (See Note 4). The Company shares 1 officer (Chairman of the
Board) and 2 additional employees (Controller and Director of Investor Relations) with MREIC. Effective January
1, 2015, the Company reduced this number to 1 officer (Chairman of the Board) and 1 additional employee (Director
of Investor Relations). Allocations of salaries and benefits are based on the amount of the employees’ time dedicated
to each company. Some general and administrative expenses, including office rent, are allocated between the
Company and MREIC based on use or services provided. Effective January 2015, MREIC obtained a separate lease
and office rent is no longer allocated between the Company and MREIC.

Employment Agreements and Compensation

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amendment). The second amendment provides that in the event of a change in control, Eugene W. Landy shall receive
a lump sum payment of $1,200,000, provided the sale price of the Company is at least $16 per share of common stock.
A change of control shall be defined as the consummation of a reorganization, merger, share exchange, consolidation,
or sale or disposition of all or substantially all of the assets of the Company. This change of control provision shall
not apply to any combination between the Company and MREIC. Payment shall be made simultaneously with the
closing of the transaction, and only in the event that the transaction closes. During 2011, Mr. Landy was also awarded
an Outstanding Leadership Achievement Award in the amount of $250,000 per year for three years. During 2013, the
Board of Directors extended Mr. Landy’s pension benefit for an additional three years, through 2016. Effective
October 1, 2014, the Company amended the employment agreement with Mr. Landy, increasing his base salary to
$250,000.

Effective January 1, 2012, the Company and Samuel A. Landy entered into a three-year Employment
Agreement under which Mr. Samuel Landy receives an annual base salary of $378,000 for 2012, $396,900 for 2013
and $416,745 for 2014, subject to increases in Funds from Operations (FFO) of 3% per year or 9% over the three-year
period. If this increase is not met, the salary increase will be limited to the increase in the consumer price index.
Bonuses are based on performance goals relating to FFO, home sales, occupancy and acquisitions, with a maximum
of 21% of salary. Mr. Samuel Landy received a restricted stock grant of 25,000 shares in 2012. In each subsequent
calendar year of employment pursuant to the Agreement, restricted stock shall be awarded to Mr. Samuel Landy at
the discretion of the Compensation Committee of the Board of Directors. Mr. Samuel Landy will receive customary
fringe benefits, four weeks of vacation, reimbursement of reasonable and necessary business expenses and use of an
automobile. The Company will reimburse Mr. Samuel Landy for the cost of a disability insurance policy. In the event
of a merger, sale or change of voting control of the Company, excluding transactions between the Company and
MREIC, Mr. Samuel Landy will have the right to extend and renew this employment agreement so that the expiration
date will be three years from the date of merger, sale or change of voting control, or the employee may terminate the
employment agreement and be entitled to receive one year’s compensation in accordance with the agreement. If there
is a termination of employment by the Company for any reason, either involuntary or voluntary, including the death
of the employee, the employee shall be entitled to the greater of the salary due under the remaining term of the
agreement or one year’s compensation at the date of termination, paid monthly over the remaining term or life of the
agreement. Mr. Landy is currently negotiating a new employment agreement.

Other Matters

The Company has an employment agreement with a certain executive officer, which in addition to base
compensation, bonuses and fringe benefits, provides for specified retirement benefits. The Company has accrued
these benefits on a present value basis over the terms of the agreements. Amounts accrued under this agreement were
$600,000 at both December 31, 2014 and 2013.

The Company leases its corporate offices where the lessor of the property is owned by certain officers and
directors of the Company. The Company is also responsible for its proportionate share of real estate taxes and common
area maintenance. On May 1, 2010, the Company renewed this lease for an additional five-year term with monthly
lease payments of $13,600 through April 30, 2013 and $14,000 through April 30, 2015. Management believes that
the aforesaid rent is no more than what the Company would pay for comparable space elsewhere. Approximately
70% of the monthly lease payment plus its proportionate share of real estate taxes and common area maintenance was
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reimbursed by MREIC through 2014. Effective January 2015, MREIC obtained a separate lease and office rent is no
longer allocated between the Company and MREIC.

NOTE 9 – SHAREHOLDERS’ EQUITY

Common Stock

The Company has a Dividend Reinvestment and Stock Purchase Plan (DRIP), as amended. Under the terms
of the DRIP, shareholders who participate may reinvest all or part of their dividends in additional shares of the
Company at a discounted price (approximately 95% of market value) directly from the Company, from authorized but
unissued shares of the Company common stock. Shareholders may also purchase additional shares at this discounted
price by making optional cash payments monthly. Optional cash payments must be not less than $500 per payment
nor more than $1,000 unless a request for waiver has been accepted by the Company.

Amounts received in connection with the DRIP for the years ended December 31, 2014, 2013 and 2012 were

as follows:

2014

2013

2012

Amounts Received
Less: Dividends Reinvested
Amounts Received, net

$34,650,730
1,858,491
$32,792,239

$37,054,626
1,861,987
$35,192,639

$19,448,937
1,390,899
$18,058,038

Number of Shares Issued

3,554,191

3,658,010

1,780,043

Preferred Stock

As of December 31, 2014, the Company had a total of 3,663,800 shares of Series A Preferred Stock

outstanding representing an aggregate liquidation preference of $91,595,000.

The annual dividend of the Series A Preferred Stock is $2.0625 per share, or 8.25%, of the $25.00 per share

liquidation value and is payable quarterly in arrears on March 15, June 15, September 15, and December 15.

The Series A Preferred Stock, par value $.10, has no maturity and will remain outstanding indefinitely unless
redeemed or otherwise repurchased. Except in limited circumstances relating to the Company’s qualification as a
REIT, and as described below, the Series B Preferred Stock is not redeemable prior to May 26, 2016. On and after
May 26, 2016, the Series A Preferred Stock will be redeemable at the Company’s option for cash, in whole or, from
time to time, in part, at a price per share equal to $25.00, plus all accrued and unpaid dividends (whether or not
declared) to the date of redemption.

Upon the occurrence of a Delisting Event or Change of Control, as defined in the Prospectus of the Preferred
Offering, each holder of the Series A Preferred Stock will have the right to convert all or part of the shares of the
Series A Preferred Stock held, unless the Company elects to redeem the Series A Preferred Stock.

Holders of the Series A Preferred Stock generally have no voting rights, except if the Company fails to pay

dividends for six or more quarterly periods, whether or not consecutive, or with respect to certain specified events.

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Issuer Purchases of Equity Securities

NOTE 10 – DISTRIBUTIONS

Common Stock

The following cash distributions, including dividends reinvested, were paid to common shareholders during

the three years ended December 31, 2014, 2013 and 2012:

Quarter Ended

Amount

Per Share

Amount

Per Share

Amount

Per Share

2014

2013

2012

March 31
June 30
September 30
December 31

$3,853,595
3,991,110
4,125,060
4,316,063

$0.18
0.18
0.18
0.18

$3,155,607
3,294,938
3,456,304
3,656,622

$0.18
0.18
0.18
0.18

$2,809,868
2,902,806
2,954,616
3,062,506

$16,285,828

$0.72

$13,563,471

$0.72

$11,729,796

These amounts do not include the discount on shares purchased through the Company’s DRIP.

$0.18
0.18
0.18
0.18

$0.72

On January 21, 2015, the Company declared a cash dividend of $0.18 per share to be paid on March 16, 2015

to common shareholders of record as of the close of business on February 17, 2015.

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Preferred Stock

The following dividends were paid to preferred shareholders during the year ended December 31, 2014, 2013

and 2012:

Declaration
Date

Record Date

1/15/2014
4/1/2014
7/1/2014
10/1/2014

2/18/2014
5/15/2014
8/15/2014
11/17/2014

Declaration
Date

Record Date

1/16/2013
4/8/2013
7/1/2013
10/1/2013

2/15/2013
5/15/2013
8/15/2013
11/15/2013

Declaration
Date

Record Date

1/18/2012
4/17/2012
7/9/2012
10/1/2012

2/15/2012
5/15/2012
8/15/2012
11/15/2012

Payment
Date

3/17/2014
6/16/2014
9/15/2014
12/15/2014

Payment
Date

3/15/2013
6/17/2013
9/16/2013
12/16/2013

Payment
Date

3/15/2012
6/15/2012
9/17/2012
12/17/2012

Dividend

$1,889,147
1,889,147
1,889,147
1,889,147

Dividend
per Share

$0.515625
0.515625
0.515625
0.515625

$7,556,588

$2.0625

Dividend

$1,889,147
1,889,147
1,889,147
1,889,147

Dividend per
Share

$0.515625
0.515625
0.515625
0.515625

$7,556,588

$2.0625

Dividend

$690,319
930,716
1,244,616
1,459,458

Dividend per
Share

$0.515625
0.515625
0.515625
0.515625

$4,325,109

$2.0625

-100-

- 99 -

NOTE 11 – FEDERAL INCOME TAXES

Reconciliation Between U.S. GAAP Net Income and Taxable Income

The following table reconciles U.S. GAAP net income to taxable income for the years ended December 31,

2014, 2013, and 2012:

U.S. GAAP net income
Add: U.S. GAAP net loss of taxable REIT

subsidiary included above

U.S. GAAP net income from REIT operations
Stock compensation expense
Acquisition costs and other book / tax
differences, net
Taxable income before adjustments
Less: Capital gains
Adjusted taxable income subject to 90% dividend

2014
Estimate
(unaudited)

2013
Actual

2012
Actual

4,237,803 $

5,836,823 $

6,474,057

3,946,571
8,184,374
922,944

(1,238,794)
7,868,524
(1,514,518)

2,746,526
8,583,349
850,349

351,413
9,785,111
(3,630,548)

3,081,837
9,555,894
573,244

(344,027)
9,785,111
(4,146,773)

requirement

6,354,006

6,154,563

5,638,338

Reconciliation Between Cash Dividends Paid and Dividends Paid Deduction

The following table reconciles cash dividends paid with the dividends paid deduction for the years ended

December 31, 2014, 2013, and 2012:

2014
Estimate
(unaudited)

2013
Actual

2012
Actual

Cash dividends paid
Less: Portion designated as capital gains

distributions
Less: Return of capital

23,842,416 $

21,120,059 $

16,798,495

(1,514,518)
(15,973,892)

(3,630,548)
(11,334,948)

(4,146,773)
(7,013,384)

Dividends paid deduction

6,354,006

6,154,563

5,638,338

Characterization of Distributions

The following table characterizes the distributions paid per common share for the years ended December 31,

2014, 2013, and 2012:

2014

2013

2012

Amount

Percent

Amount

Percent

Amount

Percent

Ordinary income $
Capital gains
Return of capital

0.01114
0.00265
0.70621

1.55%
.37%
98.08%

0.12844
0.05835
0.53321

17.84% $ 0.07892
0.08391
0.55717

8.10%
74.06%

10.96%
11.65%
77.39%

0.72

100%

0.72

100%

0.72

100%

-101-

- 100 -

For the year ended December 31, 2014, total distributions paid by the Company for preferred stock, amounted
to $7,556,588 or $2.0625 per share ($1.66551 taxed as ordinary income and $0.39699 taxed as capital gains). For the
year ended December 31, 2013, total distributions paid by the Company for preferred stock, amounted to $7,556,588
or $2.0625 per share ($1.41816 taxed as ordinary income and $.64434 taxed as capital gains). For the year ended
December 31, 2012, total distributions paid by the Company for preferred stock before accrued dividends, amounted
to $5,068,697 or $2.0625 per share ($0.99966 taxed as ordinary income and $1.06284 taxed as capital gains).

In addition to the above, taxable income from non-REIT activities conducted by S&F, a TRS, is subject to
federal, state and local income taxes. Deferred income taxes pertaining to S&F are accounted for using the asset and
liability method. Under this method, deferred income taxes are recognized for temporary differences between the
financial reporting bases of assets and liabilities and their respective tax bases and for operating loss and tax credit
carryforwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However,
deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on
consideration of available evidence, including tax planning strategies and other factors. For the years ended December
31, 2014, 2013 and 2012, S&F had operating losses for financial reporting purposes of $3,946,571, $2,746,526 and
$3,081,837, respectively. Therefore, a valuation allowance has been established against any deferred tax assets
relating to S&F. For the years ended December 31, 2014, 2013 and 2012, S&F recorded $15,000, $5,000 and $5,000,
respectively, in federal, state and franchise taxes.

NOTE 12 – COMMITMENTS, CONTINGENCIES AND LEGAL 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.

In 2010, a rainstorm bringing 13 inches of rain in a two-hour period caused flooding at Memphis Mobile
City. All homes owned by the Company were fully restored as were the homes of all residents who elected to make
repairs. On May 9, 2011, the Company was notified that a lawsuit had been filed in the United States District Court
for the Western District of Tennessee on behalf of a purported class of all individuals of Mexican national origin who
are current or former residents of Memphis Mobile City. The complaint alleges various claims based on federal and
state discrimination and consumer protection laws, seeking monetary damages and injunctive relief. The magistrate
judge ruled that plaintiffs who had signed a security agreement with an arbitration clause would be obligated to
arbitrate while the other plaintiffs would not. The Company filed a Motion to Dismiss plaintiffs’ amended Complaint
which plaintiffs opposed. The District Judge issued a decision granting our motion in part and denying it in part. This
litigation is ongoing. The Company continues to believe the action to be without merit. The Company’s insurance
company is supporting our defense of this action. The Company is working on redeveloping this property as a
manufactured home community, using fill from adjacent land that we have purchased in order to comply with current
codes. The adjacent parcel is also slated for manufactured home development upon receipt of appropriate
permits. The Company has received approval from the municipality for the first phase of the development and is
currently obtaining bids for the construction work.

The Company has entered into definitive agreements to purchase four manufactured home communities with a
total of approximately 623 developed home sites. These communities are located in Pennsylvania. The aggregate
purchase price of these communities totals approximately $12.9 million. One acquisition of 141 home sites, with a
purchase price of $3,800,000 was completed in January 2015 (See Note 15). Subject to satisfactory due diligence, we
anticipate completion of the remaining acquisitions during the first half of 2015.

In November 2013, the Company entered into an agreement with 21st Mortgage Corporation (21st Mortgage)
under which 21st Mortgage can provide financing for home purchasers in the Company’s communities. The Company
does not receive referral fees or other cash compensation under the agreement. If 21st Mortgage makes loans to purchasers
and those purchasers default on their loans and 21st Mortgage repossesses the homes securing such loans, the Company
has agreed to purchase from 21st Mortgage each such repossessed home for a price equal to 80% to 95% of the amount
under each such loan, subject to certain adjustments. This agreement may be terminated by either party with 30 days
written notice. As of December 31, 2014, there were fifty-nine transactions under this agreement with a total original loan
amount of approximately $3.0 million. Additionally, 21st Mortgage previously made loans to purchasers in certain
communities we acquired. In conjunction with these acquisitions, the Company has agreed to purchase from
21st Mortgage each repossessed home, if those purchasers default on their loans. The purchase price ranges from 55% to
100% of the amount under each such loan, subject to certain adjustments. As of December 31, 2014, the total loan balance
was approximately $3.0 million.

-102-

- 101 -

NOTE 13 - FAIR VALUE MEASUREMENTS

The Company follows ASC 825, Fair Value Measurements, for financial assets and liabilities recognized at fair
value on a recurring basis. The Company measures certain financial assets and liabilities at fair value on a recurring basis,
including securities available for sale. The fair value of these certain financial assets and liabilities was determined using
the following inputs at December 31, 2014 and 2013:

Fair Value Measurements at Reporting Date Using

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant

Unobservable
Inputs
(Level 3)

Total

December 31, 2014:
Equity Securities - Preferred Stock
Equity Securities - Common Stock
Interest Rate Swap (1)
Total

December 31, 2013:
Equity Securities - Preferred Stock
Equity Securities - Common Stock
Interest Rate Swap (1)
Total

$19,045,983
44,509,978
(39,685)
$63,516,276

$19,045,983
44,509,978
-0-
$63,555,961

$24,536,942
34,718,000
(39,840)
$59,215,102

$24,536,942
34,718,000
-0-
$59,254,942

(1) Included in accrued liabilities and deposits

$-0-
-0-
(39,685)
$(39,685)

$-0-
-0-
(39,840)
$(39,840)

$-0-
-0-
-0-
$-0-

In addition to the Company’s investment in Securities Available for Sale 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 securities available for sale 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 receivables approximates their current carrying amounts
since all such items are short-term in nature. The fair value of securities available for sale is primarily based upon
quoted market values. The fair value of variable rate mortgages payable and loans payable approximate their current
carrying amounts since such amounts payable are at approximately a weighted-average current market rate of interest.
The estimated fair value of fixed rate mortgage notes payable is based on discounting the future cash flows at a year-
end risk adjusted borrowing rate currently available to the Company for issuance of debt with similar terms and
remaining maturities. These fair value measurements fall within level 2 of the fair value hierarchy. As of December
31, 2014, the fair and carrying value of fixed rate mortgages payable amounted to $154,848,509 and $152,213,686,
respectively. As of December 31, 2013, the fair and carrying value of fixed rate mortgages payable amounted to
$127,869,529 and $128,553,264, respectively. When the Company acquires a property, it is required to fair value all
of the assets and liabilities, including intangible assets and liabilities (See Note 1). Those fair value measurements
fall within level 3 of the fair value hierarchy.

-103-

- 102 -

NOTE 14 – SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for interest during the years ended December 31, 2014, 2013 and 2012 was $10,832,747,

$8,185,305 and $4,715,898, respectively.

During the years ended December 31, 2014 and 2013, the Company assumed mortgages totaling

approximately $26.7 million and $7.7 million for the acquisition of communities.

During the years ended December 31, 2014, 2013 and 2012, land development costs of $100,372, $77,562

and $85,193, respectively were transferred to investment property and equipment and placed in service.

During the years ended December 31, 2014, 2013 and 2012, the Company had dividend reinvestments of

$1,858,491, $1,861,987 and $1,390,899, respectively which required no cash transfers.

NOTE 15 – SUBSEQUENT EVENTS

Material subsequent events have been evaluated and are disclosed herein.

On January 21, 2015, the Company acquired one manufactured home community for approximately $3.8
million located in Pennsylvania. This all-age community contains a total of 141 developed home sites that are situated
on approximately 40 total acres. The average occupancy for this community is approximately 96%. The Company
assumed a mortgage loan with a balance of approximately $2.3 million. The interest rate on this mortgage is fixed at
6.5%. This mortgage matures on October 5, 2021.

On February 27, 2015, the Company obtained an $8,100,000 Federal Home Loan Mortgage Corporation
(Freddie Mac) mortgage through Wells Fargo Bank, N.A. (Wells Fargo) on D&R Village. The interest rate on this
mortgage is fixed at 3.85%. This mortgage matures on March 1, 2025. Proceeds from this mortgage was used to
repay the D&R Village and Waterfalls Village mortgage.

On March 6, 2015, the Company obtained a $2,200,000 Freddie Mac mortgage through Wells Fargo on

Olmsted Falls. The interest rate on this mortgage is fixed at 3.98%. This mortgage matures on April 1, 2025.

NOTE 16 – PRO FORMA FINANCIAL INFORMATION (UNAUDITED)

The following unaudited pro forma condensed financial information reflects the 2014 and 2013 acquisitions
that have closed. 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 2014 and 2013 assuming that the
acquisitions had occurred as of January 1, 2013, 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.

For the years ended December 31,

2014

2013

Rental and Related Income
Community Operating Expenses
Net Loss Attributable to Common Shareholders
Net Loss Attributable to Common Shareholders per Share:
Basic
Diluted

$65,503,000
34,882,000
(4,223,000)

$61,715,000
35,079,000
(4,603,000)

(0.19)
(0.19)

(0.25)
(0.24)

-104-

- 103 -

NOTE 17 – SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
THREE MONTHS ENDED

2014

March 31

June 30

September 30

December 31

$15,849,181
15,101,441
(156,907)
568,189

Total Income
Total Expenses
Other Income (Expense)
Net Income
Net Income (Loss) Attributable
to Common Shareholders
Net Income (Loss) Attributable to Common
Shareholders per Share –
Basic
Diluted

(0.06)
(0.06)

(1,320,958)

$18,148,732
16,489,825
(228,377)
1,476,725

$18,554,782
16,777,494
(1,121,174)
629,271

$18,879,238
16,152,398
(1,173,827)
1,563,618

(412,422)

(1,259,876)

(325,529)

(0.02)
(0.02)

(0.06)
(0.06)

(0.01)
(0.01)

2013

March 31

June 30

September 30

December 31

$13,426,295
12,240,957
2,977,034
4,149,511

Total Income
Total Expenses
Other Income (Expense)
Net Income
Net Income (Loss) Attributable
to Common Shareholders
Net Income (Loss) Attributable to Common
Shareholders per Share –
Basic
Diluted

2,260,364

$16,097,925
14,196,653
(229,785)
1,619,439

$16,253,966
14,935,457
(600,121)
800,877

$16,426,921
16,636,587
(524,561)
(733,004)

(269,708)

(1,088,270)

(2,622,151)

0.13
0.13

(0.02)
(0.02)

(0.06)
(0.06)

(0.14)
(0.14)

-105-

- 104 -

UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2014

Column A

Description

Column B

Name

Location

Encumbrances

Land

Column C

Initial Cost

Site, Land

Column D

& Building
Improvements
and Rental Homes

Capitalization
Subsequent to
Acquisition

Berwick, PA

Cranberry Twp, PA
Sayre, PA

Memphis, TN
Orrville, OH
Birch Run, MI

Sayre, PA
Lewistown, PA
Tiffin, OH
Horseheads, NY
Wintersville, OH

Allentown
Auburn Estates
Birchwood Farms
Broadmore Estates Goshen, IN
Brookside Village
Brookview Village Greenfield Ctr, NY
Chambersburg, PA
Carsons
Vineland, NJ
Cedarcrest
Chambersburg I & II Chambersburg, PA
Chelsea
City View
Clinton
Collingwood
Colonial Heights
Countryside Estates Muncie, IN
Countryside Estates Ravenna, OH
Countryside Village Columbia, TN
Cranberry Village
Crestview
Cross Keys Village Duncansville, PA
Dallas Mobile Home Toronto, OH
New Springfield, OH
Deer Meadows
Clifton Park, NY
D&R Village
Lodi, OH
Evergreen Estates
Evergreen Manor
Bedford, OH
Evergreen Village Mantua, OH
Millville, NJ
Fairview Manor
Elkhart, IN
Forest Creek
Forest Park Village Cranberry Twp, PA
Frieden Manor
Green Acres
Gregory Courts
Hayden Heights
Heather Highlands
Highland
Highland Estates
Hillside Estates
Holiday
Hudson Estates
Independence Park Clinton, PA
Kinnebrook
Lake Sherman
Laurel Woods

Schuylkill Haven, PA
Chambersburg, PA
Honey Brook, PA
Dublin, OH
Inkerman, PA
Elkhart, IN
Kutztown, PA
Greensburg, PA
Nashville, TN
Peninsula, OH

Monticello, NY
Navarre, OH
Cresson, PA

Little Chippewa
Maple Manor

Orrville, OH
Taylor, PA

$ 250,000 $

2,569,101 $

114,000
70,000
1,120,000
372,000
37,500
176,000
320,000
108,000
124,000
137,000
142,000
196,000
67,000
174,000
205,000
394,000
181,930
188,000
60,774
275,600
226,000
391,724
99,000
49,000
105,000
216,000
440,000
75,000
643,000
63,000
370,000
248,100
572,500
510,000
145,000
483,600
1,632,000
141,000
686,400
235,600
290,000
432,700
113,000
674,000

1,174,000
2,797,000
11,136,000
4,776,000
232,547
2,411,000
1,866,323
2,397,000
2,049,000
613,000
3,301,800
2,317,500
2,383,000
1,926,000
2,895,997
6,916,500
1,922,931
2,258,000
378,093
2,728,503
2,299,275
704,021
1,121,300
2,372,258
1,277,001
1,166,517
7,004,000
977,225
5,293,500
584,000
1,220,000
2,147,700
2,151,569
7,084,000
1,695,041
2,678,525
5,618,000
3,515,878
2,783,633
1,402,572
1,457,673
2,070,426

1,135,000
9,432,800

8,270,359
167,500
532,478
1,727,638
639,151
3,693,950
450,569
2,046,445
247,338
278,421
944,226
69,522
684,628
2,339,241
1,554,975
340,776
3,180,792
2,450,486

497,236

2,249,070
15,549
206,051
2,756,898
59,914
23,234
212,279
9,094,057
865,604
4,667,458
689,795
5,557
61,433
97,176
5,914,235
689,293
10,582,889
154,554
3,027,213
425,478
47,269
7,720,797
6,495,265
2,258,651

303,129
1,732,827

10,486,045 (1)
7,554,281 (5)
52,082,526 (6)
(6)
14,679,583 (2)

-0-

12,177,725 (3)
8,966,785

(3)
(3)

-0-

(1)
(3)
(6)

-0-
9,083,178 (9)
-0-
-0-

(3)

-0-
-0-

(9)
6,803,625 (4)
(9)
(9)
(9)

10,139,450

(6)

-0-

(3)
(3)
(6)

-0-
989,773

(6)

9,408,128
8,495,880 (8)

-0-
8,796,065 (10)
(8)

-0-
-0-
-0-

(5)
(2)

-106-

- 105 -

UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2014

Column A
Description

Column B

Name

Location

Encumbrances

Land

Column C
Initial Cost

Column D

Site, Land
& Building
Improvements
and Rental Homes

Capitalization
Subsequent to
Acquisition

Belle Vernon, PA

New Middletown, OH
Wooster, OH
Wooster, OH
Memphis, TN
Ephrata, PA
Avoca, PA
Ephrata, PA
Coxsackie, NY
Elkhart, IN
Tunkhannock, PA
Olmsted Falls, OH
West Grove, PA
Carlisle, PA
Apollo, PA

Meadowood
Melrose Village
Melrose West
Memphis Mobile
Monroe Valley
Moosic Heights
Mountaintop
Mountain View
Oak Ridge Estates
Oakwood Lake
Olmsted Falls
Oxford Village
Pine Ridge/Manor
Pine Valley Estates
Pleasant View Estates Bloomsburg, PA
Port Royal Village
Belle Vernon, PA
River Valley Estates Marion, OH
Rolling Hills Estates Carlisle, PA
Rostraver Estates
Sandy Valley Estates Magnolia, OH
Shady Hills
Nashville, TN
Somerset/Whispering Somerset, PA
Southern Terrace
Southwind Village
Spreading Oaks
Suburban Estates
Summit Estates
Sunny Acres
Sunnyside
Trailmont
Twin Oaks I & II
Twin Pines
Valley High
Valley Hills
Valley View-I
Valley View-II
Valley View-Danboro Doylestown, PA
Valley View-HB
Waterfalls Village
Weatherly Estates
Woodland Manor
Woodlawn Village
Wood Valley
Youngstown Estates Youngstown, NY

Columbiana, OH
Jackson, NJ
Athens, OH
Greensburg, PA
Ravenna, OH
Somerset, PA
Eagleville, PA
Goodlettsville, TN
Olmsted Twp, OH
Goshen, IN
Ruffs Dale, PA
Ravenna, OH
Ephrata, PA
Ephrata, PA

Honey Brook, PA
Hamburg, NY
Lebanon, TN
West Monroe, NY
Eatontown, NJ
Caledonia, OH

(6) $
(5)
(5)

-0-

(3)
(2)
(3)

-0-

(6)
(2)

-0-
7,350,262
-0-
-0-

(2)

-0-
-0-
-0-

(8)

-0-
-0-
731,900

(6)

5,871,176
-0-
6,417,395 (7)
(10)
(7)
(6)

-0-
2,637,077

(6)
(8)
(10)
(3)
(3)
(6)
(6)
(4)

-0-
-0-
-0-
-0-

(5)

152,000
767,000
94,000
78,435
114,000
330,000
134,000
1,757,800
500,000

379,000
569,000
175,000
37,540
670,000
282,000
150,000
236,000
301,000
813,600
270,000
337,000
1,485,000
63,000
100,095
67,000
299,000
198,000
287,000
450,000
411,000
823,000
650,000
284,000
996,000
191,000
72,000
2,650,000
1,380,000
424,000
1,184,000
77,000
157,421
260,000
269,000

$ 3,191,000 $

5,429,000
1,040,000
810,477
994,000
3,794,100
1,665,000
-0-

7,524,000
1,639,000
3,031,000
990,515
198,321
1,336,600
2,174,800
2,491,796
785,293
1,419,013
2,203,506
1,941,430
3,379,000
2,050,400
3,387,000
602,820
1,326,800
5,837,272
2,779,260
6,113,528
2,674,000
1,867,000
3,527,000
6,307,000
2,266,750
6,542,178
4,359,000
1,746,000
8,266,000
5,348,000
3,812,000
4,034,480
841,000
280,749
1,753,206
1,606,000

1,218,816
797,370
10,633
952,935
245,557
712,913
386,890
1,497,683
1,490,055
310,990
678,638

1,600,405
6,719,889
3,518,511
600,563
9,724,884
5,033,760
507,699
58,430
5,603,708
1,948,025
5,380,203
206,625
2,338,536
1,962,581
1,025,661
186,289
486,204
(12,659)
2,133,953
969,541
1,032,172
50,862
1,006,862
555,107

2,508

(11,992)
157,821
2,353,158
4,299,168
1,493,572
1,019,343
3,330,308
23,054

182,670,854

34,479,319 $

249,606,503 $

164,078,637

-107-

- 106 -

UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2014

Column A
Description

Column E (6) (7)
Gross Amount at Which Carried at 12/31/14

Column F

Name

Location

Land

and Rental Homes

Total

Site, Land

& Building

Improvements

Allentown
Auburn Estates
Birchwood Farms
Broadmore Estates
Brookside Village
Brookview Village
Carsons
Cedarcrest
Chambersburg I & II
Chelsea
City View
Clinton
Collingwood
Colonial Heights
Countryside Estates
Countryside Estates
Countryside Village
Cranberry Village
Crestview
Cross Keys Village
Dallas Mobile Home
Deer Meadows
D&R Village
Evergreen Estates
Evergreen Manor
Evergreen Village
Fairview Manor
Forest Creek
Forest Park Village
Frieden Manor
Green Acres
Gregory Courts
Hayden Heights
Heather Highlands
Highland
Highland Estates
Hillside Estates
Holiday
Hudson Estates
Independence Park
Kinnebrook
Lake Sherman
Laurel Woods
Little Chippewa
Maple Manor

Memphis, TN
Orrville, OH
Birch Run, MI
Goshen, IN
Berwick, PA
Greenfield Ctr, NY
Chambersburg, PA
Vineland, NJ
Chambersburg, PA
Sayre, PA
Lewistown, PA
Tiffin, OH
Horseheads, NY
Wintersville, OH
Muncie, IN
Ravenna, OH
Columbia, TN
Cranberry Twp, PA
Sayre, PA
Duncansville, PA
Toronto, OH
New Springfield, OH
Clifton Park, NY
Lodi, OH
Bedford, OH
Mantua, OH
Millville, NJ
Elkhart, IN
Cranberry Twp, PA
Schuylkill Haven, PA
Chambersburg, PA
Honey Brook, PA
Dublin, OH
Inkerman, PA
Elkhart, IN
Kutztown, PA
Greensburg, PA
Nashville, TN
Peninsula, OH
Clinton, OH
Monticello, NY
Navarre, OH
Cresson, PA
Orrville, OH
Taylor, PA

$ 480,000
114,000
70,000
1,120,000
372,000
122,865
176,000
408,206
108,000
124,000
137,000
142,000
196,000
67,000
174,000
205,000
394,000
181,930
363,000
60,774
275,600
226,000
391,724
99,000
49,000
105,000
2,534,892
440,000
75,000
643,000
63,000
370,000
248,100
572,500
510,000
404,239
483,600
1,632,000
141,000
686,400
352,972
290,000
432,700
113,000
674,000

10,609,460 $

1,341,500
3,329,478
12,863,638
5,415,151
3,841,132
2,861,569
3,824,562
2,644,338
2,327,421
1,557,226
3,371,322
3,002,128
4,722,241
3,480,975
3,236,773
10,097,292
4,373,417
2,580,236
2,627,163
2,744,052
2,505,326
3,460,919
1,181,214
2,395,492
1,489,280
7,941,682
7,869,604
5,644,683
5,983,295
589,557
1,281,433
2,244,876
8,065,804
7,773,293
12,018,691
2,833,079
8,645,213
3,941,356
2,830,902
9,005,997
7,952,938
4,329,077
1,438,129
11,165,627

11,089,460
1,455,500
3,399,478
13,983,638
5,787,151
3,963,997
3,037,569
4,232,768
2,752,338
2,451,421
1,694,226
3,513,322
3,198,128
4,789,241
3,654,975
3,441,773
10,491,292
4,555,347
2,943,236
2,687,937
3,019,652
2,731,326
3,852,643
1,280,214
2,444,492
1,594,280
10,476,574
8,309,604
5,719,683
6,626,295
652,557
1,651,433
2,492,976
8,638,304
8,283,293
12,422,930
3,316,679
10,277,213
4,082,356
3,517,302
9,358,969
8,242,938
4,761,777
1,551,129
11,839,627

Accumulated

Depreciation

4,411,922
53,598
255,376
895,695
731,483
1,956,851
223,159
2,575,753
222,658
186,335
110,796
397,120
224,293
319,009
279,946
93,711
1,197,084
2,478,191
208,796
1,026,981
50,465
74,714
1,726,688
35,265
87,038
42,236
4,270,502
589,049
2,437,412
501,251
51,584
84,706
39,748
3,976,279
567,895
5,355,140
51,554
449,681
111,142
52,591
3,833,077
2,905,512
1,544,649
49,565
1,503,215

-108-

- 107 -

UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2014

Column A
Description

Column E (6) (7)
Gross Amount at Which Carried at 12/31/14

Column F

Name

Location

Land

and Rental Homes

Total

Site, Land

& Building

Improvements

Meadowood
Melrose Village
Melrose West
Memphis Mobile
Monroe Valley
Moosic Heights
Mountaintop
Mountain View
Oak Ridge Estates
Oakwood Lake
Olmsted Falls
Oxford Village
Pine Ridge/Manor
Pine Valley Estates
Pleasant View Estates Bloomsburg, PA
Belle Vernon, PA
Port Royal Village
Marion, OH
River Valley Estates
Carlisle, PA
Rolling Hills Estates
Rostraver Estates
Belle Vernon, PA
Sandy Valley Estates Magnolia, OH
Nashville, TN
Shady Hills
Somerset, PA
Somerset/Whispering
Columbiana, OH
Southern Terrace
Jackson, NJ
Southwind Village
Athens, OH
Spreading Oaks
Greensburg, PA
Suburban Estates
Ravenna, OH
Summit Estates
Somerset, PA
Sunny Acres
Eagleville, PA
Sunnyside
Goodlettsville, TN
Trailmont
Olmsted Twp, OH
Twin Oaks I & II
Goshen, IN
Twin Pines
Ruffs Dale, PA
Valley High
Ravenna, OH
Valley Hills
Ephrata, PA
Valley View-I
Valley View-II
Ephrata, PA
Valley View-Danboro Doylestown, PA
Valley View-HB
Waterfalls Village
Weatherly Estates
Woodland Manor
Woodlawn Village
Wood Valley
Youngstown Estates

New Middletown, OH $ 152,000
767,000
Wooster, OH
Wooster, OH
94,000
335,935
Memphis, TN
114,000
Ephrata, PA
330,000
Avoca, PA
134,000
Ephrata, PA
2,218,800
Coxsackie, NY
Elkhart, IN
500,000
379,000
Tunkhannock, PA
569,000
Olmsted Falls, OH
155,000
West Grove, PA
145,473
Carlisle, PA
732,089
Apollo, PA
282,000
505,000
236,000
301,000
813,600
270,000
337,000
1,488,600
63,000
100,095
67,000
299,000
198,000
287,000
450,000
411,000
998,000
650,000
284,000
996,000
191,000
72,000
2,650,000
1,380,000
424,000
1,184,000
77,000
135,420
260,000
269,000

Honey Brook, PA
Hamburg, NY
Lebanon, TN
West Monroe, NY
Eatontown, NJ
Caledonia, OH
Youngstown, NY

4,409,816
6,226,370
1,050,633
1,505,912
1,239,557
4,507,013
2,051,890
1,036,683
9,014,055
1,949,990
3,709,638
2,610,920
6,810,277
4,793,022
2,775,363
11,861,680
5,819,053
1,926,712
2,261,936
7,545,138
5,327,025
7,427,003
3,593,625
2,941,356
3,289,381
6,862,933
2,965,549
6,599,732
2,661,341
4,000,953
4,321,541
7,339,172
2,317,612
7,549,040
4,914,107
1,748,508
8,254,008
5,505,821
6,165,158
8,333,648
2,334,572
1,322,093
5,083,514
1,629,054

4,561,816
6,993,370
1,144,633
1,841,847
1,353,557
4,837,013
2,185,890
3,255,483
9,514,055
2,328,990
4,278,638
2,765,920
6,955,750
5,525,111
3,057,363
12,366,680
6,055,053
2,227,712
3,075,536
7,815,138
5,664,025
8,915,603
3,656,625
3,041,451
3,356,381
7,161,933
3,163,549
6,886,732
3,111,341
4,411,953
5,319,541
7,989,172
2,601,612
8,545,040
5,105,107
1,820,508
10,904,008
6,885,821
6,589,158
9,517,648
2,411,572
1,457,513
5,343,514
1,898,054

Accumulated

Depreciation

356,493
229,927
41,278
1,161,152
101,446
596,707
161,274
142,831
643,903
268,677
264,561
1,861,355
2,167,988
1,900,600
365,881
5,249,997
2,803,077
115,523
47,589
3,868,316
565,276
2,200,359
297,702
1,843,215
1,263,843
1,012,803
87,990
1,051,390
177,682
389,129
321,272
482,924
43,488
213,962
409,151
153,686
550,226
391,197
2,895,919
1,947,596
666,277
615,534
2,186,870
64,132

39,133,514

409,030,945

448,164,459

$ 90,419,913

-109-

- 108 -

UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2014

Column A

Description

Column G

Column H

Column I

Name

Location

Date of

Construction

Date

Acquired

Depreciable

Life

Memphis, TN
Orrville, OH
Birch Run, MI
Goshen, IN
Berwick, PA
Greenfield Ctr, NY
Chambersburg, PA
Vineland, NJ
Chambersburg, PA
Sayre, PA
Lewistown, PA
Tiffin, OH
Horseheads, NY
Wintersville, OH
Muncie, IN
Ravenna, OH
Columbia, TN
Cranberry Twp, PA
Sayre, PA
Duncansville, PA
Toronto, OH
New Springfield, OH
Clifton Park, NY
Lodi, OH
Bedford, OH
Mantua, OH
Millville, NJ
Elkhart, IN
Cranberry Twp, PA
Schuylkill Haven, PA
Chambersburg, PA
Honey Brook, PA
Dublin, OH
Inkerman, PA
Elkhart, IN
Kutztown, PA
Greensburgh, PA
Nashville, TN
Peninsula, OH
Clinton, PA
Monticello, NY
Navarre, OH
Cresson, PA
Orrville, OH
Taylor, PA

1986
2013
2013
2013
2010
1977
2012
1986
2012
2012
2011
2011
2012
2012
2012
2014
2011
1986
2012
1979
2014
2014
1978
2014
2014
2014
1985
2013
1982
2012
2012
2013
2014
1992
2013
1979
2014
2013
2014
2014
1988
1987
2001
2013
2010

5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
27.5
5 to 27.5
5 to 27.5
5 to 27.5
27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5

prior to 1980
1971/1985/1995
1976-1977
1950/1990
1973-1976
prior to 1970
1963
1973
1955
1972
prior to 1980
1968/1987
1970
1972
1996
1972
1988/1992
1974
1964
1961
1950-1957
1973
1972
1965
1960
1960
prior to 1980
1996-1997
prior to 1980
1969
1978
1970
1973
1970
1969
1971
1980
1967
1956
1987
1972
prior to 1980
prior to 1980
1968
1972

-110-

- 109 -

UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2014

Column A

Description

Column G

Column H

Column I

Name

Location

Date of

Construction

Date

Acquired

Depreciable

Life

Meadowood
Melrose Village
Melrose West
Memphis Mobile
Monroe Valley
Moosic Heights
Mountaintop
Mountain View
Oak Ridge Estates
Oakwood Lake
Olmsted Falls
Oxford Village
Pine Ridge/Manor
Pine Valley Estates
Pleasant View Estates
Port Royal Village
River Valley Estates
Rolling Hills Estates
Rostraver Estates
Sandy Valley Estates
Shady Hills
Somerset/Whispering
Southern Terrace
Southwind Village
Spreading Oaks
Suburban Estates
Summit Estates
Sunny Acres
Sunnyside
Trailmont
Twin Oaks I & II
Twin Pines
Valley High
Valley Hills
Valley View-I
Valley View-II
Valley View-Danboro
Valley View-HB
Waterfalls Village
Weatherly Estates
Woodland Manor
Woodlawn Village
Wood Valley
Youngstown Estates

New Middletown, OH
Wooster, OH
Wooster, OH
Memphis, TN
Ephrata, PA
Avoca, PA
Ephrata, PA
Coxsackie, NY
Elkhart, IN
Tunkhannock, PA
Olmsted Falls, OH
West Grove, PA
Carlisle, PA
Apollo, PA
Bloomsburg, PA
Belle Vernon, PA
Marion, OH
Carlisle, PA
Belle Vernon, PA
Magnolia, OH
Nashville, TN
Somerset, PA
Columbiana, OH
Jackson, NJ
Athens, OH
Greensburg, PA
Ravenna, OH
Somerset, PA
Eagleville, PA
Goodlettsville, TN
Olmsted Twp, OH
Goshen, IN
Ruffs Dale, PA
Ravenna, OH
Ephrata, PA
Ephrata, PA
Doylestown, PA
Honey Brook, PA
Hamburg, NY
Lebanon, TN
West Monroe, NY
Eatontown, NJ
Caledonia, OH
Youngstown, NY

2012
2013
2013
1985
2012
2010
2012
2005
2013
2010
2012
1974
1969
1995
2010
1983
1986
2013
2014
1985
2011
2004
2012
1969
1996
2010
2014
2010
2013
2011
2012
2013
2014
2014
2012
2012
2013
2013
1997
2006
2003
1978
1996
2013

5 to 27.5
5 to 27.5
27.5
27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
27.5
27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5
5 to 27.5

1957
1970-1978
1995
1955
1969
1972
1972
N/A
1990
1972
1953/1970
1971
1961
prior to 1980
1960's
1973
1950
1972-1975
1970
prior to 1980
1954
prior to 1980
1983
1969
prior to 1980
1968/1980
1969
1970
1960
1964
1952/1997
1956/1990
1974
1960-1970
1961
1999
1959
1970
prior to 1980
1997
prior to 1980
1964
prior to 1980
1963

-111-

- 110 -

UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2014

(1) Represents one mortgage note payable secured by two properties.

(2) Represents one mortgage note payable secured by five properties.

(3) Represents one mortgage note payable secured by eleven properties.

(4) Represents one mortgage note payable secured by two properties.

(5) Represents one mortgage note payable secured by five properties.

(6) Represents one mortgage not payable secured by thirteen properties.

(7) Represents one mortgage note payable secured by two properties.

(8) Represents one mortgage note payable secured by four properties.

(9) Represents one mortgage note payable secured by five properties.

(10) Represents one mortgage note payable secured by three properties.

(11) Reconciliation

Balance – Beginning of Year

$365,824,412

$253,490,055

$191,252,542

12/31/14

/----------FIXED ASSETS-----------/
12/31/13

12/31/12

Additions:
Acquisitions
Improvements
Total Additions

Deletions

42,422,064
40,798,234
83,220,298

88,211,013
26,041,264
114,252,277

47,376,000
16,121,717
63,497,717

(880,251)

(1,917,920)

(1,260,204)

Balance – End of Year

$448,164,459

$365,824,412

$253,490,055

/-----ACCUMULATED DEPRECIATION-----/
12/31/13

12/31/12

12/31/14

Balance – Beginning of Year

$76,435,743

$65,658,602

$58,994,093

Additions:
Depreciation
Total Additions

Deletions

14,341,575
14,341,575

11,318,194
11,318,194

6,869,251
6,869,251

(357,405)

(541,053)

(204,742)

Balance – End of Year

$90,419,913

$76,435,743

$65,658,602

(12)

The aggregate cost for Federal tax purposes approximates historical cost.

-112-

- 111 -

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

UMH PROPERTIES, INC.

BY: /s/Samuel A. Landy
SAMUEL A. LANDY
President, Chief Executive Officer and Director
(Principal Executive Officer)

BY: /s/Anna T. Chew
ANNA T. CHEW
Vice President, Chief Financial and Accounting Officer,
Treasurer and Director
(Principal Financial and Accounting Officer)

Dated: March 10, 2015

Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, this report has been duly signed
below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/Eugene W. Landy
EUGENE W. LANDY

/s/Samuel A. Landy
SAMUEL A. LANDY

/s/Anna T. Chew
ANNA T. CHEW

/s/Jeffrey A. Carus
JEFFREY A. CARUS

/s/Matthew Hirsch
MATTHEW HIRSCH

/s/Michael P. Landy
MICHAEL P. LANDY

/s/Stuart Levy
STUART LEVY

/s/James E. Mitchell
JAMES E. MITCHELL

/s/Richard H. Molke
RICHARD H. MOLKE

/s/Stephen B. Wolgin
STEPHEN B. WOLGIN

Title

Date

Chairman of the Board

March 10, 2015

President, Chief Executive Officer
and Director

March 10, 2015

Vice President,
Chief Financial and Accounting
Officer, Treasurer and Director

Director

-113-

March 10, 2015

- 112 -

DIRECTORS

Jeffrey A. Carus
Founder and
Managing Partner
JAC Partners, LLC

Anna T. Chew
Certiﬁed
Public Accountant

Matthew I. Hirsch
Attorney-at-Law
Law Ofﬁce of
Matthew I. Hirsch

James E. Mitchell
Attorney-at-Law
General Partner
Mitchell Partners LP,
President
Mitchell Capital Management

Richard H. Molke
General Partner
Molke Family
Limited Partnership

Stephen B. Wolgin
Managing Director
U.S. Real Estate Advisors, Inc.

Eugene W. Landy
Attorney-at-Law
Chairman of the Board
Monmouth Real Estate
Investment Corporation

Michael P. Landy
President and
Chief Executive Ofﬁcer
Monmouth Real Estate
Investment Corporation

Samuel A. Landy
Attorney-at-Law

Stuart Levy
Vice President
Real Estate Finance
Helaba-Landesbank
Hessen-Thüringen

OFFICERS and management

Eugene W. Landy
Chairman
of the Board

Samuel A. Landy
President and
Chief Executive Ofﬁcer

Anna T. Chew
Vice President and
Chief Financial Ofﬁcer

Craig Koster
General Counsel

Regina Beasley
Vice President

Robert Van Schuyver
Vice President

Ayal Dreifuss
Vice President of
Rental Division

Jeffrey Wolfe
Vice President of
Operations

Brittnee sperling
Assistant Controller

Elizabeth Chiarella
Secretary

Brett Taft
Vice President of
Acquisitions and
Integration

Kristin Langley
Controller

Safe Harbor Statement

COrporate Information

Corporate Office
3499 Rt. 9 North
Freehold, NJ 07728

Independent Auditors
PKF O’Connor Davies
665 Fifth Avenue
New York, NY 10022

Transfer Agent &
Registrar
American Stock Transfer
& Trust Company
6201 15th Avenue
Brooklyn, NY 11219

Stock Listing
NYSE: UMH

Internet Address
www.umh.com

Email Address
umh@umh.com

N233485_v17_UMH_AR2015_Covers.indd 2

Christine Lindsey
Vice President of Sales

Jeffrey V. Yorick, P.E.
Vice President of
Engineering

Susan M. Jordan
Director of Investor
Relations

UMH ANNUAL REPORT 2014

4/20/15 3:40 PM

UMH PROPERTIES, INC.
2014
ANNUAL REPORT

U
M
H
P
R
O
P
E
R
T

E
S

N
C

2
0
1
4
A
N
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U M H P R O P E R T I E S , I N C .
Established in 1968 NYSE: UMH
3499 Route 9 North • Freehold, New Jersey 07728 • 732.577.9997

WWW.UMH.COM

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