UMH PROPERTIES, INC.
2019 ANNUAL REPORT
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UMH PROPERTIES, INC.
Established in 1968
3499 Route 9 North | Freehold, NJ 07728
www.umh.reit 732.577.9997 NYSE: UMH
BOARD OF DIRECTORS
OFFICERS & EXECUTIVE
MANAGEMENT
Realtor and Partner of Butewicz Equestrian Lifestyle
Real Estate at Keller Williams Princeton Real Estate
President and Chief Executive Officer
Founder and Managing Partner of JAC Partners, LLC
Vice President, Chief Financial and Accounting Officer
Vice President, Chief Financial and Accounting Officer
CRAIG KOSTER
EUGENE W. LANDY
Chairman of the Board
SAMUEL A. LANDY
ANNA T. CHEW
and Treasurer
AMY L. BUTEWICZ
Doctor of Pharmacy
JEFFREY A. CARUS
ANNA T. CHEW
and Treasurer
MATTHEW I. HIRSCH
Attorney-At-Law
Law Office of Matthew I. Hirsch
EUGENE W. LANDY
Chairman of the Board
MICHAEL P. LANDY
President and Chief Executive Officer of
Monmouth Real Estate Investment Corporation
SAMUEL A. LANDY
President and Chief Executive Officer
STUART LEVY
Vice President of Real Estate Finance of
Helaba-Landesbank Hessen-Thüringen
WILLIAM E. MITCHELL
Managing Partner of Strategy Capital LLC
KENNETH K. QUIGLEY, JR.
Attorney-At-Law
President of Curry College
STEPHEN B. WOLGIN
General Counsel and Secretary
BRETT TAFT
Vice President and Chief Operating Officer
REGINA BEASLEY
Vice President
AYAL DREIFUSS
Vice President of Rental Division
DANIEL LANDY
Vice President
CHRISTINE LINDSEY
Vice President of Sales
JAMES O. LYKINS
Vice President of Capital Markets
ROBERT VAN SCHUYVER
Vice President
JEFFREY WOLFE
Vice President of Operations
JEFFREY V. YORICK
Vice President of Engineering
KRISTIN LANGLEY
BRITTNEE SPERLING
Assistant Controller
NELLI MADDEN
Director of Investor Relations
INDEPENDENT AUDITORS
PKF O’Connor Davies, LLP
665 Fifth Avenue, New York, NY 10022
www.umh.reit
EMAIL ADDRESS
ir@umh.com
Managing Director of U.S. Real Estate Advisors, Inc.
Controller
CORPORATE INFORMATION
CORPORATE OFFICE
3499 Route 9 North, Freehold, NJ 07728
TRANSFER AGENT & REGISTRAR
6201 15th Avenue, Brooklyn, NY 11219
COMMON STOCK LISTING
NYSE:UMH
American Stock Transfer & Trust Company
WEBSITE ADDRESS
Our Vision
UMH Properties, Inc. has a 52-year history of providing quality affordable housing for our Nation’s workforce.
UMH owns and operates a portfolio of 122 manufactured home communities containing 23,100 developed
homesites situated in eight states. Manufactured home communities satisfy a fundamental need – quality
affordable housing. As home prices continue to rise and available home inventory continues to shrink, the
supply of affordable housing becomes an ever-increasing concern. We are committed to being a part of the
solution to America’s affordable housing crisis.
UMH has long believed that we have an obligation to create sustainable and environmentally friendly
communities that have a positive societal impact. Throughout our history, we have and continue to develop
and invest in environmentally friendly initiatives that will conserve energy and natural resources. We build,
upgrade and manage well-maintained communities that our residents are proud to call home. We believe in
enriching the lives of the people impacted by our Company – our employees, our residents and our neighbors.
On Our Cover: CINNAMON WOODS
Conowingo, MD
2019 YEAR IN REVIEW
40%Total Shareholder Return
CHAIRMAN’S
AWARD
Manufactured Housing Institute
2019 Chairman’s Award,
Samuel A. Landy
Manufactured Housing Institute
National Industry Awards
2019 Land-Lease Community
of the Year, Memphis Blues
Memphis, TN
10%Community NOI Growth
PIKEWOOD MANOR
Elyria, OH
DEAR FELLOW
SHAREHOLDERS
Providing quality affordable housing is now the mission
of the Federal government and many state and local
governments. By owning and operating manufactured
home communities, UMH Properties, Inc. has been
providing this housing for the past 52 years.
We have learned a lot about our residents and
affordable housing during that time. Most importantly,
we have learned that the residents who live in our
communities are hard-working people seeking, above
all, housing that they can afford. These people value
their privacy and deserve respect. They desire to live
in well-maintained communities where their families
can flourish. When we manage our communities with
pride, they manage their homes and the surroundings
with pride. Providing housing and quality communities
for them is our pleasure.
We have also learned about the fear and NIMBYism
that unfortunately comes with providing affordable
housing. These misperceptions result in the creation of
giant barriers that greatly impede new construction for
all types of housing. UMH is proud to be a leader in
the ongoing efforts to break through these barriers and
build more affordable housing.
UMH reacted to the strong demand for affordable
housing and the tremendous constraints on supply
by making the decision over ten years ago to acquire
communities with a substantial amount of vacancy.
Purchasing communities with a large vacancy factor
allowed us to add significant value by implementing
our business plan of investing time and capital in
improving these communities, which has resulted in
improved community operations. As a result of our
long history in the industry, we knew it was easier
to buy communities with vacancy and fill them than
to attempt the next to impossible task of greenfield
development of new communities.
Our community portfolio now consists of 122
communities containing 23,100 developed homesites.
Our community occupancy rate is now 82%, leaving
us 4,200 vacant sites to fill and grow our income. Once
occupied, these sites will generate over $20 million
in annual site rent plus potential sales profits from
homesales.
Our portfolio also contains 1,700 acres of undeveloped
land. Most of this substantial land bank, much of
which resides in the energy rich Marcellus and Utica
shale regions, adjoins our existing communities. We
believe professional planners recognize that when a
municipality needs to expand its supply of affordable
housing, the best location to do so is adjacent to the
existing areas that are serving this need. Invariably the
best developer to supply this demand is us, as UMH
is the tried and true provider of quality affordable
housing in the areas in which we operate. While
developing our 1,700 acres of undeveloped land can
OUR TEAM
Page 2
2019 ANNUAL REPORT
yield nearly 10,000 new homesites, this will happen
gradually over time.
The most direct path to increased profitability is
achieved by filling our 4,200 existing sites.
Our plan to fill our 4,200 vacant sites is as follows:
1. Improve the communities
Most communities we acquired were virtually
100% occupied from the time they were built in the
1970’s until about 2001. The loss of manufacturing
jobs then caused vacancies and foreclosures. Those
vacancies resulted in very few, if any, improvements
being made to these properties right up until our
purchase. All of our acquisitions have a robust
improvement plan
the
infrastructure, amenities and general well-being of
the community. This is the first and most important
step in improving the reputation of a property and
creating a better quality of life for our residents.
involving upgrades
to
2. Provide brand new homes for sale or rent
UMH has adapted to the stringent changes in finance
laws by renting homes. These new rental homes
enhance the aesthetics of our communities which
results in increased demand for our homesites.
3. Provide intelligent marketing and strong management
UMH strives to provide safe, high quality, affordable
communities so that our residents are confident that
they made the right choice in buying or renting a
home from us.
Our conservative principles and long-term focus
form the key pillars of our 52-year track record of
success.
The success of our business plan is depicted by our
same property results. Our same property revenue
was up 7.0% or $7.8 million this year, and our same
property NOI was up 6.4% or $4 million. Same
property occupancy at year end was 83.8% representing
a 160-basis point improvement over 2018. Our same
property occupied site count increased by 333 sites
and we added 677 rental homes to our same property
pool. Same property operating expenses rose 7.6% as
we continued to improve our communities and bring
them up to our standards. The 6.4% increase in same
property NOI, when valued at a 5% market cap rate
equates to an increase in portfolio value of $80 million.
We anticipate continued strong growth in our same
property NOI going forward.
SAMUEL A. LANDY
MHI Innovative Housing Showcase
Our Normalized FFO for 2019 was $0.63 per share
which is down from $0.74 per share in 2018. The two
primary causes for this decline were a $2.8 million
reduction in dividend income from our REIT securities
portfolio, and the added preferred dividend expense
from the $100 million increase in our 6.75% Series C
Preferred Stock that we issued in April of 2019. While
the dividend expense from this offering hit our income
statement immediately, it takes time for these funds
to be fully deployed. The combination of these two
items had an impact of over $5 million on our FFO,
representing $0.13 per share. The capital raised from
our Series C offering has now been deployed which
we expect will positively contribute to our earnings in
2020.
At year end, we owned $116.2 million in REIT
securities earning 6.3% in dividend income. While
2019 was a difficult year for our securities portfolio as
dividend income fell by $2.8 million, since 2010 our
securities portfolio has generated $52.1 million in
dividend income and an additional $18.7 million in
realized gains. This represents a very satisfactory long-
term return on capital. Additionally, our securities
portfolio provides us with needed liquidity.
Our
issuance of preferred stock and common
equity is what allows us to grow assets and income.
Increasing our per share earnings is our goal and this
new capital will be deployed accretively. In 2019, we
acquired four communities containing 1,500 sites for
$56.2 million. These acquisitions will result in long-
term value creation for our common shareholders.
A good example of our success in this regard is
demonstrated by the recent refinancing of our Twin
Page 3
2019 ANNUAL REPORT
LAKEVIEW MEADOWS
Lakeview, OH
Oaks community. We acquired this community in
2012 for $4.4 million. Twin Oaks was acquired with a
mortgage for $2.8 million at an interest rate of 5.75%.
This year, the community appraised for $8.1 million
and we refinanced it with a new $6.1 million mortgage
at an interest rate of 3.37%. This is but one example
of the substantial capital appreciation that our assets
generate.
Our sales operation enjoyed another good year in
2019. Gross sales increased by 14% to approximately
$18 million. We sold a total of 299 homes at an average
price of $60,000. We financed 64% of these homesales
and now own a portfolio of approximately $36 million
in chattel loans at a weighted average interest rate of
approximately 8%. Demand for homesales remains
strong across our portfolio. As our community
expansions come online and our recently opened sales
centers continue to grow their pipelines, we expect
sales growth to accelerate.
At year end, our total market capitalization was $1.5
billion comprised of $647 million in common equity,
$457 million in debt and $405 million in preferred
stock. Our pool of well over $1.0 billion in real estate
assets is owned by 40 million shares of common stock.
Every 1% increase in value represents $10 million
or $0.25 in additional per share appreciation. Our
business model generates appreciation in value for
our assets each year. For 2019, UMH’s total return per
common share, which is appreciation plus dividends,
was approximately 40%.
Looking to 2020, our profitability should increase
as a result of rent increases. We also plan to add
Page 4
2019 ANNUAL REPORT
approximately 800 rental units which will generate
additional income. Our homesales have the potential to
increase our earnings further. Our expansions will also
generate additional sales profits and rental income. We
also will provide financing for some of the homesales
at our communities and we have the ability to generate
additional income streams by providing insurance for
our residents. All of these sources, coupled with the
refinancing of our high coupon 8% Series B Preferred
Stock, which becomes redeemable later this year, can
result in very meaningful increases in our earnings per
share.
Lastly, we are very proud of being a quality affordable
housing provider. We have had several meetings with
mayors and township officials who have thanked us
for the work we did to improve their communities. We
have been recognized by Dr. Ben Carson, our nation’s
Secretary of Housing and Urban Development, and
by the Manufactured Housing Institute for the quality
work we do. We look forward to growing our Company
and continuing to supply America with the quality
affordable housing it needs.
Very truly yours,
SAMUEL A. LANDY
President and Chief Executive Officer
March 2020
LETTER FROM THE
CHAIRMAN
I am extremely proud of the company that we have
built over our 52-year history. Our business plan has
evolved over the years but generally remains the same.
Our conservative stewardship of capital has built long-
term shareholder value. Our decision to invest in
manufactured housing all those years ago has proven to
be wise. Affordable housing is possibly the most critical
domestic issue facing our nation today. UMH is perfectly
positioned to be an integral solution to this affordable
housing crisis. In an age where environmental, social,
and governance concerns are highly valued, UMH
should become a preferred investment for institutional
investors. Affordable housing is the number one
concern socially. Our industry is finally getting the
attention that it deserves from Legislators that are
looking for solutions to this crisis. This past summer,
UMH was honored to participate in the Inaugural
Innovative Housing Showcase sponsored by HUD.
We set up a manufactured home on that National Mall
in Washington, D.C. This event increased awareness
about our product on a national level. Since this
event, Secretary Carson has been advocating for
manufactured housing as a part of the solution to the
affordable housing crisis.
UMH has a capital stack that includes about $470
million in perpetual preferred stock requiring over $32
million in preferred dividends per year. This preferred
capital has allowed us to more than triple the size of
the company since 2010. Historically, a blended 6.8%
cost of capital is relatively inexpensive. We are living
in a world with negative interest rates and the 10-year
Treasury yield around 1%. Replacing our preferred
with lower cost interest debt or replacing it with high
multiple common shares will result in improved
earnings. In October of 2020, we anticipate calling our
$95 million 8% Series B Preferred Stock. If we are able
to borrow at 3%, we will be able to improve earnings
by $4.5 million or $.11 per share. UMH can call our
$244 million 6.75% Series C Preferred Stock in July of
2022. Assuming refinancing at 3.75%, we can generate
improved earnings of $7.3 million, or $0.18 per share.
UMH needs to grow our equity market capitalization
in order to attract larger investors and ultimately trade
at higher multiples. We project that by recapitalizing
the Company, continuing to improve FFO metrics and
selectively acquiring new properties, we will be able to
surpass $1 billion in equity market capitalization in
EUGENE W. LANDY
2022. Issuing new shares is both accretive to earnings
and enhances value as scale is achieved. As a result,
share prices can rise with a rise in earnings. At some
time and some price, it may be accretive to our
common share value to call some of our outstanding
preferred shares with the proceeds of a common shares
offering.
The low interest returns available in the bond market
make UMH common and preferred shares an
attractive investment. The low interest cost currently
available also allows UMH ample capital to finance
existing communities, acquisitions and expansions.
In 2022 and 2023, UMH has a total of approximately
$100 million of existing mortgages coming due. Based
on today’s in place operating results, we can refinance
these properties with $200 million in new GSE
mortgages.
The potential for favorable restructuring of UMH’s
capital stack is a factor in our business plan. The
availability of financing to raise common equity capital
and preferred equity capital together with record
low long-term interest rates coupled with favorable
economics in the housing markets provide a pathway
for UMH to emulate the success of other manufactured
home REITs. Financing terms can of course be different
in the future. UMH can plan for but not assure that
favorable refinancing conditions will occur when our
preferred is callable. We look forward to continuing
to deliver exceptional results for our shareholders for
years to come.
Very truly yours,
EUGENE W. LANDY
Chairman of the Board
March 2020
Page 5
2019 ANNUAL REPORT
WOODS EDGE
West Lafayette, IN
PROPERTY PORTFOLIO
AND YEAR IN REVIEW
OUR ACCOMPLISHMENTS
“UMH’s innovative approach, focusing on value-added acquisitions and
embracing rental homes, has allowed us to build one of the best portfolios
of manufactured housing communities in the country.”
- Samuel A. Landy, President and Chief Executive Officer
During 2019, UMH has made substantial progress on multiple fronts – generating solid operating results, achieving
strong growth and improving our financial position. We have:
•
•
•
•
•
•
•
Increased Rental and Related Income by 13%;
Increased Community Net Operating Income
(“NOI”) by 10%;
Increased Same Property NOI by 6%;
Increased Same Property Occupancy by 333 sites
or 160 bps over the prior year period from 82.2%
to 83.8%;
Increased home sales by 14%;
Increased our rental home portfolio by 882
homes to approximately 7,400 total rental homes,
representing an increase of 14%;
four
containing
approximately 1,500 homesites for a total cost of
approximately $56.2 million;
Issued and sold 4 million shares of our 6.75%
Series C Preferred Stock resulting in net proceeds
of approximately $96.7 million;
communities
• Acquired
• Raised $31.5 million through our Dividend
Reinvestment and Stock Purchase Plan;
• Completed the financing/refinancing of four of our
communities for total proceeds of approximately
Portfolio Growth
30,000
25,000
20,000
15,000
10,000
5,000
0
Developed
Sites
No. of
Communities
23,100
122
21,500
118
20,000
112
17,800
18,000
98
101
15,000
88
2014
2015
2016
2017
2018
2019
Page 8
2019 ANNUAL REPORT
$44.9 million with a weighted average interest
rate of 3.40%, paying off the existing $13.8 million
mortgages with a weighted average rate of 5.91%;
• Reduced the weighted average interest rate on our
mortgages payable from 4.3% to 4.1%;
• Reduced our Net Debt
to Total Market
•
•
$80
$70
$60
$50
$40
$30
$20
$10
$0
Capitalization from 37% to 29%;
Increased our total market capitalization to $1.5
billion, representing an increase of 28%; and,
Implemented a Preferred Stock At-The-Market
Program (“ATM Program”) under which the
Company may offer and sell shares of our 6.75%
Series C Preferred Stock and/or 6.375% Series D
Preferred Stock, having an aggregate sales price
of up to $100 million. During 2019, we sold
approximately 651,000 shares of our Series D
Preferred for net proceeds of approximately $15.9
million, after offering expenses. We have sold
additional shares of Series D Preferred under the
ATM Program during 2020.”
Community Net Operating Income
($ in millions)
$66.9
$60.9
e
s
a
e
r
c
n
$54.0
1 % I
2
1
$48.0
$37.7
$30.3
2014
2015
2016
2017
2018
2019
PROPERTY PORTFOLIO
Acquired prior to 2018
112 communities and 20,000 sites
Acquired in 2018
6 communities and 1,600 sites
Acquired in 2019
4 communities and 1,500 sites
220 acres to be developed into a
manufactured home community
Marcellus and Utica Shale Regions
Sites per State
23,088 Sites
NJ - 1,006
4%
NY - 1,170
5%
MI - 740
3%
MD - 62
1%
TN - 1,750
8%
PA - 7,630
33%
IN - 3,991
17%
OH - 6,739
29%
Total Acreage
6,642 Acres
Total Shale Region Acreage - 3,396
Total Non Shale Region Acreage - 3,246
Developed
2,597
39%
Developed
2,354
35%
Vacant
892
14%
Vacant
799
12%
Vacant Acreage per State
1,691 Acres
MD - 67
4%
TN - 92
5%
NJ - 162
10%
IN - 234
14%
OH - 466
28%
PA - 361
21%
NY - 309
18%
For drone video footage of our communities, visit www.umh.reit/VideoGallery.
MARCELLUS AND UTICA SHALE REGIONS
UMH Properties, Inc. owns approximately 3,400 acres in the Marcellus and Utica shale regions. Owning
communities near these tremendous oil and gas reserves is a great benefit. These benefits are derived directly from
the oil and gas industry through drilling, power and cracker plant projects and pipeline construction. We also
benefit indirectly because this vast source of domestic energy will greatly reduce energy prices and thereby lower the
cost of manufacturing in the Northeast and create new jobs in our regions. Our communities in these regions are
currently experiencing increased demand and have improved their overall operations. As the oil and gas industry
continues to develop, we expect the local economies to further strengthen, resulting in even greater occupancy
and increased rents. As an added benefit, we have also started to receive oil and gas royalty payments at several
properties throughout the region.
Page 9
2019 ANNUAL REPORT
BOARDWALK AND PARKE PLACE
Elkhart, IN
VALUE-ADDED ACQUISITIONS
Since 2009, we have tripled the size of our property
portfolio from 28 communities with approximately 6,800
developed homesites to 122 communities with 23,100
developed homesites. We are focused on acquiring
value-add communities and leveraging our expertise
to increase property level value. Manufactured home
communities have historically been owned by operators
that may not have had the capital to make the necessary
improvements required to retain residents, resulting
in diminished operating results. We have proven that
by investing in the necessary capital improvements,
implementing strong management that enforces the
rules and regulations and bringing in new homes for
sale and rent, we can improve operating results. The
communities that we have acquired have significantly
increased in value as a result of our improved operations
and the impact of compressed cap rates. This increase
in value is realized when we refinance the communities.
20,000
16,000
12,000
8,000
4,000
0
Number of Acquired Sites
16,346
14,851
13,236
10,950 11,239
8,176
6,564
3,826
1,727
2,099
868
2,738
2,774
1,612
1,997
1,615
1,495
289
2011
2012
2013
2014
2015
2016
2017
2018
2019
RENTAL HOME OPERATIONS
Growth in Rental Home Portfolio
7,400
6,500
5 %
8
s - 1
o m e
5,600
e o
s
a
e
r
c
n
I
0 h
0
f 4 , 8
4,700
3,700
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,600
2,000
1,000
0
2014
2015
2016
2017
2018
2019
A key driver of the success of our value-added acquisition
program is our rental home operations. The inability
to satisfy down payment requirements, more stringent
credit terms and steadily increasing home prices,
continue to create hurdles for would-be homebuyers.
Rental homes are the most efficient way to improve
occupancy and increase revenue. For many residents
this is their first experience in a manufactured housing
community. Often, these first-time renters are pleased
with their experience and ultimately end up becoming
long-term residents.
Over the past six years, UMH has been increasing its
rental home portfolio, and as of year-end 2019, owned
7,400 rental homes. We plan to add approximately
800 rental homes in 2020. Our rental homes are high-
quality and built to withstand the typical wear and tear
of the rental business. They provide more stable income
streams than comparable apartments. Our rental home
turnover rate is approximately 30%. Our average cost
per unit is under $600.
Page 10
2019 ANNUAL REPORT
SALES OPERATIONS
Our sales operation has the potential to become a
major profit center for UMH. In 2019, we posted our
fourth consecutive year of double-digit sales growth
with sales improving by 14%. We are optimistic that
we can continue to build upon our recent success.
Historically, there were thousands of manufactured
housing dealers across the nation. When shipments
fell from 250,000 homes per year to less than 50,000,
most of these dealerships closed. UMH is leveraging
its expertise to reopen dealerships in areas where we
believe there is strong demand for sales both within
our communities and on customers’ privately-owned
land. Our geographic footprint allows us to leverage
our communities’ proximity to one another to drive
demand to and from our sales centers. Potential
homebuyers can tour model homes, browse floor
plans and hand-select custom features.
$20
$16
$12
$8
$4
$0
Increase in Sales
Sales ($ in millions)
# of Homes Sold
$18.0
299
$15.8
295
$10.8
222
$7.5
134
$6.8
135
$8.5
170
2014
2015
2016
2017
2018
2019
400
300
200
100
0
VALUE-ADDED EXPANSIONS
Sites Engineered for Expansion
786
767
456
537
2020
2021
2022
1,000
800
600
400
200
0
UMH owns 1,700 acres of vacant land adjoining
its existing manufactured housing communities.
The most likely place to build new manufactured
home sites is next to an existing manufactured
home community. We have the potential to build
6,800 home sites on our vacant land. These potential
sites provide UMH with a runway to organically
improve its earnings while upgrading the quality
of the community and improving the efficiency of
operations. In 2020, we expect to obtain approvals
at over 750 sites and complete construction of 350
sites. All of our expansions are located at successful
communities that should generate profitable sales
and add value to the existing community.
PINE MANOR
Carlisle, PA
Page 11
2019 ANNUAL REPORT
ESG HIGHLIGHTS
Environmental, social and corporate governance (“ESG”) responsibilities have become hot button topics and are
at the forefront of the minds of many people. UMH Properties, Inc. is pleased to report that these attributes have
been among our core principles for decades and a part of our DNA since inception. We recognize our obligation,
as well as that of the industry, to reduce our impact on the environment and to conserve our natural resources.
UMH believes in enriching the lives of the people impacted by our Company, including our employees, residents,
neighbors and the rest of society. We are also committed to integrating strong corporate governance practices
across our Company. We are proud of all our efforts, some of which are highlighted below. For more information,
we encourage our investors to review the Environmental, Social and Governance Report posted on the Company’s
website at www.umh.reit.
3
4
2
1
UMH Stage Home on the Hill
Manufactured by Cavco Industries, Inc.
1
The company has been heavily
investing in our communities by
submetering our homes which
has significantly reduced water
consumption by promoting water
conservation. We also continually
upgrade
communities’
infrastructures by replacing water
lines to eliminate
leakage and
conserve water.
our
2
Many of the homes in our
communities are Energy Star
Certified and/or contain Energy
Star appliances which
reduce
energy consumption and help our
residents save on expenses.
3
We have partnered with local
utility
to provide
residents, at no cost, with LED
companies
lightbulbs, low-flow showerheads,
energy efficient faucet aerators,
weatherization materials and water
heater pipe insulation.
4
Manufactured housing results
in less waste than the amount
produced from building homes
on site. Homes that are built in a
factory are more energy efficient.
Special Strides
Monroe, NJ
Page 12
2019 ANNUAL REPORT
INNOVATIVE HOUSING SHOWCASE
Innovative Housing Showcase
Washington, D.C.
is dedicated
to
“UMH
supporting and advancing
affordable housing on a
national level.”
- Samuel A. Landy,
President and Chief Executive Officer
UMH owns and invests in communities
located in and in close proximity to
opportunity zones. This helps spur
economic development and job creation
in these distressed locations which will
aid in positively transforming these areas.
Ben S. Carson, Sr.
U.S. Secretary of Housing and
Urban Development
Samuel A. Landy
President and Chief Executive
Officer
38 Million
AFFORDABLE HOUSING CRISIS
3.6 Million
Up to 50%
Households are considered cost
burdened, spending over 30% of their
household income on housing.(1)
Affordable housing units are needed
to bridge the gap between the supply
and demand of affordable housing
in the United States.(2)
Less cost for factory-built housing
than conventional, site-built housing
due to automated equipment and
economic assembly lines.
Over 60,000
$765
Residents have chosen to live in UMH
communities because of the benefits
provided by our product.
Per month was UMH’s average total rent
for a rental home in 2019 and $447 was
UMH’s average monthly site rent for
homeowners. The average nationwide
rent for apartments in 2019 was $1,463. (3)
(1) The Joint Center for Housing Studies of Harvard University, “The State Of The Nation’s Housing 2018”, March 2019.
(2) National Low Income Housing Coalition, “The GAP A Shortage of Affordable Housing”, March 2019.
(3) Yardi Matrix Multifamily National Report, January 2020.
Page 13
2019 ANNUAL REPORT
COMPANY GROWTH
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
)
s
n
o
i
l
l
i
m
n
i
$
(
Equity Market Capitalization
Preferred Equity
Total Debt
$1,509
$1,157
$1,182
e
s
a
e
r
I n c
2 9 1 %
$752
$980
$495
$582
$386
2012
2013
2014
2015
2016
2017
2018
2019
RECENT SHARE ACTIVITY
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
High
$14.31
14.38
14.16
16.32
2019
Low
$11.37
12.24
11.66
14.09
Distribution
$0.18
0.18
0.18
0.18
$0.72
High
$14.96
15.40
16.69
15.70
2018
Low
$11.38
12.77
14.89
11.14
Distribution
$0.18
0.18
0.18
0.18
$0.72
2019
2018
2017
2016
2015
2014
Share Volume Opening Price
Closing Price
Dividend Paid
Total Return
40,567,400
47,226,100
40,160,500
23,498,900
17,683,400
18,773,700
$11.84
$15.73
14.90
15.05
10.12
9.55
9.42
11.84
14.90
15.05
10.12
9.55
$0.72
0.72
0.72
0.72
0.72
0.72
40.21%
-16.24%
3.69%
59.0%
14.1%
9.1%
UMH Properties, Inc. common shares are traded on the New York Stock Exchange (NYSE:UMH).
Page 14
2019 ANNUAL REPORT
FINANCIAL HIGHLIGHTS
(dollars in thousands except per share amounts) (unaudited)
Operating Information
Number of Communities
Number of Sites
Rental and Related Income
Community Operating Expenses (1)
Community NOI (1)
Expense Ratio (1)
Sales of Manufactured Homes
Number of Homes Sold
Number of Rentals Added
Net Income (Loss) (2)
Net Income (Loss) Attributable to Common Shareholders (2)
Adjusted EBITDA
FFO Attributable to Common Shareholders
Normalized FFO Attributable to Common Shareholders
Shares Outstanding and Per Share Data
Weighted Average Shares Outstanding
Basic
Diluted
Net Income (Loss) Attributable to Common Shareholders per Share (2)
Basic
Diluted
FFO per Share - Diluted
Normalized FFO per Share - Diluted
Dividends per Common Share
Balance Sheet
Total Assets
Total Liabilities
Market Capitalization
Total Debt, Net of Unamortized Debt Issuance Costs
Equity Market Capitalization
Series B Preferred Stock
Series C Preferred Stock
Series D Preferred Stock
Total Market Capitalization
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
December 31, 2019
December 31, 2018
122
23,088
128,611
61,154
67,457
47.5%
17,980
299
882
27,750
2,566
67,681
24,573
25,207
39,909
40,203
0.07
0.06
0.61
0.63
0.72
1,025,453
479,114
457,344
646,976
95,030
243,750
66,268
1,509,368
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
118
21,510
113,833
52,949
60,884
46.5%
15,754
295
905
(36,216)
(56,532)
63,541
26,965
27,470
36,871
36,871
(1.53)
(1.53)
0.72
0.74
0.72
880,902
456,204
439,078
453,714
95,030
143,750
50,000
1,181,572
(1) Excludes a one-time settlement of a utility billing dispute of $375,000 over a prior ten-year period and emergency windstorm tree removal expenses in three
communities totaling $179,000 for the year ended December 31, 2019.
(2) Includes increase (decrease) in fair value of marketable securities.
Page 15
2019 ANNUAL REPORT
SAME PROPERTY STATISTICS
Same Property Performance
($ in millions)
Same Property Occupancy
2018
2019
2017
2018
2019
$119.7
$111.9
$140
$120
$100
$80
$60
$40
$20
$0
85%
84%
83%
84.0%
83.8%
83.6%
83.1%
$66.5
$62.5
82%
81.9%
81.4%
$53.2
$49.4
82.2% 82.3% 82.2%
81%
80%
79%
Rental and
Related Income
Community
Operating Expenses(1)
Community NOI
Dec 31
Mar 31
Jun 30
Sep 30
Dec 31
Mar 31
Jun 30
Sep 30
Dec 31
Total Sites
Occupied Sites
Occupancy %
Number of Properties
Total Rentals
Occupied Rentals
Rental Occupancy
Monthly Rent Per Site
Monthly Rent Per Home Including Site
December 31, 2019
December 31, 2018
19,927
16,695
83.8%
112
6,921
6,438
93.0%
$457
$769
19,903
16,362
82.2%
112
6,244
5,776
92.5%
$441
$746
(1) Excludes a one-time settlement of a utility billing dispute of $375,000 over a prior ten-year period and $53,000 from emergency windstorm damage cleanup for the
year ended December 31, 2019.
Page 16
2019 ANNUAL REPORT
COMPANY 10K
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, 2019
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:
Title of each class
Common Stock, $.10 par value
8.0% Series B Cumulative Redeemable Preferred Stock, $.10 par
value
6.75% Series C Cumulative Redeemable Preferred Stock, $.10
par value
6.375% Series D Cumulative Redeemable Preferred Stock, $.10
par value
Trading Symbol(s)
UMH
UMH PRB
Name of exchange on which registered
New York Stock Exchange
New York Stock Exchange
UMH PRC
UMH PRD
New York Stock Exchange
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 every Interactive Data File required to be submitted 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 such files). X Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging
growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
Accelerated filer
Smaller reporting company
Emerging growth company
X
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
____
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, 2019 was $498.3 million. 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, 2019 was $460.4 million.
The number of shares outstanding of issuer's common stock as of February 29, 2020 was 41,203,958 shares.
Documents Incorporated by Reference:
-Part III incorporates certain information by reference from the Registrant’s definitive proxy statement for the 2020 annual meeting
of shareholders, which will be filed no later than 120 days after the close of the Registrant’s fiscal year ended December 31, 2019.
-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 ................................................................................................................. 19
Item 2 – Properties ................................................................................................................................................. 19
Item 3 – Legal Proceedings .................................................................................................................................... 29
Item 4 – Mine Safety Disclosures .......................................................................................................................... 29
PART II ...................................................................................................................................................................... 29
Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities .............................................................................................................................................. 29
Item 6 – Selected Financial Data ............................................................................................................................ 31
Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations ................... 32
Item 7A – Quantitative and Qualitative Disclosures about Market Risk ............................................................... 46
Item 8 – Financial Statements and Supplementary Data ........................................................................................ 47
Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ................... 48
Item 9A – Controls and Procedures ....................................................................................................................... 48
Item 9B – Other Information .................................................................................................................................. 50
PART III..................................................................................................................................................................... 50
Item 10 – Directors, Executive Officers and Corporate Governance ..................................................................... 50
Item 11 – Executive Compensation ........................................................................................................................ 50
Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
.............................................................................................................................................................. 50
Item 13 – Certain Relationships and Related Transactions, and Director Independence ....................................... 50
Item 14 – Principal Accounting Fees and Services ................................................................................................ 50
PART IV ..................................................................................................................................................................... 50
Item 15 – Exhibits, Financial Statement Schedules ............................................................................................... 51
Item 16 – Form 10-K Summary ............................................................................................................................. 55
SIGNATURES ......................................................................................................................................................... 109
-2-
Item 1 – Business
General Development of Business
PART I
UMH Properties, Inc. (“UMH”), together with its predecessors and consolidated subsidiaries, are referred to
herein as “we”, “us”, “our”, or “the Company”, unless the context requires otherwise.
UMH is a self-administered and self-managed qualified real estate investment trust (“REIT”) under Sections
856-860 of the Internal Revenue Code (the “Code”). The Company 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.
Narrative Description of Business
The Company’s primary business is the ownership and operation of manufactured home communities –
leasing manufactured homesites 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, 2019, the Company owned and operated 122 manufactured home communities
containing approximately 23,100 developed homesites. These communities are located in New Jersey, New York,
Ohio, Pennsylvania, Tennessee, Indiana, Michigan and Maryland.
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 communities.
These homes may be 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 manufactured home owner leases the site on which the home is located from the Company.
The Company owns the underlying land, utility connections, streets, lighting, driveways, common area amenities and
other capital improvements and is responsible for enforcement of community guidelines and maintenance.
Manufactured homes are accepted by the public as a viable and economically attractive alternative to
conventional site-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, prices per square foot for a new manufactured
home average up 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 is generally a more efficient and stream-lined 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. Generally, modern manufactured home communities contain
buildings for recreation, green areas, and other common area facilities, all of which 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 in some manufactured home communities, while other communities supply these facilities on-site.
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
-3-
appearance of the community. The homeowner is responsible for the maintenance of the home and leased site. As a
result, our capital expenditures tend to be less significant relative to multi‑family rental apartments. Manufactured
home communities produce predictable income streams and provide protection from inflation due to the ability to
annually increase rents.
Many of our communities compete with other manufactured home community properties located in the same
or nearby markets that are owned and operated by other companies in our business. We generally monitor the rental
rates and other terms being offered by our competitors and consider this information as a factor in determining our
own rental rates. In addition to competing with other manufactured home community properties, our communities
also compete with alternative forms of housing (such as apartments and single-family homes).
In connection with the operation of its communities, UMH also leases homes to prospective tenants. As of
December 31, 2019, UMH owned a total of 7,400 rental homes, representing approximately 32% of its developed
homesites. These rental homes are 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 from both the home and the site which might otherwise be non-income producing.
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. In addition, our sales centers
earn a profit by selling homes to customers for placement on their own private land.
Investment and Other Policies
The Company may invest in improved and unimproved real property and may develop unimproved real
property. Such properties may be located throughout the U.S. , but the Company has concentrated on the Northeast
and Midwest. Since 2009, we have tripled the size of our property portfolio from 28 communities with approximately
6,800 developed homesites to 122 communities with over 23,100 developed homesites. We are focused on acquiring
communities with significant upside potential and leveraging our expertise to build long-term capital appreciation.
Our growth strategy involves purchasing well located communities in our target markets, including the
energy rich Marcellus and Utica Shale regions. As part of our growth strategy, we also intend to evaluate potential
opportunities to expand into additional geographic markets, including certain markets in the southeastern United
States.
The Company also evaluates our properties for expansion opportunities. Development of the additional
acreage available for expansion allows us to leverage existing communities and amenities. We believe our ability to
complete expansions translates to greater value creation and cash flow through operating efficiencies. The Company
has approximately 1,700 acres of additional land potentially available for future development. See PART I, Item 2 –
Properties, for a list of our additional acreage.
The Company seeks to finance acquisitions with the most appropriate available source of capital, including
purchase money mortgages or other financing, which may be first liens, wraparound mortgages or subordinated
indebtedness, sales of investments, and issuance of additional equity securities. 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. During the year ended December 31, 2019, the Company repurchased 20,000 shares
of its common stock at a cost of $237,000.
-4-
The Company also owns a portfolio of marketable REIT securities, which is currently at 9.2% of
undepreciated assets (which is the Company’s total assets excluding accumulated depreciation). The Company
generally limits the portfolio to no more than approximately 15% of its undepreciated assets. These liquid real estate
holdings provide diversification, additional liquidity and income, and serves as a proxy for real estate when more
favorable risk adjusted returns are not available. The Company, from time to time, may purchase these securities on
margin when the interest and dividend yields exceed the cost of funds.
Regulations, Insurance and Property Maintenance and Improvement
Manufactured home communities are subject to various laws, ordinances and regulations, including
regulations relating to recreational facilities such as swimming pools, clubhouses and other common areas, and
regulations relating to operating water and wastewater treatment facilities at several of our communities. We believe
that each community has all material operating permits and approvals.
Our properties are insured against risks that may cause property damage and business interruption including
events such as fire, business interruption, general liability and if applicable, flood. Our insurance policies contain
deductible requirements, coverage limits and particular exclusions. It is the policy of the Company to maintain
adequate insurance coverage on all of our properties; and, in the opinion of management, all of our properties are
adequately insured. We also obtain title insurance insuring fee title to the properties in an aggregate amount which
we believe to be adequate.
State and local rent control laws in certain jurisdictions may dictate the structure of rent increases and limit
our ability to recover increases in operating expenses and the costs of capital improvements. In 2019, the State of
New York enacted the Housing Stability and Tenant Protection Act of 2019, which, among other things, set maximum
collectible rent increases. Enactment of such laws has been considered at various times in other jurisdictions. We
presently expect to continue to maintain properties, and may purchase additional properties, in markets that are either
subject to rent control or in which rent related legislation exists or may be enacted.
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 2020 will be approximately $19 million.
Information about our Executive Officers
The following table sets forth information with respect to the executive officers of the Company as of
December 31, 2019:
Name
Eugene W. Landy
Samuel A. Landy
Anna T. Chew
Craig Koster
Brett Taft
Number of Employees
Age
86
59
61
44
30
Position
Chairman of the Board of Directors and Founder
President and Chief Executive Officer
Vice President, Chief Financial and Accounting Officer
and Treasurer
General Counsel and Secretary
Vice President and Chief Operating Officer
As of March 5, 2020, the Company had approximately 420 employees, including Officers. During the year,
the Company hires additional part-time and full-time temporary employees as grounds keepers, lifeguards, and for
emergency repairs.
Available Information
Additional information about the Company can be found on the Company’s website which is located
at www.umh.reit. Information contained on or hyperlinked from our website is not incorporated by reference into and
-5-
should not be considered part of this Annual Report on Form 10-K or our other filings with the Securities and Exchange
Commission (“SEC”). 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 SEC. 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.
Item 1A – Risk Factors
(cid:2)
Our(cid:2)business(cid:2)faces(cid:2)many(cid:2)risks.(cid:2)(cid:2)The(cid:2)following(cid:2)risk(cid:2)factors(cid:2)may(cid:2)not(cid:2)be(cid:2)the(cid:2)only(cid:2)risks(cid:2)we(cid:2)face(cid:2)but(cid:2)address(cid:2)what(cid:2)
we(cid:2)believe(cid:2)may(cid:2)be(cid:2)the(cid:2)material(cid:2)risks(cid:2)concerning(cid:2)our(cid:2)business(cid:2)at(cid:2)this(cid:2)time.(cid:2)(cid:2)If(cid:2)any(cid:2)of(cid:2)the(cid:2)risks(cid:2)discussed(cid:2)in(cid:2)this(cid:2)report(cid:2)
were(cid:2)to(cid:2)occur,(cid:2)our(cid:2)business,(cid:2)prospects,(cid:2)financial(cid:2)condition,(cid:2)results(cid:2)of(cid:2)operation(cid:2)and(cid:2)our(cid:2)ability(cid:2)to(cid:2)service(cid:2)our(cid:2)debt(cid:2)
and(cid:2)make(cid:2)distributions(cid:2)to(cid:2)our(cid:2)shareholders(cid:2)could(cid:2)be(cid:2)materially(cid:2)and(cid:2)adversely(cid:2)affected(cid:2)and(cid:2)the(cid:2)market(cid:2)price(cid:2)per(cid:2)share(cid:2)
of(cid:2) our(cid:2) stock(cid:2) could(cid:2) decline(cid:2) significantly.(cid:2) Some(cid:2) statements(cid:2) in(cid:2) this(cid:2) report,(cid:2) including(cid:2) statements(cid:2) in(cid:2) the(cid:2) following(cid:2) risk(cid:2)
factors,(cid:2)constitute(cid:2)forwardlooking statements. Please refer to the section entitled “Cautionary Statement Regarding
ForwardLooking Statements.”
Real Estate Industry Risks
(cid:2)
(cid:2)
General(cid:2)economic(cid:2)conditions(cid:2)and(cid:2)the(cid:2)concentration(cid:2)of(cid:2)our(cid:2)properties(cid:2)in(cid:2)New(cid:2)Jersey,(cid:2)New(cid:2)York,(cid:2)Ohio,(cid:2)
Pennsylvania,(cid:2)Tennessee,(cid:2)Indiana,(cid:2)Michigan(cid:2)and(cid:2)Maryland(cid:2)may(cid:2)affect(cid:2)our(cid:2)ability(cid:2)to(cid:2)generate(cid:2)sufficient(cid:2)revenue.(cid:2)(cid:2)
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, Michigan and
Maryland, 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:
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
the national and local economic climate, including that of the energy-market dependent Marcellus
and Utica Shale regions, may be adversely impacted by, among other factors, potential restrictions
on drilling, plant closings, and industry slowdowns;
local real estate market conditions such as the oversupply of manufactured homesites or a reduction
in demand for manufactured homesites in an area;
the number of repossessed homes in a particular market;
the lack of an established dealer network;
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);
-6-
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
our ability to provide adequate management, maintenance and insurance;
a pandemic or other health crisis, such as the recent outbreak of novel coronavirus (COVID-19);
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.
We(cid:2)may(cid:2)be(cid:2)unable(cid:2)to(cid:2)compete(cid:2)with(cid:2)our(cid:2)larger(cid:2)competitors(cid:2)for(cid:2)acquisitions,(cid:2)which(cid:2)may(cid:2)increase(cid:2)prices(cid:2)for(cid:2)
communities. 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 competitors 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 consequently higher fixed costs. To the extent we are unable to
effectively compete in the marketplace, our business may be adversely affected.
(cid:2)
We(cid:2) may(cid:2) not(cid:2) be(cid:2)able(cid:2) to(cid:2) integrate(cid:2) or(cid:2) finance(cid:2) our(cid:2) acquisitions(cid:2) and(cid:2) our(cid:2) acquisitions(cid:2) may(cid:2) not(cid:2) perform(cid:2) as(cid:2)
expected.(cid:2) (cid:2) We acquire and intend to continue to acquire manufactured home communities on a select basis. Our
acquisition activities and their success are subject to risks, including the following:
(cid:2)(cid:2)
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;
(cid:2)(cid:2) we may be unable to finance acquisitions on favorable terms;
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
acquired properties may fail to perform as expected;
the actual costs of repositioning or redeveloping acquired properties may be higher than our
estimates;
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
(cid:2)(cid:2) 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.
-7-
We(cid:2)may(cid:2)be(cid:2)unable(cid:2)to(cid:2)integrate,(cid:2)finance(cid:2)or(cid:2)accurately(cid:2)estimate or(cid:2)anticipate(cid:2)costs(cid:2)and(cid:2)timing(cid:2)associated(cid:2)
with(cid:2) expansion(cid:2) activities. We periodically consider expansion of existing communities and development of new
communities. Our expansion and development activities are subject to risks such as:
(cid:2)(cid:2) we may not be able to obtain financing with favorable terms for community development which
may make us unable to proceed with the development;
(cid:2)(cid:2) we may be unable to obtain, or face delays in obtaining, necessary zoning, building and other
governmental permits and authorizations, which could result in increased costs and delays, and even
require us to abandon development of the community entirely if we are unable to obtain such permits
or authorizations;
(cid:2)(cid:2) we may abandon development opportunities that we have already begun to explore and as a result
we may not recover expenses already incurred in connection with exploring such development
opportunities;
(cid:2)(cid:2) we may be unable to complete construction and lease‑up of a community on schedule resulting in
increased debt service expense and construction costs;
(cid:2)(cid:2) we may incur construction and development costs for a community which exceed our original
estimates due to increased materials, labor or other costs, which could make completion of the
community uneconomical and we may not be able to increase rents to compensate for the increase
in development costs which may impact our profitability;
(cid:2)(cid:2) we may be unable to secure long‑term financing on completion of development resulting in
increased debt service and lower profitability; and
(cid:2)(cid:2)
occupancy rates and rents at a newly developed community may fluctuate depending on several
factors, including market and economic conditions, which may result in the community not being
profitable.
If any of the above were to occur, our business and results of operations could be adversely affected.
We(cid:2)may(cid:2)be(cid:2)unable(cid:2)to(cid:2)sell(cid:2)properties(cid:2)when(cid:2)appropriate(cid:2)because(cid:2)real(cid:2)estate(cid:2)investments(cid:2)are(cid:2)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.
Our(cid:2)ability(cid:2)to(cid:2)sell(cid:2)manufactured(cid:2)homes(cid:2)may(cid:2)be(cid:2)affected(cid:2)by(cid:2)various(cid:2)factors,(cid:2)which(cid:2)may(cid:2)in(cid:2)turn(cid:2)adversely(cid:2)
affect(cid:2) our(cid:2) 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:
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
downturns in economic conditions which adversely impact the housing market;
an oversupply of, or a reduced demand for, manufactured homes;
the ability of manufactured home manufacturers to adapt to change in the economic climate and the
availability of units from these manufacturers;
the difficulty facing potential purchasers in obtaining affordable financing as a result of heightened
lending criteria; and
-8-
(cid:2)(cid:2)
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.
Licensing(cid:2) laws(cid:2) and(cid:2) compliance(cid:2) could(cid:2) affect(cid:2) our(cid:2) profitability.(cid:2) (cid:2)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,
including the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), 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.
Costs(cid:2) associated(cid:2) with(cid:2) taxes(cid:2) and(cid:2) regulatory(cid:2) compliance(cid:2) may(cid:2) reduce(cid:2) our(cid:2) 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.
Laws and regulations also govern the provision of utility services. Such laws regulate, for example, how and
to what extent owners or operators of property can charge renters for provision of utilities. Such laws can also regulate
the operations and performance of utility systems and may impose fines and penalties on real property owners or
operators who fail to comply with these requirements. The laws and regulations may also require capital investment
to maintain compliance.
(cid:2)
Rent(cid:2)control(cid:2)legislation(cid:2)may(cid:2)harm(cid:2)our(cid:2)ability(cid:2)to(cid:2)increase(cid:2)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. In 2019, the State of New York enacted the Housing Stability and Tenant Protection Act of
2019, which, among other things, set maximum collectible rent increases. Rent control also affects two of our
manufactured home communities in New Jersey. Enactment of such laws has been considered at various times in
other jurisdictions. We presently expect to continue to maintain properties, and may purchase additional properties,
in markets that are either subject to rent control or in which rent related legislation exists or may be enacted.
Environmental(cid:2) liabilities(cid:2) could(cid:2) affect(cid:2) our(cid:2) profitability. Under various federal, state and local laws,
(cid:2)
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.
-9-
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 122 manufactured home communities we currently operate, forty-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, our community-owned manufactured homes 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.
Some(cid:2)of(cid:2)our(cid:2)properties(cid:2)are(cid:2)subject(cid:2)to(cid:2)potential(cid:2)natural(cid:2)or(cid:2)other(cid:2)disasters. Certain of our manufactured home
communities are located in areas that may be subject to natural disasters, including our manufactured home
communities in flood plains or in areas that may be adversely affected by tornados, as well as our manufactured home
communities in coastal regions that may be adversely affected by increases in sea levels or in the frequency or severity
of hurricanes, tropical storms or other severe weather conditions. The occurrence of natural disasters may delay
redevelopment or development projects, increase investment costs to repair or replace damaged properties, increase
future property insurance costs and negatively impact the tenant demand for lease space. To the extent insurance is
unavailable to us or is unavailable on acceptable terms, or our insurance is not adequate to cover losses from these
events, our financial condition and results of operations could be adversely affected.
Climate(cid:2)change(cid:2)may(cid:2)adversely(cid:2)affect(cid:2)our(cid:2)business.(cid:2)(cid:2)To the extent that significant changes in the climate
occur in areas where our properties are located, we may experience extreme weather and changes in precipitation and
temperature, all of which may result in physical damage to or a decrease in demand for properties located in these
areas or affected by these conditions. Should the impact of climate change be material in nature, including significant
property damage to or destruction of our properties, or occur for lengthy periods of time, our financial condition or
results of operations may be adversely affected. In addition, changes in federal, state and local legislation and
regulation based on concerns about climate change could result in increased capital expenditures on our properties
(for example, to improve their energy efficiency and/or resistance to inclement weather) without a corresponding
increase in revenue, resulting in adverse impacts to our net income.(cid:2)
Actions(cid:2)by(cid:2)our(cid:2)competitors(cid:2)may(cid:2)decrease(cid:2)or(cid:2)prevent(cid:2)increases(cid:2)in(cid:2)the(cid:2)occupancy(cid:2)and(cid:2)rental(cid:2)rates(cid:2)of(cid:2)our(cid:2)
properties(cid:2)which(cid:2)could(cid:2)adversely(cid:2)affect(cid:2)our(cid:2)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 attract tenants, lease sites and maintain or 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
-10-
when our tenants’ leases expire. 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(cid:2)in(cid:2)excess(cid:2)of(cid:2)our(cid:2)insurance(cid:2)coverage(cid:2)or(cid:2)uninsured(cid:2)losses(cid:2)could(cid:2)adversely(cid:2)affect(cid:2)our(cid:2)cash(cid:2)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, acts of war or other catastrophic events. 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.
Our(cid:2)investments(cid:2)are(cid:2)concentrated(cid:2)in(cid:2)the(cid:2)manufactured(cid:2)housing/residential(cid:2)sector(cid:2)and(cid:2)our(cid:2)business(cid:2)would(cid:2)
be(cid:2)adversely(cid:2)affected(cid:2)by(cid:2)an(cid:2)economic(cid:2)downturn(cid:2)in(cid:2)that(cid:2)sector.(cid:2)(cid:2)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.
Financing Risks
(cid:2)
(cid:2)
We(cid:2)face(cid:2)risks(cid:2)generally(cid:2)associated(cid:2)with(cid:2)our(cid:2)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:
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
rising interest rates on our variable rate debt;
inability 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(cid:2)mortgage(cid:2)our(cid:2)properties,(cid:2)which(cid:2)subjects(cid:2)us(cid:2)to(cid:2)the(cid:2)risk(cid:2)of(cid:2)foreclosure(cid:2)in(cid:2)the(cid:2)event(cid:2)of(cid:2)nonpayment.(cid:2)(cid:2)(cid:2)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.(cid:2)
(cid:2)
(cid:2)
We(cid:2)face(cid:2)risks(cid:2)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(cid:2)face(cid:2)risks(cid:2)associated(cid:2)with(cid:2)our(cid:2)dependence(cid:2)on(cid:2)external(cid:2)sources(cid:2)of(cid:2)capital. In order to qualify as a REIT, we
(cid:2)
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
-11-
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.
(cid:2)
(cid:2)
We(cid:2)may(cid:2)become(cid:2)more(cid:2)highly(cid:2)leveraged,(cid:2)resulting(cid:2)in(cid:2)increased(cid:2)risk(cid:2)of(cid:2)default(cid:2)on(cid:2)our(cid:2)obligations(cid:2)and(cid:2)an(cid:2)
increase(cid:2)in(cid:2)debt(cid:2)service(cid:2)requirements(cid:2)which(cid:2)could(cid:2)adversely(cid:2)affect(cid:2)our(cid:2)financial(cid:2)condition(cid:2)and(cid:2)results(cid:2)of(cid:2)operations(cid:2)
and(cid:2)our(cid:2)ability(cid:2)to(cid:2)pay(cid:2)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.
Fluctuations(cid:2)in(cid:2)interest(cid:2)rates(cid:2)could(cid:2)materially(cid:2)affect(cid:2)our(cid:2)financial(cid:2)results.(cid:2)Because a portion of our debt
bears interest at variable rates, increases in interest rates could materially increase our interest expense. If the U.S.
Federal Reserve increases short-term interest rates, this may have a significant upward impact on shorter-term interest
rates, including the interest rates that our variable rate debt is based upon. Potential future increases in interest rates
and credit spreads may increase our interest expense and therefore negatively affect our financial condition and results
of operations, and reduce our access to the debt or equity capital markets.
(cid:2)
We(cid:2) may(cid:2) be(cid:2) adversely(cid:2) affected(cid:2) by(cid:2) changes(cid:2) in(cid:2) the(cid:2)London(cid:2) Interbank Offered Rate (“LIBOR”) or(cid:2) the(cid:2)
method(cid:2)in(cid:2)which(cid:2)LIBOR(cid:2)is(cid:2)determined.(cid:2)(cid:2)A portion of our debt bears interest at variable rates based on LIBOR for
deposits of U.S. dollars. The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced
that it intends to stop encouraging or requiring banks to submit LIBOR rates after 2021, and it is likely that, over time,
LIBOR may be replaced by the Secured Overnight Financing Rate (“SOFR”) published by the Federal Reserve Bank
of New York. We are monitoring this activity and evaluating the related risks. Although the full impact of such
reforms and actions, together with any transition away from LIBOR, alternative reference rates or other reforms,
remains unclear, these changes may have a material adverse impact on the availability of financing, including LIBOR-
based loans, and as a result on our financing costs.
(cid:2)
Covenants(cid:2)in(cid:2)our(cid:2)credit(cid:2)agreements(cid:2)could(cid:2)limit(cid:2)our(cid:2)flexibility(cid:2)and(cid:2)adversely(cid:2)affect(cid:2)our(cid:2)financial(cid:2)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.
(cid:2)
(cid:2)
A(cid:2) change(cid:2) in(cid:2) the(cid:2) U.S.(cid:2)(cid:2) government(cid:2) policy(cid:2) with(cid:2) regard(cid:2) to(cid:2) Fannie(cid:2) Mae(cid:2) and(cid:2) Freddie(cid:2) Mac(cid:2)could(cid:2) impact(cid:2)our(cid:2)
(cid:2)
financial(cid:2)condition.(cid:2)(cid:2)Fannie Mae and Freddie Mac are a major source of financing for the manufactured housing real estate
sector. We depend frequently on Fannie Mae and Freddie Mac to finance growth by purchasing or guaranteeing
manufactured housing community loans. We do not know when or if Fannie Mae or Freddie Mac will restrict their support
of lending to our real estate sector or to us in particular. A decision by the government to eliminate Fannie Mae or Freddie
Mac, or reduce their acquisitions or guarantees of our mortgage loans, may adversely affect interest rates, capital
availability and our ability to refinance our existing mortgage obligations as they come due and obtain additional long-
term financing for the acquisition of additional communities on favorable terms or at all.
We(cid:2) face(cid:2) risks(cid:2) associated(cid:2) with(cid:2) the(cid:2) financing(cid:2) of(cid:2) home(cid:2) sales(cid:2) to(cid:2) customers(cid:2) in(cid:2) our(cid:2) manufactured(cid:2) home(cid:2)
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:
(cid:2)(cid:2)
the borrowers may default on these loans and not be able to make debt service payments or pay
principal when due;
-12-
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
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.
Risks Related to our Status as a REIT
(cid:2)
If(cid:2)our(cid:2)leases(cid:2)are(cid:2)not(cid:2)respected(cid:2)as(cid:2)true(cid:2)leases(cid:2)for(cid:2)federal(cid:2)income(cid:2)tax(cid:2)purposes,(cid:2)we(cid:2)would(cid:2)fail(cid:2)to(cid:2)qualify(cid:2)as(cid:2)a(cid:2)
REIT.(cid:2) (cid:2) 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 certain types of 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.
(cid:2)
Failure(cid:2)to(cid:2)make(cid:2)required(cid:2)distributions(cid:2)would(cid:2)subject(cid:2)us(cid:2)to(cid:2)additional(cid:2)tax.(cid:2)(cid:2)In order to qualify as a REIT, we
(cid:2)
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. 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:
(cid:2)(cid:2)
85% of our ordinary income for that year;
(cid:2)(cid:2)
(cid:2)(cid:2)
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.
(cid:2)
(cid:2)
(cid:2)
We(cid:2) may(cid:2) not(cid:2) have(cid:2) sufficient(cid:2) cash(cid:2) available(cid:2) from(cid:2) operations(cid:2) to(cid:2) pay(cid:2) distributions(cid:2) to(cid:2) our(cid:2) stockholders,(cid:2) and,(cid:2)
therefore,(cid:2)distributions(cid:2)may(cid:2)be(cid:2)made(cid:2)from(cid:2)borrowings.(cid:2)(cid:2)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
-13-
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.
(cid:2)
(cid:2)
We(cid:2) may(cid:2) be(cid:2) required(cid:2) to(cid:2) pay(cid:2) a(cid:2) penalty(cid:2) tax(cid:2) upon(cid:2) the(cid:2) sale(cid:2) of(cid:2) a(cid:2) property.(cid:2) The federal income tax provisions
(cid:2)
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.
(cid:2)
We(cid:2)may(cid:2)be(cid:2)adversely(cid:2)affected(cid:2)if(cid:2)we(cid:2)fail(cid:2)to(cid:2)qualify(cid:2)as(cid:2)a(cid:2)REIT.(cid:2)If we fail to qualify as a REIT, we will not be
allowed to deduct distributions to shareholders in computing our taxable income and will be subject to federal income
tax at regular corporate rates and possibly increased state and local taxes. In addition, we might be barred from
qualification as a REIT for the four years following the year of disqualification. The additional tax incurred at regular
corporate rates would reduce significantly the cash flow available for distribution to shareholders and for debt service.
Furthermore, we would no longer be required to make any distributions to our shareholders as a condition to REIT
qualification. Any distributions to shareholders would be taxable as ordinary income to the extent of our current and
accumulated earnings and profits, although such dividend distributions to non-corporate shareholders would be subject
to a top federal income tax rate of 20% (and potentially a Medicare tax of 3.8%), provided applicable requirements of
the Code are satisfied. Furthermore, corporate shareholders may be eligible for the dividends received deduction on
the distributions, subject to limitations under the Code. Additionally, if we fail to qualify as a REIT, non-corporate
stockholders would no longer be able to deduct up to 20% of our dividends (other than capital gain dividends and
dividends treated as qualified dividend income), as would otherwise generally be permitted for taxable years beginning
after December 31, 2017 and before January 1, 2026.
(cid:2)
(cid:2)
To(cid:2)qualify(cid:2)as(cid:2)a(cid:2)REIT,(cid:2)we(cid:2)must(cid:2)comply(cid:2)with(cid:2)certain(cid:2)highly(cid:2)technical(cid:2)and(cid:2)complex(cid:2)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 so qualified or will remain so qualified.
(cid:2)
(cid:2)
There(cid:2)is(cid:2)a(cid:2)risk(cid:2)of(cid:2)changes(cid:2)in(cid:2)the(cid:2)tax(cid:2)law(cid:2)applicable(cid:2)to(cid:2)REITs. Because the IRS, the U.S. 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. Numerous changes to the U.S. federal income tax
laws are proposed on a regular basis. 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. Additionally, the REIT rules are
constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department,
which may result in revisions to regulations and interpretations in addition to statutory changes. If enacted, certain
proposed changes could have an adverse impact on our business and financial results. Importantly, legislation has been
proposed in several states specifically taxing REITs. If such legislation were to be enacted, our income from such states
would be adversely impacted.
(cid:2)
The act popularly known as the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), has significantly changed
the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their shareholders. Changes
made by the Tax Act that could affect us and our shareholders include:
-14-
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
temporarily reducing individual U.S. federal income tax rates on ordinary income; the highest
individual U.S. federal income tax rate has been reduced from 39.6% to 37% for taxable years
beginning after December 31, 2017 and before January 1, 2026;
permanently eliminating the progressive corporate tax rate structure, with a maximum corporate tax
rate of 35%, and replacing it with a flat corporate tax rate of 21%;
permitting a deduction for certain pass-through business income, including dividends received by
our shareholders from us that are not designated by us as capital gain dividends or qualified dividend
income, which will allow individuals, trusts, and estates to deduct up to 20% of such amounts for
taxable years beginning after December 31, 2017 and before January 1, 2026;
reducing the highest rate of withholding with respect to our distributions to non-U.S. stockholders
that are treated as attributable to gains from the sale or exchange of U.S. real property interests from
35% to 21%;
limiting our deduction for net operating losses to 80% of REIT taxable income (prior to the
application of the dividends paid deduction);
generally limiting the deduction for net business interest expense in excess of 30% of a business’s
adjusted taxable income except for taxpayers that engage in certain real estate businesses and elect
out of this rule (provided that such electing taxpayers must use an alternative depreciation system
for certain property); and
eliminating the corporate alternative minimum tax.
The Tax Act is subject to potential amendments and technical corrections, as well as interpretations and
implementing regulations by the United States Treasury Department and the IRS, any of which could lessen or increase
certain impacts of the Tax Act. Some technical corrections, proposed regulations and final regulations have already
been promulgated, some of which specifically address REITs. It is unclear how these U.S. federal income tax changes
will affect state and local taxation in various states and localities, which often use federal taxable income as a starting
point for computing state and local tax liabilities. You are urged to consult with your tax advisor with respect to the
status of legislative, regulatory, judicial or administrative developments and proposals and their potential effect on an
investment in our securities.
We(cid:2)may(cid:2)be(cid:2)unable(cid:2)to(cid:2)comply(cid:2)with(cid:2)the(cid:2)strict(cid:2)income(cid:2)distribution(cid:2)requirements(cid:2)applicable(cid:2)to(cid:2)REITs. To
(cid:2)
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.
(cid:2)
Our taxable REIT subsidiary (“TRS) is subject to special rules that may result in increased taxes. As a REIT,
we must pay a 100% penalty tax on certain payments that we receive if the economic arrangements between us and our
TRS is not comparable to similar arrangements between unrelated parties. The IRS may successfully assert that the
economic arrangements of any of our inter-company transactions are not comparable to similar arrangements between
unrelated parties. This would result in unexpected tax liability which would adversely affect our cash flows.
(cid:2)
(cid:2)
-15-
Notwithstanding(cid:2)our(cid:2)status(cid:2)as(cid:2)a(cid:2)REIT,(cid:2)we(cid:2)are(cid:2)subject(cid:2)to(cid:2)various(cid:2)federal,(cid:2)state(cid:2)and(cid:2)local(cid:2)taxes(cid:2)on(cid:2)our(cid:2)income(cid:2)
(cid:2)
and(cid:2)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.
Other Risks
We(cid:2)may(cid:2)not(cid:2)be(cid:2)able(cid:2)to(cid:2)obtain(cid:2)adequate(cid:2)cash(cid:2)to(cid:2)fund(cid:2)our(cid:2)business.(cid:2) 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.
(cid:2)
We(cid:2)are(cid:2)dependent(cid:2)on(cid:2)key(cid:2)personnel.(cid:2) 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. Further, such a loss could be negatively perceived in the capital markets.
(cid:2)
(cid:2)
Some(cid:2) of(cid:2) our(cid:2) directors(cid:2) and(cid:2) officers(cid:2) may(cid:2) have(cid:2) conflicts(cid:2) of(cid:2) interest(cid:2) with(cid:2) respect(cid:2) to(cid:2) certain(cid:2) related(cid:2) party(cid:2)
transactions(cid:2) and(cid:2) other(cid:2) business(cid:2) interests.(cid:2) (cid:2) Mr. Eugene W. Landy, the Founder and Chairman of the Board of the
Company, owns a 24% interest in the entity that is the landlord of the property where the Company’s corporate office
space is located. Effective October 1, 2019, the Company entered into a new lease for its executive offices in Freehold,
New Jersey which combines the existing corporate office space with additional adjacent office space. This new lease
extends our existing lease through April 30, 2027 and requires monthly lease payments of $23,098 through April 30, 2022
and $23,302 from May 1, 2022 through April 30, 2027. The Company is also responsible for its proportionate share of
real estate taxes and common area maintenance. Mr. Eugene Landy may have a conflict of interest with respect to his
obligations as our officer and/or director and his ownership interest in the landlord of the property.(cid:2)
(cid:2)
(cid:2)
We(cid:2)may(cid:2)amend(cid:2)our(cid:2)business(cid:2)policies(cid:2)without(cid:2)stockholder(cid:2)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.
(cid:2)
The(cid:2)market(cid:2)value(cid:2)of(cid:2)our(cid:2)preferred(cid:2)and(cid:2)common(cid:2)stock(cid:2)could(cid:2)decrease(cid:2)based(cid:2)on(cid:2)our(cid:2)performance(cid:2)and(cid:2)market(cid:2)
(cid:2)
perception(cid:2) and(cid:2)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 could 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.
(cid:2)
There(cid:2)are(cid:2)restrictions(cid:2)on(cid:2)the(cid:2)transfer(cid:2)of(cid:2)our(cid:2)capital(cid:2)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. These restrictions may discourage a tender offer
or other transaction, or a change in management or of control of us that might involve a premium price for our common
stock or preferred stock or that our shareholders otherwise believe to be in their best interests, and may result in the transfer
-16-
of shares acquired in excess of the restrictions to a trust for the benefit of a charitable beneficiary and, as a result, the
forfeiture by the acquirer of the benefits of owning the additional shares.
(cid:2)
(cid:2)
(cid:2)
Our(cid:2)earnings(cid:2)are(cid:2)dependent,(cid:2)in(cid:2)part,(cid:2)upon(cid:2)the(cid:2)performance(cid:2)of(cid:2)our(cid:2)investment(cid:2)portfolio. As permitted by the
Code, we invest in and own securities of other REITs, which we generally limit to no more than approximately 15% of
our undepreciated assets. 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.
(cid:2)
(cid:2)
(cid:2)
We(cid:2)are(cid:2)subject(cid:2)to(cid:2)restrictions(cid:2)that(cid:2)may(cid:2)impede(cid:2)our(cid:2)ability(cid:2)to(cid:2)effect(cid:2)a(cid:2)change(cid:2)in(cid:2)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:
(cid:2)(cid:2) 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.
(cid:2)(cid:2) 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.
(cid:2)(cid:2) 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.
(cid:2)(cid:2) Our Board of Directors may authorize and cause us to issue securities without shareholder approval.
Under our charter, the board has the power to classify and reclassify any of our unissued shares of capital
stock into shares of capital stock with such preferences, rights, powers and restrictions as the Board of
Directors may determine.
(cid:2)(cid:2)
“Business combination” provisions that provide that, unless exempted, a Maryland corporation may not
engage in certain business combinations, including mergers, dispositions of 10 percent or more of its
assets, certain issuances of shares of stock and other specified transactions, with an “interested
shareholder” or an affiliate of an interested shareholder for five years after the most recent date on which
the interested shareholder became an interested shareholder, and thereafter unless specified criteria are
met. An interested shareholder is defined generally as any person who beneficially owns 10% or more
of the voting power of our shares or an affiliate thereof or an affiliate or associate of ours who was the
beneficial owner, directly or indirectly, of 10% or more of the voting power of our then outstanding
voting stock at any time within the two-year period immediately prior to the date in question. In our
charter, we have expressly elected that the Maryland Business Combination Act not govern or apply to
any transaction with our affiliated company, Monmouth Real Estate Investment Corporation
(“MREIC”), a Maryland corporation.
(cid:2)(cid:2) The duties of directors of a Maryland corporation do not require them to, among other things (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 shareholders
rights plan, (c) make a determination under the Maryland Business Combination Act or the Maryland
-17-
Control Share Acquisition Act to exempt any person or transaction from the requirements of those
provisions, or (d) 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 shareholders in an acquisition.
(cid:2)
(cid:2)
We(cid:2)cannot(cid:2)assure(cid:2)you(cid:2)that(cid:2)we(cid:2)will(cid:2)be(cid:2)able(cid:2)to(cid:2)pay(cid:2)distributions(cid:2)regularly.(cid:2)(cid:2)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 and is subject to limitations under our financing arrangements and Maryland law. Under the Maryland General
Corporation Law, (“MGCL”), a Maryland corporation generally may not make a distribution if, after giving effect to the
distribution, the corporation would not be able to pay its debts as the debts became due in the usual course of business, or
the corporation’s total assets would be less than the sum of its total liabilities plus, unless the charter permits otherwise,
the amount that would be needed if the corporation were to be dissolved at the time of the distribution to satisfy the
preferential rights upon dissolution of stockholders whose preferential rights on dissolution are superior to those receiving
the distribution. Accordingly, we cannot guarantee that we will be able to pay distributions on a regular quarterly basis in
the future.
(cid:2)
Dividends(cid:2) on(cid:2) our(cid:2) capital(cid:2) stock(cid:2) do(cid:2) not(cid:2) qualify(cid:2) for(cid:2) the(cid:2) reduced(cid:2) tax(cid:2) rates(cid:2) available(cid:2) for(cid:2) some(cid:2)
dividends.(cid:2)Income from “qualified dividends” payable to U.S. stockholders that are individuals, trusts and estates are
generally subject to tax at preferential rates. Dividends payable by REITs, however, generally are not eligible for the
preferential tax rates applicable to qualified dividend income. Although these rules do not adversely affect our taxation
or the dividends payable by us, to the extent that the preferential rates continue to apply to regular corporate qualified
dividends, investors who are individuals, trusts and estates may perceive an investment in us to be relatively less
attractive than an investment in the stock of a non-REIT corporation that pays dividends, which could materially and
adversely affect the value of the shares of, and per share trading price of, our capital stock. It should be noted that the
Tax Act provides for a deduction from income for individuals, trusts and estates up to 20% of certain REIT dividends,
which reduces the effective tax rate on such dividends below the effective tax rate on interest, though the deduction is
generally not as favorable as the preferential rate on qualified dividends. The deduction for certain REIT dividends,
unlike the favorable rate for qualified dividends, expires after 2025.
(cid:2)
We(cid:2)are(cid:2)subject(cid:2)to(cid:2)risks(cid:2)arising(cid:2)from(cid:2)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.
(cid:2)
Future(cid:2) terrorist(cid:2) attacks(cid:2) and(cid:2) military(cid:2) conflicts(cid:2) could(cid:2) have(cid:2) a(cid:2) material(cid:2) adverse(cid:2) effect(cid:2) on(cid:2) general(cid:2) economic(cid:2)
conditions,(cid:2)consumer(cid:2)confidence(cid:2)and(cid:2)market(cid:2)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.
(cid:2)
Disruptions(cid:2)in(cid:2)the(cid:2)financial(cid:2)markets(cid:2)could(cid:2)affect(cid:2)our(cid:2)ability(cid:2)to(cid:2)obtain(cid:2)financing(cid:2)on(cid:2)reasonable(cid:2)terms(cid:2)and(cid:2)have(cid:2)
other(cid:2)adverse(cid:2)effects(cid:2)on(cid:2)us(cid:2)and(cid:2)the(cid:2)market(cid:2)price(cid:2)of(cid:2)our(cid:2)capital(cid:2)stock. Uncertainty in the stock and credit markets may
negatively impact our ability to access additional financing at reasonable terms, which may negatively affect our ability to
acquire properties and otherwise pursue our investment strategy. A prolonged downturn in the stock or credit markets may
cause us to seek alternative sources of potentially less attractive financing, and may require us to adjust our investment
strategy accordingly. These types of events in the stock and credit markets may make it more difficult or costly for us to
raise capital through the issuance of the common stock, preferred stock or debt securities. The potential disruptions in the
financial markets may have a material adverse effect on the market value of the common stock and preferred stock, or the
-18-
economy in general. In addition, the national and local economic climate, including that of the energy-market dependent
Marcellus and Utica Shale regions, may be adversely impacted by, among other factors, potential restrictions on drilling,
plant closings and industry slowdowns, which may have a material adverse effect on the return we receive on our properties
and investments, as well as other unknown adverse effects on us.
(cid:2)
(cid:2)
(cid:2)
We(cid:2) face(cid:2) risks(cid:2) relating(cid:2) to(cid:2) cybersecurity(cid:2) attacks(cid:2)which(cid:2)could(cid:2) adversely(cid:2) affect(cid:2)our(cid:2) business,(cid:2)cause(cid:2)loss(cid:2) of(cid:2)
confidential(cid:2) information(cid:2) and(cid:2)disrupt(cid:2) operations.(cid:2) (cid:2) We rely extensively on information technology to process
transactions and manage our business. In the ordinary course of our business, we collect and store sensitive data,
including our business information and that of our tenants, clients, vendors and employees on our network. This data
is hosted on internal, as well as external, computer systems. Our external systems are hosted by third-party service
providers that may have access to such information in connection with providing necessary information technology
and security and other business services to us. This information may include personally identifiable information such
as social security numbers, banking information and credit card information. We employ a number of measures to
prevent, detect and mitigate potential breaches or disclosure of this confidential information. We have established a
Cybersecurity Subcommittee of our Audit Committee to review and provide high level guidance on cybersecurity
related issues of importance to the Company. We also maintain cyber risk insurance to provide some coverage for
certain risks arising out of data and network breaches. While we continue to improve our cybersecurity and take
measures to protect our business, we and our third-party service providers may be vulnerable to attacks by hackers
(including through malware, ransomware, computer viruses, and email phishing schemes) or breached due to
employee error, malfeasance, fire, flood or other physical event, or other disruptions. Any such breach or disruption
could compromise the confidential information of our employees, customers and vendors to the extent such
information exists on our systems or on the systems of third-party providers. Such an incident could result in potential
liability, a loss of confidence and legal claims or proceedings; damage our reputation, competitiveness, stock price
and long-term value; increase remediation, cybersecurity protection and insurance premium costs; disrupt and affect
our business operations; or have material adverse effects on our business.
We(cid:2)are(cid:2)dependent(cid:2)on(cid:2)continuous(cid:2)access(cid:2)to(cid:2)the(cid:2)Internet(cid:2)to(cid:2)use(cid:2)our(cid:2)cloudbased(cid:2)applications. Damage or
failure to our information technology systems, including as a result of any of the reasons described above, could
adversely affect our results of operations as we may incur significant costs or data loss. We continually assess new
and enhanced information technology solutions to manage risk of system failure or interruption.
We(cid:2)face(cid:2)risks(cid:2)relating(cid:2)to(cid:2)expanding(cid:2)use(cid:2)of(cid:2)social(cid:2)media(cid:2)mediums. The use of social media could cause us
to suffer brand damage or information leakage. Negative posts or comments about us or our properties on any social
networking website could damage our, or our properties’ reputations. In addition, employees or others might disclose
non-public sensitive information relating to our business through external media channels. The continuing evolution
of social media may present us with new challenges and risks. The considerable increase in the use of social media
over recent years has greatly expanded the potential scope and scale, and increased the rapidity of the dissemination
of negative publicity that could be generated by negative posts and comments.
(cid:2)
(cid:2)
Item 1B – Unresolved Staff Comments
None.
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, Michigan and Maryland. As of December 31,
2019, the Company owned 122 manufactured home communities containing approximately 23,100 developed sites.
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. 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. 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
-19-
number. The following table sets forth certain information concerning the Company’s real estate investments as of
December 31, 2019.
Name of Community
Allentown
4912 Raleigh-Millington Road
Memphis, TN 38128
Arbor Estates
1081 North Easton Road
Doylestown, PA 18902
Auburn Estates
919 Hostetler Road
Orrville, OH 44667
Birchwood Farms
8057 Birchwood Drive
Birch Run, MI 48415
Boardwalk
2105 Osolo Road
Elkhart, IN 46514
Broadmore Estates
148 Broadmore Estates
Goshen, IN 46528
Brookside Village
107 Skyline Drive
Berwick, PA 18603
Brookview Village
2025 Route 9N, Lot 137
Greenfield Center, NY 12833
Camelot Village
2700 West 38th Street
Anderson, IN 46013
Candlewick Court
1800 Candlewick Drive
Owosso, MI 48867
Carsons
649 North Franklin St. Lot 116
Chambersburg, PA 17201
Catalina
6501 Germantown Road
Middletown, OH 45042
Cedarcrest Village
1976 North East Avenue
Vineland, NJ 08360
Number of
Developed
Sites
Occupancy Occupancy
Percentage
Percentage
Acreage
at 12/31/18 Developed
at 12/31/19
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/19
434
92%
89%
76
-0-
$465
230
91%
93%
31
-0-
$716
42
93%
90%
13
-0-
$422
143
93%
90%
28
-0-
$459
195
99%
97%
45
-0-
$381
390
88%
91%
93
19
$460
170
81%
79%
37
2
$459
150
88%
91%
52
22
$536
95
84%
78%
32
50
$323
211
64%
61%
40
-0-
$473
131
78%
71%
14
4
$409
463
55%
54%
75
26
$428
283
95%
96%
71
30
$628
-20-
Name of Community
Chambersburg I & II
5368 Philadelphia Ave Lot 34
Chambersburg, PA 17201
Chelsea
459 Chelsea Lane
Sayre, PA 18840
Cinnamon Woods
70 Curry Avenue
Conowingo, MD 21918
City View
110 Fort Granville Lot C5
Lewistown, PA 17044
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
Wolcott Hollow Rd & Route 220
Athens, PA 18810
Cross Keys Village
259 Brown Swiss Circle
Duncansville, PA 16635
Crossroads Village
549 Chicory Lane
Mount Pleasant, PA 15666
Number of
Developed
Sites
Occupancy Occupancy
Percentage
Percentage
Acreage
at 12/31/18 Developed
at 12/31/19
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/19
99
80%
75%
11
-0-
$379
84
95%
98%
12
-0-
$417
62
95%
98%
10
67
$514
57
93%
93%
20
116
99%
99%
23
2
1
$337
$423
102
85%
88%
20
-0-
$461
160
83%
75%
31
1
$333
162
83%
83%
36
28
$354
143
95%
92%
27
-0-
$352
349
96%
97%
89
63
$387
187
96%
94%
36
-0-
$619
98
93%
82%
19
-0-
$386
132
85%
83%
21
2
$463
34
76%
71%
9
-0-
$383
-21-
Name of Community
Dallas Mobile Home Community
1104 N 4th Street
Toronto, OH 43964
Deer Meadows
1291 Springfield 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
Evergreen Village
9249 State Route 44
Mantua, OH 44255
Fairview Manor
2110 Mays Landing Road
Millville, NJ 08332
Fifty-One Estates
Hayden Boulevard
Elizabeth, PA 15037
Forest Creek
855 E. Mishawaka Road
Elkhart, IN 46517
Forest Park Village
102 Holly Drive
Cranberry Township, PA 16066
Fox Chapel Village
7 Greene Drive
Cheswick, PA 15024
Frieden Manor
102 Frieden Manor
Schuylkill Haven, PA 17972
Friendly Village
27696 Oregon Road
Perrysburg, OH 43551
Green Acres
4496 Sycamore Grove Road
Chambersburg, PA 17201
Number of
Developed
Sites
Occupancy Occupancy
Percentage
Percentage
Acreage
at 12/31/18 Developed
at 12/31/19
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/19
145
79%
77%
21
-0-
$264
98
87%
91%
22
8
$334
235
91%
91%
44
-0-
$603
55
100%
100%
10
3
$357
68
85%
75%
7
-0-
$337
50
98%
98%
10
4
$371
317
94%
95%
66
132
$648
171
78%
N/A
42
3
$445
167
96%
98%
37
-0-
$488
247
96%
91%
79
-0-
$546
121
74%
66%
23
2
$369
193
88%
87%
42
22
$486
824
46%
N/A
101
-0-
$401
24
100%
100%
6
-0-
$403
-22-
Name of Community
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
High View Acres
399 Blue Jay Lane
Apollo, PA 15613
Highland
1875 Osolo Road
Elkhart, IN 46514
Highland Estates
60 Old Route 22
Kutztown, PA 19530
Hillcrest Crossing
100 Lorraine Drive
Lower Burrell, PA 15068
Hillcrest Estates
14200 Industrial Parkway
Marysville, OH 43040
Hillside Estates
Snyder Avenue
Greensburg, PA 15601
Holiday Village
201 Grizzard Avenue
Nashville, TN 37207
Holiday Village
1350 Co Road 3
Elkhart, IN 46514
Holly Acres Estates
7240 Holly Dale Drive
Erie, PA 16509
Hudson Estates
100 Keenan Road
Peninsula, OH 44264
Huntingdon Pointe
240 Tee Drive
Tarrs, PA 15688
Number of
Developed
Sites
Occupancy Occupancy
Percentage
Percentage
Acreage
at 12/31/18 Developed
at 12/31/19
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/19
39
82%
77%
9
-0-
$657
115
99%
100%
19
-0-
$402
407
73%
70%
79
-0-
$456
156
83%
80%
43
-0-
$383
246
88%
94%
42
-0-
$398
318
97%
97%
98
65
$592
198
62%
55%
60
16
$318
222
90%
77%
46
45
$440
90
82%
80%
29
20
$360
266
97%
98%
36
29
$532
326
75%
76%
53
153
91%
90%
30
2
9
$476
$385
159
93%
95%
19
-0-
$311
70
99%
91%
42
7
$299
-23-
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
Lakeview Meadows
11900 Duff Road, Lot 58
Lakeview, OH 43331
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
Marysville Estates
548 North Main Street
Marysville, OH 43040
Meadowood
9555 Struthers Road
New Middletown, OH 44442
Meadows
11 Meadows
Nappanee, IN 46550
Meadows of Perrysburg
27484 Oregon Road
Perrysburg, OH 43551
Melrose Village
4400 Melrose Drive, Lot 301
Wooster, OH 44691
Melrose West
4455 Cleveland Road
Wooster, OH 44691
Memphis Blues (1)
1401 Memphis Blues Avenue
Memphis, TN 38127
Number of
Developed
Sites
Occupancy Occupancy
Percentage
Percentage
Acreage
at 12/31/18 Developed
at 12/31/19
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/19
92
96%
91%
36
15
$385
250
94%
96%
66
8
$607
243
91%
91%
54
43
$461
81
93%
86%
21
32
$360
207
78%
79%
43
-0-
$413
62
92%
79%
13
-0-
$353
316
78%
78%
71
-0-
$406
306
57%
55%
58
-0-
$404
122
92%
91%
20
-0-
$417
335
68%
61%
61
-0-
$408
191
88%
87%
39
16
$402
293
90%
90%
71
-0-
$365
29
100%
97%
27
3
$392
90
43%
100%
22
-0-
$416
-24-
Name of Community
Monroe Valley
15 Old State Road
Jonestown, PA 17038
Moosic Heights
118 1st Street
Avoca, PA 18641
Mount Pleasant Village
549 Chicory Lane
Mount Pleasant, PA 15666
Mountaintop
Mountain Top Lane
Narvon, PA 17555
Mountain View (2)
Van Dyke Street
Coxsackie, NY 12501
New Colony
3101 Homestead Duquesne Road
West Mifflin, PA 15122
Northtowne Meadows
6255 Telegraph Road
Erie, MI 48133
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 Township, OH 44138
Oxford Village
2 Dolinger Drive
West Grove, PA 19390
Parke Place
2331 Osolo Road
Elkhart, IN 46514
Perrysburg Estates
23720 Lime City Road
Perrysburg, OH 43551
Pikewood Manor
1780 Lorain Boulevard
Elyria, OH 44035
Number of
Developed
Sites
Occupancy Occupancy
Percentage
Percentage
Acreage
at 12/31/18 Developed
at 12/31/19
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/19
44
91%
86%
11
-0-
$522
151
93%
92%
35
-0-
$424
115
95%
93%
19
-0-
$330
39
90%
95%
11
2
$605
-0-
N/A
N/A
-0-
220
$-0-
114
68%
N/A
16
-0-
$423
386
85%
N/A
85
-0-
$415
205
93%
99%
40
-0-
$480
79
63%
73%
40
-0-
$462
125
95%
93%
15
-0-
$420
224
98%
99%
59
2
$693
364
96%
95%
79
30
$385
133
65%
67%
24
9
$365
488
67%
66%
86
31
$458
-25-
Name of Community
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
Redbud Estates
1800 West 38th Street
Anderson, IN 46013
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 Pike #L1
Nashville, TN 37207
Somerset Estates/Whispering Pines
1873 Husband Road
Somerset, PA 15501
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
Number of
Developed
Sites
Occupancy Occupancy
Percentage
Percentage
Acreage
at 12/31/18 Developed
at 12/31/19
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/19
194
87%
83%
50
30
$543
212
68%
67%
38
-0-
$377
110
76%
71%
21
9
$403
473
60%
55%
101
-0-
$467
580
94%
90%
128
20
$283
232
76%
75%
60
-0-
$391
90
92%
96%
31
1
$383
66
79%
80%
17
66
$455
364
71%
70%
102
10
$421
212
96%
87%
25
-0-
$501
249
79%
78%
74
24
$389/$461
118
100%
100%
26
4
$352
250
97%
97%
36
-0-
$588
148
89%
89%
37
24
$410
-26-
Name of Community
Springfield Meadows
4100 Troy Road
Springfield, OH 45502
Suburban Estates
33 Maruca Drive
Greensburg, PA 15601
Summit Estates
3305 Summit Road
Ravenna, OH 44266
Summit Village
246 North 500 East
Marion, IN 46952
Sunny Acres
272 Nicole Lane
Somerset, PA 15501
Sunnyside
2901 West Ridge Pike
Eagleville, PA 19403
Trailmont
122 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
229 Fieldstone Lane
Ruffs Dale, PA 15679
Valley Hills
4364 Sandy Lake Road
Ravenna, OH 44266
Valley Stream
60 Valley Stream
Mountaintop, PA 18707
Valley View I
1 Sunflower Drive
Ephrata, PA 17522
Valley View II
1 Sunflower Drive
Ephrata, PA 17522
Number of
Developed
Sites
Occupancy Occupancy
Percentage
Percentage
Acreage
at 12/31/18 Developed
at 12/31/19
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/19
123
96%
90%
43
77
$363
200
90%
91%
36
-0-
$363
141
95%
93%
25
1
$416
89
85%
74%
25
33
$359
207
92%
93%
56
2
$241
63
83%
88%
8
-0-
$399
129
96%
93%
32
-0-
$685
141
99%
96%
21
-0-
$525
238
86%
83%
48
2
$508
74
80%
84%
13
16
$447
271
89%
92%
66
67
$374
143
71%
73%
37
6
$351
104
97%
97%
19
-0-
$344
43
100%
100%
7
-0-
$525
-27-
Name of Community
Valley View – Honey Brook
1 Mark Lane
Honey Brook, PA 19344
Voyager Estates
1002 Satellite Drive
West Newton, PA 15089
Waterfalls Village
3450 Howard Road Lot 21
Hamburg, NY 14075
Wayside
1000 Garfield Avenue
Bellefontaine, OH 43331
Weatherly Estates
271 Weatherly Drive
Lebanon, TN 37087
Wellington Estates
58 Tanner Street
Export, PA 15632
Woodland Manor
338 County Route 11, Lot 165
West Monroe, NY 13167
Woodlawn Village
265 Route 35
Eatontown, NJ 07724
Woods Edge
1670 East 650 North
West Lafayette, IN 47906
Wood Valley
2 West Street
Caledonia, OH 43314
Worthington Arms
5277 Columbus Pike
Lewis Center, OH 43035
Youngstown Estates
999 Balmer Road
Youngstown, NY 14174
Number of
Developed
Sites
Occupancy Occupancy
Percentage
Percentage
Acreage
at 12/31/18 Developed
at 12/31/19
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/19
147
84%
89%
28
13
$641
259
61%
61%
72
20
$371
196
82%
77%
35
-0-
$582
84
83%
77%
16
5
$315
270
99%
97%
41
-0-
$492
206
60%
53%
46
1
$300
148
68%
63%
77
-0-
$381
156
91%
92%
14
-0-
$679
599
58%
52%
151
50
$394
160
62%
56%
31
56
$343
224
91%
84%
36
-0-
$584
89
61%
64%
14
59
$369
Total
23,088
82.0%
82.0%
4,951
1,691
$447
______________________
(1)(cid:2) Community was closed due to an unusual flooding throughout the region in May 2011. We are currently working on the redevelopment of
this community. The total redevelopment will be 134 sites. Phase I, consisting of 39 sites, was 100% occupied as of December 31, 2018.
Phase II, consisting of 51 sites, was recently completed and in the process of being occupied.
(2)(cid:2) We are currently seeking site plan approvals for approximately 220 sites for this property.
-28-
The Company also has approximately 2,500 additional sites at its properties 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.
Significant Properties
The Company operates manufactured home properties with an approximate cost of $1.0 billion. These
properties consist of 122 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: Friendly Village with
824 developed sites, Woods Edge with 599 developed sites, Redbud Estates with 580 developed sites, Pikewood
Manor with 488 developed sites, and Port Royal Village with 473 developed sites.
Mortgages on Properties
The Company has mortgages on many of its properties. The maturity dates of these mortgages range from
the years 2021 to 2029, with a weighted average term of 6.0 years. Interest on these mortgages are at fixed rates
ranging from 3.37% to 6.5%. The weighted average interest rate on our mortgages, not including the effect of
unamortized debt issuance costs, was approximately 4.1% and 4.3% at December 31, 2019 and 2018, respectively.
The aggregate balances of these mortgages, net of unamortized debt issuance costs, total $373.7 million and $331.1
million at December 31, 2019 and 2018, respectively. (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
The Company is subject to claims and litigation in the ordinary course of business. For additional information
about legal proceedings, see 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.
PART II
Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Market Information
The Company’s common and preferred shares are traded on the New York Stock Exchange (“NYSE”), under
the symbol “UMH” , “UMHPRB”, “UMHPRC” and “UMHPRD”.
Shareholder Information
As of February 28, 2020, there were 981 registered shareholders of the Company’s common stock based on
the number of record owners.
Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
On January 15, 2019, the Board of Directors reaffirmed its Share Repurchase Program (the “Repurchase
Program”) that authorizes the Company to purchase up to $25 million in the aggregate of the Company's common
stock. The Repurchase Program may be made using a variety of methods, which may include open market purchases,
-29-
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 may be suspended, modified or discontinued at any time at the Company's discretion
without prior notice. On September 16, 2019, the Company repurchased 20,000 shares of its common stock at a price
of $11.87 per share, and a total cost of $237,000.
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 REITs Index 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, 2014 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
50
0
s
r
a
l
l
o
D
188
138
181
114
112
121
158
132
116
103
114
101
100
221
174
150
2014
2015
2016
2017
2018
2019
YEAR(cid:2)ENDED(cid:2)DECEMBER(cid:2)31,
UMH(cid:2)PROPERTIES,(cid:2)INC.
FTSE(cid:2)NAREIT(cid:2)ALL(cid:2)REIT
S(cid:2)&(cid:2)P(cid:2)500
-30-
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, 2019. The historical financial data has been derived from our
historical financial statements. This following information should be read in conjunction with “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” and the Consolidated Financial
Statements and Notes thereto included elsewhere herein (in(cid:2)thousands(cid:2)except(cid:2)per(cid:2)share(cid:2)amounts).
2019
2018 (1)
2017 (1)
2016 (1)
2015 (1)
Operating Data:
Rental and Related Income
Sales of Manufactured Homes
Total Income
Community Operating Expenses
Community NOI (2)
Total Expenses
Interest Income
Dividend Income
Gain on Sales of Marketable Securities, net
Increase (Decrease) in Fair Value of
Marketable Securities (3)
Interest Expense
Net Income (Loss)
Net Income (Loss) Attributable to Common
Shareholders
Net Income (Loss) Attributable to Common
Shareholders Per Share
Basic
Diluted
Cash Flow Data:
Net Cash Provided (Used) by:
Operating Activities
Investing Activities
Financing Activities
Balance Sheet Data:
Total Investment Property
Total Assets
Mortgages Payable, net of
unamortized debt issuance costs
Loans Payable, net of unamortized
debt issuance costs
Series A 8.25% Cumulative
Redeemable Preferred Stock
Series B 8.0% Cumulative
Redeemable Preferred Stock
Series C 6.75% Cumulative
Redeemable Preferred Stock
Series D 6.375% Cumulative
Redeemable Preferred Stock
Total Shareholders’ Equity
Other Information:
Average Number of Shares Outstanding
Basic
Diluted
Funds from Operations (2)
Normalized Funds from Operations (2)
Cash Dividends Per Common Share
$128,611
17,980
146,591
61,708
66,903
126,582
2,619
7,535
-0-
14,915
17,805
27,750
$113,833
15,754
129,587
52,949
60,884
111,010
2,255
10,367
20
(51,675)
16,039
(36,216)
$101,801
10,847
112,648
47,847
53,954
96,617
2,007
8,135
1,748
-0-
15,877
12,668
$90,680
8,534
99,214
42,638
48,042
83,256
1,585
6,636
2,285
-0-
15,432
11,535
2,566
(56,532)
(7,679)
(2,569)
0.07
0.06
(1.53)
(1.53)
(0.24)
(0.24)
(0.10)
(0.10)
$74,763
6,754
81,517
37,049
37,714
72,077
1,820
4,399
204
-0-
14,074
2,144
(6,123)
(0.24)
(0.24)
$38,516
(122,350)
90,053
$40,175
(137,603)
82,314
$40,858
(152,921)
130,604
$29,203
(77,567)
45,895
$29,647
(148,675)
121,420
$1,015,281
1,025,453
$881,456
880,902
$764,439
823,881
$640,217
680,445
$577,709
600,317
373,658
331,093
304,895
293,026
283,050
83,686
107,985
84,704
-0-
-0-
-0-
95,030
95,030
95,030
243,750
143,750
143,750
58,285
91,595
95,030
-0-
66,268
546,339
50,000
424,698
-0-
421,215
-0-
317,032
39,909
40,203
$24,573
$25,207
$0.72
36,871
36,871
$26,965
$27,470
$0.72
32,676
32,676
$23,462
$21,714
$0.72
27,809
27,809
$20,732
$18,446
$0.72
57,862
91,595
45,030
-0-
-0-
246,238
25,933
25,933
$14,267
$14,188
$0.72
-31-
(1)(cid:2) (cid:2)(cid:3)(cid:4)(cid:5)(cid:4)(cid:6)(cid:3)(cid:5)(cid:7)(cid:8) (cid:3)(cid:4)(cid:9)(cid:10)(cid:11)(cid:12)(cid:5)(cid:13)(cid:3)(cid:10)(cid:4)(cid:8) (cid:14)(cid:5)(cid:15)(cid:8) (cid:16)(cid:17)(cid:17)(cid:4)(cid:8) (cid:11)(cid:17)(cid:18)(cid:3)(cid:15)(cid:17)(cid:19)(cid:8) (cid:13)(cid:10)(cid:8) (cid:11)(cid:17)(cid:9)(cid:7)(cid:17)(cid:6)(cid:13)(cid:8) (cid:6)(cid:17)(cid:11)(cid:13)(cid:5)(cid:3)(cid:4)(cid:8) (cid:11)(cid:17)(cid:6)(cid:7)(cid:5)(cid:15)(cid:15)(cid:3)(cid:9)(cid:3)(cid:6)(cid:5)(cid:13)(cid:3)(cid:10)(cid:4)(cid:15)(cid:8) (cid:3)(cid:4)(cid:8) (cid:20)(cid:11)(cid:3)(cid:10)(cid:11)(cid:8) (cid:20)(cid:17)(cid:11)(cid:3)(cid:10)(cid:19)(cid:15)(cid:8) (cid:13)(cid:10)(cid:8) (cid:6)(cid:10)(cid:4)(cid:9)(cid:10)(cid:11)(cid:12)(cid:8) (cid:13)(cid:10)(cid:8) (cid:13)(cid:14)(cid:17)(cid:8) (cid:6)(cid:21)(cid:11)(cid:11)(cid:17)(cid:4)(cid:13)(cid:8) (cid:20)(cid:17)(cid:11)(cid:3)(cid:10)(cid:19)(cid:8)
(cid:20)(cid:11)(cid:17)(cid:15)(cid:17)(cid:4)(cid:13)(cid:5)(cid:13)(cid:3)(cid:10)(cid:4)(cid:22)
(2)(cid:2) Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Supplemental Measures,
contained in this Form 10-K for information regarding the presentation of community NOI, and for the presentation and reconciliation
of funds from operations and normalized funds from operations to net income (loss) attributable to common shareholders.
(3)(cid:2) Represents change in unrealized gain (loss) in marketable securities which is included in the Consolidated Statements of Income (Loss)
in accordance with ASU 2016-01 adopted January 1, 2018.
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
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:
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
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;
-32-
the ability of manufactured home buyers to obtain financing;
the level of repossessions by manufactured home lenders;
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2) market conditions affecting our investment securities;
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
changes in federal or state tax rules or regulations that could have adverse tax consequences;
our ability to qualify as a REIT 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.
2019 Accomplishments
During 2019, UMH made substantial progress on multiple fronts – generating solid operating results,
achieving strong growth and improving our financial position. We have:
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
(cid:2)(cid:2)
Increased Rental and Related Income by 13%;
Increased Community Net Operating Income (“NOI”) by 10%;
Increased Same Property NOI by 6%;
Increased Same Property Occupancy by 333 sites or 160 bps over the prior year period from 82.2% to 83.8%;
Increased home sales by 14%;
Increased our rental home portfolio by 882 homes to approximately 7,400 total rental homes, representing
an increase of 14%;
(cid:2)(cid:2) Acquired four communities containing approximately 1,500 homesites for a total cost of approximately $56.2
(cid:2)(cid:2)
million;
Issued and sold 4 million shares of our 6.75% Series C Preferred Stock resulting in net proceeds of
approximately $96.7 million;
(cid:2)(cid:2) Raised $31.5 million through our Dividend Reinvestment and Stock Purchase Plan;
(cid:2)(cid:2) Completed the financing/refinancing of four of our communities for total proceeds of approximately $44.9
million with a weighted average interest rate of 3.40%, paying off the existing $13.8 million mortgages with
a weighted average rate of 5.91%;
(cid:2)(cid:2) Reduced the weighted average interest rate on our mortgages payable from 4.3% to 4.1%;
(cid:2)(cid:2) Reduced our Net Debt to Total Market Capitalization from 37% to 29%;
(cid:2)(cid:2)
(cid:2)(cid:2)
Increased our total market capitalization to $1.5 billion, representing an increase of 28%; and,
Implemented a Preferred Stock At-The-Market Program (“ATM Program”) under which the Company may
offer and sell shares of our 6.75% Series C Preferred Stock and/or 6.375% Series D Preferred Stock having
an aggregate sales price of up to $100 million. During 2019, we sold approximately 651,000 shares of our
Series D Preferred Stock for net proceeds of approximately $15.9 million, after offering expenses. We have
sold additional shares of Series D Preferred Stock under the ATM Program during 2020.
Overview
The following discussion and analysis of the consolidated financial condition and results of operations should
be read in conjunction with "Selected Financial Data" and the historical Consolidated Financial Statements and Notes
thereto included elsewhere in this Form 10-K.
The Company is a self-administered, self-managed, 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 an annual or month-to-month basis to residential manufactured home owners.
The Company also leases homes to residents and, through its taxable REIT subsidiary, S&F, sells and finances homes
to residents and prospective residents of our communities.
-33-
Our communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan
and Maryland. 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,
2019, we purchased four manufactured home communities, for an aggregate purchase price of $56.2 million. These
acquisitions added approximately 1,500 developed homesites to our portfolio, bringing our total to 122 communities
containing approximately 23,100 developed homesites.
The Company earns income from the operation of its manufactured home communities, leasing of
manufactured homesites, the rental of manufactured homes, the sale and finance of manufactured homes, the brokering
of home sales, and from appreciation in the values of the manufactured home communities and vacant land owned by
the Company. Management views the Company as a single segment based on its method of internal reporting in
addition to its allocation of capital and resources. The Company also invests in securities of other REITs which the
Company generally limits to no more than approximately 15% of its undepreciated assets.
Occupancy in our properties, as well as our ability to increase rental rates, directly affects revenues. In 2019,
total income increased 13% from the prior year and Community NOI (as defined below) increased 10% from the prior
year, primarily due to the acquisition and rental programs in 2018 and 2019. Overall occupancy was 82.0% at
December 31, 2019 and 2018, respectively. Overall occupancy includes communities acquired in 2019 with an
average occupancy of 62%. Same property occupancy, which includes communities owned and operated as of January
1, 2018, increased from 82.2% at December 31, 2018 to 83.8% at December 31, 2019.
Sales of manufactured homes performed well during 2019, increasing by 14% year-over-year. Demand for
housing remains healthy, due to improvements in the economy, sustained wage and job growth and still favorable
interest rates. Demand for quality affordable housing is even greater. Conventional single-family home prices
continue their rise supported by low inventories and increasing sales. As household formation strengthens and for-
sale inventory remains limited, a large share of housing demand will be looking at alternative forms of housing. Our
property type offers substantial comparative value that should result in increased demand.
The macro-economic environment and current housing fundamentals continue to favor home rentals. The
inability to satisfy down payment requirements, more stringent credit terms, and steadily increasing home prices
continue to create hurdles for would-be homebuyers. Rental homes in a manufactured home community allow the
resident to obtain the efficiencies of factory-built housing and the amenities of community living for less than the cost
of other forms of affordable housing. We continue to see increased demand for rental homes. During 2019, our
portfolio of rental homes increased by 882 homes. Occupied rental homes represent approximately 36.0% of total
occupied sites. Occupancy in rental homes continues to be strong and is at 92.3% as of December 31, 2019. We
compare favorably with other types of rental housing, including apartments, and we will continue to allocate capital
to rental home purchases, as demand dictates.
The Company holds a portfolio of marketable securities of other REITs with a fair value of $116.2 million
at December 31, 2019, representing 9.2% of our undepreciated assets (total assets excluding accumulated
depreciation). The REIT securities portfolio provides the Company with additional diversification, liquidity and
income, and serves as a proxy for real estate when more favorable risk adjusted returns are not available. As of
December 31, 2019, the Company’s portfolio consisted of 3% REIT preferred stocks and 97% REIT common stocks.
The Company invests in these REIT securities and, from time to time, may use margin debt when an adequate
yield spread can be obtained. As of December 31, 2019, the Company has borrowings of $37.5 million under its
margin line at 2.25% interest. The Company’s weighted average yield on the securities portfolio was approximately
6.3% at December 31, 2019. At December 31, 2019, the Company had unrealized losses of $(25.2) million 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 2019, the Company raised approximately
$31.5 million in new capital through the Dividend Reinvestment and Stock Purchase Plan (“DRIP”). The Company
also issued and sold 4 million shares of our 6.75% Series C Cumulative Redeemable Preferred Stock (“Series C
Preferred Stock”) for net proceeds of $96.7 million. Additionally, the Company entered into a Preferred Stock At-
The-Market Sales Program and issued and sold approximately 651,000 shares of our 6.375% Series D Preferred Stock
-34-
during 2019 for net proceeds of approximately $15.9 million. Subsequent to year end, the Company raised an
additional $64.1 million through sales of Series D Preferred Stock under the ATM Program.
At December 31, 2019, the Company had approximately $12.9 million in cash and cash equivalents and $60
million available on our credit facility, with an additional $50 million potentially available pursuant to an accordion
feature. We also had $14.2 million available on our revolving lines of credit for the financing of home sales and the
purchase of inventory. Subsequent to year end, the Company paid down approximately $54.5 million in loans using
proceeds from the ATM Program. In addition, we held approximately $116.2 million in marketable REIT securities
encumbered by $37.5 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. Our business plan includes acquiring
communities that yield in excess of our cost of funds and then making physical improvements, including adding rental
homes onto otherwise vacant sites. In 2018 and 2019, we added a total of ten manufactured home communities to our
portfolio, encompassing approximately 3,100 developed sites. These manufactured home communities were acquired
with an average occupancy rate of 71%. The Company will utilize the rental home program to increase occupancy
rates and improve operating results at these communities. There is no guarantee that any additional opportunities will
materialize or that the Company will be able to take advantage of such opportunities. The growth of our real estate
portfolio depends on the availability of suitable properties which meet the Company’s investment criteria and
appropriate financing. Competition in the market areas in which the Company operates is significant and affects
acquisitions, occupancy levels, rental rates and operating expenses of certain properties.
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.
Acquisitions
Community
Acquisitions in 2019
Date of
Acquisition
State
Number
of Sites
Purchase
Price (in(cid:2)
thousands)
Number
of Acres
Occupancy
at
Acquisition
Friendly Village
New Colony and Fifty
One Estates
Northtowne Meadows
July 3, 2019
OH
July 30, 2019
August 27, 2019
PA
MI
Total 2019
Acquisitions in 2018
Redbud Estates and
Camelot Village
Summit Village
Pikewood Manor
Perrysburg Estates and
Meadows of Perrysburg
Total 2018
May 30, 2018
August 31, 2018
November 30, 2018
IN
IN
OH
December 19, 2018
OH
824
285
386
$19,386
11,650
25,201
1,495
$56,237
669
134
488
324
$20,500
3,500
23,000
12,093
1,615
$59,093
101
61
85
247
231
58
117
88
494
46%
76%
88%
62%
91%
60%
67%
79%
79%
-35-
Results of Operations
2019(cid:2)vs.(cid:2)2018(cid:2)
Rental and related income increased from $113.8 million for the year ended December 31, 2018 to $128.6
million for the year ended December 31, 2019, or 13%. This increase was due to the acquisitions during 2018 and
2019, as well as an increase in rental rates, same property occupancy and additional rental homes. During 2019, the
Company raised rental rates by 3% to 4% at most communities. Rent increases vary depending on overall market
conditions and demand. Occupancy, as well as the ability to increase rental rates, directly affects revenues. The
Company has been acquiring communities with vacant sites that can potentially be occupied and earn income in the
future. Overall occupancy was 82.0% at December 31, 2019 and 2018, respectively. Overall occupancy includes
communities acquired in 2019 and 2018, which had an average occupancy of 62% and 79%, respectively, at the time
of acquisition. Same property occupancy has increased from 82.2% at December 31, 2018 to 83.8% at December 31,
2019. The same property occupancy rate is exclusive of the sites at Memphis Blues, which is under redevelopment
due to a flood in 2011. Demand for rental homes continues to be strong. As of December 31, 2019, we had
approximately 7,400 rental homes with an occupancy of 92.3%. We continue to evaluate the demand for rental homes
and will invest in additional homes as demand dictates. Vacant sites allow for future revenue growth.
Community operating expenses increased from $52.9 million for the year ended December 31, 2018 to $61.7
million for the year ended December 31, 2019, or 17%. These increases were primarily due to an increase in water
and sewer costs, tree removal, rental home expenses and payroll and personnel costs primarily from the acquisitions
made during 2018 and 2019 and the increase in rental homes. In addition, we incurred emergency windstorm tree
removal expenses totaling $179,000. Also included in Community Operating Expenses was a one-time settlement of
$375,000 for a utility billing dispute over a prior 10-year period.
Community NOI increased from $60.9 million for the year ended December 31, 2018 to $66.9 million for
the year ended December 31, 2019, or 10%. This increase was primarily due to the acquisitions during 2018 and 2019
and an increase in rental rates, occupancy and rental homes. The Operating Expense Ratio (defined as Community
Operating Expenses divided by Rental and Related Income) was 46.5% and 47.5%, excluding non-recurring operating
expenses, for the year ended December 31, 2018 and 2019, respectively. Many recently acquired communities have
deferred maintenance requiring higher than normal expenditures in the first few years of ownership. Because most of
the community expenses are fixed costs, as occupancy rates continue to increase, these expense ratios will continue
to improve. Because of the Company’s ability to increase its rental rates annually, increasing costs due to inflation
and changing prices have generally not had a material effect on revenues and income from continuing operations.
Sales of manufactured homes increased from $15.8 million for the year ended December 31, 2018 to $18
million for the year ended December 31, 2019, or 14%. The total number of homes sold was 299 homes in 2019 as
compared to 295 homes in 2018. There were 135 new homes sold in 2019 as compared to 125 in 2018. The
Company’s average sales price was approximately $60,000 and $53,000 for the years ended December 31, 2019 and
2018, respectively. Cost of sales of manufactured homes increased from $11.7 million for the year ended December
31, 2018 to $12.9 million for the year ended December 31, 2019, or 10%. The gross profit percentage was 28% and
26% for 2019 and 2018, respectively. Selling expenses increased from $3.8 million for the year ended December 31,
2018 to $5.1 million for the year ended December 31, 2019, or 35%. Gain (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 a gain of $75,000 for the year ended December 31, 2018 to a loss of $290,000
for the year ended December 31, 2019. Many of these costs, such as rent, salaries, and to an extent, advertising and
promotion, are fixed. Although sales of manufactured homes have not yet returned to pre-recession levels, the
Company has experienced four consecutive years of double-digit sales growth. Management is encouraged by our
continued sales growth and anticipate a return to profitability for our sales operations in 2020. The U.S.
homeownership rate was 65.1% in the fourth quarter of 2019, according to the U.S. Census. This is down from 69.2%
at its peak at the end of 2004. The conventional single-family housing market has strengthened, and conventional
home prices continue their rise. The inherent affordability of our property type becomes more and more apparent
which should result in increased demand. The Company continues to be optimistic about future sales and rental
prospects given the fundamental need for affordable housing. The Company believes that sales of new homes produce
new rental revenue and represents an investment in the upgrading of our communities.
-36-
General and Administrative Expenses decreased from $10.9 million for the year ended December 31, 2018
to $10 million for the year ended December 31, 2019, or 8%. This decrease was due to a decrease in incentive
compensation. General and Administrative expenses, excluding non-recurring operating expenses, as a percentage of
gross revenue (Total Income plus Interest, Dividend and Other Income) was 6.3% and 7.3% at December 31, 2019
and 2018, respectively.
Depreciation expense increased from $31.7 million for the year ended December 31, 2018 to $36.8 million
for the year ended December 31, 2019, or 16%. This increase was primarily due to the acquisitions and the increase
in rental homes during 2019 and 2018.
Interest income increased from $2.3 million for the year ended December 31, 2018 to $2.6 million for the
year ended December 31, 2019, or 16%. This increase was primarily due to an increase in the average balance of
notes receivable from $26.9 million for the year ended December 31, 2018 to $33.1 million for the year ended
December 31, 2019.
Dividend income decreased from $10.4 million for the year ended December 31, 2018 to $7.5 million for the
year ended December 31, 2019, or 27%. This decrease was primarily due to a reduction in dividends from three
securities. It is the Company’s intent to hold its marketable securities long-term. Dividends received from our
marketable securities investments were at a weighted average yield of approximately 6.3% and 7.3% at December 31,
2019 and 2018, respectively, and continue to meet our expectations.
Increase (Decrease) in Fair Value of Marketable Securities increased from an unrealized loss of $(51.7)
million for the year ended December 31, 2018 to a gain of $14.9 million for the year ended December 31, 2019. As
of December 31, 2019, the Company had total net unrealized losses of $(25.2) million in its REIT securities portfolio.
Other income remained relatively stable for the year ended December 31, 2019 as compared to the year ended
December 31, 2018.
Interest expense, including amortization of financing costs, increased from $16.0 million for the year ended
December 31, 2018 to $17.8 million for the year ended December 31, 2019. During the year, we obtained 3 new
mortgage loans, and assumed 2 loans in conjunction with acquisitions, totaling $64.3 million. The average balance
of mortgages payable was approximately $352.4 million during 2019 as compared to approximately $318 million
during 2018. The weighted average interest rate on its mortgages, not including the effect of unamortized debt
issuance costs, was 4.1% at December 31, 2019 as compared to 4.3% at December 31, 2018.
2018(cid:2)vs.(cid:2)2017(cid:2)
Rental and related income increased from $101.8 million for the year ended December 31, 2017 to $113.8
million for the year ended December 31, 2018, or 12%. This increase was due to the acquisitions during 2017 and
2018, as well as an increase in rental rates, same property occupancy and additional rental homes. During 2018, the
Company raised rental rates by 3% to 4% at most communities. Rent increases vary depending on overall market
conditions and demand. Occupancy, as well as the ability to increase rental rates, directly affects revenues. The
Company has been acquiring communities with vacant sites that can potentially be occupied and earn income in the
future. Overall occupancy has increased from to 81.4% at December 31, 2017 to 82.0% at December 31, 2018. Overall
occupancy includes communities acquired in 2018 and 2017, which had an average occupancy of 79% and 67%,
respectively, at the time of acquisition. Same property occupancy has increased from 82.6% at December 31, 2017 to
83.0% at December 31, 2018. The same property occupancy rate is exclusive of the sites at Memphis Blues, which is
under redevelopment due to a flood in 2011. Demand for rental homes continues to be strong. As of December 31,
2018, we had approximately 6,500 rental homes with an occupancy of 92.3%. We continue to evaluate the demand
for rental homes and will invest in additional homes as demand dictates. Vacant sites allow for future revenue growth.
Community operating expenses increased from $47.8 million for the year ended December 31, 2017 to $53
million for the year ended December 31, 2018, or 11%. This increase was due to the acquisitions during 2017 and
2018.
-37-
Community NOI increased from $54 million for the year ended December 31, 2017 to $60.9 million for the
year ended December 31, 2018, or 13%. This increase was primarily due to the acquisitions during 2017 and 2018
and an increase in rental rates, occupancy and rental homes. The Operating Expense Ratio (defined as Community
Operating Expenses divided by Rental and Related Income) also improved from 47.0% for the year ended December
31, 2017 to 46.5% for the year ended December 31, 2018. Many acquisitions have deferred maintenance requiring
higher than normal expenditures in the first few years of ownership. Because most of the community expenses are
fixed costs, as occupancy rates continue to increase, these expense ratios will continue to improve. Because of the
Company’s ability to increase its rental rates annually, increasing costs due to inflation and changing prices have
generally not had a material effect on revenues and income from continuing operations.
Sales of manufactured homes increased from $10.8 million for the year ended December 31, 2017 to $15.8
million for the year ended December 31, 2018, or 45%. The total number of homes sold was 295 homes in 2018 as
compared to 222 homes in 2017. There were 125 new homes sold in 2018 as compared to 74 in 2017. The Company’s
average sales price was $53,000 and $49,000 for the years ended December 31, 2018 and 2017, respectively. Cost of
sales of manufactured homes increased from $8.5 million for the year ended December 31, 2017 to $11.7 million for
the year ended December 31, 2018, or 38%. The gross profit percentage was 26% and 22% for 2018 and 2017,
respectively. Selling expenses increased from $3.1 million for the year ended December 31, 2017 to $3.8 million for
the year ended December 31, 2018, or 22%. Gain (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 a loss $1.1 million for the year ended December 31, 2017 to a gain of $75,000 for the year ended
December 31, 2018, an improvement of 107%. The gain on sales include selling expenses of approximately $3.8
million for the year ended December 31, 2018. Many of these costs, such as rent, salaries, and to an extent, advertising
and promotion, are fixed. Although sales of manufactured homes have not yet returned to pre-recession levels, the
Company has experienced three consecutive years of double-digit sales growth. The U.S. homeownership rate was
64.8% in the fourth quarter of 2018, according to the U.S. Census. This is down from 69.2% at its peak at the end of
2004. The conventional single-family housing market has strengthened, and conventional home prices continue their
rise. The inherent affordability of our property type becomes more and more apparent which should result in increased
demand. The Company continues to be optimistic about future sales and rental prospects given the fundamental need
for affordable housing. The Company believes that sales of new homes produce new rental revenue and is an
investment in the upgrading of our communities.
General and Administrative Expenses increased from $9.7 million for the year ended December 31, 2017 to
$10.9 million for the year ended December 31, 2018, or 13%. This increase was primarily due to an increase in
personnel and personnel costs, as headcount, wages and incentive compensation increased in connection with the
Company's growth, and an increase in non-cash stock compensation expense. Stock compensation expense increased
from $1.3 million for the year ended December 31, 2017 to $1.6 million for the year ended December 31, 2018. These
increases were primarily due to an increase in the weighted-average fair value of options granted from $1.81 per share
for the year ended December 31, 2017 to $2.05 per share for the year ended December 31, 2018. Additionally, the
Founder and Chairman of the Board was granted a discretionary stock option award of 100,000 shares, as well as
1,000 shares of restricted stock. Although these awards are usually recognized over the vesting period, the entire
compensation cost of approximately $210,000 was recognized at the time of grant since he is of retirement age.
Additionally, for the year ended December 31, 2018, there was a one-time payroll expenditure of $525,000 for two
employees. General and Administrative expenses without this one-time payroll expenditure as a percentage of gross
revenue (Total Income plus Interest, Dividend and Other Income) remains in line at 7.3% and 7.8% at December 31,
2018 and 2017, respectively.
Depreciation expense increased from $27.6 million for the year ended December 31, 2017 to $31.7 million
for the year ended December 31, 2018, or 15%. This increase was primarily due to the acquisitions and the increase
in rental homes during 2017 and 2018.
Interest income increased from $2.0 million for the year ended December 31, 2017 to $2.3 million for the
year ended December 31, 2018, or 12%. This increase was primarily due to an increase in the average balance of
notes receivable from $21.2 million for the year ended December 31, 2017 to $26.9 million for the year ended
December 31, 2018.
-38-
Dividend income increased from $8.1 million for the year ended December 31, 2017 to $10.4 million for the
year ended December 31, 2018, or 27%. This increase was due to an increase in the cost of securities from $121.4
million for the year ended December 31, 2017 to $139.8 million for the year ended December 31, 2018. The dividends
received from our securities investments were at a weighted average yield of 7.3% and 7.4% as of December 31, 2018
and 2017, respectively, and continue to meet our expectations. It is the Company’s intent to hold these marketable
securities long-term.
Realized gain on sales of marketable securities, net consists of the following (in(cid:2)thousands):
Gross realized gains
Gross realized losses
Total Gain on Sales of Marketable Securities, net
Year Ended December 31,
2018
2017
$20
-0-
$20
$1,749
(1)
$1,748
Decrease in Fair Value of Marketable Securities decreased from $0 for the year ended December 31, 2017
to a loss of $51.7 million for the year ended December 31, 2018. On January 1, 2018, the Company adopted ASU
2016-01, which requires changes in the fair value of our marketable securities to be recorded in current period
earnings. Previously, changes in the fair value of marketable securities were recognized in "Accumulated Other
Comprehensive Income" on our Consolidated Balance Sheets. As a result, on January 1, 2018 the Company recorded
an increase to beginning undistributed income (accumulated deficit) of $11.5 million to recognize the unrealized gains
previously recorded in "Accumulated Other Comprehensive Income" on our Consolidated Balance Sheets. As of
December 31, 2018, the Company had total net unrealized losses of $(40.2) million in its REIT securities portfolio.
Other income decreased from $705,000 at December 31, 2017 to $410,000 at December 31, 2018. This
decrease is mainly due to an upfront oil and gas bonus payment in 2017 of $252,000 that the Company received at
one of its communities.
Interest expense, including amortization of financing costs, remained relatively stable for the year ended
December 31, 2018 as compared to the year ended December 31, 2017. During the year, we obtained two new
mortgage loans, and assumed two loans in conjunction with acquisitions, totaling $33 million. The average balance
of mortgages payable was approximately $318 million during 2018 as compared to approximately $299 million during
2017. The weighted average interest rate on its mortgages, not including the effect of unamortized debt issuance
costs, was 4.3% at December 31, 2018 as compared to 4.2% at December 31, 2017.
Supplemental Measures
In addition to the results reported in accordance with GAAP, management’s discussion and analysis of
financial condition and results of operations include certain non-GAAP financial measures that in management’s view
of the business we believe are meaningful as they allow the investor the ability to understand key operating details of
our business both with and without regard to certain accounting conventions or items that may not always be indicative
of recurring annual cash flow of the portfolio. These non-GAAP financial measures as determined and presented by
us may not be comparable to related or similarly titled measures reported by other companies, and include Community
Net Operating Income (“Community NOI”), Funds from Operations Attributable to Common Shareholders (“FFO”)
and Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”).
We define Community NOI as rental and related income less community operating expenses such as real
estate taxes, repairs and maintenance, community salaries, utilities, insurance and other expenses. We believe that
Community NOI is helpful to investors and analysts as a direct measure of the actual operating results of our
manufactured home communities, rather than our Company overall. Community NOI should not be considered a
substitute for the reported results prepared in accordance with GAAP. Community NOI should not be considered as
-39-
an alternative to net income (loss) as an indicator of our financial performance, or to cash flows as a measure of
liquidity; nor is it indicative of funds available for our cash needs, including our ability to make cash distributions.
The Company’s Community NOI is calculated as follows (in(cid:2)thousands):
(cid:2)
2019
2018
2017
2016
2015
Rental and Related Income
Community Operating Expenses
$128,611
(61,708)
$113,833
(52,949)
$101,801
(47,847)
$90,680
(42,638)
$74,763
(37,049)
Community NOI
$66,903
$60,884
$53,954
$48,042
$37,714
We assess and measure our overall operating results based upon an industry performance measure referred to
as Funds from Operations Attributable to Common Shareholders (“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 U.S. 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, and the change in the fair value of marketable securities plus certain non-cash items
such as real estate asset depreciation and amortization. Included in the NAREIT FFO White Paper - 2018 Restatement,
is an option pertaining to assets incidental to our main business in the calculation of NAREIT FFO to make an election
to include or exclude gains and losses on the sale of these assets, such as marketable equity securities and include or
exclude mark-to-market changes in the value recognized on these marketable equity securities. In conjunction with
the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude the
change in the fair value of marketable securities from our FFO calculation. NAREIT created FFO as a non-U.S.
GAAP supplemental measure of REIT operating performance. We define Normalized Funds from Operations
Attributable to Common Shareholders (“Normalized FFO”), as FFO, excluding gains and losses realized on
marketable securities investments and certain one-time charges. FFO and Normalized FFO should be considered as
supplemental measures of operating performance used by REITs. FFO and Normalized FFO exclude historical cost
depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis. However,
other REITs may use different methodologies to calculate FFO and Normalized FFO and, accordingly, our FFO and
Normalized FFO may not be comparable to all other REITs. The items excluded from FFO and Normalized FFO are
significant components in understanding the Company’s financial performance.
FFO and Normalized FFO (i) do not represent Cash Flow from Operations as defined by GAAP; (ii) should
not be considered as an alternative to net income (loss) as a measure of operating performance or to cash flows from
operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity. FFO
and Normalized FFO, as calculated by the Company, may not be comparable to similarly titled measures reported by
other REITs.
-40-
The Company’s FFO and Normalized FFO attributable to common shareholders are calculated as follows
(in(cid:2)thousands(cid:2)except(cid:2)footnotes):
(cid:2)
2019
2018
2017
2016
2015
Net Income (Loss) Attributable
to Common Shareholders
Depreciation Expense
(Gain) Loss on Sales of
Investment Property and Equipment
Acquisition Costs
Early Extinguishment of Debt (1)
(Increase) Decrease in Fair Value of
Marketable Securities (4)
Redemption of Preferred Stock
FFO Attributable to Common
Shareholders
Adjustments:
Gain on Sales of Marketable
Securities, net
Non- Recurring Other Expense(2)
Settlement of Memphis Mobile
City Litigation (3)
Normalized FFO Attributable to
Common Shareholders
$2,566
36,811
$(56,532)
31,691
$(7,679)
27,558
$(2,569)
23,214
$(6,123)
18,878
111
-0-
-0-
131
-0-
-0-
81
-0-
-0-
2
79
5
80
957
475
(14,915)
-0-
51,675
-0-
-0-
3,502
-0-
-0-
-0-
-0-
24,573
26,965
23,462
20,731
14,267
-0-
634
-0-
(20)
525
-0-
(1,748)
-0-
(2,285)
-0-
(204)
-0-
-0-
-0-
125
$25,207
$27,470
$21,714
$18,446
$14,188
Included in Interest Expense on the Consolidated Statements of Income (Loss).
(1)(cid:2)
(2)(cid:2) Consists of utility billing dispute over a prior 10-year period ($375,000), emergency windstorm tree removal expenses in three
communities ($179,000) and costs associated with acquisitions not completed ($80,000) in 2019 and one-time payroll
expenditures ($525,000) in 2018.
Included in Community Operating Expenses on the Consolidated Statements of Income (Loss).
(3)(cid:2)
(4)(cid:2) Represents change in unrealized gain (loss) in marketable securities which is included in the Consolidated Statements of Income
(Loss) in accordance with ASU 2016-01, adopted January 1, 2018.
Liquidity and Capital Resources
The Company operates as a REIT 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, payments of
expenses relating to real estate operations, acquisitions, capital improvements, development and expansions of
properties, debt service, purchases of manufactured homes, investment in debt and equity securities of other REITs,
financing of manufactured home sales and distribution requirements. 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, financing and refinancing of mortgage debt, leveraging of
real estate investments, availability of bank borrowings, proceeds from the DRIP, and access to the capital markets.
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 continues to strengthen its capital and liquidity positions and maintains financial flexibility.
On April 29, 2019, the Company issued and sold 4 million shares of its Series C Preferred Stock in an underwritten
registered public offering, raising net proceeds of approximately $96.7 million, after deducting the underwriting
discount and other estimated offering expenses.
-41-
On October 21, 2019, the Company entered into a Preferred Stock At-The-Market Sales Program (“ATM
Program”) with B. Riley FBR, Inc. (“B. Riley”), as distribution agent, under which the Company may offer and sell
shares of the Company’s Series C Preferred Stock and/or Series D Preferred Stock, having an aggregate sales price of
up to $100 million. We began selling shares under the ATM Program on October 22, 2019 and through December
31, 2019, 651,000 shares of our Series D Preferred Stock were sold at a weighted average price of $25.19 per share,
generating gross proceeds of $16.4 million and net proceeds of $15.9 million, after offering expenses. Subsequent to
yearend, we sold an additional 2.6 million shares of our Series D Preferred Stock under the ATM Program at a
weighted average price of $25.06 per share, generating gross proceeds subsequent to year end of $64.1 million and
net proceeds of $63.1 million, after offering expenses.
In addition, the Company has a DRIP in which participants can purchase stock from the Company at a price
of approximately 95% of market. During 2019, amounts received, including dividends reinvested of $7.7 million,
totaled $31.5 million. On August 14, 2019, the Company announced that it was discontinuing granting waivers to
the $1,000 monthly maximum for the purchase of shares for cash under its DRIP, which will result in less capital
being raised through the DRIP going forward. Subsequent to yearend, the monthly maximum was increased from
$1,000 to $5,000.
On November 29, 2018, the Company entered into a First Amendment to Amended and Restated Credit
Agreement to expand and extend its existing unsecured revolving credit facility. The Facility is syndicated with two
banks led by BMO Capital Markets Corp., as sole lead arranger and sole book runner, with Bank of Montreal as
administrative agent, and includes JPMorgan Chase Bank, N.A. as the sole syndication agent. The Amendment
provides for an increase from $50 million in available borrowings to $75 million in available borrowings with a $50
million accordion feature, bringing the total potential availability up to $125 million, subject to certain conditions
including obtaining commitments from additional lenders. The Amendment also extends the maturity date of the
Facility from March 27, 2020 to November 29, 2022, with a one-year extension available at the Company’s option,
subject to certain conditions including payment of an extension fee. Availability under the Facility is limited to 60%
of the value of the unencumbered communities which the Company has placed in the Facility’s unencumbered asset
pool. The Amendment increased the value of the Borrowing Base communities by reducing the capitalization rate
applied to the Net Operating Income generated by the communities in the Borrowing Base from 7.5% to 7.0%. As of
December 31, 2019, $60 million was available on this credit facility.
The Company has the ability to finance home sales, inventory purchases and rental home purchases. The
Company has a $15 million revolving line of credit for the financing of homes, of which $10 million was utilized at
December 31, 2019, and revolving credit facilities totaling $28.5 million to finance inventory purchases, of which
$19.3 million was utilized at December 31, 2019. Subsequent to year end, the Company paid down $15 million on
our revolving credit agreement to finance inventory, $5 million on its revolving line of credit and approximately $34.5
million on its margin loan.
As of December 31, 2019, the Company had $12.9 million of cash and cash equivalents and marketable
securities of $116.2 million encumbered by $37.5 million in margin loans. The Company owned 122 communities of
which 47 are unencumbered. The Company’s marketable securities and non-mortgaged properties provide us with
additional liquidity. The Company believes that cash on hand, 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 2019, total investment property increased 15% or $136.2 million. The
Company made acquisitions of four manufactured home communities totaling approximately 1,500 developed sites
at an aggregate purchase price of $56.2 million. These acquisitions were funded through new mortgages, the use of
our unsecured credit facility and the issuance of preferred stock. See Note 3 of the Notes to Consolidated Financial
Statements for additional information on our acquisitions and Note 5 of the Notes to Consolidated Financial
Statements for related debt transactions. The Company continues to evaluate acquisition opportunities. 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, including under the ATM Program. To the extent that funds or appropriate
properties are not available, fewer acquisitions will be made.
-42-
The Company also invests in rental homes and as of December 31, 2019 the Company owned approximately
7,400 rental homes, or approximately 32% of our total homesites. During 2019, our rental home portfolio increased
by 882 homes or $42.8 million. The Company markets these rental homes for sale to existing residents. The Company
estimates that in 2020 it will purchase approximately 800 - 900 manufactured homes to use as rental units for a total
cost, including setup, of approximately $36 - $40 million. Rental home rates on new homes range from approximately
$600-$1,600 per month, including lot rent, depending on size, location and market conditions. During 2019, the
Company also invested approximately $22 million in other improvements to our communities.
Additionally, the Company invests in marketable debt and equity securities of other REITs. The REIT
securities portfolio provides the Company with additional liquidity and 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. During 2019, the securities portfolio
increased 17% or $16.6 million primarily due to a net unrealized gain of $14.9 million and purchases of $1.8 million
offset by redemption of securities with a cost of $125,000. The Company had dividend income earned of $7.5 million.
The Company from time to time may purchase these securities on margin when there is an adequate yield spread. At
December 31, 2019, $37.5 million was outstanding on the margin loan at a 2.25% interest rate.
The following table summarizes cash flow activity for the years ended December 31, 2019, 2018 and 2017
(in(cid:2)thousands):
Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Provided by Financing Activities
Net Increase (Decrease) in Cash, Cash
Equivalents and Restricted Cash
$
$
2019
2018
2017
$
38,516
(122,350)
90,053
$
40,175
(137,603)
82,314
40,858
(152,921)
130,604
6,219
$
(15,114)
$
18,541
Net cash provided by operating activities remained relatively stable from 2018 to 2019.
Net cash used in investing activities decreased by $15.3 million in both 2019 and 2018, primarily due to a
decrease in acquisitions of manufactured home communities and a decrease in purchases of REIT securities.
Net cash provided by financing activities increased by $7.7 million in 2019 to $90.1 million. The Company
received $31.5 million, including dividends reinvested, through the DRIP, and sold 4 million shares of its Series C
Preferred Stock in an underwritten registered public offering, raising net proceeds of approximately $96.7 million. In
addition, in 2019 the Company sold 651,000 shares of its Series D Preferred Stock through its ATM Program, raising
net proceeds during 2019 of approximately $15.9 million. During 2019, the Company also distributed to our common
shareholders a total of $28.8 million, including dividends reinvested. In addition, the Company also paid $25.7 million
in preferred dividends.
Net cash provided by financing activities decreased by $48.3 million in 2018 to $82.3 million. The Company
received $35.1 million, including dividends reinvested, through the DRIP, and sold 2 million shares of its Series D
Preferred Stock in an underwritten registered public offering, raising net proceeds during 2018 of approximately $48
million. During 2018, the Company also distributed to our common shareholders a total of $26.6 million, including
dividends reinvested. In addition, the Company also paid $20.0 million in preferred dividends.
Cash flows were primarily used for purchases of manufactured home communities, capital improvements,
payment of dividends, purchases of marketable securities, 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.
-43-
Cash flows used for 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 $19 million in capital improvements
for 2020.
The Company’s significant commitments and contractual obligations relate to its mortgages and loans
payable, acquisitions of manufactured home communities, retirement benefits, and the lease on its corporate offices
as described in Note 8 to the Consolidated Financial Statements.
The Company has 1,700 acres of undeveloped land which it could develop over the next several years. The
Company continues to analyze the best use of its vacant land.
As of December 31, 2019, the Company had total assets of $1.0 billion and total liabilities of $479.1 million.
Our net debt (net of cash and cash equivalents) to total market capitalization as of December 31, 2019 and 2018 was
approximately 29% and 37%, respectively. Our net debt, less securities (net of cash and cash equivalents and
marketable securities) to total market capitalization as of December 30, 2019 and 2018 was approximately 22% and
28%, respectively.
The Company believes that it has the ability to meet its obligations and to generate funds for new investments.
Off-Balance Sheet Arrangements and Contractual Obligations
The Company has not executed any material off-balance sheet arrangements.
The following is a summary of the Company’s contractual obligations as of December 31, 2019 (in(cid:2)thousands):
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
Retirement Benefits
$377,045
83,681
84,044
4,157
2,044
450
$8,524
15,690
67,655
3,045
277
-0-
Total
$551,421
$95,191
$38,489
29,429
16,090
1,094
555
-0-
$85,657
$76,034
22,157
299
18
560
-0-
$253,998
16,405
-0-
-0-
652
450
$99,068
$271,505
Mortgages payable represents the principal amounts outstanding based on scheduled payments. The interest
on these mortgages are at fixed rates ranging from 3.37% to 6.5%. The weighted average interest rate, not including
the effect of unamortized debt issuance costs, was approximately 4.1% at December 31, 2019. As of December 31,
2019, the weighted average loan maturity of the mortgage payable is 6.0 years.
Loans payable represents $15 million outstanding on the Company’s unsecured line of credit with an interest
rate ranging from LIBOR plus 1.50% to 2.20% or Prime plus 0.50% to 1.20%, based on the Company’s overall
leverage (interest rate of 3.40% as of December 31, 2019); $37.5 million outstanding on its margin line with an interest
rate of 2.25% at December 31, 2019; $19.3 million 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 5.87% as of December 31, 2019); $322,000 loans outstanding
for the finance of rental homes with an interest rate of 6.99% at December 31, 2019; $10 million outstanding on the
Company’s revolving line of credit secured by eligible notes receivables with an interest rate of prime plus 25 basis
points (interest rate of 5% as of December 31, 2019); and $1.9 million outstanding on its automotive loans with a
weighted average interest rate of 4.71%.
-44-
Operating lease obligations represent a lease with a related party for the Company’s corporate offices. On
October 1, 2019, the Company entered into a new lease for its executive offices which combines the existing corporate
office space with additional adjacent office space. This new lease extends our existing lease through April 30, 2027
and requires monthly lease payments of $23,098 through April 30, 2022 and $23,302 from May 1, 2022 through April
30, 2027. The Company is also responsible for its proportionate share of real estate taxes and common area
maintenance. In conjunction with this new lease, the Company terminated the additional office space leases dated
July 1, 2017 and February 14, 2018. Mr. Eugene W. Landy, the Founder and Chairman of the Board of the Company,
owns a 24% interest in the entity that is the landlord of the property where the Company’s corporate office space is
located. Management believes that the aforesaid rent is no more than what the Company would pay for comparable
space elsewhere.
Retirement benefits of $450,000 represent the total future amount to be paid, on an undiscounted basis,
relating to the Company’s Founder and Chairman. These benefits are based upon his specific employment agreement.
The agreement does not require the Company to separately fund the obligation and therefore it will be paid from the
general assets of the Company. The Company has accrued these benefits on a present value basis over the term of the
agreement (See Note 8 of the Notes to Consolidated Financial Statements).
Critical 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 GAAP. 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 policy is affected by our more significant judgments and estimates used in the preparation of the
Company’s consolidated financial statements. For a detailed description of this and other accounting policies, see
Note 2 of the Notes to Consolidated Financial Statements included in this Form 10-K.
(cid:2)
Real(cid:2)Estate(cid:2)Investments(cid:2)
(cid:2)
The Company applies Financial Accounting Standards Board (“FASB”) 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 an other than temporary 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.
-45-
In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-01, “Business Combinations
(Topic 805), Clarifying the Definition of a Business”. ASU 2017-01 seeks to clarify the definition of a business with
the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as
acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting
including acquisitions, disposals, intangible assets and consolidation. The adoption of ASU 2017-01 was effective for
annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments
should be applied prospectively on or after the effective dates. Early adoption is permitted. The Company adopted
this standard effective January 1, 2017, on a prospective basis. The Company evaluated its acquisitions and has
determined that its acquisitions of manufactured home communities during 2018 and 2019 should be accounted for as
acquisitions of assets. As such, transaction costs, such as broker fees, transfer taxes, legal, accounting, valuation, and
other professional and consulting fees, related to acquisitions are capitalized as part of the cost of the acquisitions,
which is then subject to a purchase price allocation based on relative fair value. Prior to the adoption of ASU 2017-
01, the Company’s acquisitions were considered an acquisition of a business and therefore, the acquisition costs were
expensed.
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 entailed 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
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, 2019, 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.(cid:2)
Recent Accounting Pronouncements
See Note 2 of the Notes to Consolidated Financial Statements.
Item 7A – Quantitative and Qualitative Disclosures about Market Risk
Market risk is the risk of loss from adverse changes in market prices and interest rates. The Company's
principal market risk exposure is interest rate risk. The Company’s future income, cash flows and fair values relevant
to financial instruments are dependent upon prevalent market interest rates. Many factors, including governmental
monetary and tax policies, domestic and international economic and political considerations and other factors that are
beyond the Company’s control contribute to 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 may 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.
-46-
The following table sets forth information as of December 31, 2019, concerning the Company’s mortgages
and loans payable, including principal cash flow by scheduled maturity, weighted average interest rates and estimated
fair value (in(cid:2)thousands).
Mortgages Payable
Loans Payable
Carrying Value
Weighted
Average
Interest Rate
Carrying Value
Weighted
Average
Interest Rate
2020
2021
2022
2023
2024
Thereafter
Total
Estimated Fair
Value
-0-%
6.50%
4.42%
3.87%
-0-%
4.05%
4.14%(1)
$-0-
2,119
19,914
66,958
-0-
288,054
$377,045
$381,189
3.72%
4.87%
3.45%
5.53%
6.14%
-0-%
3.69%(1)
$67,655
640
15,450
184
115
-0-
$84,044
$84,044
(1) Weighted average interest rate, not including the effect of unamortized debt issuance costs. The weighted average interest rate,
including the effect of unamortized debt issuance costs, at December 31, 2019 was 4.18% for mortgages payable and 3.70% for
loans payable.
All mortgage loans are at fixed rates. The Company has approximately $81.9 million in variable rate loans
payable. If short-term interest rates increased or decreased by 1%, interest expense would have increased or decreased
by approximately $820,000.
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 carried at fair value.
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 (in(cid:2)thousands except(cid:2)per(cid:2)share(cid:2)amounts):
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
THREE MONTHS ENDED
2019
March 31
June 30
September 30
December 31
Total Income
Total Expenses
Other Income (Expense)
Net Income (Loss) from
continuing operations
Net Income (Loss) Attributable
to Common Shareholders
Net Income (Loss) Attributable to Common
Shareholders per Share –
Basic
Diluted
$34,287
29,750
6,521
11,037
5,914
0.16
0.15
$37,230
32,588
(3,906)
749
(5,537)
(0.15)
(0.15)
$37,329
32,387
7,519
12,433
5,622
0.14
0.14
$37,745
31,857
(2,282)
3,531
(3,433)
(0.08)
(0.08)
-47-
2018
March 31
June 30
September 30
December 31
Total Income
Total Expenses
Other Income (Expense)
Net Income (Loss) from
continuing operations
Net Income (Loss) Attributable
to Common Shareholders
Net Income (Loss) Attributable to Common
Shareholders per Share –
Basic and Diluted
$29,796
25,492
(26,496)
(22,208)
(27,155)
(0.76)
$32,099
27,761
15,800
20,072
14,949
$33,447
28,436
(11,333)
(6,349)
(11,473)
$34,245
29,321
(32,633)
(27,731)
(32,853)
0.41
(0.31)
(0.87)
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,
2019 and 2018.
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, 2019.
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 reliability of financial reporting and the
preparation of consolidated financial statements for external purposes in accordance with GAAP. Because of its
inherent limitations, including the possibility of collusion or improper management override of controls, 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.
Management assessed the Company’s internal control over financial reporting as of December 31, 2019. This
assessment was based on criteria for effective internal control over financial reporting established in Internal(cid:2)Control(cid:2)
—(cid:2) Integrated(cid:2) Framework(cid:2) 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, 2019.
PKF O’Connor Davies, LLP, 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.
-48-
(b)
Attestation Report of the Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
UMH Properties, Inc.
Opinion on Internal Control over Financial Reporting
We have audited UMH Properties, Inc.’s (the “Company”) internal control over financial reporting as of December
31, 2019, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria
established in Internal Control–Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, 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, 2019, and our report dated March 5, 2020, expressed an
unqualified opinion thereon.
Basis for Opinion
The Company’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. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. 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 of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
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, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) 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 financial statements.
-49-
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.
/s/ PKF O’Connor Davies, LLP
March 5, 2020
New York, New York
(c) Changes in Internal Control over Financial Reporting
There have been no changes to our internal control over financial reporting during the quarter ended
December 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal controls
over financial reporting.
Item 9B – Other Information
None.
Item 10 – Directors, Executive Officers and Corporate Governance
PART III
The information required by this item is incorporated herein by reference to the definitive proxy statement
for the Company’s 2020 annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A and the
information included under the caption " Information about our Executive Officers" in Part I hereof, in accordance
with General Instruction G(3) to Form 10-K.
Item 11 – Executive Compensation
The information required by this item is incorporated herein by reference to the definitive proxy statement
for the Company’s 2020 annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A, in
accordance with General Instruction G(3) to Form 10-K.
Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The information required by this item is incorporated herein by reference to the definitive proxy statement
for the Company’s 2020 annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A, in
accordance with General Instruction G(3) to Form 10-K.
Item 13 – Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated herein by reference to the definitive proxy statement
for the Company’s 2020 annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A, in
accordance with General Instruction G(3) to Form 10-K.
Item 14 – Principal Accounting Fees and Services
The information required by this item is incorporated herein by reference to the definitive proxy statement
for the Company’s 2020 annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A, in
accordance with General Instruction G(3) to Form 10-K.
-50-
Item 15 – Exhibits, Financial Statement Schedules
PART IV
(a) (1)
The following Financial Statements are filed as part of this report.
(i)
Report of Independent Registered Public Accounting Firm
(ii)
Consolidated Balance Sheets as of December 31, 2019 and 2018
(iii)
(iv)
(iv)
(v)
Consolidated Statements of Income (Loss) for the years ended December 31, 2019,
2018 and 2017
Consolidated Statements of Comprehensive Income (Loss) for the years ended
December 31, 2019, 2018 and 2017
Consolidated Statements of Shareholders’ Equity for the years ended December 31,
2019, 2018 and 2017
Consolidated Statements of Cash Flows for the years ended December 31, 2019,
2018 and 2017
(vi) Notes to Consolidated Financial Statements
(a) (2)
The following Financial Statement Schedule is filed as part of this report:
Page(s)
56
57-58
59-60
61
62-63
64
65-98
(i)
Schedule III – Real Estate and Accumulated Depreciation as of December 31, 2019
99-108
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.
-51-
(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
3.10
3.11
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).
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 20, 2015, 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 20, 2015, 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 5, 2016, Registration No.
001-12690).
-52-
Exhibit
No.
Description
3.12
3.13
3.14
3.15
3.16
3.17
3.18
3.19
3.20
3.21
3.22
(4)
4.1
4.2
Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant
with the Securities and Exchange Commission on April 5, 2016, 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 August 11, 2016, 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 June 5, 2017, 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 July 26, 2017, 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 July 26, 2017, 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 January 22, 2018, 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 29, 2019, 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 29, 2019, 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 22, 2019, 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 22, 2019, 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).
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).
-53-
Exhibit
No.
Description
4.3
4.4
4.5
(10)
10.1
10.2
10.3
10.4
Specimen certificate representing the Series B Preferred Stock of UMH Properties, Inc.
(incorporated by reference to Exhibit 4.3 to the Form S-3 as filed by the Registrant with the
Securities and Exchange Commission on January 21, 2016, Registration No. 333-209078).
Specimen certificate representing the Series C Preferred Stock of UMH Properties, Inc.
(incorporated by reference to Exhibit 4.2 to the Form 8-A12B as filed by the Registrant with the
Securities and Exchange Commission on July 26, 2018, Registration No. 001-12690).
Specimen certificate representing the Series D Preferred Stock of UMH Properties, Inc.
(incorporated by reference to Exhibit 4.2 to the Form 8-A12B as filed by the Registrant with the
Securities and Exchange Commission on January 22, 2018, 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).
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).
10.5
+
10.6
+
+
+
10.7
10.8
10.9
Amended and Restated Employment Agreement Effective January 1, 2018, between UMH
Properties, Inc. and Samuel A. Landy (incorporated by reference to the Form 8-K as filed by the
Registrant with the Securities and Exchange Commission on April 13, 2018, Registration No.
001-12690).
Amended and Restated Employment Agreement Effective January 1, 2018, between UMH
Properties, Inc. and Anna T. Chew (incorporated by reference to the Form 8-K as filed by the
Registrant with the Securities and Exchange Commission on April 13, 2018, 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. Amended and Restated 2013 Incentive Award Plan (incorporated by
reference to the Company’s Definitive Proxy Statement (DEF 14A) as filed with the Securities
and Exchange Commission on April 20, 2018, Registration No. 001-12690).
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 June 17, 2019, Registration No. 333-232162).
-54-
Exhibit
No.
10.10
10.11
(21)
(23)
(31.1)
(31.2)
(32)
*
*
*
*
*
Description
Amended and Restated Credit Agreement by and among UMH Properties, Inc. and Bank of
Montreal dated March 28, 2018 (incorporated by reference to the Form 8-K as filed by the
Registrant with the Securities and Exchange Commission on December 4, 2018, Registration No.
001-12690).
At-the-Market Sales Agreement by and between UMH Properties, Inc. and B. Riley FBR, Inc.
(incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and
Exchange Commission on October 22, 2019, Registration No. 001-12690).
Subsidiaries of the Registrant.
Consent of PKF O’Connor Davies, LLP.
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.
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.
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.
(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 data 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.
Item 16 – Form 10-K Summary
Not applicable.
-55-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
UMH Properties, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of UMH Properties, Inc. and subsidiaries (the
“Company”) as of December 31, 2019 and 2018, and the related consolidated statements of income (loss),
comprehensive income (loss), shareholders’ equity, and cash flows for each of the three years in the in the period
ended December 31, 2019, and the related notes and schedule listed in the Index at Item 15(a)(2)(i) (collectively
referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles
generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2019, based on
criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), and our report dated March 5, 2020, expressed an unqualified
opinion.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements. We believe that our
audits provide a reasonable basis for our opinion.
/s/ PKF O’Connor Davies, LLP
We have served as the Company’s auditor since 2008.
March 5, 2020
New York, New York
-56-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2019 and 2018
(in(cid:2)thousands(cid:2)except(cid:2)per(cid:2)share(cid:2)amounts)(cid:2)
-ASSETS-
2019
2018
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
Marketable Securities at Fair Value
Inventory of Manufactured Homes
Notes and Other Receivables, net
Prepaid Expenses and Other Assets
Land Development Costs
Total Other Assets
$ 72,459
618,041
27,380
297,401
1,015,281
21,145
1,036,426
(232,783)
803,643
$ 68,154
533,547
25,156
254,599
881,456
18,792
900,248
(197,208)
703,040
12,902
116,186
31,967
37,995
10,762
11,998
221,810
7,433
99,596
23,703
31,494
6,195
9,441
177,862
TOTAL ASSETS
$ 1,025,453
$ 880,902
See Accompanying Notes to Consolidated Financial Statements
-57-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
AS OF DECEMBER 31, 2019 and 2018
(in(cid:2)thousands(cid:2)except(cid:2)per(cid:2)share(cid:2)amounts)(cid:2)
- LIABILITIES AND SHAREHOLDERS’ EQUITY -
2019
2018
LIABILITIES:
Mortgages Payable, net of unamortized debt issuance costs
$ 373,658
$ 331,093
Other Liabilities:
Accounts Payable
Loans Payable, net of unamortized debt issuance costs
Accrued Liabilities and Deposits
Tenant Security Deposits
Total Other Liabilities
Total Liabilities
Commitments and Contingencies
Shareholders’ Equity:
Series B – 8.0% Cumulative Redeemable Preferred
Stock, par value $0.10 per share, 4,000 shares authorized;
3,801 shares issued and outstanding as of December 31, 2019
and 2018
Series C – 6.75% Cumulative Redeemable Preferred
Stock, par value $0.10 per share, 13,750 and 5,750 shares
authorized; 9,750 and 5,750 shares issued and outstanding as
of December 31, 2019 and 2018, respectively
Series D – 6.375% Cumulative Redeemable Preferred
Stock, par value $0.10 per share, 6,000 and 2,300 shares
authorized; 2,651 and 2,000 shares issued and outstanding as
of December 31, 2019 and 2018, respectively
Common Stock - $0.10 par value per share,123,664 and 111,364
shares authorized; 41,130 and 38,320 shares issued and
outstanding as of December 31, 2019 and 2018, respectively
Excess Stock - $0.10 par value per share, 3,000 shares
authorized; no shares issued or outstanding as of
December 31, 2019 and 2018
Additional Paid-In Capital
Undistributed Income (Accumulated Deficit)
Total Shareholders’ Equity
4,572
83,686
10,575
6,623
105,456
479,114
3,873
107,985
7,411
5,842
125,111
456,204
95,030
95,030
243,750
143,750
66,268
50,000
4,113
3,832
-0-
162,542
(25,364)
546,339
-0-
157,450
(25,364)
424,698
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$ 1,025,453
$ 880,902
See Accompanying Notes to Consolidated Financial Statements
-58-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 and 2017
(in(cid:2)thousands)(cid:2)
INCOME:
Rental and Related Income
Sales of Manufactured Homes
2019
2018
2017
$ 128,611
17,980
$ 113,833
15,754
$ 101,801
10,847
Total Income
146,591
129,587
112,648
EXPENSES:
Community Operating Expenses
Cost of Sales of Manufactured Homes
Selling Expenses
General and Administrative Expenses
Depreciation Expense
61,708
12,938
5,079
10,046
36,811
52,949
11,716
3,774
10,880
31,691
47,847
8,471
3,095
9,646
27,558
Total Expenses
126,582
111,010
96,617
OTHER INCOME (EXPENSE):
Interest Income
Dividend Income
Gain on Sales of Marketable Securities, net
Increase (Decrease) in Fair Value of Marketable Securities
Other Income
Interest Expense
2,619
7,535
-0-
14,915
588
(17,805)
2,255
10,367
20
(51,675)
410
(16,039)
2,007
8,135
1,748
-0-
705
(15,877)
Total Other Income (Expense)
7,852
(54,662)
(3,282)
Income (Loss) Before Loss on Sales of
Investment Property and Equipment
Loss on Sales of Investment Property
and Equipment
Net Income (Loss)
Less: Preferred Dividends
Less: Redemption of Preferred Stock
27,861
(36,085)
(111)
(131)
27,750
(36,216)
(25,184)
-0-
(20,316)
-0-
12,749
(81)
12,668
(16,845)
(3,502)
Net Income (Loss) Attributable to Common
Shareholders
$ 2,566
$ (56,532)
$ (7,679)
See Accompanying Notes to Consolidated Financial Statements
-59-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 and 2017
(in(cid:2)thousands(cid:2)except(cid:2)per(cid:2)share(cid:2)amounts)(cid:2)
2019
2018
2017
Basic Income (Loss) Per Share:
Net Income (Loss)
Less: Preferred Dividends
Less: Redemption of Preferred Stock
Net Income (Loss) Attributable to Common Shareholders
$0.70
(0.63)
-0-
$0.07
Diluted Income (Loss) Per Share:
Net Income (Loss)
Less: Preferred Dividends
Less: Redemption of Preferred Stock
Net Income (Loss) Attributable to Common Shareholders
Weighted Average Common Shares Outstanding:
Basic
Diluted
$0.69
(0.63)
-0-
$0.06
39,909
40,203
$(0.98)
(0.55)
-0-
$(1.53)
$(0.98)
(0.55)
-0-
$(1.53)
36,871
36,871
$0.39
(0.52)
(0.11)
$(0.24)
$0.39
(0.52)
(0.11)
$(0.24)
32,676
32,676
See Accompanying Notes to Consolidated Financial Statements
-60-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 and 2017
(in(cid:2)thousands)(cid:2)
2019
2018
2017
Net Income (Loss)
$27,750
$(36,216)
$12,668
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 (Loss)
Less: Preferred Dividends
Less: Redemption of Preferred Stock
-0-
-0-
-0-
-0-
-0-
-0-
27,750
(25,184)
-0-
(36,216)
(20,316)
-0-
(3,449)
(1,748)
4
7,475
(16,845)
(3,502)
Comprehensive Income (Loss) Attributable to Common
Shareholders
$2,566
$(56,532)
$(12,872)
See Accompanying Notes to the Consolidated Financial Statements
-61-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 and 2017
(in(cid:2)thousands)
Balance December 31, 2016
29,389
$2,939
$91,595
$95,030
$-0-
Common Stock
Issued and Outstanding
Number
Amount
Preferred
Stock
Series A
Preferred
Stock
Series B
Preferred
Stock
Series C
Common Stock Issued with the DRIP*
Common Stock Issued through Restricted Stock Awards
Common Stock Issued through Stock Options
Common Stock Issued through Registered Direct Placement, net
Preferred Stock Issued through Underwritten Registered Public
Offering, net
Preferred Stock Called for Redemption
Distributions
Stock Compensation Expense
Net Income
Unrealized Net Holding Gain on Securities Available
for Sale, Net of Reclassification Adjustment
Interest Rate Swaps
4,095
56
548
1,400
-0-
-0-
-0-
-0-
-0-
-0-
-0-
409
6
55
140
-0-
-0-
-0-
-0-
-0-
-0-
-0-
Balance December 31, 2017
35,488
3,549
Unrealized Net Holding Gain on Securities Available
for Sale, Net of Reclassification Adjustment (See Note 2)
Common Stock Issued with the DRIP*
Common Stock Issued through Restricted Stock Awards
Common Stock Issued through Stock Options
Preferred Stock Issued through Underwritten Registered Public
Offering, net
Distributions
Stock Compensation Expense
Net Income (Loss)
-0-
2,654
49
129
-0-
-0-
-0-
-0-
-0-
265
5
13
-0-
-0-
-0-
-0-
Balance December 31, 2018
38,320
3,832
Common Stock Issued with the DRIP*
Common Stock Issued through Restricted/ Unrestricted Stock
Awards
Common Stock Issued through Stock Options
Repurchase of Common Stock
Preferred Stock Issued through Underwritten Registered Public
Offering, net
Preferred Stock Issued in connection with At-The-Market
Offerings, net
Distributions
Stock Compensation Expense
Net Income (Loss)
2,468
122
240
(20)
-0-
-0-
-0-
-0-
-0-
247
12
24
(2)
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(91,595)
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
143,750
-0-
-0-
-0-
-0-
-0-
-0-
95,030
143,750
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
95,030
143,750
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
100,000
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
Balance December 31, 2019
41,130
$4,113
$-0-
$95,030
$243,750
*Dividend(cid:2)Reinvestment(cid:2)and(cid:2)Stock(cid:2)Purchase(cid:2)Plan
See Accompanying Notes to Consolidated Financial Statements
-62-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 and 2017
(cid:2)(in(cid:2)thousands)
Balance December 31, 2016
$-0-
$111,423
$16,713
$ (668)
$317,032
Preferred
Stock
Series D
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Undistributed
Income
(Accumulated
Deficit)
Total
Shareholders’
Equity
Common Stock Issued with the DRIP*
Common Stock Issued through Restricted Stock Awards
Common Stock Issued through Stock Options
Common Stock Issued through Registered Direct
Placement, net
Preferred Stock Issued through Underwritten Registered
Public Offering, net
Preferred Stock Called for Redemption
Distributions
Stock Compensation Expense
Net Income
Unrealized Net Holding Gain on Securities Available
for Sale, Net of Reclassification Adjustment
Interest Rate Swaps
Balance December 31, 2017
Unrealized Net Holding Gain on Securities Available
for Sale, Net of Reclassification Adjustment (See Note 2)
Common Stock Issued with the DRIP*
Common Stock Issued through Restricted Stock Awards
Common Stock Issued through Stock Options
Preferred Stock Issued through Underwritten Registered
Public Offering, net
Distributions
Stock Compensation Expense
Net Income (Loss)
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
50,000
-0-
-0-
-0-
Balance December 31, 2018
50,000
157,450
Common Stock Issued with the DRIP*
Common Stock Issued through Restricted Stock Awards
Common Stock Issued through Stock Options
Repurchase of Common Stock
Preferred Stock Issued through Underwritten Registered
Public Offering, net
Preferred Stock Issued in connection with At-The-Market
Offerings, net
Distributions
Stock Compensation Expense
Net Income (Loss)
-0-
-0-
-0-
-0-
-0-
16,268
-0-
-0-
-0-
31,256
(12)
2,579
(235)
(3,312)
(337)
(26,786)
1,939
-0-
59,956
(6)
5,381
22,378
(4,774)
3,488
(31,125)
1,314
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(5,197)
4
-0-
-0-
-0-
-0-
-0-
(3,488)
(9,180)
-0-
12,668
-0-
-0-
60,365
-0-
5,436
22,518
138,976
(91,595)
(40,305)
1,314
12,668
(5,197)
4
168,035
11,520
(668)
421,216
34,849
(5)
1,372
(1,753)
(46,661)
1,613
-0-
(11,520)
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
11,520
-0-
-0-
-0-
-0-
-0-
-0-
(36,216)
-0-
35,114
-0-
1,385
48,247
(46,661)
1,613
(36,216)
(25,364)
424,698
-0-
-0-
-0-
-0-
-0-
-0-
(27,750)
-0-
27,750
31,503
-0-
2,603
(237)
96,688
15,931
(54,536)
1,939
27,750
Balance December 31, 2019
$66,268
$162,542
$-0-
$(25,364)
$546,339
*Dividend(cid:2)Reinvestment(cid:2)and(cid:2)Stock(cid:2)Purchase(cid:2)Plan.(cid:2)(cid:2)
See Accompanying Notes to Consolidated Financial Statements
-63-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 and 2017
(in(cid:2)thousands)(cid:2)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)
Non-cash items included in Net Income (Loss):
Depreciation
Amortization of Financing Costs
Stock Compensation Expense
Provision for Uncollectible Notes and Other Receivables
Gain on Sales of Marketable Securities, net
(Increase) Decrease in Fair Value of Marketable Securities
Loss on Sales of Investment Property and Equipment
Changes in Operating Assets and Liabilities:
Inventory of Manufactured Homes
Notes and Other Receivables, net of Notes Acquired with
Acquisitions
Prepaid Expenses and Other Assets
Accounts Payable
Accrued Liabilities and Deposits
Tenant Security Deposits
Net Cash Provided by Operating Activities
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 Marketable Securities
Proceeds from Sales/ Redemption of Marketable Securities
Net Cash Used in Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages, net of mortgages assumed
Net (Payments) Proceeds from Short Term Borrowings
Principal Payments of Mortgages and Loans
Financing Costs on Debt
Proceeds from Issuance of Preferred Stock, net of offering costs
Proceeds from At-The-Market Preferred Equity Program, net of offering
costs
Redemption of 8.25% Series A Preferred Stock
Proceeds from Registered Direct Placement of Common Stock,
net of offering costs
Proceeds from Issuance of Common Stock in the DRIP, net of
Dividend Reinvestments
Repurchase of Common Stock
Proceeds from Exercise of Stock Options
Preferred Dividends Paid
Common Dividends Paid, net of Dividend Reinvestments
Net Cash Provided by Financing Activities
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
Cash, Cash Equivalents and Restricted Cash at Beginning of Year
2019
2018
2017
$ 27,750
$ (36,216)
$ 12,668
36,811
758
1,939
1,408
-0-
(14,915)
111
(8,264)
(7,909)
(3,817)
699
3,164
781
38,516
(38,799)
(64,535)
2,745
(20,086)
(1,800)
125
(122,350)
44,850
(24,373)
(21,624)
(752)
96,688
15,931
-0-
-0-
23,796
(237)
2,603
(25,709)
(21,120)
90,053
6,219
12,777
31,691
625
1,613
1,231
(20)
51,675
131
(6,134)
(6,438)
(457)
913
846
715
40,175
(55,880)
(52,970)
2,754
(13,221)
(18,555)
269
(137,603)
28,192
23,652
(6,866)
(749)
48,247
-0-
-0-
-0-
30,038
-0- -
1,385
(20,050)
(21,535)
82,314
(15,114)
27,891
27,558
661
1,314
1,274
(1,748)
-0-
81
(144)
(2,332)
455
(1)
264
808
40,858
(61,670)
(62,012)
2,300
(3,881)
(45,075)
17,417
(152,921)
44,420
26,401
(34,971)
(641)
138,976
-0-
(91,595)
22,518
57,506
-0-
5,436
(16,666)
(20,780)
130,604
18,541
9,350
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END
OF YEAR
$ 18,996
$ 12,777
$ 27,891
See Accompanying Notes to Consolidated Financial Statements
-64-
UMH PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2019 and 2018
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”), also sells manufactured homes to residents and
prospective residents in our communities. Inherent in the operations of manufactured home communities are site
vacancies. S&F was established to fill these vacancies and 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 (which is the Company’s total assets excluding accumulated depreciation). Management views the
Company as a single segment based on its method of internal reporting in addition to its allocation of capital and resources.
Description of the Business
As of December 31, 2019, the Company owns and operates 122 manufactured home communities containing
approximately 23,100 developed sites. These communities are located in New Jersey, New York, Ohio, Pennsylvania,
Tennessee, Indiana, Michigan and Maryland.
These manufactured home communities are listed by trade names as follows:
MANUFACTURED HOME COMMUNITY
LOCATION
Allentown
Arbor Estates
Auburn Estates
Birchwood Farms
Boardwalk
Broadmore Estates
Brookside Village
Brookview Village
Camelot Village
Candlewick Court
Carsons
Catalina
Cedarcrest Village
Chambersburg I & II
Chelsea
Cinnamon Woods
City View
Clinton Mobile Home Resort
Collingwood
Colonial Heights
Countryside Estates
Countryside Estates
Countryside Village
Cranberry Village
Crestview
Cross Keys Village
Crossroads Village
Dallas Mobile Home Community
Deer Meadows
D & R Village
Memphis, Tennessee
Doylestown, Pennsylvania
Orrville, Ohio
Birch Run, Michigan
Elkhart, Indiana
Goshen, Indiana
Berwick, Pennsylvania
Greenfield Center, New York
Anderson, Indiana
Owosso, Michigan
Chambersburg, Pennsylvania
Middletown, Ohio
Vineland, New Jersey
Chambersburg, Pennsylvania
Sayre, Pennsylvania
Conowingo, Maryland
Lewistown, Pennsylvania
Tiffin, Ohio
Horseheads, New York
Wintersville, Ohio
Muncie, Indiana
Ravenna, Ohio
Columbia, Tennessee
Cranberry Township, Pennsylvania
Athens, Pennsylvania
Duncansville, Pennsylvania
Mount Pleasant, Pennsylvania
Toronto, Ohio
New Springfield, Ohio
Clifton Park, New York
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MANUFACTURED HOME COMMUNITY
LOCATION
Evergreen Estates
Evergreen Manor
Evergreen Village
Fairview Manor
Fifty One Estates
Forest Creek
Forest Park Village
Fox Chapel Village
Frieden Manor
Friendly Village
Green Acres
Gregory Courts
Hayden Heights
Heather Highlands
High View Acres
Highland
Highland Estates
Hillcrest Crossing
Hillcrest Estates
Hillside Estates
Holiday Village
Holiday Village
Holly Acres Estates
Hudson Estates
Huntingdon Pointe
Independence Park
Kinnebrook
Lake Sherman Village
Lakeview Meadows
Laurel Woods
Little Chippewa
Maple Manor
Marysville Estates
Meadowood
Meadows
Meadows of Perrysburg
Melrose Village
Melrose West
Memphis Blues
Monroe Valley
Moosic Heights
Mount Pleasant Village
Mountaintop
New Colony
Northtowne Meadows
Oak Ridge Estates
Oakwood Lake Village
Olmsted Falls
Oxford Village
Parke Place
Perrysburg Estates
Pikewood Manor
Pine Ridge Village/Pine Manor
Pine Valley Estates
Pleasant View Estates
Port Royal Village
Lodi, Ohio
Bedford, Ohio
Mantua, Ohio
Millville, New Jersey
Elizabeth, Pennsylvania
Elkhart, Indiana
Cranberry Township, Pennsylvania
Cheswick, Pennsylvania
Schuylkill Haven, Pennsylvania
Perrysburg, Ohio
Chambersburg, Pennsylvania
Honey Brook, Pennsylvania
Dublin, Ohio
Inkerman, Pennsylvania
Apollo, Pennsylvania
Elkhart, Indiana
Kutztown, Pennsylvania
Lower Burrell, Pennsylvania
Marysville, Ohio
Greensburg, Pennsylvania
Nashville, Tennessee
Elkhart, Indiana
Erie, Pennsylvania
Peninsula, Ohio
Tarrs, Pennsylvania
Clinton, Pennsylvania
Monticello, New York
Navarre, Ohio
Lakeview, Ohio
Cresson, Pennsylvania
Orrville, Ohio
Taylor, Pennsylvania
Marysville, Ohio
New Middletown, Ohio
Nappanee, Indiana
Perrysburg, Ohio
Wooster, Ohio
Wooster, Ohio
Memphis, Tennessee
Jonestown, Pennsylvania
Avoca, Pennsylvania
Mount Pleasant, Pennsylvania
Narvon, Pennsylvania
West Mifflin, Pennsylvania
Erie, Michigan
Elkhart, Indiana
Tunkhannock, Pennsylvania
Olmsted Township, Ohio
West Grove, Pennsylvania
Elkhart, Indiana
Perrysburg, Ohio
Elyria, Ohio
Carlisle, Pennsylvania
Apollo, Pennsylvania
Bloomsburg, Pennsylvania
Belle Vernon, Pennsylvania
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MANUFACTURED HOME COMMUNITY
LOCATION
Redbud Estates
River Valley Estates
Rolling Hills Estates
Rostraver Estates
Sandy Valley Estates
Shady Hills
Somerset Estates/Whispering Pines
Southern Terrace
Southwind Village
Spreading Oaks Village
Springfield Meadows
Suburban Estates
Summit Estates
Summit Village
Sunny Acres
Sunnyside
Trailmont
Twin Oaks I & II
Twin Pines
Valley High
Valley Hills
Valley Stream
Valley View I
Valley View II
Valley View Honeybrook
Voyager Estates
Waterfalls Village
Wayside
Weatherly Estates
Wellington Estates
Woodland Manor
Woodlawn Village
Woods Edge
Wood Valley
Worthington Arms
Youngstown Estates
Anderson, Indiana
Marion, Ohio
Carlisle, Pennsylvania
Belle Vernon, Pennsylvania
Magnolia, Ohio
Nashville, Tennessee
Somerset, Pennsylvania
Columbiana, Ohio
Jackson, New Jersey
Athens, Ohio
Springfield, Ohio
Greensburg, Pennsylvania
Ravenna, Ohio
Marion, Indiana
Somerset, Pennsylvania
Eagleville, Pennsylvania
Goodlettsville, Tennessee
Olmsted Township, Ohio
Goshen, Indiana
Ruffs Dale, Pennsylvania
Ravenna, Ohio
Mountaintop, Pennsylvania
Ephrata, Pennsylvania
Ephrata, Pennsylvania
Honey Brook, Pennsylvania
West Newton, Pennsylvania
Hamburg, New York
Bellefontaine, Ohio
Lebanon, Tennessee
Export, Pennsylvania
West Monroe, New York
Eatontown, New Jersey
West Lafayette, Indiana
Caledonia, Ohio
Lewis Center, Ohio
Youngstown, New York
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
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 (“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 in accordance with GAAP, 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.
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Investment Property and Equipment and Depreciation
Property and equipment are carried at cost less accumulated depreciation. Depreciation for Sites and
Buildings 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 Site 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 statements and
any gain or loss is reflected in the current year’s results of operations.
The Company applies Financial Accounting Standards Board (“FASB”) 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 an other than temporary 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.
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, 2019, the undiscounted cash flows over the
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”)
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.
Effective January 1, 2017, the Company adopted Accounting Standards Update (“ASU”) 2017-01, “Business
Combinations (Topic 805), Clarifying the Definition of a Business”. The Company evaluated its acquisitions and has
determined that its acquisitions of manufactured home communities during 2018 and 2019 should be accounted for as
acquisitions of assets. As such, transaction costs, such as broker fees, transfer taxes, legal, accounting, valuation, and
other professional and consulting fees, related to acquisitions are capitalized as part of the cost of the acquisitions,
which is then subject to a purchase price allocation based on relative fair value. See “Recently Adopted Accounting
Pronouncements” below for additional information regarding the adoption of this ASU.
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.
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Marketable Securities
Investments in marketable securities consist of marketable common and preferred stock securities of other
REITs, which the Company generally limits to no more than approximately 15% of its undepreciated assets. These
marketable securities are all publicly-traded and purchased on the open market, through private transactions or through
dividend reinvestment plans. The Company normally holds REIT securities on a long-term basis and has the ability
and intent to hold securities to recovery, therefore as of December 31, 2019 and 2018, gains or losses on the sale of
securities are based on average cost and are accounted for on a trade date basis.
On January 1, 2018, the Company adopted ASU 2016-01, “Financial Instruments – Overall: Recognition and
Measurement of Financial Assets and Financial Liabilities”. ASU 2016-01 requires changes in the fair value of our
marketable securities to be recorded in current period earnings. Previously, changes in the fair value of marketable
securities were recognized in "Accumulated Other Comprehensive Income" on our Consolidated Balance Sheets. As
a result, on January 1, 2018 the Company recorded an increase to beginning undistributed income (accumulated
deficit) of $11.5 million to recognize the unrealized gains previously recorded in "Accumulated Other Comprehensive
Income" on our Consolidated Balance Sheets. Subsequent changes in the fair value of the Company’s marketable
securities are recorded in Increase (Decrease) in Fair Value of Marketable Securities on our Consolidated Statements
of Income (Loss). See “Recently Adopted Accounting Pronouncements” below for additional information regarding
the adoption of this ASU.
Inventory of Manufactured Homes
Inventory of manufactured homes is valued at the lower of cost or net realizable 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 and 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, 2019 and 2018 were $36.4 million and $29.7 million,
respectively. At December 31, 2019 and 2018, the reserves for uncollectible accounts, notes and other receivables
were $1.3 million and $1.1 million, respectively. For the years ended December 31, 2019, 2018 and 2017, the
provisions for uncollectible notes and other receivables were $1.4 million, $1.2 million and $1.3 million,
respectively. Charge-offs and other adjustments related to repossessed homes for the years ended December 31, 2019,
2018 and 2017 amounted to $1.2 million, $1.4 million and $1.2 million, respectively.
The Company’s notes receivable primarily consists of installment loans collateralized by manufactured
homes with principal and interest payable monthly. The weighted average interest rate on these loans is approximately
7.8% and the average maturity is approximately 12 years.
Unamortized Financing Costs
Costs incurred in connection with obtaining mortgages and other financings and refinancings are deferred
and presented in the consolidated balance sheet as a direct deduction from the carrying amount of that debt liability.
These costs are amortized on a straight-line basis over the term of the related obligations, and included as a component
of interest expense. Unamortized costs are charged to expense upon prepayment of the obligation. Upon amendment
of the line of credit or refinancing of mortgage debt, unamortized deferred financing fees are accounted for in
accordance with ASC 470-50-40, Modifications and Extinguishments. As of December 31, 2019 and 2018,
accumulated amortization amounted to $5.1 million and $4.4 million, respectively. The Company estimates that
aggregate amortization expense will be approximately $794,000 for 2020, $729,000 for 2021, $658,000 for 2022,
$476,000 for 2023, $430,000 for 2024 and $657,000 thereafter.
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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 have had the effect of fixing interest rates relative
to specific mortgage loans. As of December 31, 2019 and 2018, these agreements have expired and the Company no
longer had any interest rate swap agreements in effect.
Revenue Recognition
The Company derives its income primarily from the rental of manufactured homesites. The Company also
owns approximately 7,400 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 (39.9 million, 36.9 million and 32.7 million in 2019, 2018 and 2017,
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. For the year ended December 31, 2019, common
stock equivalents resulting from employee stock options to purchase 2.6 million shares of common stock amounted
to 294,000 shares, which were included in the computation of Diluted Net Income (Loss) per Share. For the years
ended December 31, 2018 and 2017, employee stock options to purchase 2.3 million and 1.8 million, respectively,
shares of common stock were excluded from the computation of Diluted Net Income (Loss) per Share as their effect
would be anti-dilutive.
Stock Compensation Plan
The Company accounts for awards of stock, 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 are 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 are recognized based on the
fair value of the restricted stock awards less estimated forfeitures. The fair value of restricted stock awards are 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 $1.9 million, $1.6 million and $1.3 million have been recognized in 2019, 2018 and 2017,
respectively. During 2019, 2018 and 2017, compensation costs included a one-time charge of $179,000, $210,000
and $201,000, respectively, for restricted stock and 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.
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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 or cash-type 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 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 taxes. In addition, the Company
has a taxable REIT Subsidiary (“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,
2019. The Company records interest and penalties relating to unrecognized tax benefits, if any, as interest
expense. As of December 31, 2019, the tax years 2016 through and including 2019 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 marketable securities through
December 31, 2017 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.
Recently Adopted Accounting Pronouncements
Adopted(cid:2)2019(cid:2)
(cid:2)
In August 2018, the Securities and Exchange Commission adopted the final rule under SEC Release No. 33-
10532, “Disclosure Update and Simplification”, amending certain disclosure requirements that were redundant,
duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements
on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes
in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement.
The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which
a statement of comprehensive income is required to be filed. The first presentation of changes in stockholders’ equity
was included in the Form 10-Q for the quarter ended March 31, 2019.
In February 2016, the FASB issued ASU 2016-02, “Leases.” ASU 2016-02 amends the existing accounting
standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets as a right-
of-use asset and a corresponding liability. ASU 2016-02 also makes targeted changes to lessor accounting. The
standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date
of initial application, with an option to use certain transition relief. ASU 2016-02 was effective for annual reporting
periods beginning after December 15, 2018. In July 2018, the FASB issued ASU No. 2018-10, “Codification
Improvements to Topic 842, Leases”, which included amendments to clarify certain aspects of the new lease standard.
In July 2018, the FASB also issued ASU No. 2018-11, “Leases (Topic 842) – Target Improvements.” ASU No. 2018-
11 provides a new transition method and a practical expedient to separating contract components as required by ASU
2016-02. Under ASU 2018-11, an entity applying the new lease accounting standard may record a cumulative
adjustment to the opening balance of undistributed income (accumulated deficit) in the period of adoption, instead of
having to restate comparative results, as initially required. Additionally, ASU No. 2018-11 provide lessors with a
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practical expedient, by class of underlying asset, to not separate non-lease components from the associated lease
component and, instead, to account for those components as a single component if the non-lease components otherwise
would be accounted for under the new revenue guidance if both 1. the timing and pattern of transfer of the non-lease
component(s) and associated lease component are the same (instead of the timing and pattern of revenue recognition,
as proposed); and 2. the lease component, if accounted for separately, would be classified as an operating lease. In
December 2018, the FASB issued ASU 2018-20, “Leases (Topic 842) – Narrow-Scope Improvements for Lessors.”
ASU 2018-20 allow lessors to make an accounting policy election not to evaluate whether sales taxes and similar
taxes imposed by a governmental authority on a specific lease revenue-producing transaction are the primary
obligation of the lessor as owner of the underlying leased asset. The amendments also require a lessor to exclude lessor
costs paid directly by a lessee to third parties on the lessor’s behalf from variable payments and include lessor costs
that are paid by the lessor and reimbursed by the lessee in the measurement of variable lease revenue and the associated
expense. In addition, the amendments clarify that when lessors allocate variable payments to lease and non-lease
components they are required to follow the recognition guidance in the new lease standard for the lease component
and other applicable guidance, such as the new revenue standard, for the non-lease component.
The Company adopted this standard effective January 1, 2019, and it did not have a material impact on the
Company’s financial position, results of operations or cash flows. Our primary source of revenue is generated from
lease agreements for our sites and homes, where we are the lessor. The non-lease components of our lease agreements
consist primarily of utility reimbursements. We have elected the lessor practical expedient to combine the lease and
non-lease components. We are the lessee in other arrangements, primarily for our corporate office and a ground lease
at one community. For leases with a term greater than one year, right-of-use assets and corresponding liabilities are
included on the Consolidated Balance Sheet. The right-of-use asset and corresponding lease liabilities are measured
as the estimated present value of minimum lease payments at the commencement of the lease agreement and
discounted by our borrowing rate. As of December 31, 2019, the right-of-use assets and corresponding lease liabilities
of $3.9 million is included in Prepaid Expenses and Other Assets and Accrued Liabilities and Deposits on the
Consolidated Balance Sheets. Future minimum lease payments under these leases over the remaining lease terms are
as follows (in(cid:2)thousands):
2020
2021
2022
2023
2024
Thereafter
Total Lease Payments
$ 427
427
417
384
384
8,502
$ 10,541
The weighted average remaining lease term for these leases is 143.2 years. The right of use assets and lease
liabilities was calculated using an interest rate of 5%. Additionally, for all leases, we have elected the package of
practical expedients, which permits the Company not to reassess expired or existing contracts containing a lease, the
lease classification for expired or existing contracts, and measurement of initial direct costs for any existing leases.
Adopted(cid:2)2018(cid:2)
(cid:2)
In May 2017, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope
of Modification Accounting.” ASU 2017-09 clarifies which changes to the terms or conditions of a share based
payment award are subject to the guidance on modification accounting under FASB Accounting Standards
Codification Topic 718. Entities would apply the modification accounting guidance unless the value, vesting
requirements and classification of a share based payment award are the same immediately before and after a change
to the terms or conditions of the award. ASU No. 2017-09 was effective for fiscal years beginning after December 15,
2017, including interim periods within those fiscal years. The Company adopted this standard effective January 1,
2018, and it did not have a material impact on our financial position, results of operations or cash flows.
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In February 2017, the FASB issued ASU No. 2017-05, “Other Income-Gains and Losses from the
Derecognition of Nonfinancial Assets.” ASU 2017-05 provides guidance for recognizing gains and losses from the
transfer of nonfinancial assets and in-substance non-financial assets in contracts with non-customers, unless other
specific guidance applies. The standard requires a company to derecognize nonfinancial assets once it transfers control
of a distinct nonfinancial asset or distinct in substance nonfinancial asset. Additionally, when a company transfers its
controlling interest in a nonfinancial asset, but retains a noncontrolling ownership interest, the company is required to
measure any non-controlling interest it receives or retains at fair value. The guidance requires companies to recognize
a full gain or loss on the transaction. As a result of the new guidance, the guidance specific to real estate sales in ASC
360-20 is eliminated. As such, sales and partial sales of real estate assets are now subject to the same derecognition
model as all other nonfinancial assets. The guidance was effective for annual periods beginning after December 15,
2017, including interim periods within that reporting period. The Company adopted this standard effective January
1, 2018, and it did not have a material impact on our financial position, results of operations or cash flows.
In November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash.”
ASU 2016-18 requires inclusion of restricted cash and restricted cash equivalents with cash and cash equivalents when
reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. The
guidance was effective for annual periods beginning after December 15, 2017, including interim periods within that
reporting period. The Company adopted this standard effective January 1, 2018. The Company’s restricted cash
consists of amounts primarily held in deposit for tax, insurance and repair escrows held by lenders in accordance with
certain debt agreements. Restricted cash is included in Prepaid Expenses and Other Assets on the Consolidated
Balance Sheets. Previously, changes in restricted cash were reported on the Consolidated Statements of Cash Flows
as operating, investing or financing activities based on the nature of the underlying activity.
The following table reconciles beginning of period and end of period balances of cash, cash equivalents and
restricted cash for the periods shown (in(cid:2)thousands):
12/31/19
12/31/18
12/31/17
Cash and Cash Equivalents
Restricted Cash
Cash, Cash Equivalents
And Restricted Cash
$12,902
6,094
$7,433
5,344
$23,242
4,649
$18,996
$12,777
$27,891
In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230), Classification
of Certain Cash Receipts and Cash Payments.” ASU 2016-15 makes eight targeted changes to how cash receipts and
cash payments are presented and classified in the statement of cash flows. ASU 2016-15 was effective for annual
reporting periods, including interim reporting periods within those periods, beginning after December 15, 2017. The
Company adopted this standard effective January 1, 2018, and it did not have a material impact on our financial
position, results of operations or cash flows.
In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and
Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 requires equity investments (except those
accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be
measured at fair value with changes in fair value recognized in net income, requires public business entities to use the
exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate
presentation of financial assets and financial liabilities by measurement category and form of financial asset, and
eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to
estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU
2016-01 was effective for annual reporting periods, including interim reporting periods within those periods,
beginning after December 15, 2017. The Company adopted this standard effective January 1, 2018. The Company
previously classified its marketable securities as available-for-sale and carried at fair value with unrealized holding
gains and losses excluded from earnings and reported as a separate component of Shareholders’ Equity until realized.
The change in the unrealized net holding gains (losses) was reflected in the Company’s Comprehensive Income (Loss).
As a result of adoption, these securities will continue to be measured at fair value; however, the change in the
unrealized net holding gains and losses is now recognized through net income. As of January 1, 2018, unrealized net
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holding gains of $11.5 million were reclassed to beginning undistributed income (accumulated deficit) to recognize
the unrealized gains previously recorded in "accumulated other comprehensive income" on our consolidated balance
sheets.
In May 2014, the FASB issued ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)" (ASC
606). The objective of this amendment 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 this amendment, companies will
perform a five-step analysis of transactions to determine when and how revenue is recognized. This amendment
applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. An
entity should apply the amendments using either the full retrospective approach or retrospectively with a cumulative
effect of initially applying the amendments recognized at the date of initial application. In July 2015, the FASB issued
ASU 2015-14 which deferred the effective date of ASU 2014-09 by one year to annual reporting periods beginning
after December 15, 2017, including interim periods within that reporting period. The Company adopted this standard
effective January 1, 2018. For transactions in the scope of ASU 2014-09, we recognize revenue when control of goods
or services transfers to the customer, in the amount that we expect to receive for the transfer of goods or provision of
services. The adoption of ASU 2014-09 did not result in any change to our accounting policies for revenue recognition.
Accordingly, retrospective application to prior periods or a cumulative catch-up adjustment was unnecessary.
Our primary source of revenue is generated from lease agreements for our sites and homes. Resident leases
are generally for one-year or month-to-month terms and are renewable by mutual agreement from us and the resident,
or in some cases, as provided by jurisdictional statute. The lease component of these agreements is accounted for
under ASC 842 “Leases.” The non-lease components of our lease agreements consist primarily of utility
reimbursements, which are accounted for with the site lease as a single lease under ASC 842.
Prior to the adoption of ASC 606, sales of manufactured homes were recognized under ASC 605 “Revenue
Recognition” since these homes are not permanent fixtures or improvements to the underlying real estate. In
accordance with the core principle of ASC 606, we recognize revenue from home sales at the time of closing when
control of the home transfers to the customer. After closing of the sale transaction, we have no remaining performance
obligation.
Interest income is primarily from notes receivables for the previous sales of manufactured homes. Interest
income on these receivables is accrued based on the unpaid principal balances of the underlying loans on a level yield
basis over the life of the loans. Interest income is not in the scope of ASC 606.
Dividend income and gain on sales of marketable securities, net are from our investments in marketable
securities and are presented separately but are not in the scope of ASC 606.
Other income primarily consists of brokerage commissions for arranging for the sale of a home by a third
party, service and marketing agreements with cable providers, and in 2017 included an upfront oil and gas bonus
payment. This income is recognized when the transactions are completed and our performance obligations have been
fulfilled.
As of December 31, 2019 and 2018, the Company had notes receivable of $36.4 million and $29.8 million,
respectively. Notes receivables are presented as a component of Notes and Other Receivables, net on our Consolidated
Balance Sheets. These receivables represent balances owed to us for previously completed performance obligations
for sales of manufactured homes. Due to the nature of our revenue from contracts with customers, we do not have
material contract assets or liabilities that fall under the scope of ASC 606.
Other Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires that entities use a new forward
looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The
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measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and
supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for annual
reporting periods, including interim reporting periods within those periods, beginning after December 15, 2019. As of
January 1, 2020, we adopted the fair value option for our notes receivable and do not expect there to be a material
impact.
In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework — Changes to the Disclosure
Requirements for Fair Value Measurement” which removes, modifies, and adds certain disclosure requirements
related to fair value measurements in ASC 820. This guidance is effective for public companies for fiscal years
beginning after December 15, 2019, including interim periods within that year. The Company anticipates making the
required updates to its fair value disclosures beginning with its Form 10-Q for the quarter ending March 31, 2020.
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.
NOTE 3 – INVESTMENT PROPERTY AND EQUIPMENT
Acquisitions in 2019
On July 3, 2019, the Company acquired Friendly Village, located in Perrysburg, Ohio, for approximately
$19.4 million. This all-age community contains a total of 824 developed homesites that are situated on approximately
101 total acres. At the date of acquisition, the average occupancy for this community was approximately 46%. In
conjunction with this acquisition, the Company assumed a mortgage of approximately $7.3 million on this property
(See Note 5).
On July 30, 2019, the Company acquired two communities, New Colony and 51 Estates, located in
Pennsylvania, for approximately $11.7 million. These communities contain a total of 285 developed homesites that
are situated on approximately 61 acres. At the date of acquisition, the average occupancy for these communities was
approximately 76%.
On August 27, 2019, the Company acquired Northtowne Meadows, located in Erie, Michigan, for
approximately $25.2 million. This community contains a total of 386 developed homesites that are situated on
approximately 85 total acres. At the date of acquisition, the average occupancy for this community was approximately
88%. In conjunction with this acquisition, the Company assumed a mortgage of approximately $12.1 million on this
property (See Note 5).
Acquisitions in 2018
On May 30, 2018, the Company acquired two manufactured home communities, Camelot Village and
Redbud Estates, located in Anderson, Indiana, for approximately $20.5 million. These all-age communities contain a
total of 669 developed homesites that are situated on approximately 231 total acres. At the date of acquisition, the
average occupancy for these communities was approximately 91%. In conjunction with this acquisition, the Company
drew down $20 million on its unsecured line of credit. On July 13, 2018, the Company obtained a 10-year, $13.4
million mortgage on these properties with an interest rate of 4.27% and a 30-year amortization (see Note 5).
On August 31, 2018, the Company acquired Summit Village, a manufactured home community located in
Marion, Indiana, for approximately $3.5 million. This all-age community contains a total of 134 developed homesites
that are situated on approximately 58 total acres. At the date of acquisition, the occupancy for this community was
approximately 60%. This acquisition was funded by a drawdown from the Company’s margin line.
On November 30, 2018, the Company acquired Pikewood Manor, a manufactured home community located
in Elyria, Indiana, for approximately $23 million. This all-age community contains a total of 488 developed homesites
that are situated on approximately 117 total acres. At the date of acquisition, the average occupancy for this
community was approximately 67%. In conjunction with this acquisition, the Company obtained a 10-year, $14.8
million mortgage with an interest rate of 5.0% and a 25-year amortization (see Note 5).
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On December 19, 2018, the Company acquired two manufactured home communities, Perrysburg Estates
and Meadows of Perrysburg, located in Perrysburg, Ohio, for approximately $12.1 million. These all-age communities
contain a total of 324 developed homesites that are situated on approximately 88 total acres. At the date of acquisition,
the average occupancy for these communities was approximately 79%. In conjunction with this acquisition, the
Company assumed two mortgages of approximately $4.6 million on these properties (see Note 5).
The Company has evaluated these acquisitions and has determined that they should be accounted for as
acquisitions of assets. As such, we have allocated the total cash consideration, including transaction costs of
approximately $2.1 million, to the individual assets acquired on a relative fair value basis. The following table
summarizes our purchase price allocation for the assets acquired for the years ended December 31, 2019 and 2018,
respectively (in(cid:2)thousands):
2019 Acquisitions
2018 Acquisitions
Assets Acquired:
Land
Depreciable Property
Notes Receivable and Other
Total Assets Acquired
$
$
$
4,296
53,909
127
58,332
$
6,463
53,206
835
60,504
Total Income, Community Net Operating Income (“Community NOI”)* and Net Income (Loss) for
communities acquired in 2019 and 2018, which are included in our Consolidated Statements of Income (Loss) for the
years ended December 31, 2019 and 2018, are as follows (in(cid:2)thousands):
2019 Acquisitions
2019
2018 Acquisitions
2019
2018
Total Income
Community NOI *
Net Income (Loss)
$
$
$
2,308
1,347
(205)
$
$
$
6,276
2,198
(2,053)
$
$
$
1,634
932
(311)
*Community NOI is defined as rental and related income less community operating expenses.
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.
Accumulated Depreciation
The following is a summary of accumulated depreciation by major classes of assets (in(cid:2)thousands):
Site and Land Improvements
Buildings and Improvements
Rental Homes and Accessories
Equipment and Vehicles
Total Accumulated Depreciation
Other
December 31, 2019
December 31, 2018
$ 152,456
7,720
56,808
15,799
$ 232,783
$ 132,121
6,690
44,337
14,060
$ 197,208
Many oil and gas companies compete for the opportunity to acquire sub surface mineral rights, including oil
and gas. Successful bidders pay an upfront purchase price (“bonus payment”). In May 2017, the Company received
a bonus payment of $252,000 for the right to allow a company to extract oil and gas at one of its communities. The
bonus payment is not refundable and the Company has no further obligations related to it. Therefore, this bonus
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payment received by the Company is considered earned by the Company and has been recorded as Other Income in
the accompanying Consolidated Statements of Income (Loss). 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 an 18% royalty fee based on the amount of the oil and gas removed. The
term of the Lease is for five years.
NOTE 4 – MARKETABLE SECURITIES
The Company’s marketable securities primarily 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. The Company generally limits its investment in marketable securities to no more than approximately
15% of its undepreciated assets. The REIT securities portfolio provides the Company with additional liquidity and
additional income and serves as a proxy for real estate when more favorable risk adjusted returns are not available.
The following is a listing of marketable securities at December 31, 2019 (in(cid:2)thousands):
Interest Number
of Shares
Series Rate
Cost
Market
Value
D
E
B
C
I
C
B
D
H
7.375%
6.625%
7.250%
6.500%
7.150%
6.625%
7.375%
6.875%
6.250%
Equity Securities:
Preferred Stock:
CBL & Associates Properties, Inc.
CBL & Associates Properties, Inc.
Cedar Realty Trust, Inc.
Cedar Realty Trust, Inc.
Colony Capital Inc.
Investors Real Estate Trust
Pennsylvania Real Estate Investment Trust
Pennsylvania Real Estate Investment Trust
Urstadt Biddle Properties, Inc.
Total Preferred Stock
Common Stock:
CBL & Associates Properties, Inc.
Franklin Street Properties Corporation
Office Properties Income Trust
Industrial Logistics Properties Trust
Kimco Realty Corporation
Monmouth Real Estate Investment Corporation (1)
Pennsylvania Real Estate Investment Trust
Diversified Healthcare Trust
Tanger Factory Outlet
Urstadt Biddle Properties, Inc.
Vereit, Inc.
Washington Prime Group
Total Common Stock
2
63
9
20
20
20
40
20
13
1,600
220
562
502
910
2,573
222
171
180
100
1,410
800
$ 50
1,487
203
494
500
500
1,000
498
313
5,045
16,692
2,219
36,418
9,951
17,052
23,987
2,316
2,920
4,229
2,049
12,059
6,489
136,381
$ 10
294
219
464
483
525
802
386
333
3,516
1,680
1,883
18,047
11,261
18,846
37,251
1,183
1,443
2,651
2,484
13,029
2,912
112,670
Total Marketable Securities
$141,426
$116,186
(1) Related entity – See Note 8.
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The following is a listing of marketable securities at December 31, 2018 (in(cid:2)thousands):
Interest Number
of Shares
Series Rate
Cost
Market
Value
D
E
B
C
I
C
B
D
G
H
7.375%
6.625%
7.250%
6.500%
7.150%
6.625%
7.375%
6.875%
6.750%
6.250%
Equity Securities:
Preferred Stock:
CBL & Associates Properties, Inc.
CBL & Associates Properties, Inc.
Cedar Realty Trust, Inc.
Cedar Realty Trust, Inc.
Colony Capital Inc.
Investors Real Estate Trust
Pennsylvania Real Estate Investment Trust
Pennsylvania Real Estate Investment Trust
Urstadt Biddle Properties, Inc.
Urstadt Biddle Properties, Inc.
Total Preferred Stock
Common Stock:
CBL & Associates Properties, Inc.
Franklin Street Properties Corporation
Government Properties Income Trust
Industrial Logistics Properties Trust
Kimco Realty Corporation
Monmouth Real Estate Investment Corporation (1)
Pennsylvania Real Estate Investment Trust
Senior Housing Properties Trust
Tanger Factory Outlet
Urstadt Biddle Properties, Inc.
Vereit, Inc.
Washington Prime Group
Total Common Stock
2
63
8
20
20
20
40
20
5
13
1,600
220
2,246
502
910
2,446
210
171
180
100
1,410
800
$ 50
1,487
189
494
500
500
1,000
498
125
313
5,156
16,692
2,219
36,418
9,951
17,052
22,292
2,226
2,920
4,229
2,049
12,059
6,489
134,596
$ 21
600
186
380
369
462
654
311
124
293
3,400
3,072
1,371
15,430
9,879
13,332
30,331
1,247
2,003
3,640
1,922
10,082
3,887
96,196
Total Marketable Securities
$139,752
$99,596
(1) Related entity – See Note 8.
On January 1, 2018, the Company adopted ASU 2016-01, which requires changes in the fair value of our
marketable securities to be recorded in current period earnings. Previously, changes in the fair value of marketable
securities were recognized in "Accumulated Other Comprehensive Income" on our Consolidated Balance Sheets. As
a result, on January 1, 2018 the Company recorded an increase to beginning undistributed income (accumulated
deficit) of $11.5 million to recognize the unrealized gains previously recorded in "Accumulated Other Comprehensive
Income" on our Consolidated Balance Sheets. Subsequent changes in the fair value of the Company’s marketable
securities is recorded in Increase (Decrease) in Fair Value of Marketable Securities on our Consolidated Statements
of Income (Loss).
The Company normally holds REIT securities long term and has the ability and intent to hold securities to
recovery. As of December 31, 2019, 2018 and 2017, the securities portfolio had net unrealized holding gains (losses)
of $(25.2) million, $(40.2) million and $11.5 million, respectively.
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During the years ended December 31, 2019, 2018 and 2017, the Company received proceeds of $125,000,
$269,000 and $17.4 million, on sales or redemptions of marketable securities, respectively. The Company recorded
the following Gain (Loss) on Sale of Securities, net (in(cid:2)thousands):
Gross realized gains
Gross realized losses
Total Gain on Sales of Marketable Securities, net
2019
2018
2017
$-0-
-0-
$-0-
$20
-0-
$1,749
(1)
$20
$1,748
The Company had margin loan balances of $37.5 million and $32.0 million at December 31, 2019 and 2018,
respectively, which were collateralized by the Company’s securities portfolio.
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, 2019 and 2018 was 2.25% and 2.75%, respectively. These margin loans are due on demand. At
December 31, 2019 and 2018, the margin loans amounted to $37.5 million and $32.0 million, 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 $28.5 million with 21st Mortgage Corporation (“21st
Mortgage”), Customers Bank and Northpoint Commercial Finance to finance inventory purchases. Interest rates on
these agreements range from prime with a minimum of 6% to LIBOR plus 7.75% after 2 years. As of December 31,
2019 and 2018, the total amount outstanding on these lines was $19.3 million and $15.9 million, respectively, with a
weighted average interest rate of 5.87% and 7.04%, respectively.
In April 2019, the Company expanded its revolving line of credit with OceanFirst Bank (“OceanFirst Line”)
from $10 million to $15 million. This line is secured by the Company’s eligible notes receivable. Interest rate on this
line of credit was reduced to prime plus 25 basis points. The new maturity date is June 1, 2020. As of December 31,
2019 and 2018, the amount outstanding on this revolving line of credit was $10 million and $4 million, respectively,
and the interest rate was 5.0% and 5.5%, respectively.
The Company has an agreement with 21st Mortgage to finance the Company’s purchase of 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 $322,000 and
$373,000, as of December 31, 2019 and 2018, respectively.
The Company had a $4 million loan from Two River Community Bank, secured by 1 million shares of
Monmouth Real Estate Investment Corporation common stock. This loan was at an interest rate of 4.625%, with
interest only payments through October 2018. The Company repaid this loan on October 25, 2019. The Company
also has $1.9 million in automotive loans with a weighted average interest rate of 4.71%.
Unsecured Line of Credit
On November 29, 2018, UMH Properties, Inc. (“UMH” or the “Company”) entered into a First Amendment
to Amended and Restated Credit Agreement (the “Amendment”) to expand and extend its existing unsecured revolving
credit facility (the “Facility”). The Facility is syndicated with two banks led by BMO Capital Markets Corp. (“BMO”),
as sole lead arranger and sole book runner, with Bank of Montreal as administrative agent, and includes JPMorgan
Chase Bank, N.A. (“J.P. Morgan”) as the sole syndication agent. The Amendment provides for an increase from $50
million in available borrowings to $75 million in available borrowings with a $50 million accordion feature, bringing
the total potential availability up to $125 million, subject to certain conditions including obtaining commitments from
additional lenders. The Amendment also extends the maturity date of the Facility from March 27, 2020 to November
29, 2022, with a one-year extension available at the Company’s option, subject to certain conditions including payment
of an extension fee. Availability under the Facility is limited to 60% of the value of the unencumbered communities
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which the Company has placed in the Facility’s unencumbered asset pool (“Borrowing Base”). The Amendment
increased the value of the Borrowing Base communities by reducing the capitalization rate applied to the Net
Operating Income (“NOI”) generated by the communities in the Borrowing Base from 7.5% to 7.0%.
Interest rates on borrowings are based on the Company’s overall leverage ratio and decreased from LIBOR
plus 1.75% to 2.50% or BMO’s prime lending rate plus 0.75% to 1.50%, at the Company’s option, to LIBOR plus
1.50% to 2.20%, or BMO’s prime lending rate plus 0.50% to 1.20%. Based on the Company’s current leverage ratio,
borrowings under the Facility will bear interest at LIBOR plus 1.60% or at BMO’s prime lending rate plus 0.60%,
which results in an interest rate of 3.4% at December 31, 2019.
As of December 31, 2019 and 2018, the amount outstanding under this Facility was $15 million and $50
million, respectively.
The aggregate principal payments of all loans payable, including the Credit Facility, are scheduled as follows
(in(cid:2)thousands):
Year Ended December 31,
2020
2021
2022
2023
2024
Thereafter
Total Loans Payable
Unamortized Debt Issuance Costs
Total Loans Payable, net of
Unamortized Debt Issuance Costs
Mortgages Payable
$ 67,655
640
15,450
184
115
-0-
84,044
(358)
$ 83,686
Mortgages Payable represents the principal amounts outstanding, net of unamortized debt issuance costs.
Interest is payable on these mortgages at fixed rates ranging from 3.37% to 6.5%. The weighted average interest rate
was 4.2% and 4.3% as of December 31, 2019 and December 31, 2018, respectively, including the effect of
unamortized debt issuance costs. The weighted average interest rate as of December 31, 2019 was 4.1%, compared
to 4.3% as of December 31, 2018, not including the effect of unamortized debt issuance costs. The weighted average
loan maturity of the Mortgage Notes Payable was 6.0 years at December 31, 2019 and 6.3 years at December 31,
2018.
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The following is a summary of mortgages payable at December 31, 2019 and 2018 (in(cid:2)thousands):
Property
Allentown
Brookview Village
Candlewick Court
Catalina
Cedarcrest Village
Clinton Mobile Home Resort
Cranberry Village
D & R Village
Fairview Manor
Forest Park Village
Friendly Village
Hayden Heights
Highland Estates
Holiday Village
Holiday Village- IN
Holly Acres Estates
Kinnebrook Village
Lake Sherman Village
Meadows of Perrysburg
Northtowne Meadows
Olmsted Falls
Oxford Village
Perrysburg Estates
Pikewood Manor
Shady Hills
Somerset Estates and Whispering Pines
Springfield Meadows
Suburban Estates
Sunny Acres
Southwind Village
Trailmont
Twin Oaks
Valley Hills
Waterfalls
Weatherly Estates
Wellington Estates
Woods Edge
Worthington Arms
Various (2 properties)
Various (2 properties)
Various (2 properties)
Various (4 properties)
Various (5 properties)
Various (5 properties)
Various (6 properties)
Various (13 properties)
Total Mortgages Payable
Unamortized Debt Issuance Costs
Total Mortgages Payable, net of
Unamortized Debt Issuance Costs
At December 31, 2019
Due Date
Interest Rate
Balance at December 31,
2018
2019
4.06%
3.92%
4.10%
4.20%
3.71%
4.06%
3.92%
3.85%
3.85%
4.10%
4.618%
3.92%
4.12%
4.10%
3.96%
6.50%
3.92%
4.10%
5.413%
4.45%
3.98%
3.41%
4.98%
5.00%
3.92%
4.89%
4.83%
4.06%
4.06%
5.94%
3.37%
5.75%
4.32%
4.38%
3.92%
6.35%
4.30%
4.10%
4.56%
4.27%
3.41%
4.975%
4.25%
4.75%
4.18%
4.065%
$12,865
2,664
4,294
5,095
11,510
3,376
7,305
7,362
15,399
8,006
7,150
2,007
16,054
7,619
8,176
2,119
3,881
5,294
2,946
12,049
2,007
15,604
1,587
14,420
4,786
-0-
3,033
5,364
5,971
-0-
3,191
6,047
3,285
4,474
7,785
2,316
6,214
8,976
13,583
13,132
22,810
7,765
13,061
6,853
12,829
46,781
377,045
(3,387)
$13,133
2,722
4,383
5,319
11,772
3,447
7,466
7,527
15,711
8,173
-0-
2,052
16,353
7,777
8,349
2,158
3,966
5,405
3,002
-0-
2,051
6,526
1,615
14,723
4,891
32
3,089
5,476
6,095
5,213
3,261
2,333
3,348
4,559
7,956
2,367
6,477
9,163
13,821
13,354
-0-
7,926
13,413
7,007
13,068
47,932
334,411
(3,318)
$373,658
$331,093
10/01/25
04/01/25
09/01/25
08/19/25
04/01/25
10/01/25
04/01/25
03/01/25
11/01/26
09/01/25
05/06/23
04/01/25
06/01/27
09/01/25
11/01/25
10/05/21
04/01/25
09/01/25
10/06/23
09/06/26
04/01/25
07/01/29
09/06/25
11/29/28
04/01/25
02/26/19
10/06/25
10/01/25
10/01/25
01/01/20
10/01/29
12/01/19
06/01/26
06/01/26
04/01/25
01/01/23
01/07/26
09/01/25
02/01/27
08/01/28
07/01/29
07/01/23
01/01/22
12/06/22
08/01/27
03/01/23
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At December 31, 2019 and 2018, mortgages were collateralized by real property with a carrying value of
$695.5 million and $614.3 million, respectively, before accumulated depreciation and amortization. Interest costs
amounting to $1.5 million, $1.0 million and $501,000 were capitalized during 2019, 2018 and 2017, respectively, in
connection with the Company’s expansion program.
Recent(cid:2)Transactions(cid:2)
During(cid:2)the(cid:2)year(cid:2)ended(cid:2)December(cid:2)31,(cid:2)2019(cid:2)
On July 1, 2019, the Company obtained two Federal National Mortgage Association (“Fannie Mae”)
mortgages totaling $38.8 million through Wells Fargo Bank, N.A. (“Wells Fargo”) on Oxford Village, Southwind
Village and Woodlawn Village. The interest rate on these mortgages are fixed at 3.41%. These mortgages mature on
July 1, 2029, with principal repayments based on a 30-year amortization schedule. Proceeds from these mortgages
were used to repay the existing Oxford Village and Southwind Village mortgages of approximately $11.5 million,
which had a weighted average interest rate of 5.94%.
On July 3, 2019, the Company assumed a mortgage loan with a balance of approximately $7.3 million, in
conjunction with its acquisition of Friendly Village. The interest rate on this mortgage is fixed at 4.6175%. This
mortgage matures on May 6, 2023.
On August 27, 2019, the Company assumed a mortgage loan with a balance of approximately $12.1 million,
in conjunction with its acquisition of Northtowne Meadows. The interest rate on this mortgage is fixed at 4.45%. This
mortgage matures on September 6, 2026.
On September 30, 2019, the Company obtained a $6.1 million Fannie Mae mortgage through Wells Fargo
on Twin Oaks I & II. The interest rate on this mortgage is fixed at 3.37%. This mortgage matures on October 1, 2029,
with principal repayments based on a 30-year amortization schedule. Proceeds from this mortgage was used to repay
the existing Twin Oaks I & II mortgage of approximately $2.3 million, which had an interest rate of 5.75%.
During(cid:2)the(cid:2)year(cid:2)ended(cid:2)December(cid:2)31,(cid:2)2018(cid:2)
On July 13, 2018, the Company obtained a $13.4 million Federal Home Loan Mortgage Corporation
(“Freddie Mac”) mortgage through Wells Fargo Bank, N.A. (“Wells Fargo”) on Camelot Village and Redbud Estates.
This mortgage is at a fixed rate of 4.27% and matures on August 1, 2028. Principal repayments are based on a 30-
year amortization schedule.
On November 30, 2018, the Company obtained a $14.8 million mortgage on Pikewood Manor from
OceanFirst Bank. This mortgage is at a fixed rate of 5.0% and matures on November 29, 2028. The interest rate will
be reset after five years to the weekly average yield on U.S. Treasury Securities plus 2.25%. Principal repayments are
based on a 25-year amortization schedule.
On December 18, 2018, the Company assumed a mortgage loan with a balance of approximately $3 million,
in conjunction with its acquisition of Meadows of Perrysburg. The interest rate on this mortgage is fixed at 5.4125%.
This mortgage matures on October 6, 2023.
On December 18, 2018, the Company assumed a mortgage loan with a balance of approximately $1.6 million,
in conjunction with its acquisition of Perrysburg Estates. The interest rate on this mortgage is fixed at 4.98%. This
mortgage matures on September 6, 2025.
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The aggregate principal payments of all mortgages payable are scheduled as follows (in(cid:2)thousands):
Year Ended December 31,
2020
2021
2022
2023
2024
Thereafter
Total
$ 8,524
23,276
15,213
68,645
7,389
253,998
$ 377,045
NOTE 6 – 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 of options to purchase up to 3 million shares of common stock. The 2013 Plan replaced the Company's
2003 Stock Option Plan (the “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.
On June 14, 2018, the shareholders approved and ratified an amendment and restatement (and renaming) of
the Company's Amended and Restated 2013 Incentive Award Plan (formerly 2013 Stock Option and Stock Award
Plan). The amendment and restatement made two substantive changes: (1) provide an additional 2 million common
shares for future grant of option awards, restricted stock awards, or other stock-based awards; and (2) allow for the
issuance of other stock-based awards.
The Compensation Committee has the exclusive authority to administer and construe the 2013 Plan and shall
determine, among other things: persons eligible for awards and who shall receive them; the terms and conditions of
the awards; the time or times and conditions subject to which awards may become vested, deliverable, exercisable, or
as to which any may apply, be accelerated or lapse; and amend or modify the terms and conditions of an award with
the consent of the participant.
Generally, the term of any stock option may not be more than 10 years from the date of grant. The option
price may 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 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, 2019, forty one employees were granted options to purchase a total of
644,000 shares. During the year ended December 31, 2018, forty employees were granted options to purchase a total
of 605,000 shares. During the year ended December 31, 2017, thirty-four employees were granted options to purchase
a total of 576,000 shares. The fair value of these options for the years ended December 31, 2019, 2018 and 2017 was
approximately $1.1 million, $1.2 million and $1.0 million, respectively, based on assumptions noted below and is
being amortized over the 1-year vesting period. The remaining unamortized stock option expense was $210,000 as
of December 31, 2019, which will be expensed in 2020.
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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.
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
2019
2018
2017
5.13%
24.04%
2.50%
10
-0-
4.79%
25.78%
2.74%
10
-0-
5.80%
26.30%
2.37%
10
-0-
During the year ended December 31, 2019, options to sixteen employees to purchase a total of 240,000 shares
were exercised. During the year ended December 31, 2018, options to eight employees to purchase a total of 129,000
shares were exercised. During the year ended December 31, 2017, options to twenty-seven employees to purchase a
total of 548,000 shares were exercised. During the year ended December 31, 2019, options to one employee to
purchase a total of 20,000 shares were forfeited. During the year ended December 31, 2018, options to one employee
to purchase a total of 2,000 shares were forfeited. During the year ended December 31, 2017, options to one employee
to purchase a total of 10,000 shares were forfeited.
A summary of the status of the Company’s stock option plans as of December 31, 2019, 2018 and 2017 and
changes during the years then ended are as follows (in(cid:2)thousands):
2019
2018
2017
Weighted-
Average
Exercise
Price
Shares
Weighted-
Average
Exercise
Price
Shares
2,253
644
(240)
(20)
-0-
$12.09
13.67
10.84
13.50
-0-
1,778
605
(129)
(1)
-0-
$11.60
13.26
10.78
12.41
-0-
Weighted-
Average
Exercise
Price
$9.97
14.96
9.92
9.77
-0-
Shares
1,760
576
(548)
(10)
-0-
2,637
12.05
2,253
12.09
1,778
11.60
1,196
1,648
1,202
$1.72
$2.05
$1.81
Outstanding at
beginning of year
Granted
Exercised
Forfeited
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, 2019 (in(cid:2)thousands):
Date of Grant
Number of
Employees
Number of
Shares
Option Price
Expiration
Date
08/29/12
06/26/13
06/11/14
06/24/15
04/05/16
01/19/17
04/04/17
04/02/18
07/09/18
12/10/18
01/02/19
04/02/19
* Unexercisable
4
8
7
8
16
2
32
35
4
1
2
37
26
159
142
240
329
60
505
478
40
25
60 *
573 *
2,637
11.29
10.08
9.85
9.82
9.77
14.25
15.04
13.09
15.75
12.94
11.42
13.90
08/29/20
06/26/21
06/11/22
06/24/23
04/05/24
01/19/27
04/04/27
04/02/28
07/09/28
12/10/28
01/02/29
04/02/29
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, 2019, 2018 and 2017 was $8.3 million, $2.0 million and
$5.9 million, respectively, of which $6.9 million, $2.0 million and $5.9 million relate to options exercisable. The
intrinsic value of options exercised in 2019, 2018 and 2017 was $914,000, $510,000 and $3.0 million, respectively,
determined as of the date of option exercise. The weighted average remaining contractual term of the above options
was 9.1, 7.9 and 6.8 years as of December 31, 2019, 2018 and 2017, respectively. For the years ended December 31,
2019, 2018 and 2017, amounts charged to stock compensation expense relating to stock option grants, which is
included in General and Administrative Expenses, totaled $1.2 million, $1.1 million and $929,000, respectively.
Restricted Stock
On April 2, 2019, the Company awarded a total of 118,000 shares of restricted stock to two participants,
pursuant to their employment agreements. On April 2, 2018, the Company awarded a total of 45,000 shares of
restricted stock to two participants, pursuant to their employment agreements. During 2018, the Company also
awarded 2,000 shares of restricted stock to our ten directors as additional directors’ fees. On April 4, 2017, the
Company awarded 45,000 shares of restricted stock to two participants. On September 27, 2017, the Company
awarded 11,000 shares of restricted stock to our ten directors as additional directors’ fees. The grant date fair value
of restricted stock grants awarded to participants was $1.6 million, $616,000 and $846,000 for the years ended
December 31, 2019, 2018 and 2017, respectively. These grants primarily vest in equal installments over five years.
As of December 31, 2019, there remained a total of $2.3 million 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 3.6 years. For the years ended December 31,
2019, 2018 and 2017, amounts charged to stock compensation expense related to restricted stock grants, which is
included in General and Administrative Expenses, totaled $723,000, $498,000 and $386,000, respectively.
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A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2019,
2018 and 2017, and changes during the year ended December 31, 2019, 2018 and 2017 are presented below (in(cid:2)
thousands):
2019
2018
2017
Weighted-
Average
Grant Date
Fair Value
Weighted-
Average
Grant Date
Fair Value
Shares
Shares
Weighted-
Average
Grant Date
Fair Value
Shares
161
118
11
-0-
(52)
238
$12.44
11.12
13.51
-0-
5.69
$13.33
147
47
8
-0-
(41)
161
$11.98
13.11
13.37
-0-
11.76
$12.44
133
56
7
-0-
(49)
147
$10.04
15.10
14.83
-0-
10.67
$11.98
Non-vested at
beginning of year
Granted
Dividend Reinvested Shares
Forfeited
Vested
Non-vested at end of year
Other Stock-Based Awards
Effective June 20, 2018, a portion of our quarterly directors’ fee was paid with our unrestricted common
stock. During 2019, 4,000 unrestricted shares of common stock were granted with a weighted average fair value on
the grant date of $13.52 per share. During 2018, 2,000 unrestricted shares of common stock were granted with a
weighted average fair value on the grant date of $15.13 per share.
As of December 31, 2019, there were 1.2 million shares available for grant as stock options, restricted stock
or other stock-based awards 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 2019,
2018 and 2017, 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 $376,000, $344,000 and $330,000 in 2019, 2018 and 2017, respectively.
NOTE 8 – RELATED PARTY TRANSACTIONS AND OTHER MATTERS
Transactions with Monmouth Real Estate Investment Corporation
There are five 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, 2019, the Company owns a total of 2.6 million shares of MREIC common stock, representing 2.6% of
the total shares outstanding at December 31, 2019 (See Note 4). The Company shares 1 officer (Chairman of the
Board) with MREIC.
Employment Agreements and Compensation
The Company has three year employment agreements with Mr. Eugene W. Landy, Mr. Samuel A. Landy and
Ms. Anna T. Chew. The agreements provide for base compensation aggregating approximating $1.4 million. In
addition, the agreements call for incentive bonuses, and an extension of services and severance payments upon certain
future events, such as a change in control.
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Other Matters
Mr. Eugene W. Landy, the Founder and Chairman of the Board of the Company, owns a 24% interest in the
entity that is the landlord of the property where the Company’s corporate office space is located. On October 1, 2019,
the Company entered into a new lease for its executive offices in Freehold, New Jersey which combines the existing
corporate office space with additional adjacent office space. This new lease extends our existing lease through April
30, 2027 and requires monthly lease payments of $23,098 through April 30, 2022 and $23,302 from May 1, 2022
through April 30, 2027. The Company is also responsible for its proportionate share of real estate taxes and common
area maintenance. In conjunction with this new lease, the Company terminated the additional office space leases dated
July 1, 2017 and February 14, 2018. Management believes that the aforesaid rents are no more than what the Company
would pay for comparable space elsewhere.
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. On August 14, 2019, the Company announced that it has discontinued granting
waivers to the $1,000 monthly maximum for the purchase of shares for cash under its DRIP, which will result in less capital
being raised through the DRIP going forward. After December 31, 2019, the Company increased the monthly maximum for
the purchase of shares for cash under its DRIP from $1,000 to $5,000.
Amounts received in connection with the DRIP for the years ended December 31, 2019, 2018 and 2017 were
as follows (in(cid:2)thousands):
2019
2018
2017
Amounts Received
Less: Dividends Reinvested
Amounts Received, net
$31,501
(7,705)
$23,796
$35,114
(5,076)
$30,038
$60,365
(2,859)
$57,506
Number of Shares Issued
2,468
2,655
4,095
On June 5, 2017, the Company issued and sold 1.4 million shares of its Common Stock in a registered direct
placement at a sale price of $16.60 per share. The Company received net proceeds from the offering after expenses of
approximately $22.5 million and used the net proceeds for general corporate purposes, which included purchase of
manufactured homes for sale or lease to customers, expansion of its existing communities, acquisitions of additional
properties and repayment of indebtedness on a short-term basis.
Issuer Purchases of Equity Securities
On January 15, 2019, the Board of Directors reaffirmed its Share Repurchase Program (the “Repurchase
Program”) that authorizes the Company to purchase up to $25 million in the aggregate of the Company's common stock.
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 Repurchase Program may be suspended,
modified or discontinued at any time at the Company's discretion without prior notice. During 2019, the Company
repurchased 20,000 shares at an aggregate cost of $237,000, or a weighted average price of $11.87 per share.
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Preferred Stock
8.25%(cid:2)Series(cid:2)A(cid:2)Cumulative(cid:2)Redeemable(cid:2)Preferred(cid:2)Stock(cid:2)
On August 31, 2017, the Company redeemed all 3.7 million issued and outstanding shares of its 8.25% Series
A Cumulative Redeemable Preferred Stock, Liquidation Preference $25.00 per share (“Series A Preferred Stock”) at
a redemption price of $25.00 per share, totaling $91.6 million. Unpaid dividends on the Series A Preferred Stock
accruing for the period from June 1, 2017 through the redemption date, totaling $1.9 million (or $0.515625 per share)
were paid on September 15, 2017 to holders of record as of the August 15, 2017 record date previously established by
the Company’s Board of Directors and accordingly such dividends were not included in the redemption price. The
Company recognized a deemed dividend of $3.5 million on the Consolidated Statement of Income for the year ended
December 31, 2017, which represents the difference between the redemption value and the carrying value net of
original deferred issuance costs.
8.0%(cid:2)Series(cid:2)B(cid:2)Cumulative(cid:2)Redeemable(cid:2)Preferred(cid:2)Stock
On October 20, 2015, the Company issued and sold 1.8 million shares of its 8.0% Series B Cumulative
Redeemable Preferred Stock (“Series B Preferred Stock”) in a registered direct placement at a sale price of $25.00 per
share. The Company received net proceeds from the offering of approximately $43 million, after deducting offering
related expenses. Dividends on the Series B Preferred Stock are cumulative from October 20, 2015 at an annual rate
of $2.00 per share and will be payable quarterly in arrears at March 15, June 15, September 15, and December 15.
The first quarterly dividend payment date for the Series B Preferred Stock was payable March 15, 2016 and was for
the dividend period from October 20, 2015 to February 29, 2016. A portion of the dividend to be paid on March 15,
2016, covering the period October 20, 2015 to December 31, 2016, amounting to $711,000 is included in the
computation of net loss attributable to common shareholders in the accompanying consolidated financial statements
for the year ended December 31, 2016.
The Series B Preferred Stock, par value $0.10, 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 October 20, 2020. On and after
October 20, 2020, the Series B 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 B Preferred Stock will have the right to convert all or part of the shares of the
Series B Preferred Stock held, unless the Company elects to redeem the Series B Preferred Stock.
Holders of the Series B 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.
In conjunction with the issuance of the Company’s Series B Preferred Stock, the Company filed with the
Maryland State Department of Assessments and Taxation (the “Maryland SDAT”), an amendment to the Company’s
charter to increase the authorized number of shares of the Company’s common stock by 22 million shares. As a result
of this amendment, the Company’s total authorized shares were increased from 48.7 million shares (classified as 42
million shares of common stock, 3.7 million shares of 8.25% Series A Cumulative Redeemable Preferred Stock and
3 million shares of excess stock) to 70.7 million shares (classified as 64 million shares of common stock, 3.7 million
shares of 8.25% Series A Cumulative Redeemable Preferred Stock and 3 million shares of excess stock). Immediately
following this amendment, the Company filed with the Maryland SDAT Articles Supplementary setting forth the
rights, preferences and terms of the Series B Preferred Stock and reclassifying 2 million shares of Common Stock as
shares of Series B Preferred Stock. After the reclassification, the Company’s authorized stock consisted of 62 million
shares of common stock, 3.7 million shares of 8.25% Series A Cumulative Redeemable Preferred Stock, 2 million
shares of 8% Series B Cumulative Redeemable Preferred Stock and 3 million shares of excess stock.
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On April 5, 2016, the Company issued an additional 2 million shares of its Series B Preferred Stock in a
registered direct placement at a sale price of $25.50 per share, including accrued dividends. The Company received
net proceeds from the offering after expenses of approximately $49.1 million and used the net proceeds for general
corporate purposes, which included purchase of manufactured homes for sale or lease to customers, expansion of its
existing communities, acquisitions of additional properties and repayment of indebtedness on a short-term basis.
In conjunction with the issuance of the Company’s Series B Preferred Stock, on April 4, 2016, the Company
filed with the Maryland SDAT an amendment to the Company’s charter to increase the authorized number of shares
of the Company’s common stock by 11 million shares. As a result of this amendment, the Company’s total authorized
shares were increased from 70.7 million shares (classified as 62 million shares of common stock, 3.7 million shares
of Series A Preferred stock, 2 million shares of Series B Preferred stock and 3 million shares of excess stock) to 81.7
million shares (classified as 73 million shares of common stock, 3.7 million shares of Series A Preferred stock, 2
million shares of Series B Preferred stock and 3 million shares of excess stock). Immediately following this
amendment, the Company filed with the Maryland SDAT Articles Supplementary reclassifying 2 million shares of
Common Stock as shares of Series B Preferred stock. After the reclassification, the Company’s authorized stock
consisted of 71 million shares of common stock, 3.7 million shares of Series A Preferred stock, 4 million shares of
Series B Preferred stock and 3 million shares of excess stock.
On August 11, 2016, the Company filed with the Maryland SDAT a further amendment to the Company’s
charter to increase the authorized number of shares of the Company’s common stock by 4 million shares. As a result
of this amendment, the Company’s total authorized shares were increased from 81.7 million shares (classified as 71
million shares of common stock, 3.7 million shares of Series A Preferred stock, 4 million shares of Series B Preferred
stock and 3 million shares of excess stock) to 85.7 million shares (classified as 75 million shares of common stock,
3.7 million shares of Series A Preferred stock, 4 million shares of Series B Preferred stock and 3 million shares of
excess stock). Additionally, on June 2, 2017, the Company filed with the Maryland SDAT a further amendment to
the Company’s charter to increase the authorized number of shares of the Company’s common stock by 10 million
shares.
6.75%(cid:2)Series(cid:2)C(cid:2)Cumulative(cid:2)Redeemable(cid:2)Preferred(cid:2)Stock
On July 26, 2017, the Company issued 5 million shares of its new 6.75% Series C Cumulative Redeemable
Preferred Stock, Liquidation Preference $25.00 per share (“Series C Preferred Stock”) at an offering price of $25.00
per share in an underwritten registered public offering. The Company received net proceeds from the sale of these 5
million shares, after deducting the underwriting discount and other estimated offering expenses, of approximately
$120.8 million. On August 2, 2017, the Company issued an additional 750,000 shares of Series C Preferred Stock
pursuant to the underwriters’ exercise of their overallotment option and received additional net proceeds of
approximately $18.2 million.
The Company used a portion of the net proceeds from the sale of Series C Preferred Stock to redeem all of
the 3.7 million outstanding shares of our Series A Preferred Stock. The balance of the offering proceeds will be used
for general corporate purposes, which may include purchase of manufactured homes for sale or lease to customers,
expansion of our existing communities, potential acquisitions of additional properties and possible repayment of
indebtedness on a short-term basis.
Dividends on the Series C Preferred Stock shares are cumulative from July 26, 2017 at an annual rate of
$1.6875 per share and will be payable quarterly in arrears on March 15, June 15, September 15, and December 15.
The first quarterly dividend on the Series C Preferred Stock was payable September 15, 2017 and amounted to
$970,000 or $0.16875 per share for the dividend period from July 26, 2017 to August 31, 2017.
The Series C Preferred Stock, par value $0.10 per share, 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 C Preferred Stock is not redeemable prior to July 26, 2022.
On and after July 26, 2022, the Series C 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. The Series C Preferred Stock ranks on a parity with the Company’s Series
B Preferred Stock with respect to dividend rights and rights upon liquidation, dissolution or winding up.
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Upon the occurrence of a Delisting Event or Change of Control, each as defined in the Prospectus pursuant
to which the shares of Series C Preferred Stock were offered, each holder of the Series C Preferred Stock will have
the right to convert all or part of the shares of the Series C Preferred Stock held into common stock of the Company,
unless the Company elects to redeem the Series C Preferred Stock.
Holders of the Series C Preferred Stock generally have no voting rights, except if the Company fails to pay
dividends for nine or more quarterly periods, whether or not consecutive, or with respect to certain specified events.
In conjunction with the issuance of the Company’s Series C Preferred Stock, the Company filed with the
Maryland SDAT, an amendment to the Company’s charter to increase the authorized number of shares of the
Company’s common stock by 30.8 million shares. As a result of this amendment, the Company’s total authorized
shares were increased from 95.7 million shares (classified as 85 million shares of Common Stock, 3.7 million shares
of Series A Preferred, 4 million shares of Series B Preferred and 3 million shares of excess stock) to 126.4 million
shares (classified as 115.8 million shares of Common Stock, 3.7 million shares of Series A Preferred Stock, 4 million
shares of Series B Preferred Stock and 3 million shares of excess stock). Immediately following this amendment, the
Company filed with the Maryland SDAT Articles Supplementary setting forth the rights, preferences and terms of the
Series C Preferred Stock and reclassifying 5.8 million shares of Common Stock as shares of Series C Preferred
Stock. After the reclassification, the Company’s authorized stock consisted of 110 million shares of Common Stock,
3.7 million shares of Series A Preferred, 4 million shares of Series B Preferred, 5.8 million shares of Series C Preferred
Stock and 3 million shares of excess stock. Additionally, upon the redemption on August 31, 2017 of all 3.7 million
outstanding shares of the Series A Preferred, the authorized shares of Series A Preferred automatically reverted to
authorized Common Stock, which increased our authorized Common Stock to 113.7 million shares.
On April 29, 2019, the Company issued and sold a total of 4 million shares, including as a result of the
underwriters’ exercise in full of their overallotment option of 400,000 shares, of our Series C Preferred Stock at an
offering price of $25.00 per share in an underwritten registered public offering. The additional shares of Series C
Preferred Stock form a single series with, have the same terms as, and vote as a single class with, the 5.8 million
previously outstanding shares of Series C Preferred Stock issued in July 2017 and rank on a parity with the Company's
outstanding Series B Preferred Stock and its outstanding 6.375% Series D Cumulative Redeemable Preferred Stock.
As of December 31, 2019, after giving effect to the offering, the Company had a total of 9.8 million shares of Series
C Preferred Stock outstanding.
The Company received net proceeds from the sale of the 4 million shares of Series C Preferred Stock of
approximately $96.7 million, after deducting the underwriting discount and other estimated offering expenses, and
used the proceeds for general corporate purposes, which included purchase of manufactured homes for sale or lease
to customers, expansion of its existing communities, acquisitions of additional properties and repayment of
indebtedness on a short-term basis.
In conjunction with the issuance of the Company’s Series C Preferred Stock, on April 26, 2019 the Company
filed with the Maryland SDAT, an amendment to the Company’s charter to increase the authorized number of shares
of the Company’s common stock by 16 million shares. As a result of this amendment, the Company’s total authorized
shares were increased from 126.4 million shares (classified as 111.4 million shares of Common Stock, 4 million shares
of Series B Preferred Stock, 5.8 million shares of Series C Preferred Stock, 2.3 million shares of Series D Preferred
Stock and 3 million shares of excess stock) to 142.4 million shares (classified as 127.4 million shares of Common
Stock, 4 million shares of Series B Preferred Stock, 5.8 million shares of Series C Preferred Stock, 2.3 million shares
of Series D Preferred Stock and 3 million shares of excess stock).
Immediately following this amendment, the Company filed with the Maryland SDAT Articles
Supplementary reclassifying 4 million shares of Common Stock as shares of Series C Preferred Stock. After this
amendment, the Company’s authorized stock consisted of 123.4 million shares of Common Stock, 4 million shares of
Series B Preferred Stock, 9.8 million shares of Series C Preferred Stock, 2.3 million shares of Series D Preferred Stock
and 3 million shares of excess stock.
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6.375%(cid:2)Series(cid:2)D(cid:2)Cumulative(cid:2)Redeemable(cid:2)Preferred(cid:2)Stock(cid:2)
On January 22, 2018, the Company issued 2 million shares of its new 6.375% Series D Cumulative
Redeemable Preferred Stock, Liquidation Preference $25.00 Per Share (“Series D Preferred Stock”) at an offering
price of $25.00 per share in an underwritten registered public offering. The Company received net proceeds from the
sale of these 2 million shares, after deducting the underwriting discount and other estimated offering expenses, of
approximately $48.2 million and has used the net proceeds of the offering for general corporate purposes, which
includes the purchase of manufactured homes for sale or lease to customers, expansion of its existing communities,
potential acquisitions of additional properties and possible repayment of indebtedness on a short-term basis.
Dividends on the Series D Preferred Stock shares are cumulative from January 22, 2018 and are payable
quarterly in arrears on March 15, June 15, September 15, and December 15 at an annual rate of $1.59375 per share.
On September 17, 2018, the Company paid $797,000 in dividends or $0.3984375 per share for the period from June
1, 2018 through August 31, 2018 to holders of record as of the close of business on August 15, 2018 of our Series D
Preferred Stock.
The Series D Preferred Stock, par value $0.10 per share, 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 D Preferred Stock is not redeemable prior to January 22,
2023. On and after January 22, 2023, the Series D 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. The Series D Preferred Stock shares rank on a parity with the
Company’s Series B Preferred Stock shares and the Company’s Series C Preferred Stock shares with respect to
dividend rights and rights upon liquidation, dissolution or winding up.
Upon the occurrence of a Delisting Event or Change of Control, each as defined in the Prospectus pursuant
to which the shares of Series D Preferred Stock were offered, each holder of the Series D Preferred Stock will have
the right to convert all or part of the shares of the Series D Preferred Stock held into common stock of the Company,
unless the Company elects to redeem the Series D Preferred Stock.
Holders of the Series D Preferred Stock generally have no voting rights, except if the Company fails to pay
dividends for nine or more quarterly periods, whether or not consecutive, or with respect to certain specified events.
In conjunction with the issuance of the Company’s Series D Preferred Stock, in January 2018 the Company
filed with the Maryland SDAT Articles Supplementary setting forth the rights, preferences and terms of the Series D
Preferred Stock shares and reclassifying 2.3 million shares of Common Stock as shares of Series D Preferred Stock.
After the reclassification, the Company’s authorized stock consisted of 111.4 million shares of common stock, 4
million shares of Series B Preferred Stock, 5.8 million shares of Series C Preferred Stock, 2.3 million shares of Series
D Preferred Stock and 3 million shares of excess stock.
(cid:2)
Preferred(cid:2)Stock(cid:2)AtTheMarket(cid:2)Sales(cid:2)Program(cid:2)
(cid:2)
On October 21, 2019, the Company entered into a Preferred Stock At-The-Market Sales Program (“ATM
Program”) with B. Riley FBR, Inc. (“B. Riley”), as distribution agent, under which the Company may offer and sell
shares of the Company’s Series C Preferred Stock and/or Series D Preferred Stock, having an aggregate sales price of
up to $100 million. Sales of shares under the ATM Program are “at the market offerings” as defined in Rule 415
under the Securities Act, including, without limitation, sales made directly on or through the NYSE, or on any other
existing trading market for the Series C Preferred Stock or Series D Preferred Stock, as applicable, or to or through a
market maker or any other method permitted by law, including, without limitation, negotiated transactions and block
trades. The Company began selling shares under the ATM Program on October 22, 2019 and through December 31,
2019, 651,000 shares of Series D Preferred Stock were sold at a weighted average price of $25.19 per share, generating
gross proceeds of $16.4 million and net proceeds of $15.9 million, after offering expenses. See Note 15 for
information about sales of Series D Preferred in 2020 under the ATM Program.
In conjunction with the ATM Program, on October 21, 2019, the Company filed with the Maryland SDAT,
an amendment to the Company’s charter to increase the authorized number of shares of the Company’s common stock
by 8 million shares. As a result of this amendment, the Company’s total authorized shares were increased from 142.4
million shares (classified as 123.4 million shares of common stock, 4 million shares of Series B Preferred Stock, 9.8
-91-
million shares of Series C Preferred Stock, 2.3 million shares of Series D Preferred Stock and 3 million shares of
excess stock) to 150.5 million shares (classified as 131.4 million shares of common stock, 4 million shares of Series
B Preferred Stock, 9.8 million shares of Series C Preferred Stock, 2.3 million shares of Series D Preferred Stock and
3 million shares of excess stock).
Immediately following this amendment, the Company filed with the Maryland SDAT Articles
Supplementary reclassifying and designating (i) 4 million shares of the Company’s common stock as shares of Series
C Preferred Stock and (ii) 3.7 million shares of the Company’s common stock as shares of Series D Preferred Stock.
After giving effect to the filing of the Articles of Amendment and the Articles Supplementary, the authorized capital
stock of the Company consists of 150.4 million shares, classified as 123.7 million shares of common stock, 4 million
shares of Series B Preferred Stock, 13.8 million shares of Series C Preferred Stock, 6 million shares of Series D
Preferred Stock and 3 million shares of excess stock.
NOTE 10 – DISTRIBUTIONS
Common Stock
The following cash distributions, including dividends reinvested, were paid to common shareholders during
the three years ended December 31, 2019, 2018 and 2017:
Quarter Ended
Amount
Per Share
Amount
Per Share
Amount
Per Share
2019
2018
2017
March 31
June 30
September 30
December 31
$6,980,052
7,159,331
7,321,730
7,364,054
$0.18
0.18
0.18
0.18
$6,492,774
6,600,506
6,693,069
6,824,288
$0.18
0.18
0.18
0.18
$5,416,827
5,700,036
6,188,961
6,333,573
$28,825,167
$0.72
$26,610,637
$0.72
$23,639,397
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 15, 2020, the Company declared a cash dividend of $0.18 per share to be paid on March 16, 2020
to shareholders of record as of the close of business on February 18, 2020.
Preferred Stock
The following dividends were paid to holders of our Series A Preferred Stock during the year ended
December 31, 2017:
Declaration
Date
Record Date
Payment
Date
Dividend
Dividend per
Share
1/19/2017
4/3/2017
7/3/2017
2/15/2017
5/15/2017
8/15/2017
3/15/2017
6/15/2017
9/15/2017
$1,889,147
1,889,147
1,889,147
$0.515625
0.515625
0.515625
$5,667,441
$1.546875
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Declaration
Date
1/15/2019
4/1/2019
7/1/2019
10/1/2019
1/15/2018
4/1/2018
7/1/2018
10/1/2018
1/19/2017
4/3/2017
7/3/2017
10/2/2017
Declaration
Date
1/15/2019
4/1/2019
7/1/2019
10/1/2019
1/15/2018
4/1/2018
7/1/2018
10/1/2018
The following dividends were paid to holders of our Series B Preferred Stock during the years ended
December 31, 2019, 2018 and 2017:
Record Date
Payment Date
Dividend
2/15/2019
5/15/2019
8/15/2019
11/15/2019
2/15/2018
5/15/2018
8/15/2018
11/15/2018
2/15/2017
5/15/2017
8/15/2017
11/15/2017
Dividend
per Share
$0.50
0.50
0.50
0.50
3/15/2019
6/17/2019
9/16/2019
12/16/2019
$1,900,600
1,900,600
1,900,600
1,900,600
$7,602,400
$2.00
3/15/2018
6/15/2018
9/17/2018
12/17/2018
$1,900,600
1,900,600
1,900,600
1,900,600
$0.50
0.50
0.50
0.50
$7,602,400
$2.00
3/15/2017
6/15/2017
9/15/2017
12/15/2017
$1,900,600
1,900,600
1,900,600
1,900,600
$0.50
0.50
0.50
0.50
$7,602,400
$2.00
On January 15, 2020, the Board of Directors declared a quarterly dividend of $0.50 per share for the period
from December 1, 2019 through February 29, 2020, on the Company's Series B Preferred Stock payable March 16,
2020 to shareholders of record as of the close of business on February 18, 2020.
The following dividends were paid to holders of our Series C Preferred Stock during the years ended
December 31, 2019, 2018 and 2017:
Record Date
Payment Date
Dividend
Dividend
per Share
$0.421875
0.421875
0.421875
0.421875
3/15/2019
6/17/2019
9/16/2019
12/16/2019
$2,425,781
4,113,281
4,113,281
4,113,281
$14,765,624
$1.68750
3/15/2018
6/15/2018
9/17/2018
12/17/2018
$2,425,781
2,425,781
2,425,781
2,425,781
$0.421875
0.421875
0.421875
0.421875
$9,703,124
$1.68750
2/15/2019
5/15/2019
8/15/2019
11/15/2019
2/15/2018
5/15/2018
8/15/2018
11/15/2018
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Declaration
Date
Record Date
Payment Date
Dividend
Dividend
per Share
7/3/2017
10/2/2017
8/15/2017
11/15/2017
9/15/2017
12/15/2017
$970,313
2,425,781
$0.168750
0.421875
$3,396,094
$0.590625
On January 15, 2020, the Board of Directors declared a quarterly dividend of $0.421875 per share for the
period from December 1, 2019 through February 29, 2020, on the Company's Series C Preferred Stock payable March
16, 2020 to shareholders of record as of the close of business on February 18, 2020.
The following dividends were paid to holders of our Series D Preferred Stock during the years ended
December 31, 2019 and 2018:
Declaration
Date
Record Date
Payment Date
Dividend
1/15/2019
4/1/2019
7/1/2019
10/1/2019
1/15/2018
4/1/2018
7/1/2018
10/1/2018
2/15/2019
5/15/2019
8/15/2019
11/15/2019
2/15/2018
5/15/2018
8/15/2018
11/15/2018
3/15/2019
6/17/2019
9/16/2019
12/16/2019
3/15/2018
6/15/2018
9/17/2018
12/17/2018
Dividend
per Share
$0.3984375
0.3984375
0.3984375
0.3984375
$796,876
796,876
796,876
950,760
$3,341,388
$1.59375
$354,166
796,876
796,876
796,876
$0.1770830
0.3984375
0.3984375
0.3984375
$2,744,794
$1.372396
On January 15, 2020, the Board of Directors declared a quarterly dividend of $0.3984375 per share for the
period from December 1, 2019 through February 29, 2020, on the Company's Series D Preferred Stock payable March
16, 2020 to shareholders of record as of the close of business on February 18, 2020.
NOTE 11 – FEDERAL INCOME TAXES
Characterization of Distributions
The following table characterizes the distributions paid for the years ended December 31, 2019, 2018 and
2017:
2019
2018
2017
Amount
Percent
Amount
Percent
Amount
Percent
Common Stock
Ordinary income
Capital gains
Return of capital
$
-0-
-0-
0.72
-0-% $
-0-%
100.00%
-0-
-0-
0.72
-0-% $
-0-%
100.00%
-0-
-0-
0.72
-0-%
-0-%
100.00%
$
0.72
100.00% $
0.72
100.00% $
0.72
100.00%
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2019
2018
2017
Amount
Percent
Amount
Percent
Amount
Percent
Preferred Stock - Series A
Ordinary income
Capital gains
Return of capital
$
$
-0-
-0-
-0-
-0-
-0-% $
-0-%
-0-%
-0-% $
-0-
-0-
-0-
-0-
-0-% $
-0-%
-0-%
0.494148
0.138204
0.914523
31.95%
8.93%
59.12%
-0-% $
1.546875
100.00%
Preferred Stock - Series B
Ordinary income
Capital gains
Return of capital
$
1.18476
0.05394
0.76130
59.24% $
2.70%
38.06%
1.288868
-0-
0.711132
64.44% $
-0-%
35.56%
0.638896
0.178688
1.182416
31.95%
8.93%
59.12%
$
2.00000
100.00% $
2.00000
100.00% $
2.00000
100.00%
Preferred Stock - Series C
Ordinary income
Capital gains
Return of capital
0.999640
0.045508
0.642352
$
59.24% $
2.70%
38.06%
1.087484
-0-
0.600016
64.44% $
-0-%
35.56%
0.188674
0.052769
0.349182
31.95%
8.93%
59.12%
$
1.687500
100.00% $
1.687500
100.00% $
0.590625
100.00%
Preferred Stock - Series D
Ordinary income
Capital gains
Return of capital
$
0.94410
0.04298
0.60667
59.24% $
2.70%
38.06%
0.884419
-0-
0.487978
64.44% $
-0-%
35.56%
$
1.593750
100.00% $
1.372397
100.00% $
-0-
-0-
-0-
-0-
-0-%
-0-%
-0-%
-0-%
In addition to the above, taxable income from non-REIT activities conducted by S&F, a Taxable REIT
Subsidiary (“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, 2019, 2018 and 2017, S&F had operating losses for financial reporting
purposes of $1.3 million, $1.2 million and $2.1 million, respectively. Therefore, a valuation allowance has been
established against any deferred tax assets relating to S&F. For the years ended December 31, 2019, 2018 and 2017,
S&F recorded $8,000, $8,000 and $0, 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.
The Company has 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
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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, 2019, the total loan balance under this agreement was approximately $2.4 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, 2019, the total loan balance owed to 21st Mortgage with respect
to homes in these acquired communities was approximately $2.5 million. Although this agreement is still active, this
program is not being utilized by the Company’s new customers as a source of financing.
S&F entered into a Chattel Loan Origination, Sale and Servicing Agreement (“COP Program”) with Triad
Financial Services, effective January 1, 2016. Neither the Company, nor S&F, receive referral fees or other cash
compensation under the agreement. Customer loan applications are initially submitted to Triad for consideration by
Triad’s portfolio of outside lenders. If a loan application does not meet the criteria for outside financing, the
application is then considered for financing under the COP Program. If the loan is approved under the COP Program,
then it is originated by Triad, assigned to S&F and then assigned by S&F to the Company. Included in Notes and
Other Receivables is approximately $25.4 million of loans that the Company acquired under the COP Program as of
December 31, 2019.
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 marketable securities. The fair value of these certain financial assets and liabilities was determined
using the following inputs at December 31, 2019 and 2018 (in(cid:2)thousands):
Fair Value Measurements at Reporting Date Using
December 31, 2019:
Equity Securities - Preferred Stock
Equity Securities - Common Stock
Total
December 31, 2018:
Equity Securities - Preferred Stock
Equity Securities - Common Stock
Total
Total
$3,516
112,670
$116,186
$3,400
96,196
$99,596
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
$3,516
112,670
$116,186
$3,400
96,196
$99,596
$-0-
-0-
$-0-
$-0-
-0-
$-0-
$-0-
-0-
$-0-
$-0-
-0-
$-0-
In addition to the Company’s investment in Marketable Securities 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 marketable securities 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
-96-
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 marketable securities 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, 2019,
the fair and carrying value of fixed rate mortgages payable amounted to $381.2 million and $377.0 million,
respectively. As of December 31, 2018, the fair and carrying value of fixed rate mortgages payable amounted to
$332.1 million and $334.4 million, respectively. Prior to 2017, if the Company acquired a property that was considered
an acquisition of a business, the Company was required to fair value all of the acquired assets and liabilities, including
intangible assets and liabilities (See Note 1). Those fair value measurements fell within level 3 of the fair value
hierarchy.
NOTE 14 – SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest during the years ended December 31, 2019, 2018 and 2017 was $18.4 million, $16.4
million and $15.7 million, respectively.
During the years ended December 31, 2019 and 2018, the Company assumed mortgages totaling $19.4
million and $4.6 million, respectively for the acquisition of communities.
During the years ended December 31, 2019, 2018 and 2017, land development costs of $17.5 million, $10.1
million and $7.8 million, respectively were transferred to investment property and equipment and placed in service.
During the years ended December 31, 2019, 2018 and 2017, the Company had dividend reinvestments of
$7.7 million, $5.1 million and $2.9 million, respectively which required no cash transfers.
NOTE 15 – SUBSEQUENT EVENTS
Management has evaluated subsequent events for disclosure and/or recognition in the financial statements
through the date that the financial statements were issued.
In February 2020, the Company paid down $15 million on its revolving credit agreement to finance inventory,
$5 million on its revolving line of credit and approximately $34.5 million on its margin line.
From January 1 through February 28, 2020, the Company sold an additional 2.6 million shares of its Series
D Preferred Stock under the Company’s ATM Program at a weighted average price of $25.06 per share, generating
gross proceeds of $64.1 million and net proceeds of $63.1, after offering expenses.
NOTE 16 – PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The following unaudited pro forma condensed financial information reflects the 2019 and 2018 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 2019 and 2018 assuming that the
acquisitions had occurred as of January 1, 2018, 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 (in(cid:2)thousands).
-97-
Rental and Related Income
Community Operating Expenses
Net Income (Loss) Attributable to Common Shareholders
Net Income (Loss) Attributable to Common Shareholders per
Share:
Basic
Diluted
For the years ended December 31,
2019
2018
$131,819
63,018
2,019
$123,986
58,155
(59,150)
0.05
0.05
(1.59)
(1.59)
NOTE 17 – SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
THREE MONTHS ENDED (in(cid:2)thousands(cid:2)except(cid:2)per(cid:2)share(cid:2)amounts)(cid:2)
2019
March 31
June 30
September 30
December 31
Total Income
Total Expenses
Other Income (Expense)
Net Income (Loss) from
continuing operations
Net Income (Loss) Attributable
to Common Shareholders
Net Income (Loss) Attributable to Common
Shareholders per Share –
Basic
Diluted
$34,287
29,750
6,521
11,037
5,914
0.16
0.15
$37,230
32,588
(3,906)
749
(5,537)
(0.15)
(0.15)
$37,329
32,387
7,519
12,432
5,622
0.14
0.14
$37,745
31,857
(2,282)
3,531
(3,433)
(0.08)
(0.08)
2018
March 31
June 30
September 30
December 31
Total Income
Total Expenses
Other Income (Expense)
Net Income (Loss) from
continuing operations
Net Income (Loss) Attributable
to Common Shareholders
Net Income (Loss) Attributable to Common
Shareholders per Share –
Basic and Diluted
$29,796
25,492
(26,496)
(22,208)
(27,155)
(0.76)
$32,099
27,761
15,800
20,072
14,949
$33,447
28,436
(11,333)
(6,349)
(11,473)
$34,245
29,321
(32,633)
(27,731)
(32,853)
0.41
(0.31)
(0.87)
-98-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2019 (in(cid:2)thousands)
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
Allentown
Arbor Estates
Auburn Estates
Memphis, TN
Doylestown, PA
Orrville, OH
Birch Run, MI
Elkhart, IN
Goshen, IN
Berwick, PA
Greenfield Ctr, NY
Anderson, IN
Owosso, MI
Chambersburg, PA
Middletown, OH
Vineland, NJ
Chambersburg, PA
Sayre, PA
Conowingo, MD
Lewistown, PA
Tiffin, OH
Horseheads, NY
Wintersville, OH
Muncie, IN
Ravenna, OH
Columbia, TN
Cranberry Twp, PA
Athens, PA
Duncansville, PA
Mount Pleasant, PA
Clifton Park, NY
Birchwood Farms
Boardwalk
Broadmore Estates
Brookside
Brookview
Camelot Village
Candlewick Court
Carsons
Catalina
Cedarcrest Village
Chambersburg
Chelsea
Cinnamon Woods
City View
Clinton
Collingwood
Colonial Heights
Countryside Estates
Countryside Estates
Countryside Village
Cranberry
Crestview
Cross Keys
Crossroads Village
D&R
Dallas Mobile Home Toronto, OH
Deer Meadows
Evergreen Estates
Evergreen Manor
Evergreen Village
Fairview Manor
Fifty One Estates
Forest Creek
Forest Park
Fox Chapel Village
Frieden Manor
Friendly Village
Green Acres
Gregory Courts
Hayden Heights
Heather Highlands
High View Acres
Highland
Highland Estates
Hillcrest Crossing
Hillcrest Estates
Hillside Estates
Holiday Village
Holiday Village
New Springfield, OH
Lodi, OH
Bedford, OH
Mantua, OH
Millville, NJ
Elizabeth, PA
Elkhart, IN
Cranberry Twp, PA
Cheswick, PA
Schuylkill Haven, PA
Perrysburg, OH
Chambersburg, PA
Honey Brook, PA
Dublin, OH
Inkerman, PA
Apollo, PA
Elkhart, IN
Kutztown, PA
Lower Burrell, PA
Marysville, OH
Greensburg, PA
Nashville, TN
Elkhart, IN
$
12,865
$
(1)
(4)
(1)
13,583 (6)
46,781 (1)
(3)
2,664
(7)
4,294
-0-
5,095
11,510
-0-
(2)
-0-
-0-
3,376
-0-
(1)
-0-
-0-
-0-
7,305
-0-
-0-
-0-
7,362
-0-
-0-
-0-
-0-
-0-
15,399
-0-
(1)
8,006
-0-
12,829 (2)
7,150
-0-
(1)
2,007
-0-
-0-
(1)
16,054
-0-
-0-
(5)
7,619
8,176
-99-
250 $
2,650
114
70
1,796
1,120
372
38
824
159
176
1,008
320
108
124
1,884
137
142
196
67
174
205
394
182
188
61
183
392
276
226
99
49
105
216
1,214
440
75
372
643
1,215
63
370
248
573
825
510
145
961
1,277
484
1,632
491
2,569 $
8,266
1,174
2,797
4,768
11,136
4,776
233
2,480
7,087
2,411
11,735
1,866
2,397
2,049
2,116
613
3,302
2,318
2,383
1,926
2,896
6,917
1,923
2,258
378
1,403
704
2,729
2,299
1,121
2,372
1,277
1,167
5,746
7,004
977
4,082
5,294
18,141
584
1,220
2,148
2,152
4,264
7,084
1,695
1,464
3,034
2,679
5,618
13,808
12,146
1,765
670
3,652
(38)
10,573
3,246
9,106
278
4,841
1,620
6,587
2,953
800
1,711
485
1,422
374
2,319
5,576
4,349
5,463
9,485
4,385
2,607
4,146
75
3,426
2,151
2,835
513
1,330
1,062
10,485
440
1,871
8,617
1,545
2,814
2,182
165
752
723
12,918
352
5,372
12,769
5,230
4,404
2,952
7,270
6,020
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2019 (in(cid:2)thousands)
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
Wooster, OH
Wooster, OH
Memphis, TN
Jonestown, PA
Avoca, PA
Narvon, PA
West Mifflin, PA
Erie, MI
Elkhart, IN
Tunkhannock, PA
Olmsted Township, OH
West Grove, PA
Elkhart, IN
Perrysburg, OH
Elyria, OH
Erie, PA
Peninsula, OH
Tarrs, PA
Clinton, PA
Monticello, NY
Navarre, OH
Lakeview, OH
Cresson, PA
Orrville, OH
Taylor, PA
Marysville, OH
New Middletown, OH
Nappanee, IN
Holly Acres
Hudson Estates
Huntingdon Pointe
Independence Park
Kinnebrook
Lake Sherman
Lakeview Meadows
Laurel Woods
Little Chippewa
Maple Manor
Marysville Estates
Meadowood
Meadows
Meadows of Perrysburg Perrysburg, OH
Melrose Village
Melrose West
Memphis Blues
Monroe Valley
Moosic Heights
Mount Pleasant Village Mount Pleasant, PA
Mountaintop
New Colony
Northtowne Meadows
Oak Ridge
Oakwood Lake
Olmsted Falls
Oxford
Parke Place
Perrysburg Estates
Pikewood Manor
Pine Ridge/Pine Manor Carlisle, PA
Apollo, PA
Pine Valley
Bloomsburg, PA
Pleasant View
Belle Vernon, PA
Port Royal
Anderson, IN
Redbud Estates
Marion, OH
River Valley
Carlisle, PA
Rolling Hills Estates
Belle Vernon, PA
Rostraver Estates
Magnolia, OH
Sandy Valley
Nashville, TN
Shady Hills
Somerset, PA
Somerset/Whispering
Columbiana, OH
Southern Terrace
Jackson, NJ
Southwind
Athens, OH
Spreading Oaks
Springfield, OH
Springfield Meadows
Greensburg, PA
Suburban Estates
Ravenna, OH
Summit Estates
Marion, IN
Summit Village
Somerset, PA
Sunny Acres
Eagleville, PA
Sunnyside
Goodlettsville, TN
Trailmont
Olmsted Township, OH
Twin Oaks
Goshen, IN
Twin Pines
Ruffs Dale, PA
Valley High
Ravenna, OH
Valley Hills
Mountaintop, PA
Valley Stream
Honeybrook, PA
Valley View HB
$
2,119
-0-
-0-
$
7,765 (5)
3,881
5,294
-0-
-0-
(4)
13,061 (3)
-0-
(1)
-0-
2,946
6,853 (4)
(4)
-0-
(2)
(3)
-0-
(2)
-0-
12,049
(1)
(3)
2,007
15,604
(6)
1,587
14,420
-0-
-0-
(3)
-0-
13,132 (7)
-0-
-0-
(5)
-0-
4,786
-0-
(1)
22,810 (8)
-0-
3,033
5,364
-0-
-0-
5,971
(1)
3,191
6,047
(1)
(5)
3,285
-0-
(1)
-100-
$
194
141
399
686
236
290
574
433
113
674
810
152
549
2,146
767
94
78
114
330
280
134
429
1,272
500
379
569
175
4,317
399
1,053
38
670
282
150
1,739
236
301
814
270
337
1,485
63
100
67
1,230
299
198
522
287
450
411
823
650
284
996
323
1,380
3,591 $
3,516
865
2,784
1,403
1,458
1,104
2,070
1,135
9,433
4,556
3,191
6,721
5,541
5,429
1,040
810
994
3,794
3,502
1,665
4,129
23,859
7,524
1,639
3,031
991
10,341
4,047
22,068
198
1,337
2,175
2,492
15,091
785
1,419
2,204
1,941
3,379
2,050
3,387
603
1,327
3,093
5,837
2,779
2,821
6,114
2,674
1,867
3,527
6,307
2,267
6,542
3,191
5,348
1,087
5,712
1,817
3,273
14,381
12,810
1,918
4,641
2,118
6,337
4,220
4,080
7,556
408
5,565
80
7,968
494
3,425
1,120
658
306
1,152
2,408
1,179
2,236
2,537
5,230
788
4,871
10,084
6,170
1,972
13,645
2,841
7,540
1,613
2,361
10,157
4,409
8,311
544
2,937
3,887
1,486
3,681
3,917
1072
2,623
498
3,773
2,158
4,687
1,699
8,390
923
2,819
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2019 (in(cid:2)thousands)
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
Valley View I
Valley View II
Voyager Estates
Waterfalls
Wayside
Weatherly Estates
Wellington Estates
Wood Valley
Woodland Manor
Woodlawn
Woods Edge
Worthington Arms
Youngstown Estates
Ephrata, PA
Ephrata, PA
West Newton, PA
Hamburg, NY
Bellefontaine, OH
Lebanon, TN
Export, PA
Caledonia, OH
West Monroe, NY
Eatontown, NJ
West Lafayette, IN
Lewis Center, OH
Youngstown, NY
$
(2) $
(2)
-0-
4,474
-0-
7,785
2,316
-0-
-0-
-0- (8)
6,214
8,976
(4)
$
191
72
742
424
196
1,184
896
260
77
157
1,808
437
269
4,359 $
1,746
3,143
3,812
1,080
4,034
6,179
1,753
841
281
13,321
12,706
1,606
1,350
39
3,547
4,734
1,548
4,159
1,053
5,201
3,876
1,713
6,212
3,975
1,396
$
377,045
$
65,248 $
480,687 $
462,169
-101-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2019 (in(cid:2)thousands)
Column A
Description
Column E (9) (10)
Gross Amount at Which Carried at 12/31/19
Column F
Site, Land
& Building
Improvements
Accumulated
Name
Location
Land
and Rental Homes
Total
Depreciation
$
Allentown
Arbor Estates
Auburn Estates
Birchwood Farms
Boardwalk
Broadmore Estates
Brookside
Brookview
Camelot Village
Candlewick Court
Carsons
Catalina
Cedarcrest Village
Chambersburg
Chelsea
Cinnamon Woods
City View
Clinton
Collingwood
Colonial Heights
Countryside Estates
Countryside Estates
Countryside Village
Cranberry
Crestview
Cross Keys
Crossroads Village
D&R
Dallas Mobile Home
Deer Meadows
Evergreen Estates
Evergreen Manor
Evergreen Village
Fairview Manor
Fifty One Estates
Forest Creek
Forest Park
Fox Chapel Village
Frieden Manor
Friendly Village
Green Acres
Gregory Courts
Hayden Heights
Heather Highlands
High View Acres
Highland
Highland Estates
Hillcrest Crossing
Hillcrest Estates
Hillside Estates
Holiday Village
Holiday Village
Memphis, TN
Doylestown, PA
Orrville, OH
Birch Run, MI
Elkhart, IN
Goshen, IN
Berwick, PA
Greenfield Ctr, NY
Anderson, IN
Owosso, MI
Chambersburg, PA
Middletown, OH
Vineland, NJ
Chambersburg, PA
Sayre, PA
Conowingo, MD
Lewistown, PA
Tiffin, OH
Horseheads, NY
Wintersville, OH
Muncie, IN
Ravenna, OH
Columbia, TN
Cranberry Twp, PA
Athens, PA
Duncansville, PA
Mount Pleasant, PA
Clifton Park, NY
Toronto, OH
New Springfield, OH
Lodi, OH
Bedford, OH
Mantua, OH
Millville, NJ
Elizabeth, PA
Elkhart, IN
Cranberry Twp, PA
Cheswick, PA
Schuylkill Haven, PA
Perrysburg, OH
Chambersburg, PA
Honey Brook, PA
Dublin, OH
Inkerman, PA
Apollo, PA
Elkhart, IN
Kutztown, PA
Lower Burrell, PA
Marysville, OH
Greensburg, PA
Nashville, TN
Elkhart, IN
480
2,650
114
70
1,796
1,120
372
123
828
159
176
1,008
408
118
124
1,884
137
142
196
67
174
205
609
182
362
61
183
392
276
226
119
49
105
2,535
1,268
440
75
372
643
1,265
63
370
248
573
825
510
404
961
1,277
484
1,632
491
$
14,485 $
10,031
1,844
6,449
4,730
21,709
8,022
9,254
2,754
11,928
4,031
18,322
4,731
3,187
3,760
2,601
2,035
3,676
4,637
7,959
6,275
8,359
16,187
6,308
4,691
4,524
1,478
4,130
4,880
5,134
1,614
3,702
2,339
9,333
6,132
8,875
9,594
5,627
8,108
20,273
749
1,972
2,871
15,070
4,616
12,456
14,205
6,694
7,438
5,631
12,888
19,828
-102-
$
14,965
12,681
1,958
6,519
6,526
22,829
8,394
9,377
3,582
12,087
4,207
19,330
5,139
3,305
3,884
4,485
2,172
3,818
4,833
8,026
6,449
8,564
16,796
6,490
5,053
4,585
1,661
4,522
5,156
5,360
1,733
3,751
2,444
11,868
7,400
9,315
9,669
5,999
8,751
21,538
812
2,342
3,119
15,643
5,441
12,966
14,609
7,655
8,715
6,115
14,520
20,319
6,529
2,349
362
1,384
512
4,796
1,934
2,898
154
1,959
870
2,911
2,969
771
777
236
466
1,058
964
1,610
1,245
1,324
4,203
3,232
859
1,574
130
2,251
813
852
313
644
429
5,582
92
2,468
3,800
393
1,957
322
180
441
577
5,964
343
2,807
7,569
541
536
881
2,769
3,014
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2019 (in(cid:2)thousands)(cid:2)
Column A
Description
Column E (9) (10)
Gross Amount at Which Carried at 12/31/19
Column F
Name
Location
Land
and Rental Homes
Total
Site, Land
& Building
Improvements
Accumulated
Depreciation
Holly Acres
Hudson Estates
Huntingdon Pointe
Independence Park
Kinnebrook
Lake Sherman
Lakeview Meadows
Laurel Woods
Little Chippewa
Maple Manor
Marysville Estates
Meadowood
Meadows
Meadows of Perrysburg
Melrose Village
Melrose West
Memphis Blues
Monroe Valley
Moosic Heights
Mount Pleasant Village
Mountaintop
New Colony
Northtowne Meadows
Oak Ridge
Oakwood Lake
Olmsted Falls
Oxford
Parke Place
Perrysburg Estates
Pikewood Manor
Pine Ridge/Pine Manor
Pine Valley
Pleasant View
Port Royal
Redbud Estates
River Valley
Rolling Hills Estates
Rostraver Estates
Sandy Valley
Shady Hills
Somerset/Whispering
Southern Terrace
Southwind
Spreading Oaks
Springfield Meadows
Suburban Estates
Summit Estates
Summit Village
Sunny Acres
Sunnyside
Trailmont
Twin Oaks
$
Erie, PA
Peninsula, OH
Tarrs, PA
Clinton, PA
Monticello, NY
Navarre, OH
Lakeview, OH
Cresson, PA
Orrville, OH
Taylor, PA
Marysville, OH
New Middletown, OH
Nappanee, IN
Perrysburg, OH
Wooster, OH
Wooster, OH
Memphis, TN
Jonestown, PA
Avoca, PA
Mount Pleasant, PA
Narvon, PA
West Mifflin, PA
Erie, PA
Elkhart, IN
Tunkhannock, PA
Olmsted Township, OH
West Grove, PA
Elkhart, IN
Perrysburg, OH
Elyria, OH
Carlisle, PA
Apollo, PA
Bloomsburg, PA
Belle Vernon, PA
Anderson, IN
Marion, OH
Carlisle, PA
Belle Vernon, PA
Magnolia, OH
Nashville, TN
Somerset, PA
Columbiana, OH
Jackson, NJ
Athens, OH
Springfield, OH
Greensburg, PA
Ravenna, OH
Marion, IN
Somerset, PA
Eagleville, PA
Goodlettsville, TN
Olmsted Township, OH
194
141
399
686
353
290
726
433
113
674
818
152
549
2,182
767
94
336
114
330
280
134
448
1,312
500
379
569
155
4,317
407
1,071
145
732
282
505
1,753
236
301
814
270
337
1,489
63
100
67
1,230
299
198
522
287
450
411
998
$
-103-
$
4,678
9,228
2,682
6,057
15,667
14,268
2,870
6,711
3,253
15,770
8,768
7,271
14,277
5,913
10,994
1,120
8,520
1,488
7,219
4,622
2,323
4,416
24,971
9,932
2,818
5,267
3,548
15,571
4,827
26,921
10,175
7,445
4,147
15,782
17,918
8,325
3,032
4,565
12,098
7,788
10,357
3,931
3,540
5,214
4,579
9,518
6,696
3,893
8,737
3,172
5,640
5,510
$
4,872
9,369
3,081
6,743
16,020
14,558
3,596
7,144
3,366
16,444
9,586
7,423
114,826
8,095
11,761
1,214
8,856
1,602
7,549
4,902
2,457
4,864
26,283
10,432
3,197
5,836
3,703
19,888
5,234
27,992
10,320
8,177
4,429
16,287
19,671
8,561
3,333
5,379
12,368
8,125
11,846
3,994
3,640
5,281
5,809
9,817
6,894
4,415
9,024
3,622
6,051
6,508
751
1,520
279
983
5,959
4,767
315
2,522
522
4,202
765
1,508
1,795
224
2,088
242
1,847
362
1,706
381
583
66
418
2,580
744
1,083
2,172
1,701
208
1,073
3,833
3,228
1,000
7,454
941
3,886
898
781
5,266
1,921
3,891
1,012
2,125
2,045
425
2,551
1,099
325
2,460
732
1,387
1,330
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2019 (in(cid:2)thousands)(cid:2)
Column A
Description
Column E (9) (10)
Gross Amount at Which Carried at 12/31/19
Column F
Name
Location
Land
and Rental Homes
Total
Site, Land
& Building
Improvements
Accumulated
Depreciation
$
$
Twin Pines
Valley High
Valley Hills
Valley Stream
Valley View HB
Valley View I
Valley View II
Voyager Estates
Waterfalls
Wayside
Weatherly Estates
Wellington Estates
Wood Valley
Woodland Manor
Woodlawn
Woods Edge
Worthington Arms
Youngstown Estates
Goshen, IN
Ruffs Dale, PA
Ravenna, OH
Mountaintop, PA
Honeybrook, PA
Ephrata, PA
Ephrata, PA
West Newton, PA
Hamburg, NY
Bellefontaine, OH
Lebanon, TN
Export, PA
Caledonia, OH
West Monroe, NY
Eatontown, NJ
West Lafayette, IN
Lewis Center, OH
Youngstown, NY
650
284
996
323
1,380
280
72
742
424
261
1,184
896
260
77
135
1,808
437
269
$
10,994
3,966
14,932
4,114
8,167
5,620
1,785
6,690
8,546
2,563
8,193
7,232
6,954
4,717
2,016
19,533
16,681
3,002
$
11,644
4,250
15,928
4,437
9,547
5,900
1,857
7,432
8,970
2,824
9,377
8,128
7,214
4,794
2,151
21,341
17,118
3,271
2,483
680
2,638
651
1,840
1,418
473
922
4,258
197
3,468
598
3,214
1,344
919
2,738
2,400
521
$
70,241
$
937,863
$
1,008,104
$
216,332
-104-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2019
Column A
Description
Name
Location
Allentown
Arbor Estates
Auburn Estates
Birchwood Farms
Boardwalk
Broadmore Estates
Brookside
Brookview
Camelot Village
Candlewick Court
Carsons
Catalina
Cedarcrest Village
Chambersburg
Chelsea
Cinnamon Woods
City View
Clinton
Collingwood
Colonial Heights
Countryside Estates
Countryside Estates
Countryside Village
Cranberry
Crestview
Cross Keys
Crossroads Village
D&R
Dallas Mobile Home
Deer Meadows
Evergreen Estates
Evergreen Manor
Evergreen Village
Fairview Manor
Fifty One Estates
Forest Creek
Forest Park
Fox Chapel Village
Frieden Manor
Friendly Village
Green Acres
Gregory Courts
Hayden Heights
Heather Highlands
High View Acres
Highland
Highland Estates
Hillcrest Crossing
Hillcrest Estates
Hillside Estates
Memphis, TN
Doylestown, PA
Orrville, OH
Birch Run, MI
Elkhart, IN
Goshen, IN
Berwick, PA
Greenfield Ctr, NY
Anderson, IN
Owosso, MI
Chambersburg, PA
Middletown, OH
Vineland, NJ
Chambersburg, PA
Sayre, PA
Conowingo, MD
Lewistown, PA
Tiffin, OH
Horseheads, NY
Wintersville, OH
Muncie, IN
Ravenna, OH
Columbia, TN
Cranberry Twp, PA
Athens, PA
Duncansville, PA
Mount Pleasant, PA
Clifton Park, NY
Toronto, OH
New Springfield, OH
Lodi, OH
Bedford, OH
Mantua, OH
Millville, NJ
Elizabeth, PA
Elkhart, IN
Cranberry Twp, PA
Cheswick, PA
Schuylkill Haven, PA
Perrysburg, OH
Chambersburg, PA
Honey Brook, PA
Dublin, OH
Inkerman, PA
Apollo, PA
Elkhart, IN
Kutztown, PA
Lower Burrell, PA
Marysville, OH
Greensburg, PA
Column G
Column H
Column I
Date
Acquired
Depreciable
Life
1986
2013
2013
2013
2017
2013
2010
1977
2018
2015
2012
2015
1986
2012
2012
2017
2011
2011
2012
2012
2012
2014
2011
1986
2012
1979
2017
1978
2014
2014
2014
2014
2014
1985
2019
2013
1982
2017
2012
2019
2012
2013
2014
1992
2017
2013
1979
2017
2017
2014
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
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
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
Date of
Construction
prior to 1980
1959
1971/1985/1995
1976-1977
1995-1996
1950/1990
1973-1976
prior to 1970
1998
1975
1963
1968-1976
1973
1955
1972
2005
prior to 1980
1968/1987
1970
1972
1996
1972
1988/1992
1974
1964
1961
1955/2004
1972
1950-1957
1973
1965
1960
1960
prior to 1980
1970
1996-1997
prior to 1980
1975
1969
1970
1978
1970
1973
1970
1984
1969
1971
1971
1995
1980
-105-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2019
Column A
Description
Name
Location
Holiday Village
Holiday Village
Holly Acres
Hudson Estates
Huntingdon Pointe
Independence Park
Kinnebrook
Lake Sherman
Lakeview Meadows
Laurel Woods
Little Chippewa
Maple Manor
Marysville Estates
Meadowood
Meadows
Meadows of Perrysburg
Melrose Village
Melrose West
Memphis Blues
Monroe Valley
Moosic Heights
Mount Pleasant Village
Mountaintop
New Colony
Northtowne Meadows
Oak Ridge
Oakwood Lake
Olmsted Falls
Oxford
Parke Place
Perrysburg Estates
Pikewood Manor
Pine Ridge/Pine Manor
Pine Valley
Pleasant View
Port Royal
Redbud Estates
River Valley
Rolling Hills Estates
Rostraver Estates
Sandy Valley
Shady Hills
Somerset/Whispering
Southern Terrace
Southwind
Spreading Oaks
Springfield Meadows
Suburban Estates
Summit Estates
Summit Village
Sunny Acres
Sunnyside
Trailmont
Twin Oaks
Twin Pines
Valley High
Nashville, TN
Elkhart, IN
Erie, PA
Peninsula, OH
Tarrs, PA
Clinton, PA
Monticello, NY
Navarre, OH
Lakeview, OH
Cresson, PA
Orrville, OH
Taylor, PA
Marysville, OH
New Middletown, OH
Nappanee, IN
Perrysburg, OH
Wooster, OH
Wooster, OH
Memphis, TN
Jonestown, PA
Avoca, PA
Mount Pleasant, PA
Narvon, PA
West Mifflin, PA
Erie, MI
Elkhart, IN
Tunkhannock, PA
Olmsted Township, OH
West Grove, PA
Elkhart, IN
Perrysburg, OH
Elyria, OH
Carlisle, PA
Apollo, PA
Bloomsburg, PA
Belle Vernon, PA
Anderson, IN
Marion, OH
Carlisle, PA
Belle Vernon, PA
Magnolia, OH
Nashville, TN
Somerset, PA
Columbiana, OH
Jackson, NJ
Athens, OH
Springfield, OH
Greensburg, PA
Ravenna, OH
Marion, IN
Somerset, PA
Eagleville, PA
Goodlettsville, TN
Olmsted Township, OH
Goshen, IN
Ruffs Dale, PA
Column G
Column H
Column I
Date
Acquired
Depreciable
Life
2013
2015
2015
2014
2015
2014
1988
1987
2016
2001
2013
2010
2017
2012
2015
2018
2013
2013
1985
2012
2010
2017
2012
2019
2019
2013
2010
2012
1974
2017
2018
2018
1969
1995
2010
1983
2018
1986
2013
2014
1985
2011
2004
2012
1969
1996
2016
2010
2014
2018
2010
2013
2011
2012
2013
2014
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
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
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
Date of
Construction
1967
1966
1977/2007
1956
2000
1987
1972
prior to 1980
1995
prior to 1980
1968
1972
1960s to 2015
1957
1965-1973
1998
1970-1978
1995
1955
1969
1972
1977-1986
1972
1930/1973
1988
1990
1972
1953/1970
1971
1995-1996
1972
1962
1961
prior to 1980
1960's
1973
1966/1998/2003
1950
1972-1975
1970
prior to 1980
1954
prior to 1980
1983
1969
prior to 1980
1970
1968/1980
1969
2000
1970
1960
1964
1952/1997
1956/1990
1974
-106-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2019
Column A
Description
Name
Location
Valley Hills
Valley Stream
Valley View HB
Valley View I
Valley View II
Voyager Estates
Waterfalls
Wayside
Weatherly Estates
Wellington Estates
Wood Valley
Woodland Manor
Woodlawn
Woods Edge
Worthington Arms
Youngstown Estates
Ravenna, OH
Mountaintop, PA
Honeybrook, PA
Ephrata, PA
Ephrata, PA
West Newton, PA
Hamburg, NY
Bellefontaine, OH
Lebanon, TN
Export, PA
Caledonia, OH
West Monroe, NY
Eatontown, NJ
West Lafayette, IN
Lewis Center, OH
Youngstown, NY
Column G
Column H
Column I
Date of
Construction
Date
Acquired
Depreciable
Life
1960-1970
1970
1970
1961
1999
1968
prior to 1980
1960’s
1997
1970/1996
prior to 1980
prior to 1980
1964
1974
1968
1963
2014
2015
2013
2012
2012
2015
1997
2016
2006
2017
1996
2003
1978
2015
2015
2013
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
-107-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2019
(1)(cid:2) Represents one mortgage note payable secured by thirteen properties.
(2)(cid:2) Represents one mortgage note payable secured by six properties.
(3)(cid:2) Represents one mortgage note payable secured by five properties.
(4)(cid:2) Represents one mortgage note payable secured by five properties.
(5)(cid:2) Represents one mortgage note payable secured by four properties.
(6)(cid:2) Represents one mortgage note payable secured by two properties.
(7)(cid:2) Represents one mortgage note payable secured by two properties.
(8)(cid:2) Represents one mortgage note payable secured by two properties.
(9)(cid:2) Reconciliation
/----------FIXED ASSETS-----------/
(in(cid:2)thousands)(cid:2)
12/31/18
12/31/19
12/31/17
Balance – Beginning of Year
$874,601
$758,487
$636,577
Additions:
Acquisitions
Improvements
Total Additions
Deletions
56,015
81,399
137,414
(3,911)
58,730
61,102
119,833
(3,718)
59,308
65,458
124,766
(2,856)
Balance – End of Year
$1,008,104
$874,601
$758,487
/-----ACCUMULATED DEPRECIATION-----/
(in(cid:2)thousands)
12/31/18
12/31/17
12/31/19
Balance – Beginning of Year
$182,599
$153,592
$128,781
Additions:
Depreciation
Total Additions
Deletions
34,816
34,816
(1,083)
29,841
29,841
(834)
25,307
25,307
(496)
Balance – End of Year
$216,332
$182,599
$153,592
(10)
The aggregate cost for Federal tax purposes approximates historical cost.
-108-
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 5, 2020
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/Amy Butewicz
AMY BUTEWICZ
/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/William Mitchell
WILLIAM MITCHELL
/s/Kenneth K. Quigley, Jr.
KENNETH K. QUIGLEY
/s/Stephen B. Wolgin
STEPHEN B. WOLGIN
Title
Chairman of the Board
Date
March 5, 2020
President, Chief Executive Officer and Director
March 5, 2020
Vice President, Chief Financial and Accounting
Officer, Treasurer and Director
March 5, 2020
Director
Director
Director
Director
Director
Director
Director
Director
-109-
March 5, 2020
March 5, 2020
March 5, 2020
March 5, 2020
March 5, 2020
March 5, 2020
March 5, 2020
March 5, 2020
-110-
BOARD OF DIRECTORS
AMY L. BUTEWICZ
Doctor of Pharmacy
Realtor and Partner of Butewicz Equestrian Lifestyle
Real Estate at Keller Williams Princeton Real Estate
JEFFREY A. CARUS
Founder and Managing Partner of JAC Partners, LLC
ANNA T. CHEW
Vice President, Chief Financial and Accounting Officer
and Treasurer
MATTHEW I. HIRSCH
Attorney-At-Law
Law Office of Matthew I. Hirsch
EUGENE W. LANDY
Chairman of the Board
MICHAEL P. LANDY
President and Chief Executive Officer of
Monmouth Real Estate Investment Corporation
SAMUEL A. LANDY
President and Chief Executive Officer
STUART LEVY
Vice President of Real Estate Finance of
Helaba-Landesbank Hessen-Thüringen
WILLIAM E. MITCHELL
Managing Partner of Strategy Capital LLC
KENNETH K. QUIGLEY, JR.
Attorney-At-Law
President of Curry College
STEPHEN B. WOLGIN
Managing Director of U.S. Real Estate Advisors, Inc.
OFFICERS & EXECUTIVE
MANAGEMENT
EUGENE W. LANDY
Chairman of the Board
SAMUEL A. LANDY
President and Chief Executive Officer
ANNA T. CHEW
Vice President, Chief Financial and Accounting Officer
and Treasurer
CRAIG KOSTER
General Counsel and Secretary
BRETT TAFT
Vice President and Chief Operating Officer
REGINA BEASLEY
Vice President
AYAL DREIFUSS
Vice President of Rental Division
DANIEL LANDY
Vice President
CHRISTINE LINDSEY
Vice President of Sales
JAMES O. LYKINS
Vice President of Capital Markets
ROBERT VAN SCHUYVER
Vice President
JEFFREY WOLFE
Vice President of Operations
JEFFREY V. YORICK
Vice President of Engineering
KRISTIN LANGLEY
Controller
BRITTNEE SPERLING
Assistant Controller
NELLI MADDEN
Director of Investor Relations
CORPORATE INFORMATION
CORPORATE OFFICE
3499 Route 9 North, Freehold, NJ 07728
TRANSFER AGENT & REGISTRAR
American Stock Transfer & Trust Company
6201 15th Avenue, Brooklyn, NY 11219
COMMON STOCK LISTING
NYSE:UMH
INDEPENDENT AUDITORS
PKF O’Connor Davies, LLP
665 Fifth Avenue, New York, NY 10022
WEBSITE ADDRESS
www.umh.reit
EMAIL ADDRESS
ir@umh.com
Our Vision
UMH Properties, Inc. has a 52-year history of providing quality affordable housing for our Nation’s workforce.
UMH owns and operates a portfolio of 122 manufactured home communities containing 23,100 developed
homesites situated in eight states. Manufactured home communities satisfy a fundamental need – quality
affordable housing. As home prices continue to rise and available home inventory continues to shrink, the
supply of affordable housing becomes an ever-increasing concern. We are committed to being a part of the
solution to America’s affordable housing crisis.
UMH has long believed that we have an obligation to create sustainable and environmentally friendly
communities that have a positive societal impact. Throughout our history, we have and continue to develop
and invest in environmentally friendly initiatives that will conserve energy and natural resources. We build,
upgrade and manage well-maintained communities that our residents are proud to call home. We believe in
enriching the lives of the people impacted by our Company – our employees, our residents and our neighbors.
On Our Cover: CINNAMON WOODS
Conowingo, MD
UMH PROPERTIES, INC.
2019 ANNUAL REPORT
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UMH PROPERTIES, INC.
Established in 1968
3499 Route 9 North | Freehold, NJ 07728
www.umh.reit 732.577.9997 NYSE: UMH