UMH Properties(UMH)2025-02-26 21:16Company Operations - As of December 31, 2024, the company operated 139 manufactured home communities with approximately 26,300 developed homesites and 10,300 company-owned rental homes[16]. - The company has quadrupled the number of developed homesites since 2010, acquiring 107 communities with approximately 18,800 homesites[24]. - The company has approximately 2,400 acres of additional land potentially available for future development[26]. - The company operates 139 manufactured home communities, with 45 having their own wastewater treatment facilities, subject to environmental compliance[71]. - The company has a total of 26,259 developed sites with an occupancy rate of 86.5% as of December 31, 2024, compared to 85.8% in the previous year[160]. - The company is currently working on the redevelopment of a community that will consist of 237 sites, with phases I and II fully completed and occupied, and phase III recently completed in 2023[161]. - Approximately 3,400 sites are in various stages of the approval process, which may be developed over the next seven years[162]. - The company has developed a total of 9,500 potential sites from its undeveloped acres[162]. - The Company owned manufactured home properties with an approximate cost of 0.86 in 2023 to 2.5 billion, while Equity Market Capitalization rose by 48% to over 0.215 per share, equating to 0.205 to 0.85 per share for the year[185]. Market and Economic Conditions - The company is concentrated in the manufactured housing/residential sector, making it vulnerable to economic downturns in that sector[45]. - The current interest rate environment poses risks that may affect the company's cost of capital and financial results[45]. - The geographic concentration of properties in the Eastern United States exposes the company to local economic downturns[53]. - Economic downturns in the manufactured housing sector could adversely affect the company's financial performance[78]. - Increased competition in the manufactured housing sector could adversely affect occupancy and rental rates, impacting overall profitability[45]. Risks and Compliance - The company faces risks associated with the illiquidity of real estate investments, which may hinder property sales when appropriate[45]. - The company may face challenges in maintaining or increasing rental rates and occupancy levels due to market conditions[49]. - The company is subject to various federal, state, and local taxes on income and property, despite its REIT status[45]. - Changes in tax laws applicable to REITs could adversely affect the company's financial condition and results of operations[45]. - The company faces risks associated with debt financing, including potential foreclosure if mortgage payments are not met[82]. - The company is required to distribute at least 90% of its REIT taxable income to shareholders annually, which may limit its ability to fund future capital needs from retained cash[83]. - Non-compliance with REIT qualification could lead to significant tax liabilities and reduced cash flow available for distributions[95]. Joint Ventures and Investments - The company formed an opportunity zone fund, UMH OZ Fund, LLC, holding a 77% interest, to acquire and develop manufactured home communities in economically distressed areas[15]. - The joint venture with Nuveen Real Estate may limit decision-making authority and expose the company to disputes[79]. - The joint venture with Nuveen Real Estate was established to acquire manufactured housing communities, with an initial equity capital commitment of up to 170 million[168]. - The Company acquired Sebring Square for 15.1 million through the joint venture with Nuveen[173]. - In November 2023, a new joint venture entity was formed with Nuveen, focusing on the development of a new manufactured housing community on 61 acres in Pennsylvania, expected to contain 113 sites[175]. Cybersecurity and Technology - The company faces cybersecurity risks that could lead to loss of confidential information and disrupt operations, despite measures in place to mitigate these risks[129]. - The Company has established a comprehensive cybersecurity risk management strategy, including incident response planning and employee training[139]. - The IT Department collaborates with senior management to implement a cybersecurity program to protect information systems and respond to incidents[142]. - The Board and Cybersecurity Subcommittee receive regular updates on cybersecurity risk management practices and developments[141]. - The Company conducts annual reviews of cybersecurity policies and practices, adjusting them based on assessment results[140]. Employee and Governance - The company employs approximately 513 individuals, with 42% of the total employee population being female[35]. - The company is dependent on key personnel, and the loss of management could adversely affect financial condition and cash flow[104]. - Conflicts of interest may arise from related party transactions involving key personnel, potentially impacting corporate governance[106]. - The company may amend its business policies without shareholder approval, which could impact shareholder interests[108]. - The ability to pay distributions in the future is dependent on the company's profitability and cash generation, with no guarantee of regular quarterly distributions[123].