UMH PROPERTIES, INC.
2020 ANNUAL REPORT
Our Vision
UMH Properties, Inc. has a 53-year history of providing quality, affordable housing for our Nation’s
workforce. UMH owns and operates a portfolio of manufactured home communities consisting of 126
communities with 23,800 developed homesites situated in ten 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: MEADOWS OF PERRYSBURG
Perrysburg, OH
2020 YEAR IN REVIEW
Normalized FFO per Share Increase
11%
Same Store NOI Increase
15%
SALES CENTER
Manufactured Housing Institute
National Industry Awards
2020 Sales Center of the Year
Sunny Acres Sales Center
Somerset, PA
Increase in Sales
Over 5 Year Period
137%
MEMPHIS BLUES
Memphis, TN
DEAR FELLOW
SHAREHOLDERS
My mother, Gloria Landy, passed away on April 23,
2020. All of us have the brightness of the sun, the
moon and the stars. For all who knew Gloria Landy,
there was additional brightness. Her shining optimistic
personality radiated from her eyes, her smile, and her
words. No one ever left her presence without feeling
even happier to be alive. Dignitaries from around the
world knew and loved Gloria. She sincerely wanted all
the best for everyone. From the time she was nine years
old Gloria lived with and shared the pain of broken
families brought to America after the ravages of the
Holocaust. As a child, at the Old Broadway Synagogue,
she worked with her mother Eva Sadoff and father
Sam Sadoff to house, clothe and obtain jobs for all
they could. She knew their tears and she fought to
brighten the world for them and for everyone she met.
She made this her life mission and was involved in the
U.N. as a leader in the Jewish NGO Caucus. She was a
past Secretary of the World Jewish Congress, and the
first female President of Congregation B’Nai Israel in
Rumson. Gloria Landy was always proud of our UMH
team and would be very proud of the compassionate
way we managed UMH through the pandemic.
IN MEMORY OF
GLORIA SADOFF LANDY
August 12, 1933 - April 23, 2020
Page 2
2020 ANNUAL REPORT
Despite
through
the difficulties of managing
COVID-19, UMH had a very good year. The
foundation we spent years building is in place for
earnings growth for years to come. The success of
our business plan is now translating into improved
earnings and a higher share price. The cash flow
generated by our business plan held up extraordinarily
well through one of the most difficult economic
circumstances one can imagine. Our rent collections
have been in line with pre-pandemic levels all year. We
collected 98% of our rent and maintained 95% rental
home occupancy. Our total income grew 12% to $164
million. Our community NOI increased 20% to $80
million. Our operating expense ratio decreased from
48% in 2019, to 44.1% in 2020. We installed and rented
858 homes. We grew same property occupancy by 718
sites, or 320 basis points, resulting in same property
NOI growth of 15%. Our home sales were up 13%
generating sales profits of approximately $770,000. We
financed a portfolio of unencumbered communities
resulting in proceeds of $106 million at an interest
rate of 2.62%. These proceeds were used to redeem
our 8% Series B Preferred Stock which will result in
increased FFO of $5 million, or $0.11 per share in
2021. All of these positive operating metrics resulted in
improved Normalized FFO per share of 11% this past
year, as well as continued growth going forward. These
operating metrics have given management and the
Board the confidence to increase our dividend by 5.5%
to $0.76 per share annually. Assuming similar strong
performance, we anticipate further dividend increases
in the future.
Our business plan has changed over the years, always
with the same intention of providing quality affordable
housing with great results for our shareholders. We
once worked to build communities to sell homes and
rent lots. As a result of the changing business climate
and financing regulations imposed on our industry, we
began pivoting to a rental home model several years
ago. During 2020, we installed 858 rental homes. That
is the equivalent of building an 858-unit apartment
complex. Our rental home portfolio now contains
approximately 8,300 homes that are 95% occupied. We
continue to experience strong demand throughout our
rental portfolio and anticipate adding an additional
800-900 homes in 2021.
Our rental home program has been so successful
that it has allowed us to purchase communities with
vacancies in good markets, invest in the infrastructure
and deferred maintenance, and fill them with rental
homes resulting in tremendous property appreciation.
As our properties appreciate, and we are able to
recapture the increased equity through refinancing,
we are able to reduce our overall cost of capital.
This positive trend was recently illustrated when we
redeemed our higher cost preferred series by utilizing
low cost GSE debt. In August, we completed the
financing of a pool of unencumbered communities,
most of which were acquired over the past few years.
This financing generated proceeds of $106 million at
an interest rate of 2.62%. Our investments in these
communities totaled $116 million. These communities
appraised for $145 million representing an increase in
value of 25%. The portfolio is currently 83% occupied
and we will continue to fill sites and increase property
values. Increases in value can be realized by utilizing
the borrow-up features per the loan agreement.
The capital generated through this refinancing was
used to redeem our 8% Series B Preferred stock. This
recapitalization will increase our FFO by over $5
million, or $0.11 per share in 2021. We can achieve
additional preferred dividend savings in 2022 and
2023. In 2022, we can redeem $250 million of our
6.75% Series C Preferred Stock, and in 2023, we can
redeem $160 million of our 6.375% Series D Preferred
Stock. Assuming we can refinance our preferred
equity at a blended cost of 4%, we will improve our
FFO by over $10 million, or $0.24 per share. Just by
completing these recapitalizations, we can improve
earnings by $0.35 or more, bringing our earnings
above $1 per share.
As our earnings continue to grow, we anticipate further
common stock price appreciation and dividend growth.
UMH has several avenues to continue to improve our
operating results organically:
2.
1. 4% annual rent increases result in additional
income of approximately $5.6 million. Operating
at a 45% expense ratio will result in $3.1 million of
additional NOI.
Installing and renting an additional 800 rental
homes at $800 per month generates additional
income of $7.7 million. Operating at a 45%
expense ratio will generate additional NOI of
approximately $4.2 million. This is a $42 million
investment
that yields approximately 10%
unlevered.
SAMUEL A. LANDY
New York Stock Exchange
3. Continuing to increase the profitability of home
sales. In 2020, we earned $770,000 on home sales.
Our sales volume and our profitability continue to
improve. We believe we can earn an additional $1
million or more in sales profits.
4. Developing 400 sites per year.
These paths forward to continued earnings growth
pale in comparison to the increase in property
values we believe is generated by our business plan.
International accounting standards would have a
line on the income statement depicting the change in
asset value. Our communities have increased in value
because of improved operations, cap rate compression
and general property appreciation. If our $1.5 billion
in assets increases in value by 4% in any given year, the
increased value of our company is $60 million or $1.50
per share. Our same property NOI in 2020 increased
approximately $11 million over 2019. Applying a
market cap rate of 5% to this increase in NOI results
in an increase in value of $170 million net of the cost
of the rental units.
Our same property results are exceptionally strong.
During 2020, we improved the same community
occupancy by 320 basis points or 718 sites. This
resulted in increased same property income of 8% and
Page 3
2020 ANNUAL REPORT
Our Tribute to the American Flag
PIKEWOOD MANOR
Elyria, OH
crisis. My father also strongly believes it is not only
about investing in the right sectors that creates wealth,
but also having the ability and discipline to evaluate
each potential acquisition for its potential upside and
downside. Our disciplined approach to acquisitions
and our solid balance sheet has allowed us to generate
exceptional performance throughout some of the most
challenging economic cycles. UMH has always and
will always be well positioned for withstanding black
swan events.
Our Chairman points out that UMH should be
considered a social investment. We have been a social
investment since our inception. We provide residents
with a quality home, in a well-managed community at
an affordable price. Affordable housing has come to be
recognized as a human right. The generally accepted
definition of affordable housing is that 30% of income
should cover ones’ housing costs. At year end, our
average home rent was $790 per month, or $9,480 per
year. A family with annual income of $32,000 qualifies
to rent a home in our communities. Our housing offers
our residents financial flexibility that they do not have
with more costly and less desirable housing options.
Many thanks to the entire UMH team, our Board of
Directors and our investors for their support and
encouragement.
Very truly yours,
SAMUEL A. LANDY
President and Chief Executive Officer
March 2021
same property NOI of 15%. These results are excellent,
but our business plan was designed to allow us to
achieve similar results moving forward. We have 3,700
vacant sites which we are actively working to fill as
demonstrated by our strong same property occupancy
results. We have 1,800 vacant acres which can be
developed into 7,300 sites upon which we can either
sell homes or rent homes, further increasing income
and growing value.
We anticipate obtaining approvals to develop 700
sites in 2021. Of these 700 approved sites we should
complete the development of approximately 400 sites
this year. These sites are located in communities that
have historically had very strong sales.
We also can continue to grow through acquisitions.
2020 was a relatively quiet year on the acquisition
front. We acquired 2 communities containing 310 sites
for a total purchase price of $7.8 million. In January
of 2021, we acquired 2 communities in new markets,
Alabama and South Carolina, containing 337 sites
for a total purchase price of $8 million. All of these
acquisitions are value-added in nature, and will
benefit from our business plan. We are particularly
excited about our entrance into the Southeast and look
forward to expanding our footprint in these markets in
the near future.
The two best real estate asset classes are net leased
industrial warehouses and manufactured home
communities. My Father and our Chairman, Eugene
Landy, positioned us in both of these asset classes
many years ago. He founded UMH Properties, Inc. in
1968, recognizing that our nation faced an affordable
housing crisis and that manufactured housing in
land-leased communities could help to combat the
Page 4
2020 ANNUAL REPORT
LETTER FROM THE
CHAIRMAN
If 2020 has taught us anything, it is to always expect
and prepare for the unexpected. Countless well-
run companies were pushed to the brink because of
the impact that the COVID-19 pandemic had on
our Nation’s economy. Fortunately, over our 53-year
history we have always positioned UMH to survive a
black swan event. Our raising of $78 million of our
Series C and D Preferred Stock through our ATM
program could not have been better timed. This capital
gave management the tools to not only survive the
pandemic, but to prosper. While many companies had
to rely on bank lines to stay afloat, UMH was very well
positioned with ample capital from this preferred raise
and our securities portfolio to continue to invest in our
communities and achieve our long-term goals.
Our platform and our asset class delivered
exceptionally strong results this year. While many
companies’ income streams dried up, UMH was able
to maintain our rent collections at pre-pandemic rates
(approximately 98%) and improve our same property
occupancy rate by 320 basis points to 86.8%. Overall
community NOI increased 20% and same property
NOI increased by 15% for the year. Our sales increased
by 13% for the year and generated a profit of $770,000.
Moving forward, our business plan has provided a
runway for organic growth for the next few years. We
still have 3,700 vacant sites that we will fill with rental
homes and homes for sale. This year, we were able to
fill 718 sites in our same property portfolio. We also
have 1,800 acres of vacant land that can be developed
into approximately 7,300 additional home sites.
While we are proud of the community operating
results, we were also able to make strides in refinancing
our capital stack. During the year, we took advantage
of historically low interest rates by financing 28 of our
unencumbered communities generating proceeds of
$106 million at an interest rate of 2.62%. This capital
was used to redeem our $95 million of 8% Series B
Preferred stock. This recapitalization will generate
additional FFO of over $5 million annually. In 2022, we
can further reduce our cost of capital by recapitalizing
$250 million of our 6.75% Series C Preferred stock.
Assuming refinancing at 4%, we can generate
improved FFO of approximately $7 million, or $0.16
per share. In 2023, we can recapitalize $160 million of
our Series D Preferred stock. Assuming refinancing at
4%, we can generate improved FFO of approximately
$3.5 million, or $0.08 per share. These two items alone
can increase our per share earnings by $0.24, which
can improve our share price by almost $5 at a 20x
multiple. We have several avenues available to us to
complete these recapitalizations. As our earnings and
stock price continue to rise, we may be in a position to
replace our preferred equity with common equity or a
lower coupon preferred. We are also working with the
GSE’s and private banks to obtain further acceptance
of our rental program which will allow us to tap into
the $350 million of rental home equity that is on our
balance sheet. 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. As the call date approaches, we
will evaluate all of the options and determine what
the best approach is to maintain and generate further
long-term value for our shareholders.
Affordable housing will be a major issue in our country
over the next few years. UMH and the manufactured
housing industry are perfectly positioned to fill this
need. In an era where ESG is a major factor in where
capital is allocated, we believe that UMH deserves
strong consideration. The mission statement of UMH
is to provide quality affordable housing to all who need
it. Affordable housing as a right has been recognized
by the United Nations. The federal government, and
most states, have also recognized it as a human right.
UMH has the wind at our back. Manufactured housing
communities have never been in higher demand. Our
portfolio of communities has never been more valuable.
The plan we have set forth will generate substantial
earnings growth and stock price appreciation. I am
proud of the job that our President and CEO, Sam
Landy, has done in building a platform and portfolio
that is positioned to produce outstanding results for
years to come. I am also proud of our team for their
hard work and dedication during an unprecedented
global health crisis.
Very truly yours,
EUGENE W. LANDY
Chairman of the Board
March 2021
Page 5
2020 ANNUAL REPORT
VALLEY HILLS
Ravenna, OH
PROPERTY PORTFOLIO
AND YEAR IN REVIEW
OUR ACCOMPLISHMENTS
“UMH has built over 800 manufactured home spaces, added over 8,000 rental homes and
sold over 2,000 manufactured homes in the last decade. Since 2010, we have also acquired 98
communities consisting of approximately 17,000 lots. We are on a mission to provide quality
affordable housing, improve the lives of our residents and create long-lasting value for our
shareholders.”
- Samuel A. Landy, President and Chief Executive Officer
Community Operating Income
2020 will be viewed as a transformational year for UMH Properties. Despite the uncertainty caused by COVID-19 we
($ in millions)
were able to generate exceptional results on all fronts. Our accomplishments during the year include:
Portfolio Growth
30000
25000
20000
15000
10000
5000
•
•
•
•
•
•
•
0
•
2015
Increased Rental and Related Income by 11%;
Increased Community Net Operating Income
(“NOI”) by 20%;
Increased Normalized Funds from Operations
(“Normalized FFO”) by 16% and Normalized FFO
per share by 11%;
Improved our Operating Expense ratio by 390 basis
points to 44.1%;
Increased Same Property NOI by 15%;
Increased Same Property Occupancy by 718 sites
from 83.6% to 86.8% or 320 basis points;
Increased our rental home portfolio by 858
homes to approximately 8,300 total rental homes,
representing an increase of 12%;
Increased rental home occupancy by 230 basis
2019
points from 92.3% to 94.6%;
Increased Sales of Manufactured Homes by 13%;
2018
2017
2020
2016
two
containing
approximately 310 homesites for a total cost of
approximately $7.8 million;
communities
•
• Acquired
$90
$75
shares of our 8.0% Series B Cumulative Redeemable
Preferred Stock for $96.1 million with proceeds
from our 2.62% Fannie Mae financing, resulting in
a savings of over $5 million annually;
$60
•
$45
$30
• Reduced the weighted average interest rate on our
mortgages payable from 4.1% to 3.8% year over
year;
Subsequent to year end, issued and sold 768,000
additional shares of Series D Preferred Stock at a
weighted average price of $24.80 per share through
our At-the-Market Sale Program for our Preferred
Stock, generating gross proceeds of $19.1 million
and net proceeds of $18.8 million, after offering
expenses;
$0
Subsequent to year end, acquired two communities
2015
2020
containing approximately 340 homesites for a total
cost of approximately $8.0 million; and,
Subsequent to year end, raised our dividend by
5.5% to an annualized rate of $0.76 per share.
2017
2018
2016
2019
$15
•
•
17,800
•
23,400
21,500
20,000
23,100
Developed
Sites
Portfolio Growth
• Completed the financing of 28 unencumbered
communities with Fannie Mae for proceeds of
approximately $106 million, with a maturity of 10
years and a 30-year amortization at a fixed rate of
2.62%;
Issued and sold approximately 135,000 shares of
No. of
Common Stock through an At-the-Market Sale
Communities
Program for our Common Stock at a weighted
average price of $14.60 per share, generating gross
proceeds of $2.0 million and net proceeds of $1.7
million, after offering expenses;
Issued and sold, through At-the-Market Sale
Programs for our Preferred Stock, 134,000 shares
of Series C Preferred Stock at a weighted average
price of $24.96 per share and 3.8 million shares
of Series D Preferred Stock at a weighted average
price of $24.98 per share, generating total gross
proceeds of $97.8 million and total net proceeds of
$96.1 million, after offering expenses;
18,000
101
122
124
118
112
98
•
• Redeemed all 3.8 million issued and outstanding
2015
2016
2019
2020
2017
2018
30,000
25,000
20,000
15,000
10,000
5,000
0
Page 8
2020 ANNUAL REPORT
GROWTH OF RENTAL HOME PORTFOLIO
10000
8000
6000
4000
2000
0
COMMUNITY NET OPERATING INCOME
COMMUNITY NET OPERATING INCOME
($ in millions)
$80.2
e
s
a
e
r
c
n
$60.9
3 % I
1
1
$54.0
$66.9
$48.0
$37.7
2015
2016
2017
2018
2019
2020
)
s
n
o
i
l
l
i
m
n
i
$
(
$90
$75
$60
$45
$30
$15
$0
10,000
8,000
6,000
2,000
0
GROWTH OF RENTAL HOME PORTFOLIO
4 %
2
s - 1
o m e
0 h
0
6,500
8,300
7,400
f 4 , 6
e o
s
a
e
r
c
n
I
5,600
4,700
4,000
3,700
2015
2016
2017
2018
2019
2020
2015
2016
2017
2018
2019
2020
PROPERTY PORTFOLIO
Acquired in 2020
2 communities and 300 sites
Acquired in 2021
2 communities and 300 sites
220 acres to be developed into a
manufactured home community
Marcellus and Utica Shale Regions
SITES PER STATE
23,770 SITES
NJ - 1,006
4%
NY - 1,339
5%
TN - 1,776
7%
MI - 740
3%
MD - 62
1%
AL - 195
1%
SC - 142
1%
IN - 3,998
17%
PA - 7,785
33%
IN - 3,998
OH - 6,727
17%
28%
TOTAL ACREAGE
6,915 ACRES
Total Shale Region Acreage - 3,449
Total Non Shale Region Acreage - 3,466
Developed
2,657
38%
Developed
2,421
35%
Vacant
792
12%
Vacant
1,045
15%
VACANT ACREAGE PER STATE
1,837 ACRES
MD - 67
4%
NJ - 162
9%
IN - 225
12%
TN - 246
13%
NY - 326
18%
OH - 453
25%
PA - 358
19%
Over the years, UMH Properties, Inc. has strategically built an irreplaceable portfolio of manufactured housing
communities. Our strong operating performance throughout the portfolio has given us the confidence to implement
our proven business plan in new states. We have acquired our first communities in Alabama and South Carolina. We
plan on further diversifying our portfolio by acquiring additional communities in new markets.
UMH Properties, Inc. owns approximately 3,400 acres in the Marcellus and Utica shale regions. This vast source of
domestic energy will greatly reduce energy prices which will lower the cost of manufacturing in the Northeast and
create new jobs in our regions. As the oil and gas industry continues to develop, we expect the local economies to
further strengthen, resulting in even greater occupancy and rent growth.
Page 9
2020 ANNUAL REPORT
20000
16000
12000
8000
4000
0
20,000
16,000
12,000
8,000
0
3,826
4,000
1500
1200
900
600
300
0
Annual Volume
Cumulative Volume
2012
2013
2014
2015
2016
2017
2018
2019
2020
NUMBER OF ACQUIRED SITES
Cumulative Volume
Annual Volume
16,656
16,346
14,851
13,236
10,950 11,239
8,176
6,564
2,738
2,774
1,727
1,612
1,997
289
1,615
1,495
310
2012
2013
2014
2015
2016
2017
2018
2019
2020
$25
$20
$15
$10
$5
400
300
200
100
$0
OUR COMPELLING VALUE-ADD BUSINESS PLAN
2016
2019
2017
2016
2018
2020
2020
2015
2018
2019
2017
2015
0
$25
$20
# of Homes Sold
INCREASE IN SALES
Sales ($ in millions)
Since 2010, UMH has acquired 98 communities
containing approximately 17,000 developed homesites.
These communities were acquired with a blended
occupancy rate of 74% for a total purchase price of $516
million or $30,000 per site. An important factor in this
business plan is the strategic acquisition of communities
with vacant sites in good markets. Immediately upon
acquisition we begin to improve the infrastructure,
common areas and amenities which results in clean,
well-managed communities that our residents are
proud to call home. As we complete the improvements
at the property, we order new homes for sale and for
rent. Our higher quality and affordability results in
rapidly improving occupancy rates and ultimately
better operating results. Each acquisition is unique and
will require a slightly different plan and time horizon to
achieve the results we expect. As a result of this business
plan, we have generated double digit same property
NOI growth for five quarters in a row.
$10.8
2017
2016
2015
$6.8
$8.5
135
170
$10
$15
222
$5
$0
We have invested $622 million in our acquisitions from
2010-2018, including all capital improvements and
rental home investments. Using a current market cap-
rate of 5%, these communities have increased in value by
$233 million or approximately 38%. These communities
are yielding in excess of 8%. As we continue to increase
our occupancy levels and operating results, these
300
communities will rise in value accordingly.
Annual Volume
Cumulative Volume
400
$20.3
299
323
20000
295
16000
$18.0
$15.8
12000
200
Many of our communities also have vacant land
adjoining them which can be developed into additional
sites. We have 1,800 vacant acres which can potentially
8000
be developed into 7,300 home sites. The average cost
to develop a homesite is approximately $70,000. We
expect to develop 400 or more sites in 2021. Home sales
4000
in expansions should generate sales profits of $30,000
or more per home which helps to alleviate the cost to
develop the site and increase our yield.
0
2015
2019
2012
2020
2019
2017
2018
2014
2016
2013
2020
100
0
2018
$25
$20
$15
$10
$5
$0
2015
2016
2017
2018
2019
2020
2015
2016
2017
2018
2019
2020
400
300
200
100
0
SITES ENGINEERED FOR EXPANSION
SITES ENGINEERED FOR EXPANSION
SITES ENGINEERED FOR EXPANSION
NUMBER OF ACQUIRED SITES
NUMBER OF ACQUIRED SITES
Cumulative Volume
Annual Volume
1,500
1,200
900
600
300
0
1,195
802
813
711
2021
2022
2023
2024 and
thereafter
16,656
16,346
14,851
13,236
20,000
16,000
12,000
8,000
3,826
4,000
10,950 11,239
8,176
6,564
2,738
2,774
1,727
1,612
1,997
289
1,615
1,495
310
0
2012
2013
2014
2015
2016
2017
2018
2019
2020
FAIRVIEW MANOR EXPANSION
Vineland, NJ
2021
2022
2023
2024 and thereafter
295
299
$18.0
323
$20.3
222
$15.8
INCREASE IN SALES
Sales ($ in millions)
# of Homes Sold
$10
135
$10.8
170
$8.5
$6.8
$25
$20
$15
$5
$0
2015
2016
2017
2018
2019
2020
400
300
200
100
0
Page 10
2020 ANNUAL REPORT
SITES ENGINEERED FOR EXPANSION
SITES ENGINEERED FOR EXPANSION
1500
1200
900
600
300
0
802
813
711
1,500
1,200
900
600
300
0
1,195
2024 and
thereafter
2021
2022
2023
2024 and thereafter
2021
2022
2023
Samuel A. Landy, Anna T. Chew, Nelli Madden, Daniel Landy, UMH Properties, Inc. (from right to left)
Jeffery R. Hayward, Fannie Mae’s Executive Vice President and Chief Administrative Officer (on the right, attending virtually)
Nick Bertino and Anthony J. Petosa, Wells Fargo’s Managing Directors (on the left, attending virtually)
Chris Taylor, NYSE’s Vice President of Listings and Services (on the far right)
UMH’S GROUNDBREAKING
FINANCING OPPORTUNITIES
“Fannie Mae’s innovative manufactured home communities loan provides us the added
flexibility to purchase underperforming communities, create a market-based mix of ownership
and rental housing, and maximize affordability for manufactured homeowners and renters.”
- Samuel A. Landy, President and Chief Executive Officer
UMH has proven that our business model generates
significant property level value. We can realize this
increase in value by financing or refinancing our
communities to tap into the trapped equity within the
property. The GSE’s have historically provided best-in-
class financing for stabilized communities with minimal
rental homes. We have worked with the GSE’s, MHI and
HUD to familiarize them with the benefits provided by
rental homes in manufactured housing communities.
Our hard work is starting to produce results.
In August, we closed on
the financing of 28
unencumbered communities generating proceeds
of $106 million at a rate of 2.62%. Fannie Mae issued
waivers to allow us to include several communities
with lower occupancy rates and to allow for a high
percentage of the sites to be occupied by rental homes.
This acceptance of rental homes solidifies the UMH
business plan and allows us to continue our mission of
providing quality affordable housing. The availability of
capital will allow us to acquire and turn around more
communities, purchase and fill sites with rental homes
where needed and generate improved earnings.
Our next step is to obtain reasonable financing on the
rental homes themselves. Our position is that when
the community owner owns both the home and the
site, it should be considered one dwelling unit and the
entire dwelling unit should be included in the loan as
collateral.
In the interim, we have entered into a $20 million line of
credit, expandable to $30 million, with First Bank that
is secured by our rental homes and the income derived
from them. This line is priced at prime + 25 basis points
and is the most advantageous financing we have been
able to obtain on rental homes to date. We anticipate
growing this line in the future to create additional
liquidity from the rental homes.
Page 11
2020 ANNUAL REPORT
Portfolio Growth
Community Operating Income
($ in millions)
$90
$75
$60
$45
$30
$15
$0
2015
2016
2017
2018
2019
2020
2015
2016
2017
2018
2019
2020
Portfolio Growth
COMMUNITY NET OPERATING INCOME
($ in millions)
No. of
Communities
Developed
Sites
21,500
118
20,000
112
17,800
18,000
98
101
23,100
122
23,400
124
2015
2016
2017
2018
2019
2020
$90
$75
$60
$45
$30
$15
$0
$80.2
e
s
a
e
r
c
n
$60.9
3 % I
1
1
$54.0
$66.9
$48.0
$37.7
2015
2016
2017
2018
ALLENTOWN
2019
2020
Memphis, TN
30000
25000
20000
15000
10000
5000
0
30,000
25,000
20,000
15,000
10,000
5,000
0
Annual Volume
Cumulative Volume
THE SOLUTION TO
QUALITY AFFORDABLE HOUSING
GROWTH OF RENTAL HOME PORTFOLIO
$25
10000
8000
6000
4000
$20
$15
The affordable housing crisis is fundamentally a
supply issue affecting our Nation’s lowest earners, the
demographic most negatively impacted by the extreme
lack of housing, as reported by the NLIHC. Those at or
below the poverty line need an additional 3.6 million
units to match supply with households demanding
affordable housing(1). Supply shortages are market wide
as Freddie Mac reports that the country falls short of
housing demand by 370,00 homes per year in addition
to the obsoletion of roughly 350,000 homes. They
estimate that 900,000 to 4 million new homes, with a
base estimate of 2.5 million new homes, are needed to
bring supply and demand in line(2). An average of 1.6
million homes per year is required for a decade.
2015
2020
2018
2019
2017
2018
2019
2015
2016
2020
2016
$10
$0
$5
13,236
16,656
16,346
14,851
We believe the best way to solve the affordable housing
crisis is to operate manufactured housing communities
professionally, and we have done so for over 50
years. Across our portfolio, we can provide America’s
workforce with the housing it can afford; our average
monthly rental home price is $790, while site rent is
$461. We can achieve this through strategic value add
communities in strong locations that increase in value
with the right management and capital improvements.
Value is shared with our residents as they see their
home values increase and as the community becomes
a more desirable place in which to live. The FHFA has
debunked long-held misconceptions, proving that well-
maintained manufactured homes in strong locations
appreciate similarly to site-built homes(3). We are often
1,997
the only opportunity low-income families have to build
2017
equity and create wealth in their housing options.
1,615
1,495
2019
2018
2020
310
GROWTH OF RENTAL HOME PORTFOLIO
GROWTH IN RENTAL HOME PORTFOLIO
10,000
8,000
6,000
4,000
3,700
4 %
2
s - 1
o m e
0 h
0
6,500
f 4 , 6
e o
s
a
e
r
c
n
I
8,300
7,400
5,600
4,700
2017
2,000
2018
2019
2020
2015
2016
2017
2018
2019
2020
0
$25
$20
$15
2015
2016
2017
2018
2019
2020
INCREASE IN SALES
INCREASE IN SALES
Sales ($ in millions)
# of Homes Sold
295
299
$18.0
323
$20.3
222
$15.8
$10
135
170
$8.5
$10.8
$5
$0
$6.8
2015
2016
2017
2018
2019
2020
400
300
200
100
0
2012
2013
2014
2015
2000
2016
2017
0
NUMBER OF ACQUIRED SITES
Cumulative Volume
Annual Volume
10,950 11,239
8,176
6,564
3,826
4,000
2,738
2,774
1,727
1,612
289
2012
2013
2014
2015
2016
0
400
300
200
100
0
(1) National Low Income Housing Coalition, “The GAP: A Shortage of Affordable Housing”, March 2020.
(2) Freddie Mac, “The Major Challenge of Inadequate U.S Housing Supply”, December 2018.
(3) Federal Housing Finance Agency, “Highlights Manufactured House Price Index”, August 2018.
SITES ENGINEERED FOR EXPANSION
Page 12
2020 ANNUAL REPORT
SITES ENGINEERED FOR EXPANSION
802
813
711
1,500
1,200
900
600
300
0
1,195
2024 and
thereafter
2021
2022
2023
2024 and thereafter
2021
2022
2023
20000
16000
12000
8000
4000
0
20,000
16,000
12,000
8,000
1500
1200
900
600
300
0
ESG HIGHLIGHTS
Our commitment to ESG continues to grow as we
regularly improve our sustainability practices and
continue to uphold healthy corporate governance
practices across the Company. Inherently within
our DNA, our operations are more sustainable than
traditional site-built multifamily developers through
the homes we buy. This is because prefabrication leads
to less toxic runoff, less waste due to exact ordering,
and fewer carbon emissions during transportation are
emitted. In stride with the entire manufactured housing
industry, UMH recognizes its obligation to reduce the
impact on the environment and conserve our natural
resources. Some of our ESG highlights are shown
below; however, a more in-depth analysis of our ESG
matters can be found in our annual ESG report, which
can be viewed at www.umh.reit.
Special Strides
Monroe, NJ
•
In 2020, we pushed online applications in order to
save paper and promote healthy habits during the
pandemic. In our first year, we successfully received
1,047 applicants, a continually increasing number.
• We have eight communities retrofitted for LED
bulbs in our common areas, clubhouses and street
light poles. This will result in a projected yearly
watt decrease of about 5 times the current usage.
Additionally, we plan to install smart thermostats
in all of our clubhouses.
• We now have a total of 80 communities that are
submetered. In 2018, we started billing and sub-
metering in-house at 16 communities. At these
locations, daily usage per home decreased by 24%.
All the while, we have invested in leak detection
technology and are continually upgrading our
community infrastructure to conserve water.
• Many of the homes in our communities are Energy
Star Certified and/or contain Energy Certified
appliances. This reduces energy consumption and
decreases resident expenses.
• We regularly support the community at large
through charitable donations including: the Boy
Scouts of America, Boys and Girls clubs, Special
Strides and branches of our Armed Forces,
including the U.S. Merchant Marine Academy.
“
I am a healthcare worker that has been working many
physical and emotionally draining hours. Sometimes I
reach out to the community for assistance and the staff
helps every time. I write this with tears in my eyes, as
it has been so incredible to come home with one less
worry. I truly cannot put into words how thankful I am
for the staff here and the sense of community.
Scott W.
Forest Creek Resident 2020
“
Page 13
2020 ANNUAL REPORT
2000
1600
1200
800
400
0
)
s
n
o
i
l
l
i
m
n
i
$
(
2,000
1,600
1,200
800
400
0
2,000
1,600
1,200
Equity Market Capitalization
Preferred Equity
Total Debt
2014
2013
COMPANY GROWTH
2015
2016
2017
2018
2019
2020
Equity Market Capitalization
Preferred Equity
Total Debt
$495
$582
$752
$1,509
$1,585
I n c r e a s e
2 2 0 %
$980
$1,157
$1,182
2013
2014
2015
2016
2017
2018
2019
2020
Equity Market Capitalization
Preferred Equity
Total Debt
RECENT SHARE ACTIVITY
High
$980
$16.64
14.17
15.05
16.67
$1,509
2020
$1,157
Low
$1,182
Distribution
$ 8.63
10.32
11.67
13.11
$0.18
0.18
0.18
0.18
$0.72
$1,585
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
First Quarter
Second Quarter
800
$752
Third Quarter
Fourth Quarter
400
0
2020
2019
2018
2017
2016
2015
2015
2016
2017
2018
2019
2020
Share Volume Opening Price
Closing Price
Dividend Paid
Total Return
39,971,900
40,567,400
47,226,100
40,160,500
23,498,900
17,683,400
$15.73
$14.81
11.84
14.90
15.05
10.12
9.55
15.73
11.84
14.90
15.05
10.12
$0.72
0.72
0.72
0.72
0.72
0.72
-0.71%
40.21%
-16.24%
3.69%
59.0%
14.1%
UMH Properties, Inc. common shares are traded on the New York Stock Exchange (NYSE:UMH).
Page 14
2020 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
Community NOI
Expense Ratio
Sales of Manufactured Homes
Number of Homes Sold
Number of Rentals Added
Net Income (1)
Net Income (Loss) Attributable to Common Shareholders (1)(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 (1)(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
(1) Includes increase (decrease) in fair value of marketable securities.
(2) Includes charges associated with redemption of preferred stock.
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
December 31, 2020
December 31, 2019
124
23,433
143,344
63,175
80,169
44.1%
20,265
323
858
5,055
(29,759)
79,540
26,283
29,154
41,395
41,395
(0.72)
(0.72)
0.63
0.70
0.72
1,087,214
585,406
556,288
620,819
0
247,100
160,854
1,585,061
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
122
23,088
128,611
61,708
66,903
48.0%
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
Page 15
2020 ANNUAL REPORT
Same Property NOI ($ in millions)
Same Property NOI ($ in millions)
Same Property Occupancy
Same Property Occupancy
88%
88%
2020
2020
87%
87%
2019
2019
86%
86%
85%
85%
84%
84%
83%
83%
82%
82%
81%
81%
$150
$150
$125
$125
$100
$100
$75
$75
$50
$50
$25
$25
$0
$0
Rental and Related Income
Rental and Related Income
Community Operating Expenses
Community Operating Expenses
Community NOI
Community NOI
80%
80%
Dec 31
Mar 31
Dec 31
Jun 30
Mar 31
Sep 30
Jun 30
Dec 31
Sep 30
Mar 31
Dec 31
Jun 30
Mar 31
Sep 30
Jun 30
Dec 31
Sep 30
Dec 31
SAME PROPERTY STATISTICS
SAME PROPERTY PERFORMANCE
SAME PROPERTY OCCUPANCY
2019
2019
2020
2020
2018
2018
2019
2019
2020
2020
$150
$150
$136.5
$136.5
$125
$125.9
$125
$125.9
$100
$100
)
s
n
o
i
l
l
i
m
n
i
$
(
$75
$75
$50
$50
$25
$25
$79.4
$79.4
$68.8
$68.8
$57.1
$57.1
$57.1
$57.1
88%
88%
87%
87%
86%
86%
85%
85%
84%
84%
86.9%
86.9%
86.8%
86.8%
85.8%
85.8%
84.6%
84.6%
83.7% 83.6%
83.7% 83.6%
83.3%
83.3%
83%
83%
82.8%
82.8%
82%
82.0%
82%
82.0%
81%
81%
$0
$0
Rental and
Related Income
Rental and
Related Income
Community
Operating Expenses(1)
Community
Operating Expenses(1)
Community NOI
Community NOI
80%
80%
Dec 31
Dec 31
Mar 31
Mar 31
Dec 31
Dec 31
Jun 30
Jun 30
Mar 31
Mar 31
Sep 30
Sep 30
Jun 30
Jun 30
Dec 31
Dec 31
Sep 30
Sep 30
Mar 31
Mar 31
Dec 31
Dec 31
Jun 30
Jun 30
Mar 31
Mar 31
Sep 30
Sep 30
Jun 30
Jun 30
Dec 31
Dec 31
Sep 30
Sep 30
Dec 31
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, 2020
December 31, 2019
21,530
18,698
86.8%
118
7,927
7,511
94.8%
464
790
21,503
17,980
83.6%
118
7,189
6,671
92.8%
449
765
(1) Excludes a one-time settlement of a utility billing dispute of $375,000 over a prior ten-year period and $179,000 from emergency windstorm damage cleanup for the year
ended December 31, 2019.
Page 16
2020 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, 2020
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
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 PRC
Name of exchange on which registered
New York Stock Exchange
New York Stock Exchange
UMH PRD
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report. X Yes No
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, 2020 was $534.0 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, 2020 was $497.9 million.
The number of shares outstanding of issuer's common stock as of March 5, 2021 was 42,371,157 shares.
Documents Incorporated by Reference:
-Part III incorporates certain information by reference from the Registrant’s definitive proxy statement for the 2021 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, 2020.
-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 ............................................................................................................................................. 7
Item 1B – Unresolved Staff Comments .................................................................................................................. 23
Item 2 – Properties ................................................................................................................................................. 23
Item 3 – Legal Proceedings .................................................................................................................................... 33
Item 4 – Mine Safety Disclosures .......................................................................................................................... 33
PART II ...................................................................................................................................................................... 34
Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities .............................................................................................................................................. 34
Item 6 – Selected Financial Data ............................................................................................................................ 36
Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations ................... 37
Item 7A – Quantitative and Qualitative Disclosures about Market Risk................................................................ 51
Item 8 – Financial Statements and Supplementary Data ........................................................................................ 52
Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ................... 52
Item 9A – Controls and Procedures ....................................................................................................................... 52
Item 9B – Other Information .................................................................................................................................. 55
PART III..................................................................................................................................................................... 55
Item 10 – Directors, Executive Officers and Corporate Governance ..................................................................... 55
Item 11 – Executive Compensation ........................................................................................................................ 55
Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
.............................................................................................................................................................. 55
Item 13 – Certain Relationships and Related Transactions, and Director Independence ....................................... 55
Item 14 – Principal Accounting Fees and Services ................................................................................................ 55
PART IV ..................................................................................................................................................................... 55
Item 15 – Exhibits, Financial Statement Schedules ............................................................................................... 56
Item 16 – Form 10-K Summary ............................................................................................................................. 60
SIGNATURES ......................................................................................................................................................... 111
-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.
UMH was incorporated in the state of New Jersey in 1968. On September 29, 2003, UMH changed its state
of incorporation from New Jersey to Maryland by merging with and into a Maryland corporation. Our executive
office is located in Freehold, NJ.
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.
During 2020, the Company purchased two communities totaling 310 homesites for a total purchase price of
$7.8 million. As of December 31, 2020, the Company owned and operated 124 manufactured home communities
containing approximately 23,400 developed homesites. These communities are located in New Jersey, New York,
Ohio, Pennsylvania, Tennessee, Indiana, Michigan and Maryland. Subsequent to year end, the Company purchased
one community in Alabama and one community in South Carolina. The two communities acquired during 2021
contain a total of 337 homesites and were purchased for a total price of $8.0 million.
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.
Generally, 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, inventory control of construction materials and control of all
aspects of the construction process, which is generally a more efficient and streamlined process as compared to a site-
built home.
Modern residential land lease communities are similar to typical residential subdivisions containing central
entrances, paved well-lit streets, curbs and gutters. 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
-3-
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, and renewable upon the consent of both
parties. The community manager interviews prospective residents, collects rent and finance payments, ensures
compliance with community regulations, maintains common areas and community facilities and is responsible for the
overall 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, 2020, UMH owned a total of 8,300 rental homes, representing approximately 35% 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 126 communities with over 23,800 developed homesites, including the two communities
recently purchased in January 2021. 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. During 2021, we
have entered the Alabama and South Carolina markets by acquiring communities in those markets. As part of our
growth strategy, we intend to evaluate potential opportunities to expand into additional geographic markets, including
certain other 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 1,800 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.
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The Company may consider issuing securities as a form of payment to acquire communities; 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, 2020,
the Company repurchased 174,000 shares of its common stock at an aggregate cost of $1.8 million, or a weighted
average price of $10.50 per share. The last repurchase was made on May 14, 2020. In addition, during 2020 the
Company voluntarily redeemed all outstanding shares of its 8.0% Series B Cumulative Redeemable Preferred Stock.
The Company also owns a portfolio of marketable REIT securities, which is 7.6% of undepreciated assets
(which is the Company’s total assets excluding accumulated depreciation) at year end. 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 serve 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. 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.
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 2021 will be approximately $12 million.
Human Capital
The attraction, motivation and retention of our employees are critical factors in furthering the growth and
financial success of the Company. We recognize that our ability to achieve the high standards we set for ourselves
can best be accomplished by having a diverse team. We are committed to promoting diversity, equity and inclusion
and our benefits programs are designed to achieve employee satisfaction and advancement. As of March 5, 2021, the
Company had approximately 440 employees, including officers. Approximately half of our management team and
44% of our total employee population are female. Over 35% of our employees are 40 years of age or older and 30%
are over 60 years of age. During each year, the Company hires additional part-time and seasonal employees as grounds
keepers and lifeguards and to conduct emergency repairs.
Our employees are fairly compensated as compared to employees of our competitors and are routinely
recognized for outstanding performance. They are offered regular opportunities to participate in professional
development programs which focus on building their skills and capabilities. We conduct regional training sessions
and are committed to providing a safe and healthy workplace that is free from violence, intimidation and other unsafe
or disruptive practices. We hold an annual employee meeting that includes safety training, as required under the
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federal Occupational, Safety and Health Act, as well as harassment training. The Company also offers a robust
wellness program to its employees that incorporates health benefits, including incentives for enrolling in exercise
classes and for gym memberships. This encourages our employees to improve their mental and physical well-being.
Information about our Executive Officers
The following table sets forth information with respect to the executive officers of the Company as of
December 31, 2020:
Name
Eugene W. Landy
Samuel A. Landy
Anna T. Chew
Craig Koster
Brett Taft
Age
87
60
62
45
31
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
Environmental, Social and Governance (“ESG”) Considerations
The Company’s mission is to address the fundamental need of providing affordable housing and in doing so,
create sustainable and environmentally friendly communities that have a positive societal impact. We recognize our
obligation, as well as that of our industry, to reduce our impact on the environment and to conserve natural resources.
We continually invest in energy-efficient technology where practicable, including water and energy conservation
initiatives, and are committed to incorporating environmental and social considerations into our business practices to
create value and enhance the communities where our residents live. We also recognize the importance of good
corporate governance in ensuring the Company’s continued success and maintaining the confidence of our
shareholders and financing sources. Our policies and practices are endorsed and supported by the Company’s
executive management, including its Director of ESG, and are regularly reviewed by the Board of Directors and its
Nominating and Corporate Governance Committee.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this Annual Report on 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:
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changes in the real estate market conditions and general economic conditions;
risks and uncertainties related to the COVID-19 pandemic;
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 made in a timely manner in accordance with all rules and regulations,
and any potential fraud or embezzlement is thwarted or detected;
the ability of manufactured home buyers to obtain financing;
the level of repossessions by manufactured home lenders;
market conditions affecting our investment securities;
changes in federal or state tax rules or regulations that could have adverse tax consequences;
our ability to qualify as a real estate investment trust for federal income tax purposes; and,
those risks and uncertainties referenced under the heading "Risk Factors" contained in this Form 10-K
and the Company's filings with the Securities and Exchange Commission (“SEC”).
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 Annual Report on 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.
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
should not be considered part of this Annual Report on Form 10-K or our other filings with the 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 Exchange Act 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
Our business faces many risks. The following risk factors may not be the only risks we face but address what
we believe may be the material risks concerning our business at this time. If any of the risks discussed in this report
were to occur, our business, prospects, financial condition, results of operation and our ability to service our debt
and make distributions to our shareholders could be materially and adversely affected and the market price per share
of our stock could decline significantly. Some statements in this report, including statements in the following risk
factors, constitute forward-looking statements. Please refer to the section entitled “Cautionary Statement Regarding
Forward-Looking Statements.”
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Real Estate Industry Risks
General economic conditions and the concentration of our properties in certain states may affect our
ability to generate sufficient revenue. The market and economic conditions in our current markets may significantly
affect manufactured home occupancy or rental rates. Occupancy and rental rates, in turn, may significantly affect our
revenues, and if our communities do not generate revenues sufficient to meet our operating expenses, including debt
service and capital expenditures, our cash flow and ability to pay or refinance our debt obligations could be adversely
affected. As a result of the geographic concentration of our properties in ten states in the Eastern United States, we
are exposed to the risks of downturns in the local economy or other local real estate market conditions which could
adversely affect occupancy rates, rental rates, and property values in these markets.
Other factors that may affect general economic conditions or local real estate conditions include:
the national and local economic climate, 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);
our ability to provide adequate management, maintenance and insurance;
a pandemic or other health crisis, such as the outbreak of 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 may be unable to compete with our larger competitors for acquisitions, which may increase prices for
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
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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.
We may not be able to integrate or finance our acquisitions and our acquisitions may not perform as
expected. We acquire and intend to continue to acquire manufactured home communities on a select basis. Our
acquisition activities and their success are subject to risks, including the following:
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;
we may be unable to finance acquisitions on favorable terms;
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
we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of
portfolios of properties, into our existing operations.
If any of the above were to occur, our business and results of operations could be adversely affected.
In addition, we may acquire properties subject to liabilities and without any recourse, or with only limited
recourse, with respect to unknown liabilities. As a result, if a liability were to be asserted against us based upon
ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our
cash flow.
We may be unable to finance or accurately estimate or anticipate costs and timing associated with
expansion activities. We periodically consider expansion of existing communities and development of new
communities. Our expansion and development activities are subject to risks such as:
we may not be able to obtain financing with favorable terms for community development which
may make us unable to proceed with the development;
we may be unable to obtain, or may 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 a community entirely if we are unable to obtain such permits
or authorizations;
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;
we may be unable to complete construction and lease‑up of a community on schedule resulting in
increased debt service expense and construction costs;
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
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community uneconomical and we may not be able to increase rents to compensate for the increase
in development costs which may impact our profitability;
we may be unable to secure long‑term financing on completion of development resulting in
increased debt service and lower profitability; and
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 may be unable to sell properties when appropriate because real estate investments are illiquid. Real
estate investments generally cannot be sold quickly and, therefore, will tend to limit our ability to vary our property
portfolio promptly in response to changes in economic or other conditions. In addition, the Code limits our ability to
sell our properties. The inability to respond promptly to changes in the performance of our property portfolio could
adversely affect our financial condition and ability to service our debt and make distributions to our stockholders.
Our ability to sell manufactured homes may be affected by various factors, which may in turn adversely
affect our profitability. S&F operates in the manufactured home market offering homes for sale to tenants and
prospective tenants of our communities. The market for the sale of manufactured homes may be adversely affected
by the following factors:
downturns in economic conditions which adversely impact the housing market;
an oversupply of, or a reduced demand for, manufactured homes;
the 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
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 laws and compliance could affect our profitability. We are subject to the Secure and Fair
Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), which requires that we obtain appropriate licenses
pursuant to the Nationwide Mortgage Licensing System & Registry in each state where we conduct business. There
are extensive federal and state requirements mandated by the SAFE Act and other laws pertaining to financing,
including the Dodd-Frank Wall Street Reform and Consumer Protection 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 associated with taxes and regulatory compliance may reduce our revenue. We are subject to
significant regulation that inhibits our activities and may increase our costs. Local zoning and use laws, environmental
statutes and other governmental requirements may restrict expansion, rehabilitation and reconstruction activities.
These regulations may prevent us from taking advantage of economic opportunities. Legislation such as the
Americans with Disabilities Act may require us to modify our properties at a substantial cost and noncompliance could
result in the imposition of fines or an award of damages to private litigants. Future legislation may impose additional
requirements. We cannot predict what requirements may be enacted or amended or what costs we will incur to comply
with such requirements. Costs resulting from changes in real estate laws, income taxes, service or other taxes may
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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.
Rent control legislation may harm our ability to increase rents. State and local rent control laws in certain
jurisdictions may limit our ability to increase rents and to recover increases in operating expenses and the costs of
capital improvements. 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 liabilities could affect our profitability. Under various federal, state and local laws,
ordinances and regulations, an owner or operator of real estate is liable for the costs of removal or remediation of
certain hazardous substances at, on, under or in such property, as well as certain other potential costs relating to
hazardous or toxic substances. Such laws often impose such liability without regard to whether the owner knew of,
or was responsible for, the presence of such hazardous substances. A conveyance of the property, therefore, does not
relieve the owner or operator from liability. As a current or former owner and operator of real estate, we may be
required by law to investigate and clean up hazardous substances released at or from the properties we currently own
or operate or have in the past owned or operated. We may also be liable to the government or to third parties for
property damage, investigation costs and cleanup costs. In addition, some environmental laws create a lien on the
contaminated site in favor of the government for damages and costs the government incurs in connection with the
contamination. Contamination may adversely affect our ability to sell or lease real estate or to borrow using the real
estate as collateral. Persons who arrange for the disposal or treatment of hazardous substances also may be liable for
the costs of removal or remediation of such substances at a disposal or treatment facility owned or operated by another
person. In addition, certain environmental laws impose liability for the management and disposal of asbestos-
containing materials and for the release of such materials into the air. These laws may provide for third parties to seek
recovery from owners or operators of real properties for personal injury associated with asbestos-containing materials.
In connection with the ownership, operation, management, and development of real properties, we may be considered
an owner or operator of such properties and, therefore, are potentially liable for removal or remediation costs, and also
may be liable for governmental fines and injuries to persons and property. When we arrange for the treatment or
disposal of hazardous substances at landfills or other facilities owned by other persons, we may be liable for the
removal or remediation costs at such facilities. We are not aware of any environmental liabilities relating to our
investment properties which would have a material adverse effect on our business, assets, or results of operations.
However, we cannot assure you that environmental liabilities will not arise in the future and that such liabilities will
not have a material adverse effect on our business, assets or results of operations.
Of the 124 manufactured home communities we operated as of December 31, 2020, 47 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
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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 of our properties are subject to potential natural or other 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, in areas that may be adversely affected by tornados and 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 change may adversely affect our business. 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
regulations 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.
Actions by our competitors may decrease or prevent increases in the occupancy and rental rates of our
properties which could adversely affect our business. We compete with other owners and operators of manufactured
home community properties, some of which own properties similar to ours in the same submarkets in which our
properties are located. The number of competitive manufactured home community properties in a particular area
could have a material adverse effect on our ability to 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
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 in excess of our insurance coverage or uninsured losses could adversely affect our cash flow. We
generally maintain insurance policies related to our business, including casualty, general liability and other policies
covering business operations, employees and assets. However, we may be required to bear all losses that are not
adequately covered by insurance. In addition, there are certain losses that are not generally insured because it is not
economically feasible to insure against them, including losses due to riots, 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 investments are concentrated in the manufactured housing/residential sector and our business would
be adversely affected by an economic downturn in that sector. Our investments in real estate assets are primarily
concentrated in the manufactured housing/residential sector. This concentration may expose us to the risk of economic
downturns in this sector to a greater extent than if our business activities included a more significant portion of other
sectors of the real estate industry.
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Financing Risks
We face risks generally associated with our debt. We finance a portion of our investments in properties and
marketable securities through debt. We are subject to the risks normally associated with debt financing, including the risk
that our cash flow will be insufficient to meet required payments of principal and interest. In addition, debt creates other
risks, including:
rising interest rates on our variable rate debt;
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 mortgage our properties, which subjects us to the risk of foreclosure in the event of non-payment. We
mortgage many of our properties to secure payment of indebtedness. If we are unable to meet mortgage payments,
then the property could be foreclosed upon or transferred to the mortgagee with a consequent loss of income and asset
value. A foreclosure of one or more of our properties could adversely affect our financial condition, results of
operations, cash flow, ability to service debt and make distributions and the market price of our preferred and common
stock and any other securities we issue.
We face risks related to “balloon payments” and refinancings. Certain of our mortgages will have significant
outstanding principal balances on their maturity dates, commonly known as “balloon payments.” There can be no
assurance that we will be able to refinance the debt on favorable terms or at all. To the extent we cannot refinance debt on
favorable terms or at all, we may be forced to dispose of properties on disadvantageous terms or pay higher interest rates,
either of which would have an adverse impact on our financial performance and ability to service debt and make
distributions.
We face risks associated with our dependence on external sources of capital. In order to qualify as a REIT, we
are required each year to distribute to our stockholders at least 90% of our REIT taxable income, and we are subject to tax
on our income to the extent it is not distributed. Because of this distribution requirement, we may not be able to fund all
future capital needs from cash retained from operations. As a result, to fund capital needs, we rely on third-party sources
of capital, which we may not be able to obtain on favorable terms, if at all. Our access to third-party sources of capital
depends upon a number of factors, including (i) general market conditions; (ii) the market’s perception of our growth
potential; (iii) our current and potential future earnings and cash distributions; and (iv) the market price of our preferred
and common stock. Additional debt financing may substantially increase our debt-to-total capitalization ratio. Additional
equity issuance may dilute the holdings of our current stockholders.
We may become more highly leveraged, resulting in increased risk of default on our obligations and an
increase in debt service requirements which could adversely affect our financial condition and results of operations
and our ability to pay distributions. We have incurred, and may continue to incur, indebtedness in furtherance of our
activities. Our governing documents do not limit the amount of indebtedness we may incur. Accordingly, our Board
of Directors may vote to incur additional debt and would do so, for example, if it were necessary to maintain our status
as a REIT. We could therefore become more highly leveraged, resulting in an increased risk of default on our
obligations and in an increase in debt service requirements, which could adversely affect our financial condition and
results of operations and our ability to pay distributions to stockholders.
Fluctuations in interest rates could materially affect our financial results. 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.
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We may be adversely affected by changes in the London Interbank Offered Rate (“LIBOR”) or the method
in which LIBOR is determined. 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 or another alternative benchmark. 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.
Covenants in our credit agreements could limit our flexibility and adversely affect our financial condition.
The terms of our various credit agreements and other indebtedness require us to comply with a number of customary
financial and other covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance
coverage. These covenants may limit our flexibility in our operations, and breaches of these covenants could result in
defaults under the instruments governing the applicable indebtedness even if we had satisfied our payment obligations. If
we were to default under our credit agreements, our financial condition would be adversely affected.
A change in the U.S. government policy with regard to Fannie Mae and Freddie Mac could impact our
financial condition. Fannie Mae and Freddie Mac are major sources 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 face risks associated with the financing of home sales to customers in our manufactured home
communities. To produce new rental revenue and to upgrade our communities, we sell homes to customers in our
communities at competitive prices and finance these home sales through S&F. We allow banks and outside finance
companies the first opportunity to finance these sales. We are subject to the following risks in financing these homes:
the borrowers may default on these loans and not be able to make debt service payments or pay
principal when due;
the default rates may be higher than we anticipate;
demand for consumer financing may not be as great as we anticipate or may decline;
the value of property securing the installment notes receivable may be less than the amounts owed;
and
interest rates payable on the installment notes receivable may be lower than our cost of funds.
Additionally, there are many regulations pertaining to our home sales and financing activities. There are
significant consumer protection laws and the regulatory framework may change in a manner which may adversely
affect our operating results. The regulatory environment and associated consumer finance laws create a risk of greater
liability from our home sales and financing activities and could subject us to additional litigation. We are also
dependent on licenses granted by state and other regulatory authorities, which may be withdrawn or which may not
be renewed and which could have an adverse impact on our ability to continue with our home sales and financing
activities.
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Risks Related to our Status as a REIT
If our leases are not respected as true leases for federal income tax purposes, we would fail to qualify as a
REIT. To qualify as a REIT, we must, among other things, satisfy two gross income tests, under which specified
percentages of our gross income must be 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.
Failure to make required distributions would subject us to additional tax. In order to qualify as a REIT, we
must, among other requirements, distribute, each year, to our stockholders at least 90% of our taxable income, excluding
net capital gains. To the extent that we satisfy the 90% distribution requirement, but distribute less than 100% of our taxable
income, we will be subject to federal corporate income tax on our undistributed income. In addition, we will incur a 4%
nondeductible excise tax on the amount, if any, by which our distributions (or deemed distributions) in any year are less
than the sum of:
85% of our ordinary income for that year;
95% of our capital gain net earnings for that year; and
100% of our undistributed taxable income from prior years.
To the extent we pay out in excess of 100% of our taxable income for any tax year, we may be able to carry
forward such excess to subsequent years to reduce our required distributions for purposes of the 4% nondeductible
excise tax in such subsequent years. We intend to pay out our income to our stockholders in a manner intended to
satisfy the 90% distribution requirement. Differences in timing between the recognition of income and the related cash
receipts or the effect of required debt amortization payments could require us to borrow money or sell assets to pay
out enough of our taxable income to satisfy the 90% distribution requirement and to avoid corporate income tax.
We may not have sufficient cash available from operations to pay distributions to our stockholders, and,
therefore, distributions may be made from borrowings. The actual amount and timing of distributions to our stockholders
will be determined by our Board of Directors in its discretion and typically will depend on the amount of cash available
for distribution, which will depend on items such as current and projected cash requirements, limitations on distributions
imposed by law on our financing arrangements and tax considerations. As a result, we may not have sufficient cash
available from operations to pay distributions as required to maintain our status as a REIT. Therefore, we may need to
borrow funds to make sufficient cash distributions in order to maintain our status as a REIT, which may cause us to incur
additional interest expense as a result of an increase in borrowed funds for the purpose of paying distributions.
We may be required to pay a penalty tax upon the sale of a property. The federal income tax provisions
applicable to REITs provide that any gain realized by a REIT on the sale of property held as inventory or other property
held primarily for sale to customers in the ordinary course of business is treated as income from a “prohibited transaction”
that is subject to a 100% penalty tax. Under current law, unless a sale of real property qualifies for a safe harbor, the
question of whether the sale of real estate or other property constitutes the sale of property held primarily for sale to
customers is generally a question of the facts and circumstances regarding a particular transaction. We intend that we and
our subsidiaries will hold the interests in the real estate for investment with a view to long-term appreciation, engage in the
business of acquiring and owning real estate, and make occasional sales as are consistent with our investment objectives.
We do not intend to engage in prohibited transactions. We cannot assure you, however, that we will only make sales that
satisfy the requirements of the safe harbors or that the IRS will not successfully assert that one or more of such sales are
prohibited transactions.
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We may be adversely affected if we fail to qualify as a REIT. If we fail to qualify as a REIT, we will not be
allowed to deduct distributions to 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 maximum 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.
To qualify as a REIT, we must comply with certain highly technical and complex requirements. We cannot
be certain we have complied, and will always be able to comply, with the requirements to qualify as a REIT because there
are few judicial and administrative interpretations of these provisions. In addition, facts and circumstances that may be
beyond our control may affect our ability to continue to qualify as a REIT. We cannot assure you that new legislation,
regulations, administrative interpretations or court decisions will not change the tax laws significantly with respect to our
qualification as a REIT or with respect to the Federal income tax consequences of qualification. We believe that we have
qualified as a REIT since our inception and intend to continue to qualify as a REIT. However, we cannot assure you that
we are so qualified or will remain so qualified.
There is a risk of changes in the tax law applicable to 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. Furthermore, members
of the U.S. Congress and the Biden administration have expressed intent to pass legislation to change or repeal parts
of currently enacted tax law, including, in particular, legislation that will increase corporate tax rates from the current
flat rate of 21%. 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.
The act popularly known as the Tax Cuts and Jobs Act of 2017 (the “TCJA”), as amended by the Coronavirus
Aid, Relief, and Economic Security Act (“CARES Act”), has significantly changed the U.S. federal income taxation
of U.S. businesses and their owners, including REITs and their shareholders. On March 27, 2020, the CARES Act,
federal legislation intended to ameliorate the economic impact of the COVID-19 pandemic, was signed into law. The
CARES Act made technical corrections, or temporary modifications, to certain of the provisions of the TCJA. The
individual and collective impact of the changes made by the TCJA and the CARES Act on REITs and their security
holders are uncertain and may not become evident for some period of time. It is also possible that additional legislation
could be enacted in the future as a result of the ongoing COVID-19 pandemic which may affect the holders of our
securities. Changes made by the TCJA and the CARES Act that could affect us and our shareholders include:
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%;
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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 (“NOL’s”) to 80% of REIT taxable income (prior to
the application of the dividends paid deduction) (this was modified by the CARES Act as discussed
below);
generally limiting the deduction for net business interest expense in excess of a specified percentage
(50% for taxable years beginning in 2019 and 2020 and 30% for subsequent taxable years) 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). The CARES Act increases this interest limitation to 50% for taxable
years beginning in 2019 or 2020 (with special rules applicable to interest allocation from entities
treated as partnerships for tax purposes) and permits an entity to elect to use its 2019 adjusted taxable
income to calculate the applicable limitation for its 2020 taxable year; and
eliminating the corporate alternative minimum tax.
The CARES Act significantly modified the treatment of NOLs. Generally, a corporate taxpayer must pay
tax on its net capital gain at ordinary corporate rates and may deduct capital losses only to the extent of capital gains,
though excess capital losses may be carried forward indefinitely. As discussed above, under the TCJA, corporate
NOLs arising in tax years beginning after December 31, 2017, can only offset 80% of taxable income (before the
dividends paid deduction). These NOLs can now be carried forward indefinitely instead of the previous 20-year
limitation, and carrybacks of these losses are no longer permitted. NOLs arising in tax years beginning before
December 31, 2017 retain the same rules, and can be carried back two years and forward 20 years. There is no taxable
income limit to usage of such losses. The CARES Act repeals the above 80% limitation for taxable years beginning
before January 1, 2021, and allows a five-year carryback for NOLs arising in 2018, 2019 or 2020. This NOL carryback
does not apply directly to REITs, however, taxable REIT subsidiaries are eligible to carry back NOLs and may benefit
from this provision.
The TCJA and the CARES Act are 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 TCJA and/or the CARES 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 may be unable to comply with the strict income distribution requirements applicable to REITs. To
maintain qualification as a REIT under the Code, a REIT must annually distribute to its stockholders at least 90% of
its REIT taxable income, excluding the dividends paid deduction and net capital gains. This requirement limits our
ability to accumulate capital. We may not have sufficient cash or other liquid assets to meet the distribution
requirements. Difficulties in meeting the distribution requirements might arise due to competing demands for our
funds or to timing differences between tax reporting and cash receipts and disbursements, because income may have
to be reported before cash is received, because expenses may have to be paid before a deduction is allowed, because
deductions may be disallowed or limited or because the IRS may make a determination that adjusts reported income.
In those situations, we might be required to borrow funds or sell properties on adverse terms in order to meet the
distribution requirements and interest and penalties could apply which could adversely affect our financial condition.
If we fail to make a required distribution, we could cease to be taxed as a REIT.
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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.
Notwithstanding our status as a REIT, we are subject to various federal, state and local taxes on our income
and property. For example, we will be taxed at regular corporate rates on any undistributed taxable income, including
undistributed net capital gains; provided, however, that properly designated undistributed capital gains will effectively
avoid taxation at the stockholder level. We may be subject to other Federal income taxes and may also have to pay some
state income or franchise taxes because not all states treat REITs in the same manner as they are treated for federal income
tax purposes.
General Risk Factors
We face various risks and uncertainties related to public health crises, including the ongoing COVID-19
pandemic. The COVID-19 pandemic and its consequences may have a material adverse effect on us. We face various
risks and uncertainties related to public health crises, including the ongoing global COVID-19 pandemic, which has
disrupted financial markets and significantly impacted worldwide economic activity and is likely to continue to do so. The
future effects of the evolving impact of the COVID-19 pandemic as well as mandatory and voluntary actions taken to
mitigate the public health impact of the pandemic may have a material adverse effect on our financial condition. The
COVID-19 pandemic and social and governmental responses to the pandemic have caused, and are likely to continue to
cause, severe economic, market and other disruptions worldwide. Although the COVID-19 pandemic and related societal
and government responses have not, to date, had a material impact on our business or financial results, the extent to which
COVID-19 and related actions may, in the future, impact our operations cannot be predicted with any degree of confidence.
As a result, we cannot at this time predict the direct or indirect impact on us of the COVID-19 pandemic, but it could have
a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.
We may not be able to evict tenants for nonpayment of rent in a timely manner due to federal, state and local
eviction moratoriums enacted in response to the COVID-19 pandemic. The Centers for Disease Control and Prevention
(CDC) issued an order (the “Moratorium”), which became effective on September 4, 2020, temporarily halting residential
evictions of any consumers for failure to pay rent until December 31, 2020. The Moratorium requires renters to file sworn
declarations stating they are eligible for the relief, despite their best efforts to procure government assistance, because they
earn less than a certain income amount, have suffered a loss of income or employment, have used best efforts to make
timely partial payments and that eviction would likely render them homeless. The Moratorium does not relieve any
individual of any obligation to pay rent nor does it prevent the “charging or collecting of fees, penalties, or interest as a
result of the failure to pay rent or other housing payment on a timely basis." Further, landlords and property managers still
have the ability to evict for health and safety reasons. The Consolidated Appropriations Act, 2021 was signed into law by
the President on December 27, 2020, and extended the expiration of the CDC moratorium to March 31, 2021. President
Biden has expressed interest in further extending the Moratorium past that date. However, on February 25, 2021, US.
District Judge J. Campbell Barker issued an opinion ruling that the Moratorium is unconstitutional. Given the uncertainty
regarding the Moratorium and the presence of state and local eviction moratoriums in some other areas where we operate,
we cannot be certain as to our ability to evict residents for nonpayment of rent which can increase tenant delinquencies.
However, to date, our rent collections have not been materially impacted by eviction moratoriums or the COVID-19
pandemic.
We may not be able to obtain adequate cash to fund our business. Our business requires access to adequate
cash to finance our operations, distributions, capital expenditures, debt service obligations, development and
redevelopment costs and property acquisition costs, if any. We expect to generate the cash to be used for these purposes
primarily with operating cash flow, borrowings under secured and unsecured loans, proceeds from sales of
strategically identified assets and, when market conditions permit, through the issuance of debt and equity securities
from time to time. We may not be able to generate sufficient cash to fund our business, particularly if we are unable
to renew leases, lease vacant space or re-lease space as leases expire according to our expectations.
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We are dependent on key personnel. Our executive and other senior officers have a significant role in our
success. Our ability to retain our management group or to attract suitable replacements should any members of the
management group leave is dependent on the competitive nature of the employment market. The loss of services from key
members of the management group or a limitation in their availability could adversely affect our financial condition and
cash flow. Further, such a loss could be negatively perceived in the capital markets.
Some of our directors and officers may have conflicts of interest with respect to certain related party
transactions and other business interests. Mr. Eugene W. Landy, the Founder and Chairman of the Board of Directors
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.
We may amend our business policies without stockholder approval. Our Board of Directors determines our
growth, investment, financing, capitalization, borrowing, REIT status, operations and distributions policies. Although our
Board of Directors has no present intention to change or reverse any of these policies, they may be amended or revised
without notice to stockholders. Accordingly, stockholders may not have control over changes in our policies. We cannot
assure you that changes in our policies will serve fully the interests of all stockholders.
The market value of our preferred and common stock could decrease based on our performance and market
perception and conditions. The market value of our preferred and common stock may be based primarily upon the
market’s perception of our growth potential and current and future cash dividends, and may be secondarily based upon the
real estate market value of our underlying assets. The market price of our preferred and common stock is influenced by
their respective distributions relative to market interest rates. Rising interest rates may lead potential buyers of our stock to
expect a higher distribution rate, which 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.
The market price and trading volume of our common stock may fluctuate significantly. The per-share
trading price of our common stock may fluctuate. In addition, the trading volume in our common stock may fluctuate
and cause significant price variations to occur. If the per-share trading price of our common stock declines
significantly, investors in our common stock may be unable to resell their shares at or above their purchase price. We
cannot provide any assurance that the per-share trading price of our common stock will not fluctuate or decline
significantly in the future.
Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading
volume of our stock include:
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actual or anticipated variations in our quarterly operating results or dividends;
changes in our funds from operations or earnings estimates;
publication of research reports about us or the real estate industry;
prevailing interest rates;
the market for similar securities;
changes in market valuations of similar companies;
adverse market reaction to any additional debt we incur in the future;
additions or departures of key management personnel;
actions by institutional stockholders;
speculation in the press or investment community;
the extent of investor interest in our securities;
the general reputation of REITs and the attractiveness of our equity securities in comparison to other
equity securities, including securities issued by other real estate-based companies;
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our underlying asset value;
investor confidence in the stock and bond markets, generally;
changes in tax laws;
future equity issuances;
failure to meet earnings estimates;
failure to maintain our REIT status;
changes in valuation of our REIT securities portfolio;
general economic and financial market conditions;
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• war, terrorist acts and epidemic disease, including the ongoing COVID-19 pandemic;
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our issuance of debt or preferred equity securities;
our financial condition, results of operations and prospects; and
the realization of any of the other risk factors presented in this Annual Report on Form 10-K.
In the past, securities class action litigation has often been instituted against companies following periods of
volatility in the price of their common stock. This type of litigation could result in substantial costs and divert our
management’s attention and resources, which could have an adverse effect on our financial condition, results of
operations, cash flow and per-share trading price of our common stock.
The market prices and trading volumes of our Series C Preferred Stock and Series D Preferred Stock may
fluctuate significantly. Although our Series C Preferred Stock and Series D Preferred Stock are listed and traded on
the NYSE, the trading markets for the Series C Preferred Stock and Series D Preferred Stock are limited. Since the
Series C Preferred Stock and the Series D Preferred Stock have no maturity dates, investors seeking liquidity may
elect to sell their shares of Series C Preferred Stock or Series D Preferred Stock in the secondary market. If an active
trading market does not exist, the market price and liquidity of the Series C Preferred Stock or Series D Preferred
Stock may be adversely affected by such sales. Even if an active public market exists, we cannot guarantee that the
market price for the Series C Preferred Stock or the Series D Preferred Stock will equal or exceed the price that
investors in the Series C Preferred Stock or the Series D Preferred Stock paid for their shares.
The future issuance or sale of additional shares of Common Stock or Preferred Stock could adversely
affect the trading prices of our outstanding Common Stock and Preferred Stock. Future issuances or sales of
substantial numbers of shares of our Common Stock or Preferred Stock in the public market, or the perception that
such issuances or sales might occur, could adversely affect the per-share trading prices of our Common Stock, Series
C Preferred Stock or Series D Preferred Stock. The per-share trading price of our Common Stock, Series C Preferred
Stock or Series D Preferred Stock may decline significantly upon the sale or registration of additional shares of our
Common Stock, Series C Preferred Stock or Series D Preferred Stock.
Future issuances of our debt securities, which would be senior to our Series C Preferred Stock and Series
D Preferred Stock upon liquidation, or preferred equity securities which may be senior to our Series C Preferred
Stock and Series D Preferred Stock for purposes of dividend distributions or upon liquidation, may adversely affect
the per-share trading prices of our Series C Preferred Stock or Series D Preferred Stock. In the future, we may
attempt to increase our capital resources by issuing additional debt securities and/or additional classes or series of
preferred stock. Upon liquidation, holders of our debt securities and lenders with respect to other borrowings will be
entitled to receive our available assets prior to any distribution to holders of our Series C Preferred Stock or Series D
Preferred Stock. Additionally, any convertible or exchangeable securities that we issue in the future may have rights,
preferences and privileges more favorable than those of our Series C Preferred Stock or Series D Preferred Stock. Any
shares of preferred stock that we issue in the future could have a preference on liquidating distributions or a preference
on dividend payments that could limit our ability to pay dividends to holders of our Series C Preferred Stock or Series
D Preferred Stock. Any such future issuances may adversely affect the trading price of our Series C Preferred Stock
or Series D Preferred Stock.
There are restrictions on the transfer of our capital stock. To maintain our qualification as a REIT under the
Code, no more than 50% in value of our outstanding capital stock may be owned, actually or by attribution, by five or
fewer individuals, as defined in the Code to also include certain entities, during the last half of a taxable year. Accordingly,
our charter contains provisions restricting the transfer of our capital stock. 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
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stock or preferred stock or that our shareholders otherwise believe to be in their best interests, and may result in the transfer
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.
Our earnings are dependent, in part, upon the performance of our investment portfolio. As permitted by the
Code, we invest in and own securities of other REITs, which we generally limit to no more than approximately 15% of
our undepreciated assets. To the extent that the value of those investments decline or those investments do not provide a
return, our earnings and cash flow could be adversely affected.
We are subject to restrictions that may impede our ability to effect a change in control. Certain provisions
contained in our charter and bylaws and certain provisions of Maryland law may have the effect of discouraging a third
party from making an acquisition proposal for us and thereby inhibit a change in control. These provisions include the
following:
Our charter provides for three classes of directors with the term of office of one class expiring each
year, commonly referred to as a “staggered board.” By preventing common stockholders from
voting on the election of more than one class of directors at any annual meeting of stockholders, this
provision may have the effect of keeping the current members of our Board of Directors in control
for a longer period of time than stockholders may desire.
Our charter generally limits any holder from acquiring more than 9.8% (in value or in number,
whichever is more restrictive) of our outstanding equity stock (defined as all of our classes of capital
stock, except our excess stock). While this provision is intended to assure our ability to remain a
qualified REIT for Federal income tax purposes, the ownership limit may also limit the opportunity
for stockholders to receive a premium for their shares of common stock that might otherwise exist
if an investor was attempting to assemble a block of shares in excess of 9.8% of the outstanding
shares of equity stock or otherwise effect a change in control.
The request of stockholders entitled to cast at least a majority of all votes entitled to be cast at such
meeting is necessary for stockholders to call a special meeting. We also require advance notice by
common stockholders for the nomination of directors or proposals of business to be considered at a
meeting of stockholders.
Our Board of Directors may authorize and 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.
“Business combination” provisions that provide that, unless exempted, a Maryland corporation may not
engage in certain business combinations, including mergers, dispositions of 10% or more of its assets,
certain issuances of shares of stock and other specified transactions, with an “interested 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.
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
-21-
rights plan, (c) make a determination under the Maryland Business Combination Act or the Maryland
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.
We cannot assure you that we will be able to pay distributions regularly. Our ability to pay distributions in the
future is dependent on our ability to operate profitably and to generate cash from our operations and the operations of our
subsidiaries and is subject to limitations under our financing arrangements and Maryland law. Under the Maryland General
Corporation Law, 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.
Dividends on our capital stock do not qualify for the reduced tax rates available for some
dividends. 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
TCJA 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.
We are subject to risks arising from litigation. We may become involved in litigation. Litigation can be costly,
and the results of litigation are often difficult to predict. We may not have adequate insurance coverage or contractual
protection to cover costs and liability in the event we are sued, and to the extent we resort to litigation to enforce our rights,
we may incur significant costs and ultimately be unsuccessful or unable to recover amounts we believe are owed to us.
We may have little or no control of the timing of litigation, which presents challenges to our strategic planning.
Future terrorist attacks and military conflicts could have a material adverse effect on general economic
conditions, consumer confidence and market liquidity. Among other things, it is possible that interest rates may be
affected by these events. An increase in interest rates may increase our costs of borrowing, leading to a reduction in our
earnings. Terrorist acts affecting our properties could also result in significant damages to, or loss of, our properties.
Additionally, we may be unable to obtain adequate insurance coverage on acceptable economic terms for losses resulting
from acts of terrorism. Our lenders may require that we carry terrorism insurance even if we do not believe this insurance
is necessary or cost effective. Should an act of terrorism result in an uninsured loss or a loss in excess of insured limits,
we could lose capital invested in a property, as well as the anticipated future revenues from a property, while remaining
obligated for any mortgage indebtedness or other financial obligations related to the property. Any loss of these types
would adversely affect our financial condition.
Disruptions in the financial markets could affect our ability to obtain financing on reasonable terms and have
other adverse effects on us and the market price of our capital 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
-22-
financial markets may have a material adverse effect on the market value of the common stock and preferred stock, or the
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.
We face risks relating to cybersecurity attacks which could adversely affect our business, cause loss of
confidential information and disrupt operations. 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 or 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 are dependent on continuous access to the Internet to use our cloud-based 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 face risks relating to expanding use of social media 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.
Item 1B – Unresolved Staff Comments
None.
Item 2 – Properties
UMH Properties, Inc. is engaged in the ownership and operation of manufactured home communities. As of
December 31, 2020, the Company owned 124 manufactured home communities containing approximately 23,400
developed sites, located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan and Maryland.
Subsequent to December 31, 2020, the Company purchased a community in Alabama and a community in South
Carolina, containing a total of 337 homesites. The rents collectible from the land in our communities 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
-23-
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 number. The following table sets forth certain information
concerning the Company’s real estate investments as of December 31, 2020.
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
Camelot Woods
500 Earnhardt Dr.
Altoona, PA 16601
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
Number of Occupancy Occupancy
Acreage
Percentage
Percentage
Developed
at 12/31/19 Developed
at 12/31/20
Sites
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/20
434
97%
92%
74
31
$487
230
94%
91%
31
-0-
$749
42
93%
93%
13
-0-
$441
143
95%
93%
28
-0-
$480
195
97%
99%
45
-0-
$399
390
90%
88%
93
19
$483
170
80%
81%
37
2
$474
157
92%
88%
71
39
$567
95
92%
84%
32
50
$341
147
54%
NA
27
-0-
$310
211
72%
64%
40
-0-
$498
131
84%
78%
14
4
$430
462
66%
55%
75
26
$450
-24-
Name of Community
Cedarcrest Village
1976 North East Avenue
Vineland, NJ 08360
Chambersburg I & II
5368 Philadelphia Ave Lot 34
Chambersburg, PA 17201
Chelsea
459 Chelsea Lane
Sayre, PA 18840
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/ Duck River Estates
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
Number of Occupancy Occupancy
Percentage
Percentage
Developed
Acreage
at 12/31/19 Developed
at 12/31/20
Sites
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/20
283
96%
95%
71
30
$658
99
78%
80%
11
-0-
$400
84
96%
95%
12
-0-
$443
62
98%
95%
10
67
$531
57
95%
93%
20
116
100%
99%
23
2
1
$353
$443
102
90%
85%
20
-0-
$472
160
88%
83%
31
1
$348
162
80%
83%
46
18
$374
142
95%
95%
27
-0-
$371
359
89%
96%
69
108
$408
187
98%
96%
36
-0-
$605
98
95%
93%
19
-0-
$409
132
89%
85%
21
2
$486
-25-
Name of Community
Crossroads Village
549 Chicory Lane
Mount Pleasant, PA 15666
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
Number of Occupancy Occupancy
Percentage
Percentage
Developed
Acreage
at 12/31/19 Developed
at 12/31/20
Sites
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/20
34
79%
76%
9
-0-
$404
145
86%
79%
21
-0-
$277
98
95%
87%
22
8
$346
235
94%
91%
44
-0-
$632
55
98%
100%
10
3
$368
68
90%
85%
7
-0-
$346
50
92%
98%
10
4
$392
317
95%
94%
66
132
$670
171
86%
78%
42
3
$449
167
95%
96%
37
-0-
$510
247
95%
96%
79
-0-
$547
121
92%
74%
23
2
$384
193
92%
88%
42
22
$510
824
49%
46%
101
-0-
$401
-26-
Name of Community
Green Acres
4496 Sycamore Grove Road
Chambersburg, PA 17201
Gregory Courts
1 Mark Lane
Honey Brook, PA 19344
Hayden Heights
5501 Cosgray Road
Dublin, OH 43016
Heather Highlands
109 Main Street
Inkerman, PA 18640
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
Number of Occupancy Occupancy
Percentage
Percentage
Developed
Acreage
at 12/31/19 Developed
at 12/31/20
Sites
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/20
25
96%
100%
39
90%
82%
6
9
-0-
-0-
$424
$687
115
98%
99%
19
-0-
$423
408
74%
73%
79
-0-
$479
154
83%
83%
43
-0-
$402
246
88%
88%
42
-0-
$418
318
97%
97%
98
65
$621
198
75%
62%
60
16
$338
220
96%
90%
46
45
$456
88
95%
82%
29
20
$379
282
90%
97%
36
29
$486
326
85%
75%
53
153
93%
91%
30
2
9
$497
$404
159
91%
93%
19
-0-
$329
-27-
Name of Community
Huntingdon Pointe
240 Tee Drive
Tarrs, PA 15688
Independence Park
355 Route 30
Clinton, PA 15026
Kinnebrook
351 State Route 17B
Monticello, NY 12701
Lake Erie Estates
3742 East Main Street, Apt 1
Fredonia, NY 14757
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
Number of Occupancy Occupancy
Percentage
Percentage
Developed
Acreage
at 12/31/19 Developed
at 12/31/20
Sites
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/20
75
91%
99%
45
4
$315
92
91%
96%
36
15
$405
250
98%
94%
66
8
$635
162
70%
N/A
21
-0-
$406
243
94%
91%
58
39
$485
79
99%
93%
21
32
$382
209
76%
78%
43
-0-
$437
62
92%
92%
13
-0-
$372
316
82%
78%
71
-0-
$412
306
65%
57%
58
-0-
$421
122
93%
92%
20
-0-
$435
335
77%
68%
61
-0-
$428
191
93%
88%
39
16
$421
293
91%
90%
71
-0-
$383
-28-
Name of Community
Melrose West
4455 Cleveland Road
Wooster, OH 44691
Memphis Blues (1)
1401 Memphis Blues Avenue
Memphis, TN 38127
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
Number of Occupancy Occupancy
Percentage
Percentage
Developed
Acreage
at 12/31/19 Developed
at 12/31/20
Sites
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/20
29
100%
100%
27
3
$408
90
69%
43%
16
78
$448
44
98%
91%
11
-0-
$546
151
93%
93%
35
-0-
$427
115
97%
95%
19
-0-
$349
39
92%
90%
11
2
$632
-0-
N/A
N/A
-0-
220
$-0-
113
68%
68%
16
-0-
$441
386
87%
85%
85
-0-
$415
205
96%
93%
40
-0-
$504
79
67%
63%
40
-0-
$486
125
97%
95%
15
-0-
$441
224
98%
98%
59
2
$725
364
97%
96%
79
30
$405
-29-
Name of Community
Perrysburg Estates
23720 Lime City Road
Perrysburg, OH 43551
Pikewood Manor
1780 Lorain Boulevard
Elyria, OH 44035
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
Number of Occupancy Occupancy
Percentage
Percentage
Developed
Acreage
at 12/31/19 Developed
at 12/31/20
Sites
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/20
133
88%
65%
33
-0-
$361
489
84%
67%
86
31
$457
194
88%
87%
50
30
$565/$583
212
77%
68%
38
-0-
$392
110
81%
76%
21
9
$416
476
63%
60%
101
-0-
$491
580
94%
94%
128
21
$301
231
85%
76%
60
-0-
$412
90
90%
92%
31
1
$421
66
89%
79%
17
66
$478
364
74%
71%
102
10
$440
212
91%
96%
25
-0-
$491
249
82%
79%
74
24
$407/$486
118
100%
100%
26
4
$372
-30-
Name of Community
Southwind Village
435 E. Veterans Highway
Jackson, NJ 08527
Spreading Oaks Village
7140-29 Selby Road
Athens, OH 45701
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
Number of Occupancy Occupancy
Percentage
Percentage
Developed
Acreage
at 12/31/19 Developed
at 12/31/20
Sites
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/20
250
99%
97%
36
-0-
$603
148
92%
89%
37
24
$431
123
97%
96%
43
77
$381
200
95%
90%
36
-0-
$417
141
98%
95%
25
1
$378
96
85%
85%
25
33
$256
207
94%
92%
56
2
$420
63
86%
83%
8
-0-
$713
129
92%
96%
32
-0-
$506
141
96%
99%
21
-0-
$539
238
84%
86%
48
2
$470
75
95%
80%
13
16
$388
268
98%
89%
66
67
$373
143
77%
71%
37
6
$361
-31-
Name of Community
Valley View I
1 Sunflower Drive
Ephrata, PA 17522
Valley View II
1 Sunflower Drive
Ephrata, PA 17522
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
Number of Occupancy Occupancy
Percentage
Percentage
Developed
Acreage
at 12/31/19 Developed
at 12/31/20
Sites
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/20
104
98%
97%
19
-0-
$547
43
100%
100%
7
-0-
$570
147
90%
84%
28
13
$674
259
65%
61%
72
20
$371
196
82%
82%
35
-0-
$605
82
93%
83%
16
5
$332
270
96%
99%
41
-0-
$436
206
72%
60%
46
1
$317
148
71%
68%
77
-0-
$396
156
91%
91%
14
-0-
$686
599
58%
58%
151
50
$412
160
68%
62%
31
56
$362
223
92%
91%
36
-0-
$610
-32-
Name of Community
Youngstown Estates
999 Balmer Road
Youngstown, NY 14174
Number of Occupancy Occupancy
Percentage
Percentage
Developed
Acreage
at 12/31/19 Developed
at 12/31/20
Sites
Weighted Average
Additional Monthly Rent Per
Acreage
Site at 12/31/20
89
66%
61%
14
59
$384
Total
23,433
85.0%
82.0%
5,016
1,837
$461
(1) 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 in 2020 and in the process of being occupied. Phase III, consisting of 44 sites, is in
the process of being developed.
(2) We are currently seeking site plan approvals for approximately 220 sites for this property.
The Company also has 1,800 undeveloped acres that may be developed into approximately 7,300 sites. We
have 3,500 sites in various stages of the approval process that may be developed over the next 5 years. 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 operated manufactured home properties with an approximate cost of $1.1 billion as of
December 31, 2020. These properties consist of 124 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 489 developed sites, and Port Royal Village with 476
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 2030, with a weighted average term of 6.0 years. Interest on these mortgages are at fixed rates
ranging from 2.62% to 6.5%. The weighted average interest rate on our mortgages, not including the effect of
unamortized debt issuance costs, was approximately 3.8% and 4.1% at December 31, 2020 and 2019, respectively.
The aggregate balances of these mortgages, net of unamortized debt issuance costs, totaled $469.3 million and $373.7
million at December 31, 2020 and 2019, 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.
-33-
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 stock and its Series C Preferred Stock and Series D Preferred Stock are traded on
the New York Stock Exchange (“NYSE”), under the symbols “UMH”, “UMHPRC” and “UMHPRD”, respectively.
Shareholder Information
As of February 28, 2021, there were 1,059 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, 2020, the Board of Directors reaffirmed our Common Stock Repurchase Program (the
“Repurchase Program”) that authorized us to repurchase up to $25 million in the aggregate of the Company’s common
stock. Purchases under the Repurchase Program were permitted to be made using a variety of methods, which may
include open market purchases, privately negotiated transactions or block trades, or by any combination of such
methods, in accordance with applicable insider trading and other securities laws and regulations. The size, scope and
timing of any purchases were based on business, market and other conditions and factors, including price, regulatory
and contractual requirements or consents, and capital availability. The Repurchase Program did 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. During 2020, the Company repurchased approximately 174,000
shares of common stock at an aggregate cost of $1.8 million, or a weighted average price of $10.50 per share. The
last repurchase was made on May 14, 2020.
During March 2020, the Company repurchased 531 shares of our Series B Preferred Stock for approximately
$12,000.
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, 2015 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.
-34-
s
r
a
l
l
o
D
250
200
150
100
50
0
159
109
112
165
136
118
138
130
113
100
194
171
146
203
192
138
2015
2016
2017
2018
2019
2020
YEAR ENDED DECEMBER 31,
UMH PROPERTIES, INC.
FTSE NAREIT ALL REIT
S & P 500
-35-
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, 2020. 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 thousands except per share amounts).
2020
2019
2018 (1)
2017 (1)
2016 (1)
Operating Data:
Rental and Related Income
Sales of Manufactured Homes
Total Income
Community Operating Expenses
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
Community NOI (2)
Funds from Operations (2)
Normalized Funds from Operations (2)
Cash Dividends Per Common Share
$143,344
20,265
163,609
63,175
135,296
2,917
5,729
-0-
(14,119)
18,287
5,055
$128,611
17,980
146,591
61,708
126,582
2,619
7,535
-0-
14,915
17,805
27,750
$113,833
15,754
129,587
52,949
111,010
2,255
10,367
20
(51,675)
16,039
(36,216)
$101,801
10,847
112,648
47,847
96,617
2,007
8,135
1,748
-0-
15,877
12,668
(29,759)
2,566
(56,532)
(7,679)
(0.72)
(0.72)
0.07
0.06
(1.53)
(1.53)
(0.24)
(0.24)
$90,680
8,534
99,214
42,638
83,256
1,585
6,636
2,285
-0-
15,432
11,535
(2,569)
(0.10)
(0.10)
$69,037
(103,770)
44,330
$38,516
(122,350)
90,053
$40,175
(137,603)
82,314
$40,858
(152,921)
130,604
$29,203
(77,567)
45,895
$1,108,483
1,087,214
$1,015,281
1,025,453
$881,456
880,902
$764,439
823,881
$640,217
680,445
469,279
373,658
331,093
304,895
293,026
87,009
83,686
107,985
84,704
-0-
-0-
-0-
-0-
-0-
95,030
95,030
95,030
247,100
243,750
143,750
143,750
160,854
501,808
66,268
546,339
50,000
424,698
-0-
421,215
39,909
40,203
$66,903
$24,573
$25,207
$0.72
36,871
36,871
$60,884
$26,965
$27,470
$0.72
32,676
32,676
$53,954
$23,462
$21,714
$0.72
41,395
41,395
$80,169
$26,283
$29,154
$0.72
-36-
58,285
91,595
95,030
-0-
-0-
317,032
27,809
27,809
$48,042
$20,732
$18,446
$0.72
(1) Financial information has been revised to reflect certain reclassifications in prior periods to conform to the current period presentation.
(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) 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
Impact of COVID-19
The following discussion is intended to provide certain information regarding the impact of the COVID-19
pandemic on our business and management’s efforts to respond to those impacts.
We continue to closely monitor our operations and government recommendations and have taken steps to
make the safety, security and welfare of our employees, their families and our residents a top priority.
We have complied with government “stay-at-home” orders and “social distancing” practices. We have
implemented remote working arrangements for our non-essential employees. Our IT system and website allow for
virtual tours of our homes for sale or rent, online execution of applications and lease agreements, online payment of
rent and other tenant actions. With the lifting of shelter-in-place mandates, we are experiencing high demand for our
rental homes and our homes for sale, while also experiencing fewer move-outs. We continue to maintain our
communities and deliver essential services to our residents while following social distancing protocols.
We had suspended the mailing of rent increase notifications in March and April of 2020, which delayed the
related rent increases, which would have been effective May 1, 2020 and June 1, 2020. This affected May 2020’s
rental income by approximately $24,000 and June 2020’s rental income by an additional $20,000. We subsequently
resumed our regular rent increase schedule. We had offered deferred payment plans, as needed, to our residents who
have experienced financial hardship related to COVID-19. Approximately 100 residents (less than 1%) have executed
these payment plans in 2020. Although the unemployment benefits and the economic stimulus payments under the
Coronavirus Aid, Relief, and Economic Security (CARES) Act are no longer in effect, many of our residents should
benefit from the availability of the $25 billion in federal aid to state and local governments for rental assistance
programs, pursuant to the 2021 Consolidated Appropriation Act that was enacted subsequent to year-end. Collections
are consistent with pre-pandemic levels and we have collected 98% of December 2020 site and home rent as of today’s
date.
The impact of the COVID-19 pandemic remains uncertain and dependent on future developments (including
the ongoing roll-out of vaccines and their efficacy). We will continue to monitor these rapidly evolving developments
and respond in the best interests of our employees, residents and shareholders. At this time, we believe that the
COVID-19 pandemic and its consequences will not have a material adverse effect on our operations.
2020 Accomplishments
During 2020, UMH 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 11%;
Increased Community Net Operating Income (“NOI”) by 20%;
Increased Normalized Funds from Operations (“Normalized FFO”) by 16% and Normalized FFO per share
by 11%;
Improved our Operating Expense ratio by 390 basis points to 44.1%;
Increased Same Property NOI by 15%;
Increased Same Property Occupancy by 718 sites from 83.6% to 86.8% or 320 basis points;
Increased our rental home portfolio by 858 homes to approximately 8,300 total rental homes, representing
an increase of 12%;
Increased rental home occupancy by 230 basis points from 92.3% to 94.6%;
-37-
Increased Sales of Manufactured Homes by 13%;
Acquired two communities containing approximately 310 homesites for a total cost of approximately $7.8
million;
Completed the financing of 28 unencumbered communities with Fannie Mae for proceeds of approximately
$106 million, with a maturity of 10 years and a 30-year amortization at a fixed rate of 2.62%;
Issued and sold approximately 135,000 shares of Common Stock through an At-the-Market Sale Program for
our Common Stock at a weighted average price of $14.60 per share, generating gross proceeds of $2.0 million
and net proceeds of $1.7 million, after offering expenses;
Issued and sold, through At-the-Market Sale Programs for our Preferred Stock, 134,000 shares of Series C
Preferred Stock at a weighted average price of $24.96 per share and 3.8 million shares of Series D Preferred
Stock at a weighted average price of $24.98 per share, generating total gross proceeds of $97.8 million and
total net proceeds of $96.1 million, after offering expenses;
Redeemed all 3.8 million issued and outstanding shares of our 8.0% Series B Cumulative Redeemable
Preferred Stock for $96.1 million with proceeds from our 2.62% Fannie Mae financing, resulting in a savings
of over $5 million annually;
Reduced the weighted average interest rate on our mortgages payable from 4.1% to 3.8% year-over-year;
Subsequent to year end, issued and sold 768,000 additional shares of Series D Preferred Stock at a weighted
average price of $24.80 per share through our At-the-Market Sale Program for our Preferred Stock,
generating gross proceeds of $19.1 million and net proceeds of $18.8 million, after offering expenses;
Subsequent to year end, acquired two communities containing approximately 340 homesites for a total cost
of approximately $8.0 million; and
Subsequent to year end, raised our dividend by 5.5% to an annualized rate of $0.76 per share.
Refer to Item 7, Management’s Discussion and Analysis of Financial Condition, Results of Operations, and Non-GAAP 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.
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.
As of December 31, 2020, we owned and operated 124 manufactured home communities containing
approximately 23,400 developed homesites. These 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, 2020, we purchased two manufactured home communities, for an
aggregate purchase price of $7.8 million. These acquisitions added approximately 310 developed homesites to our
portfolio, bringing our total to 124 communities containing approximately 23,400 developed homesites as of
December 31, 2020. Subsequent to December 31, 2020, we purchased a community in Alabama and a community in
South Carolina. The two communities acquired during 2021 contain a total of 337 homesites and were purchased for
a total price of $8.0 million.
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 and the
brokering of home sales and revenue under cable service agreements as well as 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
-38-
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 2020,
total income increased 12% from the prior year and Community NOI (as defined below) increased 20% from the prior
year, primarily due to the acquisition and rental programs in 2019 and 2020. Overall occupancy was 85.0% and
82.0% at December 31, 2020 and 2019, respectively. Overall occupancy includes communities acquired in 2020 with
an average occupancy of 64%. Same property occupancy, which includes communities owned and operated as of
January 1, 2019, increased from 83.6% at December 31, 2019 to 86.8% at December 31, 2020.
Despite the COVID-19 pandemic, sales of manufactured homes performed well during 2020, increasing by
13% year-over-year. Demand for quality affordable housing remains healthy. Conventional single-family home
prices continue their rise supported by low inventories and increasing sales. As 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 2020, our
portfolio of rental homes increased by 858 homes. Occupied rental homes represent approximately 39.2% of total
occupied sites. Occupancy in rental homes continues to be strong and is at 94.6% as of December 31, 2020. 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 $103.2 million
at December 31, 2020, representing 7.6% 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, 2020, 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, 2020, the Company had borrowings of $17.6 million under its
margin line at 0.75% interest. The Company’s weighted average yield on the securities portfolio was approximately
4.7% at December 31, 2020. At December 31, 2020, the Company had unrealized losses of $39.4 million in its REIT
securities portfolio. It is our intent to hold these securities for investment on a long-term basis.
The Company continues to strengthen its balance sheet. During 2020, the Company raised approximately
$9.2 million in new capital through the Dividend Reinvestment and Stock Purchase Plan (“DRIP”). During the year
ended December 31, 2020, through an At-the-Market Sale Program (“ATM Program”) for our Series C Preferred
Stock and Series D Preferred Stock that we commenced in 2019 (the “2019 Preferred ATM Program”) and a
subsequent ATM Program for our Series C Preferred Stock and Series D Preferred Stock that we commenced in July
2020 (the “New Preferred ATM Program”), the Company issued and sold a total of 134,000 shares of our Series C
Preferred Stock and 3.8 million shares of our Series D Preferred Stock, generating gross proceeds of $97.8 million
and net proceeds of $96.1 million, after offering expenses, during the year ended December 31, 2020. Subsequent to
year end, the Company issued and sold an additional 768,000 shares of its Series D Preferred Stock at a weighted
average price of $24.80 per share under the New Preferred ATM Program, generating gross proceeds of $19.1 million
and net proceeds of $18.8 million, after offering expenses.
During the year ended December 31, 2020, the Company also issued and sold 135,000 shares of Common
Stock at a weighted average price of $14.60 per share through an ATM Program for our Common Stock (the “Common
ATM Program”) that we commenced in June 2020, generating gross proceeds of $2.0 million and net proceeds of $1.7
million, after offering expenses.
-39-
On October 20, 2020, the Company redeemed all 3.8 million issued and outstanding shares of its Series B
Preferred Stock at a redemption price equal to the $25.00 per share liquidation preference plus accrued and unpaid
dividends to, but not including, the October 20, 2020 redemption date in an amount of $0.2722 per share, for a total
payment of $25.2722 per share, or $96.1 million in the aggregate. The redemption was funded in part with proceeds
from a $106 million property financing with Fannie Mae completed in August 2020 and described below.
The Company believes that its capital structure, which allows for the ownership of assets using a balanced
combination of equity obtained through the issuance of common stock, preferred stock and debt, will enhance
shareholder returns as the properties appreciate over time.
During August 2020, the Company completed a financing of 28 of its previously unencumbered
communities, containing approximately 4,100 sites, through Wells Fargo Bank, N. A. for total proceeds of
approximately $106 million. This secured Federal National Mortgage Association (“Fannie Mae”) credit facility has
a 10-year maturity with a 30-year amortization schedule, with interest at a fixed rate of 2.62%.
At December 31, 2020, the Company had approximately $15.3 million in cash and cash equivalents and $30
million available on our credit facility, with an additional $50 million potentially available pursuant to an accordion
feature. We also had $29.4 million available on our revolving lines of credit for the financing of home sales and the
purchase of inventory and $15 million available on our line of credit secured by rental homes and rental homes leases.
In addition, we held approximately $103.2 million in marketable REIT securities encumbered by $17.6 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 2019 and 2020, we added a total of six manufactured home communities to our
portfolio, encompassing approximately 1,800 developed sites. These manufactured home communities were acquired
with an average occupancy rate of 63%. We acquired two additional communities subsequent to December 31, 2020.
The Company will utilize the rental home program to seek 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.
-40-
Acquisitions in 2020 and 2019
Community
Acquisitions in 2020
Date of
Acquisition
State
Number
of Sites
Purchase
Price (in
thousands)
Number
of Acres
Occupancy
at
Acquisition
Camelot Woods
Lake Erie Estates
July 24, 2020
September 21, 2020
PA
NY
Total 2020
Acquisitions in 2019
Friendly Village
New Colony and Fifty
One Estates
Northtowne Meadows
July 3, 2019
July 30, 2019
July 3, 2019
OH
PA
OH
147
163
310
824
285
386
$3,340
4,500
$7,840
$19,386
11,650
25,201
Total 2019
1,495
$56,237
27
21
48
101
61
85
247
56%
71%
64%
46%
76%
88%
62%
Results of Operations
2020 vs. 2019
Rental and related income increased from $128.6 million for the year ended December 31, 2019 to $143.3
million for the year ended December 31, 2020, or 11%. This increase was due to the acquisitions during 2019 and
2020, as well as an increase in rental rates, same property occupancy and additional rental homes. During 2020, 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 85.0% and 82.0% at December 31, 2020 and 2019, respectively. Overall occupancy
includes communities acquired in 2020 and 2019, which had an average occupancy of 64% and 62%, respectively, at
the time of acquisition. Same property occupancy has increased from 83.6% at December 31, 2019 to 86.8% at
December 31, 2020. 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, 2020,
we had approximately 8,300 rental homes with an occupancy of 94.6%. 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 remained relatively stable increasing from $61.7 million for the year ended
December 31, 2019 to $63.2 million for the year ended December 31, 2020, or 2%.
Community NOI increased from $66.9 million for the year ended December 31, 2019 to $80.2 million for
the year ended December 31, 2020, or 20%. This increase was primarily due to the acquisitions during 2019 and 2020
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 47.5% and 44.1%, excluding non-recurring operating
expenses, for the year ended December 31, 2019 and 2020, 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 consist of fixed costs, as occupancy rates increase, these expense ratios are expected to
continue to improve. Since the Company has the 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.
-41-
Sales of manufactured homes increased from $18.0 million for the year ended December 31, 2019 to $20.3
million for the year ended December 31, 2020, or 13%. The total number of homes sold was 323 homes in 2020 as
compared to 299 homes in 2019. There were 140 new homes sold in 2020 as compared to 135 in 2019. The Company’s
average sales price was approximately $63,000 and $60,000 for the years ended December 31, 2020 and 2019,
respectively. Cost of sales of manufactured homes increased from $12.9 million for the year ended December 31, 2019 to
$14.4 million for the year ended December 31, 2020, or 11%. The gross profit percentage was 29% and 28% for 2020
and 2019, respectively. Selling expenses decreased from $5.1 million for the year ended December 31, 2019 to $4.9
million for the year ended December 31, 2020, or 3%. Gain from the sales operations (defined as sales of manufactured
homes less cost of sales of manufactured homes less selling expenses less interest on the financing of inventory) increased
from a loss of $290,000 for the year ended December 31, 2019 to a gain of $768,000 for the year ended December 31,
2020. Many of the costs associated with sales, such as rent, salaries, and to an extent, advertising and promotion, are fixed.
The National Association of Realtors reported that in December 2020, sales of existing homes grew 22% from December
2019. Home prices continue their rise as fewer sellers are listing homes and inventories decline. 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 represent an investment in the upgrading of our
communities.
General and administrative expenses increased from $10 million for the year ended December 31, 2019 to
$11.1 million for the year ended December 31, 2020, or 10%. These increases were due to an increase in personnel
costs, including an increase in incentive compensation based on FFO metrics and an increase in matching contributions
associated with our 401(k) Plan. General and administrative expenses, excluding non-recurring expenses, as a
percentage of gross revenue (total income plus interest, dividend and other income) was 6.4% and 6.3% at December
31, 2020 and 2019, respectively.
Depreciation expense increased from $36.8 million for the year ended December 31, 2019 to $41.7 million
for the year ended December 31, 2020, or 13%. This increase was primarily due to the acquisitions and the increase
in rental homes during 2020 and 2019.
Interest income increased from $2.6 million for the year ended December 31, 2019 to $2.9 million for the
year ended December 31, 2020, or 11%. This increase was primarily due to an increase in the average balance of
notes receivable from $33.1 million for the year ended December 31, 2019 to $40.4 million for the year ended
December 31, 2020.
Dividend income decreased from $7.5 million for the year ended December 31, 2019 to $5.7 million for the
year ended December 31, 2020, or 24%. This decrease was primarily due to reduced dividends from our securities
holdings, as many REITs reduced their dividends in 2020 due to the COVID-19 pandemic. Dividends received from
our marketable securities investments were at a weighted average yield of approximately 4.7% and 6.3% at December
31, 2020 and 2019, respectively.
Increase (decrease) in fair value of marketable securities decreased from an unrealized gain of $14.9 million
for the year ended December 31, 2019 to an unrealized loss of $14.1 million for the year ended December 31, 2020.
This decrease was due to the effects of the COVID-19 pandemic on prices in the securities market. As of December
31, 2020, the Company had total net unrealized losses of $39.4 million in its REIT securities portfolio.
Interest expense, including amortization of financing costs, increased from $17.8 million for the year ended
December 31, 2019 to $18.3 million for the year ended December 31, 2020, or 3%. This increase was primarily due
to the $106 million Fannie Mae credit facility we entered into during August 2020. The average balance of mortgages
payable was approximately $421.5 million during 2020 as compared to approximately $352.4 million during 2019.
The weighted average interest rate on mortgages, not including the effect of unamortized debt issuance costs, was
3.8% at December 31, 2020 as compared to 4.1% at December 31, 2019.
-42-
2019 vs. 2018
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 varied 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 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 was under redevelopment
due to a flood in 2011. Demand for rental homes continued to be strong in 2019. As of December 31, 2019, we had
approximately 7,400 rental homes with an occupancy of 92.3%.
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. Management is encouraged by our continued sales growth. 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.
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.
-43-
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. 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.
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 three new
mortgage loans, and assumed two 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.
Non-GAAP 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
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 thousands):
2020
2019
2018
2017
2016
Rental and Related Income
Community Operating Expenses
$143,344
(63,175)
$128,611
(61,708)
$113,833
(52,949)
$101,801
(47,847)
$90,680
(42,638)
Community NOI
$80,169
$66,903
$60,884
$53,954
$48,042
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
-44-
performance measure of a REIT. FFO, as defined by 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.
The Company’s FFO and Normalized FFO attributable to common shareholders are calculated as follows
(in thousands except footnotes):
2020
2019
2018
2017
2016
Net Income (Loss) Attributable
to Common Shareholders
Depreciation Expense
Loss on Sales of Investment Property
and Equipment
Acquisition Costs
Early Extinguishment of Debt (1)
(Increase) Decrease in Fair Value of
Marketable Securities (3)
FFO Attributable to Common
Shareholders
Adjustments:
Redemption of Preferred Stock
Gain on Sales of Marketable
Securities, net
Non-Recurring Other Expense(2)
Normalized FFO Attributable to
Common Shareholders
$(29,759)
41,707
$2,566
36,811
$(56,532)
31,691
$(7,679)
27,558
$(2,569)
23,214
216
-0-
-0-
111
-0-
-0-
131
-0-
-0-
14,119
(14,915)
51,675
81
-0-
-0-
-0-
2
79
5
-0-
26,283
24,573
26,965
19,960
20,731
2,871
-0-
-0-
-0-
-0-
634
-0-
(20)
525
3,502
(1,748)
-0-
-0-
(2,285)
-0-
$29,154
$25,207
$27,470
$21,714
$18,446
Included in Interest Expense on the Consolidated Statements of Income (Loss).
(1)
(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.
(3) 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.
-45-
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, distributions to the
Company’s shareholders, acquisitions, capital improvements, development and expansions of properties, debt service,
purchases of manufactured home inventory and rental homes, financing of manufactured home sales and payments of
expenses relating to real estate operations. The Company’s ability to generate cash adequate to meet these demands
is dependent primarily on income from its real estate investments and marketable securities portfolio, the sale of real
estate investments and marketable securities, refinancing of mortgage debt, leveraging of real estate investments,
availability of bank borrowings or lines of credit, proceeds from the DRIP and access to the capital markets. In
addition to cash generated through operations, the Company uses a variety of sources to fund its cash needs, including
acquisitions. Specifically, the Company may sell marketable securities from its investment portfolio, borrow on its
unsecured credit facility or lines of credit, finance and refinance its properties, and/or raise capital through the DRIP
and capital markets. In order to provide financial flexibility to opportunistically access the capital markets, during
2020 the Company implemented both the Common ATM Program and the New Preferred ATM Program. The
Common ATM Program allows the Company to offer and sell shares of the Company’s Common Stock having an
aggregate sales price of up to $100 million from time to time to or through the Company’s distribution agents. The
New Preferred ATM Program allows the Company to 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 from time to time to or through
the Company’s distribution agent.
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 investing in physical improvements, including adding
rental homes onto otherwise vacant sites. There is no guarantee that any of these additional opportunities will
materialize or that the Company will be able to take advantage of such opportunities. The 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. To the extent
that funds or appropriate communities are not available, fewer acquisitions will be made.
The Company continues to strengthen its capital and liquidity positions and maintains financial flexibility.
Through the 2019 Preferred ATM Program and the New Preferred ATM Program, during 2020 the Company issued
and sold a total of 134,000 shares of our Series C Preferred Stock and 3.8 million shares of our Series D Preferred
Stock, generating gross proceeds of $97.8 million and net proceeds after offering expenses of $96.1 million during
the year ended December 31, 2020. Subsequent to year end, the Company issued and sold an additional 768,000
shares of its Series D Preferred Stock at a weighted average price of $24.80 per share under the New Preferred ATM
Program, generating gross proceeds of $19.1 million and net proceeds of $18.8 million, after offering expenses.
During the year ended December 31, 2020, the Company issued and sold 135,000 shares of Common Stock
through the Common ATM Program at a weighted average price of $14.60 per share, generating gross proceeds of
$2.0 million and net proceeds of $1.7 million, after offering expenses.
On October 20, 2020, the Company voluntarily redeemed all 3.8 million issued and outstanding shares of its
Series B Preferred Stock at a redemption price equal to the $25.00 per share liquidation preference plus accrued and
unpaid dividends to, but not including, the October 20, 2020 redemption date in an amount of $0.2722 per share, for
a total payment of $25.2722 per share, or $96.1 million. The redemption was funded in part with proceeds from our
$106 million Fannie Mae financing completed in August 2020.
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 2020, amounts received, including dividends reinvested of $3.2 million,
totaled $9.2 million. Subsequent to year end, the Company announced that it was decreasing the maximum amount
of optional cash payments that may be made by participants in the DRIP in any single month from $5,000 to $1,000,
unless a request for waiver of such allowable monthly maximum amount has been granted by the Company.
-46-
During August 2020, the Company completed a financing of 28 of its previously unencumbered
communities, containing approximately 4,100 sites, through Wells Fargo Bank, N. A. for total proceeds of
approximately $106 million. This secured Fannie Mae credit facility has a 10-year maturity with a 30-year
amortization schedule, with interest at a fixed rate of 2.62%.
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%.
Subsequent to year end, the capitalization rate was further reduced from 7.0% to 6.5%. As of December 31, 2020,
$30 million was available on this credit facility.
The Company also has the ability to finance home sales, inventory purchases and rental home purchases.
The Company has a $20 million revolving line of credit for the financing of homes, of which $6 million was utilized
at December 31, 2020, and revolving credit facilities totaling $28.5 million to finance inventory purchases, of which
$13.1 million was utilized at December 31, 2020. During 2020, the Company also entered into a new $20 million
revolving line of credit (expandable to $30 million) secured by rental homes and rental home leases in several of our
manufactured home communities, of which $5 million was utilized at December 31, 2020.
As of December 31, 2020, the Company had $15.3 million of cash and cash equivalents and marketable
securities of $103.2 million encumbered by $17.6 million in margin loans. The Company owned 124 communities of
which 20 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 2020, total investment property, including rental homes, increased 9% or
$93.2 million. The Company made acquisitions of two manufactured home communities totaling approximately 310
developed sites at an aggregate purchase price of $7.8 million. These acquisitions were funded by assuming the
existing mortgages and the use of our unsecured credit facility. 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 Common ATM Program or New Preferred ATM
Program. To the extent that funds or appropriate properties are not available, fewer acquisitions will be made.
The Company owned approximately 8,300 rental homes, or approximately 35% of our total homesites ad of
December 31, 2020. During 2020, our rental home portfolio increased by 858 homes or $52.5 million. The Company
markets these rental homes for sale to existing residents. The Company estimates that in 2021 it will purchase
approximately 900 manufactured homes to use as rental units for a total cost, including setup, of approximately $45
million. Rental home rates on new homes range from approximately $650-$1,500 per month, including lot rent,
depending on size, location and market conditions. During 2020, the Company also invested approximately $24
million in other improvements to our communities.
Additionally, the Company has investments 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
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securities investments to no more than approximately 15% of its undepreciated assets. During 2020, the securities
portfolio decreased 11% or $13.0 million primarily due to a net unrealized loss of $14.1 million partially offset by
purchases of $1.1 million. The Company had dividend income earned of $5.7 million. The Company from time to
time may purchase these securities on margin when there is an adequate yield spread. At December 31, 2020, $17.6
million was outstanding on the margin loan at a 0.75% interest rate.
The following table summarizes cash flow activity for the years ended December 31, 2020, 2019 and 2018
(in 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
$
$
2020
2019
2018
$
69,037
(103,770)
44,330
$
38,516
(122,350)
90,053
40,175
(137,603)
82,314
9,597
$
6,219
$
(15,114)
Net cash provided by operating activities increased by $30.5 million in 2020 to $69.0 million. This increase
was primarily due to an increase in Community NOI and a decrease in inventory in 2020 compared to an increase in
2019. Net cash provided by operating activities remained relatively stable from 2018 to 2019.
Net cash used in investing activities decreased by $18.6 million in 2020 and $15.3 million in 2019, primarily
due to a decrease in acquisitions of manufactured home communities and, in 2019, a decrease in purchases of REIT
securities.
Net cash provided by financing activities decreased by $45.7 million in 2020 to $44.3 million. The Company
obtained new mortgages of $106 million. The Company also received $9.2 million, including dividends reinvested,
through the DRIP. In addition, in 2020 the Company issued and sold 134,000 shares of its Series C Preferred Stock
and 3.8 million shares of its Series D Preferred Stock through the 2019 Preferred ATM Program and the New Preferred
ATM Program, raising net proceeds during 2020 of approximately $96.1 million. The Company also issued and sold
135,000 shares of its Common Stock through the Common ATM Program, raising net proceeds of approximately $1.7
million. In October 2020, the Company voluntarily redeemed all of its Series B Preferred Stock for approximately
$96.1 million. During 2020, the Company also distributed to our common shareholders a total of $29.8 million,
including dividends reinvested. In addition, the Company also paid $31.9 million in preferred dividends.
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 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. In addition, in 2019 the Company issued and sold 651,000 shares of its Series D Preferred Stock through the
2019 Preferred ATM Program, raising net proceeds 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.
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 flows and refinancing. The dividend payments were primarily made from
cash flows from operations.
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 $12 million in capital improvements
for 2021.
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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 extent to which COVID-19 and related actions impact our operations, financial condition and cash flows
will depend on future developments (including the ongoing roll-out of vaccines and their efficacy), which cannot be
predicted with any degree of confidence, including the scope, severity, duration and geographies of the outbreak, the
actions taken to contain the COVID-19 pandemic or mitigate its impact requested or mandated by governmental
authorities or otherwise voluntarily taken by individuals or businesses, the success of governmental actions undertaken
to support the economy during the pandemic and the duration and severity of direct and indirect economic effects of
the pandemic and containment measures, among others. As previously discussed, at this time, we believe that the
consequences of the COVID-19 pandemic will not have a material adverse effect on our financial condition.
The Company has 1,800 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, 2020, the Company had total assets of $1.1 billion and total liabilities of $585.4 million.
Our net debt (net of cash and cash equivalents) to total market capitalization as of December 31, 2020 and 2019 was
approximately 34% and 29%, respectively. Our net debt, less securities (net of cash and cash equivalents and
marketable securities) to total market capitalization as of December 31, 2020 and 2019 was approximately 28% and
22%, 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, 2020 (in
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
Purchase of Properties
Retirement Benefits
$476,390
92,503
87,353
2,967
1,768
8,000
400
$25,668
18,108
31,121
1,844
277
8,000
-0-
$88,839
31,405
56,232
1,123
558
-0-
-0-
$149,088
23,263
-0-
-0-
560
-0-
-0-
$212,795
19,727
-0-
-0-
373
-0-
400
Total
$669,381
$85,018
$178,157
$172,911
$233,295
Mortgages payable represents the principal amounts outstanding based on scheduled payments. The interest
on these mortgages are at fixed rates ranging from 2.62% to 6.5%. The weighted average interest rate, not including
the effect of unamortized debt issuance costs, was approximately 3.8% at December 31, 2020. As of December 31,
2020, the weighted average loan maturity of the mortgage payable is 6.0 years.
Loans payable represents $45 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 1.65% as of December 31, 2020); $17.6 million outstanding on its margin line with an interest
rate of 0.75% at December 31, 2020; $13.1 million outstanding on the Company’s revolving credit agreements to
finance inventory with interest rates ranging from 4.15% to prime with a minimum of 6% (weighted average interest
rate of 4.44% as of December 31, 2020); $5.0 million outstanding on its revolving line of credit secured by rental
-49-
homes and rental home leases with an interest rate of prime plus 25 basis points with a floor of 3.5% (interest rate of
3.50% at December 31, 2020); $6.0 million outstanding on the Company’s revolving line of credit secured by eligible
notes receivables with an interest rate of prime with a floor of 3.25% (interest rate of 3.25% as of December 31, 2020);
and $658,000 outstanding on its automotive loans with a weighted average interest rate of 4.22%.
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. Mr. Eugene W. Landy, the Founder and Chairman of the Board of Directors 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.
Purchase of properties represents the total purchase price of two communities under contract as of December
31, 2020, one in Alabama and one in South Carolina, totaling 337 developed home sites. The Company completed
the acquisitions of these properties in January 2021.
Retirement benefits of $400,000 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.
Impairment in Real Estate Investments
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.
-50-
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, 2020, 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.
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.
The following table sets forth information as of December 31, 2020, concerning the Company’s mortgages
and loans payable, including principal cash flow by scheduled maturity, weighted average interest rates and estimated
fair value (in thousands).
Mortgages Payable
Loans Payable
Carrying Value
Weighted
Average
Interest Rate
Carrying Value
Weighted
Average
Interest Rate
2021
2022
2023
2024
2025
Thereafter
Total
Estimated Fair
Value
6.50%
4.42%
3.88%
-0-%
4.04%
2.48%
3.81%(1)
$2,077
19,386
65,240
-0-
131,760
257,927
$476,390
$487,720
2.35%
2.00%
4.22%
-0-%
-0-%
-0-%
2.12%(1)
$31,121
56,228
4
-0-
-0-
-0-
$87,353
$87,353
(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, 2020 was 3.87% for mortgages payable and 2.13% for
loans payable.
All mortgage loans are at fixed rates. The Company has approximately $86.7 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 $867,000.
-51-
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 thousands except per share amounts):
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
THREE MONTHS ENDED
2020
March 31
June 30
September 30
December 31
$37,573
31,819
(40,395)
(34,748)
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
(42,838)
(1.04)
$40,084
33,348
11,628
18,325
10,235
$43,123
35,747
(9,112)
(1,767)
(12,747)
$42,829
34,382
14,837
23,245
15,591
0.25
(0.31)
0.38
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)
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,
2020 and 2019.
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
-52-
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, 2020.
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, 2020. This
assessment was based on criteria for effective internal control over financial reporting established in Internal Control
— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”) (2013 framework). Based on this assessment, management has concluded that the Company’s internal
control over financial reporting was effective as of December 31, 2020.
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.
-53-
(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, 2020, 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, 2020, 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, 2020 and 2019, 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, 2020, and our report dated March 10, 2021, 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.
-54-
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 10, 2021
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, 2020 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 2021 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 2021 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 2021 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 2021 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 2021 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.
-55-
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, 2020 and 2019
(iii)
(iv)
(v)
Consolidated Statements of Income (Loss) for the years ended December 31, 2020,
2019 and 2018
Consolidated Statements of Shareholders’ Equity for the years ended December 31,
2020, 2019 and 2018
Consolidated Statements of Cash Flows for the years ended December 31, 2020,
2019 and 2018
(vi) Notes to Consolidated Financial Statements
(a) (2)
The following Financial Statement Schedule is filed as part of this report:
Page(s)
61-62
63-64
65-66
67-68
69
70-100
(i)
Schedule III – Real Estate and Accumulated Depreciation as of December 31, 2020
101-110
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.
-56-
(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).
-57-
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
3.23
3.24
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).
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 18, 2020, 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 16, 2020, 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).
(4)
Instruments Defining the Rights of Security Holders, Including Indentures
-58-
Exhibit
No.
Description
4.1
4.2
4.3
(10)
10.1
10.2
10.3
10.4
10.5
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 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).
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).
10.6
+
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).
+
+
10.7
10.8
10.9
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).
-59-
Exhibit
No.
10.10
10.11
10.12
10.13
(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).
Equity Distribution Agreement by and between UMH Properties, Inc. and BMO Capital Markets
Corp., B. Riley FBR, Inc., Compass Point Research & Trading LLC, D.A. Davidson & Co.,
Janney Montgomery Scott LLC, and J.P. Morgan Securities LLC (incorporated by reference to
the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on June
30, 2020, Registration No. 001-12690).
At-the-Market Sales Agreement by and between UMH Properties, Inc. and B. Riley Securities,
Inc. (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and
Exchange Commission on July 22, 2020, 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.SCH ++
101.CAL ++
101.LAB ++
++
101.PRE
++
101.DEF
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data
File because its XBRL tags are embedded within the Inline XBRL document)
Inline XBRL Taxonomy Extension Schema Document
Inline XBRL Taxonomy Extension Calculation Document
Inline XBRL Taxonomy Extension Label Linkbase Document
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Inline 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.
-60-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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, 2020 and 2019, 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, 2020, and the related notes and schedule listed in the Index at Item 15(a)(2)(i) (collectively referred to
as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2020, 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, 2020, 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 10, 2021, expressed an unqualified
opinion.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s consolidated 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 consolidated 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 consolidated 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 consolidated 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
consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (1) relates
to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way
our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which
it relates.
-61-
Valuation of Investment in Property and Equipment
At December 31, 2020, the Company’s net consolidated investment property and equipment totaled $858 million. As
discussed in note 2 to the consolidated financial statements, the Company’s investment property and equipment is
evaluated annually or whenever events or changes in circumstances indicates possible impairment. If there is an
indication of possible impairment related to an investment property that is held and used, the expected future
undiscounted cash flows are compared against the carrying value of that investment property. If the undiscounted cash
flows are less than the carrying value, the Company would then determine the fair market value of the property to
calculate the extent of any impairment loss to recognize.
Auditing the Company’s evaluation of investment property and equipment for impairment was complex and highly
subjective. The determination of the undiscounted cash flows for properties are sensitive to significant assumptions
such as rental revenue and expense growth rates, and capitalization rates used to estimate a property’s residual value,
all of which can be affected by expectations about future market conditions, customer demand, and competition, as
well as the Company’s intent to hold and operate the property over the term assumed in the analysis.
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls related to the
Company’s process for evaluating investment in real estate for impairment, including controls over management’s
review of the significant assumptions described above.
To test the Company’s process for evaluating investment property and equipment for impairment, we performed audit
procedures that included, among others, assessing the methodologies, evaluating the significant assumptions of the
matters discussed above and testing the completeness and accuracy of the underlying data used by the Company in its
analysis. We compared the significant assumptions used by the Company to historical operational data of the particular
property. We also compared the projected net operating income to historical actual results. As part of our evaluation,
we assessed the historical accuracy of the Company’s estimates and performed sensitivity analyses of certain
assumptions to evaluate the changes in the undiscounted cash flows of certain properties that would result from
changes in the assumptions used by management.
March 10, 2021
New York, New York
We have served as the Company’s auditor since 2008.
/s/ PKF O’Connor Davies, LLP
-62-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2020 and 2019
(in thousands except per share amounts)
-ASSETS-
2020
2019
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
$ 73,704
656,721
28,153
349,905
1,108,483
22,572
1,131,055
(272,823)
858,232
$ 72,459
618,041
27,380
297,401
1,015,281
21,145
1,036,426
(232,783)
803,643
15,336
103,172
25,450
46,414
17,785
20,825
228,982
12,902
116,186
31,967
37,995
10,762
11,998
221,810
TOTAL ASSETS
$ 1,087,214
$ 1,025,453
See Accompanying Notes to Consolidated Financial Statements
-63-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
AS OF DECEMBER 31, 2020 and 2019
(in thousands except per share amounts)
- LIABILITIES AND SHAREHOLDERS’ EQUITY -
2020
2019
LIABILITIES:
Mortgages Payable, net of unamortized debt issuance costs
$ 469,279
$ 373,658
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;
4,390
87,009
17,295
7,433
116,127
585,406
4,572
83,686
10,575
6,623
105,456
479,114
3,801 shares issued and outstanding as of December 31, 2019
-0-
95,030
Series C – 6.75% Cumulative Redeemable Preferred
Stock, par value $0.10 per share, 13,750 shares authorized;
9,884 and 9,750 shares issued and outstanding as of December
31, 2020 and 2019, respectively
Series D – 6.375% Cumulative Redeemable Preferred
Stock, par value $0.10 per share, 9,300 and 6,000 shares
authorized; 6,434 and 2,651 shares issued and outstanding as
of December 31, 2020 and 2019, respectively
Common Stock - $0.10 par value per share,140,364 and 123,664
shares authorized; 41,919 and 41,130 shares issued and
outstanding as of December 31, 2020 and 2019, respectively
Excess Stock - $0.10 par value per share, 3,000 shares
authorized; no shares issued or outstanding as of
December 31, 2020 and 2019
Additional Paid-In Capital
Undistributed Income (Accumulated Deficit)
Total Shareholders’ Equity
247,100
243,750
160,854
66,268
4,192
4,113
-0-
115,026
(25,364)
501,808
-0-
162,542
(25,364)
546,339
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$ 1,087,214
$ 1,025,453
See Accompanying Notes to Consolidated Financial Statements
-64-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 and 2018
(in thousands)
INCOME:
Rental and Related Income
Sales of Manufactured Homes
2020
2019
2018
$ 143,344
20,265
$ 128,611
17,980
$ 113,833
15,754
Total Income
163,609
146,591
129,587
EXPENSES:
Community Operating Expenses
Cost of Sales of Manufactured Homes
Selling Expenses
General and Administrative Expenses
Depreciation Expense
63,175
14,417
4,941
11,056
41,707
61,708
12,938
5,079
10,046
36,811
52,949
11,716
3,774
10,880
31,691
Total Expenses
135,296
126,582
111,010
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
2,917
5,729
-0-
(14,119)
718
(18,287)
2,619
7,535
-0-
14,915
588
(17,805)
2,255
10,367
20
(51,675)
410
(16,039)
Total Other Income (Expense)
(23,042)
7,852
(54,662)
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
5,271
(216)
5,055
(31,943)
(2,871)
27,861
(111)
27,750
(25,184)
-0-
(36,085)
(131)
(36,216)
(20,316)
-0-
Net Income (Loss) Attributable to Common
Shareholders
$(29,759)
$ 2,566
$ (56,532)
See Accompanying Notes to Consolidated Financial Statements
-65-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 and 2018
(in thousands except per share amounts)
2020
2019
2018
Basic Income (Loss) Per Share:
Net Income (Loss)
Less: Preferred Dividends
Less: Redemption of Preferred Stock
Net Income (Loss) Attributable to Common Shareholders
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
$0.12
(0.77)
(0.07)
$(0.72)
$0.12
(0.77)
(0.07)
$(0.72)
41,395
41,395
$0.70
(0.63)
-0-
$0.07
$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
See Accompanying Notes to Consolidated Financial Statements
-66-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 and 2018
(in thousands)
Common Stock
Issued and Outstanding
Number
Amount
Preferred
Stock
Series B
Preferred
Stock
Series C
Balance December 31, 2017
35,488
$3,549
$95,030
$143,750
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-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
Balance December 31, 2018
38,320
3,832
95,030
143,750
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-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
100,000
-0-
-0-
-0-
-0-
Balance December 31, 2019
41,130
4,113
95,030
243,750
Common Stock Issued with the DRIP*
Common Stock Issued through Restricted/ Unrestricted Stock
Awards
Common Stock Issued through Stock Options
Common Stock Issued in connection with At-The-Market
Offerings, net
Repurchase of Common Stock
Repurchase of Preferred Stock
Preferred Stock Issued in connection with At-The-Market
Offerings, net
Redemption of Preferred Stock
Distributions
Stock Compensation Expense
Net Income (Loss)
720
46
63
135
(174)
-0-
-0-
-0-
-0-
-0-
-0-
72
5
6
13
(17)
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(13)
-0-
(95,017)
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
3,350
-0-
-0-
-0-
-0-
Balance December 31, 2020
41,920
$4,192
$-0-
$247,100
*Dividend Reinvestment and Stock Purchase Plan
See Accompanying Notes to Consolidated Financial Statements
-67-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 and 2018
(in thousands)
Preferred
Stock
Series D
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Undistributed
Income
(Accumulated
Deficit)
Total
Shareholders’
Equity
Balance December 31, 2017
$-0-
$168,035
$11,520
$(668)
$421,216
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-
50,000
-0-
-0-
-0-
-0-
34,849
(5)
1,372
(1,753)
(46,661)
1,613
-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-
Balance December 31, 2019
66,268
162,542
Common Stock Issued with the DRIP*
Common Stock Issued through Restricted/ Unrestricted
Stock Awards
Common Stock Issued through Stock Options
Common Stock Issued in connection with At-The-Market
Offerings, net
Repurchase of Common Stock
Repurchase of Preferred Stock
Preferred Stock Issued in connection with At-The-Market
Offerings, net
Redemption of Preferred Stock
Distributions
Stock Compensation Expense
Net Income (Loss)
-0-
-0-
-0-
-0-
-0-
-0-
94,586
-0-
-0-
-0-
-0-
9,082
(5)
653
1,730
(1,813)
1
(1,795)
2,871
(59,567)
1,327
-0-
(11,520)
-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-
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
(25,364)
546,339
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(2,871)
(2,184)
-0-
5,055
9,154
-0-
659
1,743
(1,830)
(12)
96,141
(95,017)
(61,751)
1,327
5,055
Balance December 31, 2020
$160,854
$115,026
$-0-
$(25,364)
$501,808
*Dividend Reinvestment and Stock Purchase Plan.
See Accompanying Notes to Consolidated Financial Statements
-68-
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 and 2018
(in thousands)
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 Proceeds (Payments) 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 8.0% Series B Preferred Stock
Proceeds from At-The-Market Common Equity Program,
net of offering costs
Proceeds from Issuance of Common Stock in the DRIP, net of
dividend reinvestments
Repurchase of Preferred Stock
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
2020
2019
2018
$ 5,055
$ 27,750
$ (36,216)
41,707
1,027
1,327
1,546
-0-
14,119
216
6,517
(9,965)
140
(182)
6,720
810
69,037
(7,790)
(76,761)
2,657
(20,771)
(1,105)
-0-
(103,770)
105,984
3,309
(9,313)
(4,737)
-0-
96,141
(95,017)
1,743
6,003
(12)
(1,830)
659
(31,943)
(26,657)
44,330
9,597
18,996
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
-0-
(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-
-0-
1,385
(20,050)
(21,535)
82,314
(15,114)
27,891
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END
OF YEAR
$ 28,593
$ 18,996
$ 12,777
See Accompanying Notes to Consolidated Financial Statements
-69-
UMH PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 and 2019
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.
On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020,
the United States declared a national emergency with respect to COVID-19. The Company’s 124 residential communities
remain open and operational. The effects of the COVID-19 pandemic did not significantly impact the Company’s
operating results for the year ended December 31, 2020. However, the future effects of the evolving impact of the COVID-
19 pandemic are uncertain.
Description of the Business
As of December 31, 2020, the Company owned and operated 124 manufactured home communities
containing approximately 23,400 developed sites. These communities are located in New Jersey, New York, Ohio,
Pennsylvania, Tennessee, Indiana, Michigan and Maryland. Subsequent to year end, the Company purchased two
additional communities totaling approximately 340 sites, one in Alabama and one in South Carolina.
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
Camelot Woods
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
Memphis, Tennessee
Doylestown, Pennsylvania
Orrville, Ohio
Birch Run, Michigan
Elkhart, Indiana
Goshen, Indiana
Berwick, Pennsylvania
Greenfield Center, New York
Anderson, Indiana
Altoona, Pennsylvania
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
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MANUFACTURED HOME COMMUNITY
LOCATION
Crestview
Cross Keys Village
Crossroads Village
Dallas Mobile Home Community
Deer Meadows
Deer Run
D & R Village
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
Iris Winds
Kinnebrook
Lake Erie Estates
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
Athens, Pennsylvania
Duncansville, Pennsylvania
Mount Pleasant, Pennsylvania
Toronto, Ohio
New Springfield, Ohio
Dothan, Alabama
Clifton Park, New York
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
Sumter, South Carolina
Monticello, New York
Fredonia, 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
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MANUFACTURED HOME COMMUNITY
LOCATION
Olmsted Falls
Oxford Village
Parke Place
Perrysburg Estates
Pikewood Manor
Pine Ridge Village/Pine Manor
Pine Valley Estates
Pleasant View Estates
Port Royal Village
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
Olmsted Township, Ohio
West Grove, Pennsylvania
Elkhart, Indiana
Perrysburg, Ohio
Elyria, Ohio
Carlisle, Pennsylvania
Apollo, Pennsylvania
Bloomsburg, Pennsylvania
Belle Vernon, Pennsylvania
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.
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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.
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, 2020, 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.
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
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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 2019 and 2020 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.
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.
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, 2020 and 2019, 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).
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. At December 31, 2020 and 2019, the reserves for uncollectible accounts, notes and other receivables were
$1.6 million and $1.3 million, respectively. For the years ended December 31, 2020, 2019 and 2018 the provisions
for uncollectible notes and other receivables were $1.5 million, $1.4 million and $1.2 million, respectively. Charge-
offs and other adjustments related to repossessed homes for the years ended December 31, 2020, 2019 and 2018
amounted to $1.2 million, $1.2 million and $1.4 million, respectively. In 2020, the Company adopted ASU No. 2016-
13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”
See “Recently Adopted Accounting Pronouncements” below for additional information regarding the adoption of this
ASU.
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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
7.3% and the average maturity is approximately 10 years.
Unamortized Financing Costs
Costs incurred in connection with obtaining mortgages and other financings and refinancings are deferred
and 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, 2020 and 2019,
accumulated amortization amounted to $6.2 million and $5.1 million, respectively. The Company estimates that
aggregate amortization expense will be approximately $1.3 million for 2021, $1.2 million for 2022, $933,000 for
2023, $886,000 for 2024, $754,000 for 2025 and $2.4 million thereafter.
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, 2020 and 2019, these agreements have expired and the Company no
longer had any interest rate swap agreements in effect.
Leases
We account for our leases under ASC 842, “Leases.” Our primary source of revenue is generated from lease
agreements for our sites and homes, where we are the lessor. These leases are generally for one-year or month-to-
month terms and renewable by mutual agreement from us and the resident, or in some cases, as provided by
jurisdictional statute.
We are the lessee in other arrangements, primarily for our corporate office and a ground lease at one
community. As of December 31, 2020, the right-of-use assets and corresponding lease liabilities of $3.8 million are
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
thousands):
2021
2022
2023
2024
2025
Thereafter
Total Lease Payments
$ 433
423
391
391
391
19,495
$ 21,524
The weighted average remaining lease term for these leases is 162.6 years. The right of use assets and lease
liabilities was calculated using an interest rate of 5%.
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Restricted Cash
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.
The following table reconciles beginning of period and end of period balances of cash, cash equivalents and
restricted cash for the periods shown (in thousands):
12/31/20
12/31/19
12/31/18
12/31/17
$15,336
13,257
$12,902
6,094
$7,433
5,344
$23,242
4,649
$28,593
$18,996
$12,777
$27,891
Cash and Cash Equivalents
Restricted Cash
Cash, Cash Equivalents
And Restricted Cash
Revenue Recognition
On January 1, 2018, the Company adopted ASU 2014-09 "Revenue from Contracts with Customers (Topic
606)" (ASC 606). For transactions in the scope of ASC 606, 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.
Rental and related income is generated from lease agreements for our sites and homes. 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.
Revenue from sales of manufactured homes is recognized in accordance with the core principle of ASC 606,
at the time of closing when control of the home transfers to the customer. After closing of the sale transaction, we
generally 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.
Dividend income and gain on sales of marketable securities 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 and other miscellaneous income. This income is recognized when the transactions are completed and our
performance obligations have been fulfilled.
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 (41.4 million, 39.9 million and 36.9 million in 2020, 2019 and 2018,
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 years ended December 31, 2020 and 2018,
employee stock options to purchase 3.3 million and 2.3 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. 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.
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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 $1.3 million, $1.9 million and $1.6 million have been recognized in 2020, 2019 and 2018,
respectively. During 2020, compensation costs included a one-time charge of $127,000 for restricted stock and stock
option grants awarded to two participants who were of retirement age and therefore the entire amount of measured
compensation cost has been recognized at grant date. During 2019 and 2018, compensation costs included a one-time
charge of $179,000, and $210,000, 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.
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,
2020. The Company records interest and penalties relating to unrecognized tax benefits, if any, as interest
expense. As of December 31, 2020, the tax years 2017 through and including 2020 remain open to examination by
the Internal Revenue Service. There are currently no federal tax examinations in progress.
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 2020
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
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 there was not a material impact. As
of December 31, 2020 and 2019, the Company had notes receivable of $43.4 million and $35.7 million, net the fair
value adjustment of $0.9 million and $0.7 million, respectively. Notes receivable are presented as a component of
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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.
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 adopted this standard
effective with its financial statements for the quarter ended March 31, 2020, and it did not have a material impact on
its fair value disclosures.
Other Recent Accounting Pronouncements
Management does not believe that any other recently issued, but not yet effective accounting
pronouncements, if adopted, would have a material effect on the accompanying Consolidated Financial Statements.
NOTE 3 – INVESTMENT PROPERTY AND EQUIPMENT
Acquisitions in 2020
On July 24, 2020, the Company acquired Camelot Woods, located in Altoona, Pennsylvania, for
approximately $3.3 million. This all-age community contains a total of 147 developed homesites that are situated on
approximately 27 total acres. At the date of acquisition, the average occupancy for this community was approximately
56%.
On September 21, 2020, the Company acquired Lake Erie Estates, located in Fredonia, New York, for
approximately $4.5 million. This community contains a total of 163 developed homesites that are situated on
approximately 21 total acres. At the date of acquisition, the average occupancy for this community was approximately
71%. In conjunction with this acquisition, the Company assumed a mortgage of approximately $2.7 million on this
property (See Note 5).
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 located in West Mifflin,
Pennsylvania and 51 Estates, located in Elizabeth, Pennsylvania, for a total purchase price of 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).
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 $2.7 million for 2020, 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, 2020 and
2019, respectively (in thousands):
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2020 Acquisitions
2019 Acquisitions
Assets Acquired:
Land
Depreciable Property
Notes Receivable and Other
Total Assets Acquired
$
$
$
906
9,558
-0-
10,464
$
4,296
53,909
127
58,332
Total Income, Community Net Operating Income (“Community NOI”)* and Net Income (Loss) for
communities acquired in 2020 and 2019, which are included in our Consolidated Statements of Income (Loss) for the
years ended December 31, 2020 and 2019, are as follows (in thousands):
2020 Acquisitions
2020
2019 Acquisitions
2020
2019
Total Income
Community NOI *
Net Income (Loss)
$
$
$
373
158
(73)
$
$
$
5,845
3,126
(609)
$
$
$
2,308
1,347
(205)
*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 thousands):
Site and Land Improvements
Buildings and Improvements
Rental Homes and Accessories
Equipment and Vehicles
Total Accumulated Depreciation
NOTE 4 – MARKETABLE SECURITIES
December 31, 2020
December 31, 2019
$ 175,219
8,860
71,112
17,632
$ 272,823
$ 152,456
7,720
56,808
15,799
$ 232,783
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.
-79-
The following is a listing of marketable securities at December 31, 2020 (in 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.
Diversified Healthcare Trust
Five Star Senior Living
Franklin Street Properties Corporation
Industrial Logistics Properties Trust
Kimco Realty Corporation
Monmouth Real Estate Investment Corporation (1)
Office Properties Income Trust
Pennsylvania Real Estate Investment Trust
Tanger Factory Outlet
Urstadt Biddle Properties, Inc.
Vereit, Inc.
Washington Prime Group
Total Common Stock
2
63
10
20
20
20
40
20
13
1,600
171
12
220
502
910
2,655
562
222
180
100
282
89
$ 50
1,487
219
494
500
500
1,000
498
313
5,061
16,692
2,920
45
2,219
9,951
17,052
25,031
36,418
2,316
4,229
2,049
12,059
6,489
137,470
$ 2
50
206
428
472
520
404
206
313
2,601
66
704
80
961
11,698
13,659
45,982
12,757
222
1,793
1,413
10,657
579
100,571
Total Marketable Securities
$142,531
$103,172
(1) Related entity – See Note 8.
-80-
The following is a listing of marketable securities at December 31, 2019 (in 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.
Diversified Healthcare Trust
Franklin Street Properties Corporation
Industrial Logistics Properties Trust
Kimco Realty Corporation
Monmouth Real Estate Investment Corporation (1)
Office Properties Income Trust
Pennsylvania Real Estate Investment 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
171
220
502
910
2,573
562
222
180
100
1,410
800
$ 50
1,487
203
494
500
500
1,000
498
313
5,045
16,692
2,920
2,219
9,951
17,052
23,987
36,418
2,316
4,229
2,049
12,059
6,489
136,381
$ 10
294
219
464
483
525
802
386
333
3,516
1,680
1,443
1,883
11,261
18,846
37,251
18,047
1,183
2,651
2,484
13,029
2,912
112,670
Total Marketable Securities
$141,426
$116,186
(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 are 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, 2020, 2019 and 2018, the securities portfolio had net unrealized holding losses of $39.4
million, $25.2 million and $40.2 million, respectively.
The Company had margin loan balances of $17.6 million and $37.5 million at December 31, 2020 and 2019,
respectively, which were collateralized by the Company’s securities portfolio.
-81-
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, 2020 and 2019 was 0.75% and 2.25%, respectively. These margin loans are due on demand. At
December 31, 2020 and 2019, the margin loans amounted to $17.6 million and $37.5 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 4.15% to prime with a minimum of 6%. As of December 31, 2020 and 2019, the total
amount outstanding on these lines was $13.1 million and $19.3 million, respectively, with a weighted average interest
rate of 4.44% and 5.87%, respectively.
In June 2020, the Company expanded its revolving line of credit with OceanFirst Bank (“OceanFirst Line”)
from $15 million to $20 million. This line is secured by the Company’s eligible notes receivable. Interest was reduced
from prime plus 25 basis points to prime with a floor of 3.25%. The amendment also extended the maturity date from
June 1, 2020 to June 1, 2022, with a one year extension at the Bank’s option. As of December 31, 2020 and 2019, the
amount outstanding on this revolving line of credit was $6 million and $10 million, respectively, and the interest rate
was 3.25% and 5.0%, 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 Company repaid this loan on September 21, 2020.
The amount outstanding on this loan was $322,000 as of December 31, 2019.
On October 7, 2020, the Company entered into a revolving line of credit with FirstBank secured by rental
homes and rental home leases in several of our manufactured home communities. This facility allows for proceeds of
$20 million and is expandable to $30 million with an accordion feature. The facility has a maturity date of November
29, 2022, with a one-year extension available at the Company’s option. Interest is payable at prime plus 25 basis
points with a floor of 3.5%. As of December 31, 2020, the amount outstanding on this revolving line of credit was $5
million and the interest rate was 3.5%.
The Company also has $658,000 in automotive loans with a weighted average interest rate of 4.22%.
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
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%. Subsequent to
year end, the capitalization rate was further reduced from 7.0% to 6.5% (see Note 15).
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,
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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 1.65% at December 31, 2020.
As of December 31, 2020 and 2019, the amount outstanding under this Facility was $45 million and $15
million, respectively.
The aggregate principal payments of all loans payable, including the Credit Facility, are scheduled as follows
(in thousands):
Year Ended December 31,
2021
2022
2023
2024
2025
Thereafter
Total Loans Payable
Unamortized Debt Issuance Costs
Total Loans Payable, net of
Unamortized Debt Issuance Costs
Mortgages Payable
$ 31,121
56,228
4
-0-
-0-
-0-
87,353
(344)
$ 87,009
Mortgages Payable represents the principal amounts outstanding, net of unamortized debt issuance costs.
Interest is payable on these mortgages at fixed rates ranging from 2.62% to 6.5%. The weighted average interest rate
was 3.9% and 4.2% as of December 31, 2020 and 2019, respectively, including the effect of unamortized debt issuance
costs. The weighted average interest rate as of December 31, 2020 was 3.8%, compared to 4.1% as of December 31,
2019, not including the effect of unamortized debt issuance costs. The weighted average loan maturity of the Mortgage
Notes Payable was 6.0 years at both December 31, 2020 and 2019, respectively.
-83-
The following is a summary of mortgages payable at December 31, 2020 and 2019 (in 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 Erie Estates
Lake Sherman Village
Meadows of Perrysburg
Northtowne Meadows
Olmsted Falls
Oxford Village
Perrysburg Estates
Pikewood Manor
Shady Hills
Springfield Meadows
Suburban Estates
Sunny Acres
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)
Various (28 properties)
Total Mortgages Payable
Unamortized Debt Issuance Costs
Total Mortgages Payable, net of
Unamortized Debt Issuance Costs
At December 31, 2020
Due Date
Interest Rate
Balance at December 31,
2019
2020
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%
5.16%
4.10%
5.413%
4.45%
3.98%
3.41%
4.98%
5.00%
3.92%
4.83%
4.06%
4.06%
3.92%
3.37%
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%
2.62%
$12,587
2,603
4,201
4,853
11,238
3,303
7,139
7,191
15,076
7,833
6,906
1,962
15,744
7,454
7,998
2,077
3,792
2,657
5,180
2,888
11,818
1,962
15,301
1,558
14,103
4,677
2,975
5,248
5,842
3,118
5,930
3,220
4,386
7,607
2,263
5,940
8,783
13,335
12,902
22,368
7,596
12,694
6,692
12,581
45,588
105,221
476,390
(7,111)
$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
-0-
5,294
2,946
12,049
2,007
15,604
1,587
14,420
4,786
3,033
5,364
5,971
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
-0-
377,045
(3,387)
$469,279
$373,658
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
07/06/25
09/01/25
10/06/23
09/06/26
04/01/25
07/01/29
09/06/25
11/29/28
04/01/25
10/06/25
10/01/25
10/01/25
04/01/25
10/01/29
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
09/01/30
-84-
At December 31, 2020 and 2019, mortgages were collateralized by real property with a carrying value of
$932.5 million and $695.5 million, respectively, before accumulated depreciation and amortization. Interest costs
amounting to $1.3 million, $1.5 million and $1.0 million were capitalized during 2020, 2019 and 2018, respectively,
in connection with the Company’s expansion program. At December 31, 2020, the Company owned 124 communities
of which 20 are unencumbered.
Recent Transactions
During the year ended December 31, 2020
On August 20, 2020, the Company completed the financing of 28 of its unencumbered communities,
containing approximately 4,100 sites, through Wells Fargo Bank, N. A. for total proceeds of approximately $106
million. This Federal National Mortgage Association (“Fannie Mae”) credit facility has a 10-year maturity with a 30-
year amortization schedule. Interest is at a fixed rate of 2.62%.
On September 21, 2020, the Company assumed a mortgage loan with a balance of approximately $2.7
million, in conjunction with its acquisition of Lake Erie Estates in Fredonia, New York. The interest rate on this
mortgage is fixed at 5.16%. This mortgage matures on July 6, 2025.
During the year ended December 31, 2019
On July 1, 2019, the Company obtained two 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 were used to repay
the existing Twin Oaks I & II mortgage of approximately $2.3 million, which had an interest rate of 5.75%.
The aggregate principal payments of all mortgages payable are scheduled as follows (in thousands):
Year Ended December 31,
2021
2022
2023
2024
2025
Thereafter
Total
$ 25,668
17,670
71,169
9,983
139,105
212,795
$ 476,390
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
-85-
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, 2020, forty one employees were granted options to purchase a total of
715,000 shares. 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. The fair value of these options for the years ended December 31, 2020, 2019 and 2018 was
approximately $686,000, $1.1 million and $1.2 million, respectively, based on assumptions noted below and is being
amortized over the vesting period. The remaining unamortized stock option expense was $500,000 as of December
31, 2020, which will be expensed ratably through 2025.
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.
-86-
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
2020
2019
2018
5.33%
24.57%
0.89%
10
-0-
5.13%
24.04%
2.50%
10
-0-
4.79%
25.78%
2.74%
10
-0-
During the year ended December 31, 2020, options to ten employees to purchase a total of 62,500 shares
were exercised. 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, 2020, options to two employees to purchase a
total of 23,000 shares were forfeited or expired. 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.
A summary of the status of the Company’s stock option plans as of December 31, 2020, 2019 and 2018 and
changes during the years then ended are as follows (in thousands):
2020
2019
2018
Weighted-
Average
Exercise
Price
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Exercise
Price
Shares
Shares
2,637
715
(63)
(11)
(12)
$12.05
9.84
10.55
11.65
11.29
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-
3,266
12.03
2,637
12.05
2,253
12.09
2,556
1,196
1,648
$0.96
$1.72
$2.05
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
-87-
The following is a summary of stock options outstanding as of December 31, 2020 (in thousands):
Date of Grant
Number of
Employees
Number of
Shares
Option Price
Expiration
Date
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
01/17/20
03/25/20
05/20/20
* Unexercisable
7
7
8
12
2
31
31
4
1
2
36
1
39
2
148
142
240
297
60
504
470
40
25
60
570
10 *
685 *
15 *
3,266
10.08
9.85
9.82
9.77
14.25
15.04
13.09
15.75
12.94
11.42
13.90
16.37
9.70
11.80
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
01/17/30
03/25/30
05/20/30
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, 2020, 2019 and 2018 was $9.3 million, $8.3 million and
$2.0 million, respectively, of which $5.7 million, $6.9 million and $2.0 million relate to options exercisable. The
intrinsic value of options exercised in 2020, 2019 and 2018 was $283,000, $914,000 and $510,000, respectively,
determined as of the date of option exercise. The weighted average remaining contractual term of the above options
was 9.9, 9.1 and 7.9 years as of December 31, 2020, 2019 and 2018, respectively. For the years ended December 31,
2020, 2019 and 2018, amounts charged to stock compensation expense relating to stock option grants, which is
included in General and Administrative Expenses, totaled $396,000, $1.2 million and $1.1 million, respectively.
Restricted Stock
On January 8, 2020, the Company awarded a total of 15,000 shares of restricted stock to three employees.
On October 23, 2020, the Company awarded a total of 19,700 shares of restricted stock to two participants, pursuant
to their employment agreements. 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. The grant
date fair value of restricted stock grants awarded to participants was $512,000, $1.6 million and $616,000 for the years
ended December 31, 2020, 2019 and 2018, respectively. These grants primarily vest in equal installments over five
years. As of December 31, 2020, there remained a total of $2.0 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 3.5 years. For the years ended
December 31, 2020, 2019 and 2018, amounts charged to stock compensation expense related to restricted stock grants,
which is included in General and Administrative Expenses, totaled $931,000, $723,000 and $498,000, respectively.
-88-
A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2020,
2019 and 2018, and changes during the year ended December 31, 2020, 2019 and 2018 are presented below (in
thousands):
2020
2019
2018
Weighted-
Average
Grant Date
Fair Value
Weighted-
Average
Grant Date
Fair Value
Shares
Shares
Weighted-
Average
Grant Date
Fair Value
Shares
238
35
11
(72)
212
$13.33
14.75
12.91
12.87
$13.69
161
118
11
(52)
238
$12.44
11.12
13.51
5.69
$13.33
147
47
8
(41)
161
$11.98
13.11
13.37
11.76
$12.44
Non-vested at
beginning of year
Granted
Dividend Reinvested Shares
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 2020, 11,000 unrestricted shares of common stock were granted with a weighted average fair value on
the grant date of $16.13 per share. 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, 2020, there were 458,000 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 2020,
2019 and 2018, 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 $1.1 million, $376,000 and $344,000 in 2020, 2019 and 2018, respectively.
NOTE 8 – RELATED PARTY TRANSACTIONS AND OTHER MATTERS
Transactions with Monmouth Real Estate Investment Corporation
There are four Directors of the Company who are also Directors and shareholders of MREIC. The Company
holds common stock of MREIC in its securities portfolio. As of December 31, 2020, the Company owned a total of
2.7 million shares of MREIC common stock, representing 2.7% of the total shares outstanding at December 31, 2020
(See Note 4). The Company shares one 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 Directors 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. 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 January 15, 2020, the Company increased the monthly maximum for the
purchase of shares for cash under its DRIP from $1,000 to $5,000. Effective February 11, 2021, the Company reduced the
monthly maximum from $5,000 to $1,000.
Amounts received in connection with the DRIP for the years ended December 31, 2020, 2019 and 2018 were
as follows (in thousands):
2020
2019
2018
Amounts Received
Less: Dividends Reinvested
Amounts Received, net
$9,154
(3,151)
$6,003
$31,503
(7,705)
$23,798
$35,114
(5,076)
$30,038
Number of Shares Issued
720
2,468
2,655
Common Stock At-The-Market Sales Program
On May 14, 2020, the Company filed with the State Department of Assessments and Taxation of the State of
Maryland (the “Maryland SDAT”) an amendment to the Company’s charter to increase the Company’s authorized
shares of common stock, par value $0.10 per share (“Common Stock”), by 20 million shares.
On June 30, 2020, the Company entered into an Equity Distribution Agreement (“Common ATM Program”)
with BMO Capital Markets Corp., B. Riley FBR, Inc. (“B Riley”), Compass Point Research & Trading, LLC, D.A.
Davidson & Co., Janney Montgomery Scott LLC, and J.P. Morgan Securities LLC, as distribution agents (the
“Distribution Agents”) under which the Company may offer and sell shares of the Company’s Common Stock, having
an aggregate sales price of up to $100 million from time to time through the Distribution Agents. Sales of the shares
of Common Stock under the Common ATM Program, if any, will be in “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 Common 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. Shares of Common
Stock sold under the Common ATM Program are offered pursuant to the Company’s Registration Statement on Form
S-3 (File No. 333-238321), filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2020, and
declared effective on June 1, 2020 (the “2020 Registration Statement”), and the prospectus dated June 1, 2020 included
in the 2020 Registration Statement and the related prospectus supplement dated June 30, 2020. The Company began
selling shares under the Common ATM Program on September 17, 2020 and through December 31, 2020, 135,000
shares of Common Stock were issued and sold at a weighted average price of $14.60 per share, generating gross
proceeds of $2.0 million and net proceeds of $1.7 million, after offering expenses.
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Issuer Purchases of Equity Securities
On January 15, 2020, the Board of Directors reaffirmed our Common Stock Repurchase Program (the
“Repurchase Program”) that authorized us to repurchase up to $25 million in the aggregate of the Company’s common
stock. Purchases under the Repurchase Program were permitted to be made using a variety of methods, which may
include open market purchases, privately negotiated transactions or block trades, or by any combination of such
methods, in accordance with applicable insider trading and other securities laws and regulations. The size, scope and
timing of any purchases were based on business, market and other conditions and factors, including price, regulatory
and contractual requirements or consents, and capital availability. The Repurchase Program did 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. During 2020, the Company repurchased approximately 174,000 shares of
our common stock at an aggregate cost of $1.8 million, or a weighted average price of $10.50 per share. The last
repurchase was made on May 14, 2020.
Preferred Stock
8.0% Series B Cumulative Redeemable Preferred Stock
On March 13, 2020, the Board of Directors approved our Series B Preferred Stock Repurchase Program (the
“Series B Repurchase Program”) that authorized us to repurchase up to $5 million in the aggregate of the Company’s
Series B Preferred Stock. Purchases under the Series B Repurchase Program were permitted to be made using a
variety of methods, which may including open market purchases, privately negotiated transactions or block trades, or
by any combination of such methods, in accordance with applicable insider trading and other securities laws and
regulations. The size, scope and timing of any purchases were based on business, market and other conditions and
factors, including price, regulatory and contractual requirements or consents, and capital availability. The Series B
Repurchase Program did not require the Company to acquire any particular amount of Series B Preferred Stock.
During March 2020, the Company repurchased 531 shares of our Series B Preferred Stock for approximately $12,000.
On October 20, 2020, the Company voluntarily redeemed all 3.8 million issued and outstanding shares of its
8.0% Series B Preferred Stock at a redemption price equal to the $25.00 per share liquidation preference plus accrued
and unpaid dividends to, but not including, the October 20, 2020 redemption date in an amount of $0.2722 per share,
for a total payment of $25.2722 per share, or $96.1 million. As a result of our redemption notice, the Company
recognized a preferred share redemption charge of approximately $2.9 million related to the original issuance costs.
6.75% Series C Cumulative Redeemable Preferred 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.
Dividends on the Series C Preferred Stock shares are cumulative 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 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.
6.375% Series D Cumulative Redeemable Preferred Stock
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
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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
included the 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.
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.
Preferred Stock At-The-Market Sales Program
On October 21, 2019, the Company entered into a Preferred Stock At-The-Market Sales Program (“2019
Preferred ATM Program”) with B. Riley, as distribution agent, under which the Company was permitted to 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 2019 Preferred ATM Program were “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 2019 Preferred ATM Program
on October 22, 2019 and through June 30, 2020, 3.2 million shares of Series D Preferred Stock were issued and sold
under the 2019 Preferred ATM Program at a weighted average price of $25.09 per share, generating gross proceeds
of $80.5 million and net proceeds of $79.1 million, after offering expenses. Of these amounts, year to date through
June 30, 2020, we issued and sold 2.6 million shares at a weighted average price of $25.06 per share, generating gross
proceeds of $64.1 million and net proceeds after offering expenses of $63.1 million. The Company discontinued the
sale of shares under the 2019 Preferred ATM Program prior to June 30, 2020.
On July 15, 2020, the Company filed with the Maryland SDAT Articles Supplementary reclassifying and
designating 3.3 million shares of the Company’s Common Stock as shares of Series D Preferred. Following the filing
of the Articles Supplementary, the authorized capital stock of the Company consists of 140.4 million shares of
Common Stock, 4.0 million shares of Series B Preferred Stock, 13.8 million shares of Series C Preferred Stock, 9.3
million shares of Series D Preferred Stock and 3 million shares of excess stock, par value $0.10 per share.
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On July 22, 2020, the Company entered into a new Preferred ATM Stock At-The-Market Sales Program
(“New Preferred ATM Program”) with 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 New Preferred 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. Shares of Series C Preferred Stock and/or Series D Preferred Stock sold under the New Preferred
ATM Program are offered pursuant to the Company’s 2020 Registration Statement and are sold and issued pursuant
to the Company’s prospectus dated June 1, 2020 included in the 2020 Registration Statement and the related
prospectus supplement dated July 22, 2020. The New Preferred ATM Program replaced the 2019 Preferred ATM
Program. The Company began selling shares under the New Preferred ATM Program on August 11, 2020 and through
December 31, 2020, 134,000 shares of Series C Preferred Stock were issued and sold at a weighted average price of
$24.96 per share and 1.2 million shares of Series D Preferred Stock were issued and sold at a weighted average price
of $24.80 per share, generating total gross proceeds of $33.7 million and total net proceeds of $33.0 million, after
offering expenses. As of December 31, 2020, $66.1 million in shares of Series C Preferred Stock and/or Series D
Preferred Stock remained eligible for sale under the New Preferred ATM Program.
NOTE 10 – DISTRIBUTIONS
Common Stock
The following cash distributions, including dividends reinvested, were paid to common shareholders during
the three years ended December 31, 2020, 2019 and 2018 (in thousands):
Quarter Ended
Amount
Per Share
Amount
Per Share
Amount
Per Share
2020
2019
2018
March 31
June 30
September 30
December 31
$7,417
7,417
7,454
7,520
$0.18
0.18
0.18
0.18
$6,980
7,159
7,322
7,364
$0.18
0.18
0.18
0.18
$6,493
6,601
6,693
6,824
$29,808
$0.72
$28,825
$0.72
$26,611
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 13, 2021, the Company declared a 6% increase in the cash dividend, raising it from $0.18 per
share to $0.19 per share, to be paid on March 15, 2021 to shareholders of record as of the close of business on February
16, 2021.
Preferred Stock
The following dividends were paid to holders of our Series B Preferred Stock during the years ended
December 31, 2020, 2019 and 2018:
Declaration
Date
1/15/2020
4/2/2020
7/1/2020
9/11/2020
Record Date
Payment Date
Dividend
2/18/2020
5/15/2020
8/17/2020
9/11/2020
3/16/2020
6/15/2020
9/15/2020
10/20/2020
$1,900,600
1,900,335
1,900,335
1,034,541
Dividend
per Share
$0.50
0.50
0.50
0.2722
$6,735,811
$1.7722
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Record Date
Payment Date
Dividend
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
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
$1,900,600
1,900,600
1,900,600
1,900,600
Dividend
per Share
$0.50
0.50
0.50
0.50
3/15/2018
6/15/2018
9/17/2018
12/17/2018
$7,602,400
$2.00
$1,900,600
1,900,600
1,900,600
1,900,600
$7,602,400
$0.50
0.50
0.50
0.50
$2.00
The following dividends were paid to holders of our Series C Preferred Stock during the years ended
December 31, 2020, 2019 and 2018:
Declaration
Date
Record Date
Payment Date
Dividend
1/15/2020
4/2/2020
7/1/2020
10/1/2020
1/15/2019
4/1/2019
7/1/2019
10/1/2019
1/15/2018
4/1/2018
7/1/2018
10/1/2018
2/18/2020
5/15/2020
8/17/2020
11/16/2020
2/15/2019
5/15/2019
8/15/2019
11/15/2019
2/15/2018
5/15/2018
8/15/2018
11/15/2018
Dividend
per Share
$0.421875
0.421875
0.421875
0.421875
3/16/2020
6/15/2020
9/15/2020
12/15/2020
$4,113,281
4,113,281
4,127,330
4,169,813
$16,523,705
$1.68750
3/15/2019
6/17/2019
9/16/2019
12/16/2019
$2,425,781
4,113,281
4,113,281
4,113,281
$0.421875
0.421875
0.421875
0.421875
$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
On January 13, 2021, the Board of Directors declared a quarterly dividend of $0.421875 per share for the
period from December 1, 2020 through February 28, 2021, on the Company's Series C Preferred Stock payable March
15, 2021 to shareholders of record as of the close of business on February 16, 2021.
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The following dividends were paid to holders of our Series D Preferred Stock during the years ended
December 31, 2020, 2019 and 2018:
Declaration
Date
Record Date
Payment Date
Dividend
1/15/2020
4/2/2020
7/1/2020
10/1/2020
1/15/2019
4/1/2019
7/1/2019
10/1/2019
1/15/2018
4/1/2018
7/1/2018
10/1/2018
2/18/2020
5/15/2020
8/17/2020
11/16/2020
2/15/2019
5/15/2019
8/15/2019
11/15/2019
2/15/2018
5/15/2018
8/15/2018
11/15/2018
3/16/2020
6/15/2020
9/15/2020
12/15/2020
$2,076,126
2,076,126
2,081,704
2,449,415
Dividend
per Share
$0.3984375
0.3984375
0.3984375
0.3984375
3/15/2019
6/17/2019
9/16/2019
12/16/2019
3/15/2018
6/15/2018
9/17/2018
12/17/2018
$8,683,371
$1.59375
$796,876
796,876
796,876
950,760
$0.3984375
0.3984375
0.3984375
0.3984375
$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 13, 2021, the Board of Directors declared a quarterly dividend of $0.3984375 per share for the
period from December 1, 2020 through February 28, 2021, on the Company's Series D Preferred Stock payable March
15, 2021 to shareholders of record as of the close of business on February 16, 2021.
NOTE 11 – FEDERAL INCOME TAXES
Characterization of Distributions
The following table characterizes the distributions paid for the years ended December 31, 2020, 2019 and
2018:
2020
2019
2018
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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2020
2019
2018
Amount
Percent
Amount
Percent
Amount
Percent
Preferred Stock - Series B
Ordinary income
Capital gains
Return of capital
$
0.661633
-0-
1.110567
37.33% $
-0-%
62.67%
1.18476
0.05394
0.76130
59.24% $
2.70%
38.06%
1.288868
-0-
0.711132
64.44%
-0-%
35.56%
$
1.772200
100.00% $
2.00000
100.00% $
2.00000
100.00%
Preferred Stock - Series C
Ordinary income
Capital gains
Return of capital
$
0.630008
-0-
1.057492
37.33% $
-0-%
62.67%
0.999640
0.045508
0.642352
59.24% $
2.70%
38.06%
1.087484
-0-
0.600016
64.44%
-0-%
35.56%
$
1.687500
100.00% $
1.687500
100.00% $
1.687500
100.00%
Preferred Stock - Series D
Ordinary income
Capital gains
Return of capital
$
0.595008
-0-
0.998742
37.33% $
-0-%
62.67%
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% $
1.593750
100.00% $
1.372397
100.00%
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, 2020, 2019 and 2018, S&F had operating losses for financial reporting
purposes of $273,000, $1.3 million and $1.2 million, respectively. Therefore, a valuation allowance has been
established against any deferred tax assets relating to S&F. For the years ended December 31, 2020, 2019 and 2018,
S&F recorded $10,000, $8,000 and $8,000, respectively, in federal, state and franchise taxes.
NOTE 12 – COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS
The Company is subject to claims and litigation in the ordinary course of business. Management does not
believe that any such claim or litigation will have a material adverse effect on the business, assets, or results of
operations of the Company.
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
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, 2020, the total loan balance under this agreement was approximately $1.7 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, 2020, the total loan balance owed to 21st Mortgage with respect
-97-
to homes in these acquired communities was approximately $2.0 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 $35.4 million of loans that the Company acquired under the COP Program as of
December 31, 2020.
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, 2020 and 2019 (in thousands):
Fair Value Measurements at Reporting Date Using
December 31, 2020:
Equity Securities - Preferred Stock
Equity Securities - Common Stock
Total
December 31, 2019:
Equity Securities - Preferred Stock
Equity Securities - Common Stock
Total
Total
$2,601
100,571
$103,172
$3,516
112,670
$116,186
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
$2,601
100,571
$103,172
$3,516
112,670
$116,186
$-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
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
-98-
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, 2020,
the fair and carrying value of fixed rate mortgages payable amounted to $487.7 million and $476.4 million,
respectively. 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.
NOTE 14 – SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest during the years ended December 31, 2020, 2019 and 2018 was $18.3 million, $18.4
million and $16.4 million, respectively. Interest cost capitalized to land development during the years ended
December 31, 2020, 2019 and 2018 was $1.3 million, $1.5 million and $1.0 million, respectively.
During the years ended December 31, 2020, 2019 and 2018, the Company assumed mortgages totaling $2.7
million, $19.4 million and $4.6 million, respectively for the acquisition of communities.
During the years ended December 31, 2020, 2019 and 2018, land development costs of $11.9 million, $17.5
million and $10.1 million, respectively were transferred to investment property and equipment and placed in service.
During the years ended December 31, 2020, 2019 and 2018, the Company had dividend reinvestments of
$3.2 million, $7.7 million and $5.1 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.
On January 8, 2021, the Company acquired Deer Run, located in Dothan, Alabama, for approximately $4.6
million. This community contains a total of 195 developed homesites that are situated on approximately 33 total acres.
At the date of acquisition, the average occupancy for this community was approximately 37%.
On January 21, 2021, the Company acquired Iris Winds, located in Sumter, South Carolina, for approximately
$3.4 million. This community contains a total of 142 developed homesites that are situated on approximately 24 total
acres. At the date of acquisition, the average occupancy for this community was approximately 49%.
On January 29, 2021, the Company awarded approximately 147,000 shares of restricted stock to five
employees.
On February 5, 2021, the Company entered into a Second Amendment to Amended and Restated Credit
Agreement with BMO to reduce the capitalization rate from 7.0% to 6.5%.
From January 1, 2021 through February 28, 2021, the Company issued and sold an additional 768,000 shares
of its Series D Preferred Stock under the New Preferred ATM Program at a weighted average price of $24.80 per
share, generating gross proceeds of $19.1 million and net proceeds of $18.8 million, after offering expenses.
NOTE 16 – PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The following unaudited pro forma condensed financial information reflects the acquisitions during 2019 and
through January 21, 2021. 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 this period, 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 thousands).
-99-
Rental and Related Income
Community Operating Expenses
Net Income (Loss) Attributable to Common Shareholders
Net Income (Loss) Attributable to Common Shareholders per
Share:
Basic and Diluted
For the years ended December 31,
2020
2019
$144,557
63,923
(29,742)
$133,567
64,222
2,240
(0.72)
0.06
NOTE 17 – SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
THREE MONTHS ENDED (in thousands except per share amounts)
2020
March 31
June 30
September 30
December 31
$37,573
31,819
(40,395)
(34,748)
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
(42,838)
(1.04)
$40,084
33,348
11,628
18,325
10,235
$43,123
35,747
(9,112)
(1,767)
(12,747)
$42,829
34,382
14,837
23,245
15,591
0.25
(0.31)
0.38
2019
March 31
June 30
September 30
December 31
Total Income
Total Expenses
Other Income (Expense)
Net Income 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)
-100-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (in 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
Altoona, PA
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
Camelot Woods
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
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
$
12,587
$
250 $
(1)
(4)
(1)
(6)
(1)
(3)
(7)
(2)
(1)
(1)
(2)
(1)
(1)
(5)
13,334
45,588
2,603
-0-
4,201
-0-
4,853
11,238
-0-
-0-
-0-
3,303
-0-
-0-
-0-
105,221
7,139
-0-
-0-
-0-
7,191
-0-
-0-
-0-
-0-
-0-
15,076
-0-
7,833
-0-
12,581
6,906
-0-
1,962
-0-
-0-
15,744
-0-
-0-
7,454
-101-
2,650
114
70
1,796
1,120
372
38
824
573
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
2,569 $
8,266
1,174
2,797
4,768
11,136
4,776
233
2,480
2,767
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
13,317
2,058
782
4,039
(6)
11,220
3,556
10,384
428
1,202
5,614
2,353
9,725
3,239
826
1,996
540
1,492
437
3,126
6,845
5,482
5,771
10,224
4,592
2,934
4,412
188
3,401
2,884
3,747
529
1,467
1,066
10,707
2,042
2,099
8,923
2,728
3,701
5,036
128
994
826
13,745
439
5,632
12,762
7,461
5,384
3,557
7,377
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (in 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, PA
Elkhart, IN
Tunkhannock, PA
Olmsted Township, OH
West Grove, PA
Elkhart, IN
Perrysburg, OH
Elyria, OH
Elkhart, IN
Erie, PA
Peninsula, OH
Tarrs, PA
Clinton, PA
Monticello, NY
Fredonia, NY
Navarre, OH
Lakeview, OH
Cresson, PA
Orrville, OH
Taylor, PA
Marysville, OH
New Middletown, OH
Nappanee, IN
Holiday Village
Holly Acres
Hudson Estates
Huntingdon Pointe
Independence Park
Kinnebrook
Lake Erie Estates
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
$
$
(5)
(4)
(3)
(1)
(4)
(4)
(2)
(3)
(2)
(1)
(3)
(6)
(3)
(7)
(5)
(1)
(8)
(1)
(1)
(5)
7,998
2,077
-0-
-0-
7,596
3,792
2,657
5,180
-0-
-0-
12,694
-0-
-0-
2,888
6,692
-0-
-0-
-0-
11,818
1,962
15,301
1,558
14,103
-0-
-0-
-0-
12,902
-0-
-0-
-0-
4,677
-0-
22,368
-0-
2,976
5,248
-0-
-0-
5,842
3,118
5,930
3,220
-0-
-102-
491 $
194
141
399
686
236
104
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
13,808 $
3,591
3,516
865
2,784
1,403
4,391
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
7,482
1,224
5,809
2,054
3,520
14,553
1,572
13,661
2,032
4,853
2,641
7,375
6,340
4,673
9,715
649
6,818
92
10,221
674
3,548
1,326
775
833
1,591
3,210
1,748
2,301
2,753
5,754
3,378
12,229
10,546
7,497
2,405
15,008
4,507
8,547
1,950
2,467
11,539
4,433
8,973
612
3,048
4,204
1,748
4,578
4,146
1,933
2,941
669
3,574
2,189
5,301
2,340
9,039
1,206
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (in 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 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
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
(1) $
(2)
(2)
(8)
(4)
-0-
4,386
-0-
7,607
2,263
-0-
-0-
5,940
8,783
$
1,380
191
72
742
424
196
1,184
896
260
77
157
1,808
437
269
5,348 $
4,359
1,746
3,143
3,812
1,080
4,034
6,179
1,753
841
281
13,321
12,706
1,606
4,076
1,326
56
4,480
5,014
2,296
3,966
3,853
5,876
4,429
1,894
7,785
5,468
1,752
$
476,390
$
65,925 $
487,845 $
546,486
-103-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (in thousands)
Column A
Description
Column E (10) (11)
Gross Amount at Which Carried at 12/31/20
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
Camelot Woods
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
Altoona, PA
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
$
703
2,650
114
70
1,796
1,120
372
123
828
766
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
-104-
15,433 $
10,324
1,956
6,836
4,762
22,356
8,332
10,532
2,904
3,776
12,701
4,764
21,460
5,017
3,213
4,045
2,656
2,105
3,739
5,444
9,228
7,408
8,667
16,926
6,515
5,018
4,790
1,591
4,105
5,613
6,046
1,630
3,839
2,343
9,555
7,734
9,103
9,900
6,810
8,995
23,127
712
2,214
2,974
15,897
4,703
12,716
14,198
8,925
8,418
6,236
$
16,136
12,974
2,070
6,906
6,558
23,476
8,704
10,655
3,732
4,542
12,860
4,940
22,468
5,425
3,331
4,169
4,540
2,242
3,881
5,640
9,295
7,582
8,872
17,535
6,697
5,380
4,851
1,774
4,497
5,889
6,272
1,749
3,888
2,448
12,090
9,002
9,543
9,975
7,182
9,638
24,392
775
2,584
3,222
16,470
5,528
13,226
14,602
9,886
9,695
6,720
7,058
2,753
433
1,643
693
5,726
2,245
3,236
255
58
2,578
1,030
3,891
3,068
891
933
335
544
1,195
1,172
1,944
1,525
1,667
4,887
3,433
1,051
1,726
197
2,291
1,022
1,094
376
802
524
5,890
348
2,815
4,124
621
2,304
1,182
200
552
692
6,379
522
3,425
7,967
872
836
1,125
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (in thousands)
Column A
Description
Column E (10) (11)
Gross Amount at Which Carried at 12/31/20
Column F
Site, Land
& Building
Improvements
Accumulated
Name
Location
Land
and Rental Homes
Total
Depreciation
Holiday Village
Holiday Village
Holly Acres
Hudson Estates
Huntingdon Pointe
Independence Park
Kinnebrook
Lake Erie Estates
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
$
Nashville, TN
Elkhart, IN
Erie, PA
Peninsula, OH
Tarrs, PA
Clinton, PA
Monticello, NY
Fredonia, 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
1,632
491
194
141
399
686
353
140
290
726
433
113
674
818
152
549
2,182
767
94
336
114
330
280
249
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
$
-105-
$
12,995
21,290
4,815
9,325
2,919
6,304
15,839
5,927
15,119
2,984
6,923
3,776
16,808
10,888
7,864
16,436
6,154
12,247
1,132
10,773
1,668
7,342
4,828
2,325
4,943
25,410
10,734
3,387
5,332
3,764
16,095
7,417
34,279
10,637
8,772
4,580
17,145
19,584
9,332
3,369
4,671
13,480
7,812
11,019
3,999
3,651
5,531
4,841
10,415
6,925
4,754
9,055
3,343
$
14,627
21,781
5,009
9,466
3,318
6,990
16,192
6,067
15,409
3,710
7,356
3,889
17,482
11,706
8,016
16,985
8,336
13,014
1,226
11,109
1,782
7,672
5,108
2,574
5,391
26,722
11,234
3,766
5,901
3,919
20,412
7,824
35,350
10,782
9,504
4,862
17,650
21,337
9,568
3,670
5,485
13,750
8,149
12,508
4,062
3,751
5,598
6,071
10,714
7,123
5,276
9,342
3,793
3,219
3,912
931
1,893
382
1,243
6,466
68
5,315
434
2,790
653
4,824
1,161
1,806
2,471
444
2,551
284
2,286
425
1,976
599
668
242
1,452
2,967
865
1,278
2,253
2,466
457
2,251
4,235
3,540
1,173
8,007
1,668
4,170
1,016
963
5,590
2,225
4,311
1,158
2,200
2,251
606
2,947
1,411
685
2,805
859
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (in thousands)
Column A
Description
Column E (10) (11)
Gross Amount at Which Carried at 12/31/20
Column F
Site, Land
& Building
Improvements
Accumulated
Name
Location
Land
and Rental Homes
Total
Depreciation
Trailmont
Twin Oaks
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
$
Goodlettsville, TN
Olmsted Township, OH
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
$
411
998
650
284
996
323
1,380
280
72
742
424
261
1,184
896
260
77
135
1,808
437
269
$
5,441
5,541
11,608
4,607
15,581
4,397
9,424
5,596
1,802
7,623
8,826
3,311
8,000
10,032
7,629
5,270
2,197
21,106
18,174
3,358
$
5,852
6,539
12,258
4,891
16,577
4,720
10,804
5,876
1,874
8,365
9,250
3,572
9,184
10,928
7,889
5,347
2,332
22,914
18,611
3,627
1,510
1,543
2,968
848
3,266
800
2,198
1,628
538
1,208
4,589
308
3,676
970
3,463
1,561
950
3,615
3,099
649
$
71,485
$
1,028,771
$
1,100,256
$
254,369
-106-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020
Column A
Description
Name
Location
Allentown
Arbor Estates
Auburn Estates
Birchwood Farms
Boardwalk
Broadmore Estates
Brookside
Brookview
Camelot Village
Camelot Woods
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
Altoona, PA
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
2020
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
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
1999
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
-107-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020
Column A
Description
Name
Location
Holiday Village
Holiday Village
Holly Acres
Hudson Estates
Huntingdon Pointe
Independence Park
Kinnebrook
Lake Erie Estates
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
Nashville, TN
Elkhart, IN
Erie, PA
Peninsula, OH
Tarrs, PA
Clinton, PA
Monticello, NY
Fredonia, 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
Column G
Column H
Column I
Date
Acquired
Depreciable
Life
2013
2015
2015
2014
2015
2014
1988
2020
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
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
1965
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
-108-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020
Column A
Description
Name
Location
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
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
Column G
Column H
Column I
Date of
Construction
Date
Acquired
Depreciable
Life
1974
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
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
5 to 27.5
-109-
UMH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020
(1) Represents one mortgage note payable secured by twenty-eight properties.
(2) Represents one mortgage note payable secured by thirteen properties.
(3) Represents one mortgage note payable secured by six properties.
(4) Represents one mortgage note payable secured by five properties.
(5) Represents one mortgage note payable secured by five properties.
(6) Represents one mortgage note payable secured by four properties.
(7) Represents one mortgage note payable secured by two properties.
(8) Represents one mortgage note payable secured by two properties.
(9) Represents one mortgage note payable secured by two properties.
(10) Reconciliation
/----------FIXED ASSETS-----------/
(in thousands)
12/31/19
12/31/20
12/31/18
Balance – Beginning of Year
$1,008,104
$874,601
$758,487
Additions:
Acquisitions
Improvements
Total Additions
Deletions
7,835
88,684
96,519
(4,367)
56,015
81,399
137,414
(3,911)
58,730
61,102
119,832
(3,718)
Balance – End of Year
$1,100,256
$1,008,104
$874,601
/-----ACCUMULATED DEPRECIATION-----/
(in thousands)
12/31/19
12/31/18
12/31/20
Balance – Beginning of Year
$216,332
$182,599
$153,592
Additions:
Depreciation
Total Additions
Deletions
39,525
39,525
(1,488)
34,816
34,816
(1,083)
29,841
29,841
(834)
Balance – End of Year
$254,369
$216,332
$182,599
(11)
The aggregate cost for Federal tax purposes approximates historical cost.
-110-
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
UMH PROPERTIES, INC.
BY: /s/Samuel A. Landy
SAMUEL A. LANDY
President, Chief Executive Officer and Director
(Principal Executive Officer)
BY: /s/Anna T. Chew
ANNA T. CHEW
Vice President, Chief Financial and Accounting Officer, Treasurer and
Director (Principal Financial and Accounting Officer)
Dated: March 10, 2021
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 10, 2021
President, Chief Executive Officer and Director
March 10, 2021
Vice President, Chief Financial and Accounting
Officer, Treasurer and Director
March 10, 2021
Director
Director
Director
Director
Director
Director
Director
Director
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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 Director 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
NELLI MADDEN
Vice President of Investor Relations
ROBERT VAN SCHUYVER
Vice President
T.C. SHEPPARD
Vice President of Consumer Finance
JEFFREY WOLFE
Vice President of Operations
JEFFREY V. YORICK
Vice President of Engineering
KRISTIN LANGLEY
Controller
BRITTNEE SPERLING
Assistant Controller
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
UMH PROPERTIES, INC.
Established in 1968
3499 Route 9 North | Freehold, NJ 07728
www.umh.reit 732.577.9997 NYSE: UMH