UMH Properties Q1 Earnings Call Highlights

Key Points

• Q1 normalized FFO of $0.23 per share was unchanged year‑over‑year (normalized FFO $19.4M, +3% in dollars), with results pressured by higher interest costs and seasonal headwinds even as same‑property NOI rose ~7.1%.
• Operating momentum: overall occupancy climbed to about 88% (up 184 units), UMH added 166 rental homes this quarter bringing rental inventory to ~11,200 units (94.6% occupied), and management says it can fill 800+ new rental homes this year with a target to exceed 90% portfolio occupancy.
• Balance sheet and guidance: total debt roughly $760M (99% fixed, weighted average rate ~4.92%), liquidity of $37.4M cash plus $260M available on the revolver, and tightened full‑year normalized FFO guidance to $0.98–$1.04 per share with expected mid‑single‑digit growth.

UMH Properties NYSE: UMH reported first-quarter 2026 normalized funds from operations (FFO) of $0.23 per diluted share, unchanged from the year-ago period, as management pointed to higher interest costs and seasonal pressures that moderated per-share earnings despite improving occupancy and same-property growth.

Quarterly performance shaped by interest expense and seasonality

President and CEO Samuel Landy said normalized FFO for the quarter was $0.23 per share versus $0.23 last year, with results “impacted by increased interest rates and increased investment in rental units and expansion lots, which are not yet occupied.” He added that the company faced seasonal headwinds that affected sales volume and increased community operating expenses.

Still, Landy said operating momentum improved during the quarter, highlighting “meaningful” occupancy gains, 7% same-property net operating income (NOI) growth, and stable home sales revenue. Those positives were “partially offset by higher interest costs associated with refinancing debt, bringing expansion lots online, adding rental homes, and the seasonal impact on home sales and operating expenses,” he said.

In prepared remarks on the call, the company reported normalized FFO (excluding amortization and non-recurring items) of $19.4 million, compared with $18.8 million in the first quarter of 2025, a 3% increase on a dollar basis.

Occupancy rises and same-property NOI grows

Landy said demand across the company’s manufactured housing portfolio continues to translate into higher occupancy and improved operating results. Overall occupancy increased by 184 units in the quarter to about 88%, which he attributed to converting 166 homes from inventory to revenue-producing rental homes and improved occupancy in the existing rental portfolio.

On a same-property basis, Landy said revenue grew 7.6% (or $4.1 million) and same-property NOI rose 7.1% (or $2.3 million). He said that performance was driven by 5% site rent increases and an increase in occupancy of 412 units versus last year. Expenses were “elevated as a result of the bad winter, as well as an increase in real estate taxes,” he said.

During the Q&A, EVP and COO Brett Taft described weather-related expense pressure across multiple states, citing deep freezes that affected water and sewer systems, maintenance tied to freeze-ups, and snow removal costs. Taft said management expects expense growth to moderate as the year progresses and reiterated an expectation for expenses to grow in the 5% to 7% range, adding that the company remains “absolutely confident” in its ability to deliver high single-digit same-property NOI growth.

Taft also said he believes portfolio occupancy has room to improve further, stating, “I don’t see any reason why, in the near term, call it the end of the year, we can’t get, you know, above 90% occupancy.”

Rental program, home sales trends, and expansion pipeline

UMH continues to expand its rental home program, which management identified as a key driver of occupancy gains. Landy said the company added and rented 166 new homes during the quarter (including homes in joint venture communities), bringing total rental home inventory to about 11,200 units with a 94.6% occupancy rate. He cited a turnover rate of about 20% and said expenses per unit per year are approximately $400.

Landy said UMH is “well-positioned to fill 800 or more new rental homes this year,” noting 80 homes on site and ready for occupancy, 400 being set up, and 160 on order. He also pointed to $45 million invested in 600 vacant expansion sites that have already been developed, saying each occupied site should add revenue with limited additional investment because the sites have been paid for and the interest is already being expensed.

On home sales, Landy said manufactured home sales increased 6% to $7.1 million in the quarter, including sales at Honey Ridge, a community owned through a joint venture with Nuveen. He also said UMH financed 63% of its home sales during the quarter and that its notes receivable portfolio “continues to perform well.”

Taft provided an early look into second-quarter trends, saying April sales were “very strong” at about $3.5 million. He added that the sales pipeline remains in good shape, supported by inventory ready for sale at recently opened expansions, and noted second-quarter 2025 sales were about $10.5 million. While he said there is “a long way to go,” Taft said management remains confident in its ability to grow sales year-over-year in the second quarter.

Balance sheet, liquidity, and guidance update

Executive Vice President and CFO Anna Chew said UMH ended the quarter with approximately $760 million of debt, comprised of $554 million in community-level mortgage debt, $28 million in loans payable, $102 million of 4.72% Series A bonds, and $76 million of 5.85% Series B bonds. Chew said total debt was 99% fixed rate with a weighted average interest rate of 4.92%.

Chew said the weighted average interest rate on mortgage debt was 4.75% at quarter end, up from 4.18% a year earlier, and that the weighted average maturity on mortgage debt was 5.9 years versus 4.2 years at the prior-year quarter end.

On liquidity, Chew said UMH had $37.4 million in cash and cash equivalents and $260 million available on its unsecured revolving credit facility, with potential total availability up to $500 million via an accordion feature. The facility expires in November, and Chew said the company is working on a renewal. UMH also had $183 million available on other lines of credit used for home sales financing and for purchasing inventory and rental homes. Chew noted the company had $26.4 million in an unencumbered REIT securities portfolio and said UMH is committed to not increasing those investments and has continued to sell certain positions.

The company tightened its normalized FFO guidance range to $0.98 to $1.04 per share, from a prior range of $0.97 to $1.05 per share. Landy said the company still expects full-year normalized FFO per share growth in the mid-single-digit range.

In the Q&A, management addressed interest expense expectations for the remainder of the year, with Chew saying she expects it to be “pretty much the same” throughout 2026 without major increases or decreases. Landy added that increased interest expense has been driven by refinancing at higher rates as well as interest tied to adding rental units and building lots that “cannot possibly earn money until they’re occupied,” which he said are now becoming occupied. Taft also referenced last year’s refinancing activity and the resulting higher interest costs, saying the company does not expect large fluctuations going forward.

Regulatory and market commentary

Chairman Eugene Landy said UMH remains focused on its mission of providing “high-quality, affordable housing” and argued that the manufactured housing industry has performed well across economic cycles. He said earnings have been impacted by rising interest rates, expansion completions, additions to rental inventory, and seasonal fluctuations, but that management believes UMH is positioned for meaningful earnings growth this year.

On the regulatory front, Samuel Landy and Eugene Landy discussed potential changes related to manufactured housing rules and financing. Samuel Landy said a change removing the chassis requirement is “not complete yet,” but could enable two-story homes and expand product options, including duplex configurations. He said removing the chassis could reduce the cost of each unit “by $3,000 or more,” though setup costs may initially rise before efficiencies develop. He also discussed possible improvements in tenant financing, including changes to the Title I program and broader efforts to expand access to credit, which he said could benefit home sales and potentially lead to refinancing of existing loans that would provide cash to the company.

UMH also highlighted leasing momentum in its Opportunity Zone (OZ) Fund properties in the Southeast. Executive Vice President Daniel Landy said the Georgia property has been leasing “around, you know, four or five homes a month,” while the South Carolina property has an “incredible waiting list” and has filled every home set up to date. He said the company is pursuing additional approvals for expansion and infill in South Carolina.

UMH said it plans to report second-quarter 2026 results in early August.

About UMH Properties NYSE: UMH

UMH Properties, Inc is a self-administered real estate investment trust (REIT) that specializes in the ownership, operation, acquisition and development of manufactured home communities and recreational vehicle (RV) communities. The company's business model centers on providing affordable housing solutions by offering land lease lots and home sales in well-maintained, amenity-rich settings. UMH Properties focuses on maximizing occupancy and enhancing tenant satisfaction through professional on-site management and ongoing community improvements.

The company generates revenue through rental lot fees, home sales and related community services.

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