UMH - Earnings call transcript Q4 2018

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Operator

Good morning and welcome to UMH Properties fourth quarter and full year 2018 earnings conference call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. event recorded. today's note, also is being Please It's pleasure to host, Ms. introduce your now my of Investor Director Madden, Nelli Relations. you. Thank Ms. you Madden, may begin.

Nelli Madden

Thank you very much operator.

the may call, Litigation are which we have forward-looking are umh.reit. like XXXX. made be that annual during are and facts, of available In Securities deemed SEC this based within I information historical Private The presentation information this would to expectations current Reform involve XX-K meaning the the our call filed conference our supplemental statements we make certain addition XX-K on that statements with with risks presentation. not yesterday, The various we everyone uncertainties. fourth of on company's filed to forward-looking the statements Act and and unaudited on remind along an quarter supplemental that the website at

expectations company achieved. could based statements. the obligation reasonable assumptions, believes actual update from Commission. the detailed statements its cause forward-looking will annual company's The Although, provide the and that are the uncertainties in that on and expectations risks disclaims the earnings assurance and materially expectations can release reflected company company any any results in no XXXX The filings forward-looking Exchange are its with to be differ Securities to

call Officer, Financial Chew, President to today: is UMH's and Landy. Brett Eugene and Vice Officer Executive Vice my SEC President. turn non-GAAP and I explanatory during and our today's as information to metrics with Chief financial said the earnings filings. President President management these language Chief financial Chairman, non-GAAP as release, Having that, comparable Landy, introduce in of well our the addition, Samuel In Chief financial to supplemental Reconciliations us call, Samuel we discussing are pleasure will historical would to now Officer, Taft, over It metrics. and our GAAP and metrics Landy, Anna Executive included like be cautioning

Samuel Landy

was ended XXXX the our communities very We operating XXXX. the you was communities of am continue XXX during sales manufactured great of in I homesites. execute business report another portfolio our results December we long-term grew highlighted our growth, XX, much, to plan. our by UMH, for pleased year by XXXX which for and successfully to Nelli. Thank and X% earnings quarter strength our improvement developed platform. fourth operation containing growth, portfolio our housing XX,XXX to year

a million. FFO net was related related our total increase resulted and driven year Community XX%, Our and revenue $XXX increased eighth normalized by in growth double-digit $XX.X in normalized third XX% FFO sales consecutive to of increased revenue. was by This rental XXXX. over to operating income XX% income delivering XX% and of growth. operating primarily This double-digit in rental a growth per strong performance of This XX% of increase increase XX%. increased consecutive a share. and a representing delivering million, On year by sales income our basis, $X.XX per-share

for and a properties are of a turnaround some than shorter homesites good have and purchase utilities communities with These market, Three additional condition million. through in rents developing approximately the of Ohio. in sites, acquired previous communities During These will acquisition. submetering total are significant three occupancy XX%. were of communities to a are generally average developed Indiana communities weighted containing of six we and require potential price filling acquired The rate X,XXX vacant in the year, $XX.X upside raising our sites. a period

million. all-time price closed The for which remains sites to near cap at of $XX pipeline communities Our two of a has remain approximately rates very consists or acquisition purchase currently market X,XXX acquisition containing total lows. competitive,

and the deals We to company are acquisitions. optimistic through grow continue about to future our source ability

on Moving operations. to

We related XXXX. XXXX. increase of all XX% million rental $XX million, of our to of representing This markets. income operating for strong XX% $XXX demand an resulted Community and experience net to in of in an continue income over increase increased housing affordable XXXX, for very which is over

community Our improved in XX% XXXX ratio expense operating in to XXXX. from XX.X%

to Our XX% the increases, at rates acquisitions, exceptional overall program year-end and rental business can occupancy compared to at be rent overall These of was results our year-end our XXXX XX.X% as home XXXX. plan. recent attributed strength our

continued net exhibit to property XXXX million compared an increase income $XX property metrics XXXX X.X%. property of in in million Same same of was $XX X.X%. an results. to million increase in as was operating XXXX, operating million representing improvement income $XXX compared XXXX, Our $XX Same in in as representing

the with property performance portfolio. pleased same our very are We solid of

same Our and as rate year-end occupancy XXXX. XXXX compared to XX% at year-end XX.X% property was

Our rent XXXX, year-end an at same to at XXXX increased $XXX representing property of per year-end $XXX from site increase X.X%.

healthy a property of home same XX.X%. now Our of occupancy X,XXX consists rental homes rate with portfolio

$XXX by to year-end rates at rental home X.X% Our increased XXXX.

occupancy rental we During the now maintain year, homes units. consists XXX a our rental XX.X%. of We portfolio home rate healthy X,XXX to of which added

We occupancy includes utilize occupancy and more home home results efficient communities to program plan is rental with significant average our of is values. higher program rent. acquire levels. rental levels rate $XXX Our one in our the rental increase driving the of community This operations property key business home site per month, low which and revenue growth quickly components The year-after-year.

or refinance in are our effectively then communities, the investments finance the recapturing to able communities. We

manufactured the opportunity long-term a is living manufactured the benefits give to For community. home homes of many home a our in making commitment. people The without rental residents, first rental experience housing experience many the

gross million that of since time XXXX with to have a profit operation. sales of encouraged the sales We profit XXXX, in compared sales posted double-digit in year first success Sales increased is $XX.X have a is with sales $XX,XXX. XX% we profit of XXXX. million by our of growth. This led of a Gross sale our third which to as were for the approximately XXXX. a XX% gross XX% $XX.X are This consecutive profit

we $XX,XXX of an in During $XX,XXX the XXX with of an year, average to homes XXX average homes XXXX. compared price price sold as with

be can sales total Our our factors encompasses vacant raw UMH's improving that be these the that relief, quality of the and economic can conditions will believe further improvement in X,XXX to continue communities. sales acres of attributed regulatory is growth. We X,XXX of portfolio approximately improvement drive to which land, land developed.

develop potential that Assuming have acre, four to homes we additional sites. net X,XXX we per the an

on our the continue We communities. make home progress of existing manufactured expansion to

in developed for Several projects of have slipped sites. that beginning had During total various XXXX XXXX, we anticipated a construction XXXX to XX we reasons.

this look can we completing more at believe them in several XXX that forward XXXX. to spring. and We We are completing work site deliver or sites expansions new

year long-term employment land Owning the The and of these own will vast natural be economic game will in These net also in The from that occupancy and oil Ohio in Cracker per generate producer X,XXX growth resources through prosperity. XXX,XXX the Pennsylvania exporter natural increased a and benefit be a that will gas. lucrative generate in acquired now developments investment. Petroleum very from economic energy United acres leading for in and markets these We American projects prove projects jobs to energy Institute continue Utica of shale resulting rich region investment an for to world's increase Marcellus we The the have region. with and will the States Ohio number gas and changer regions. communities the one to come. and a pipeline year Plants capital is Panda years the XXXX. plants, Pennsylvania, will

year's both $X.XX, for normalized and were FFO FFO we respectively, earnings. year Each dividend. and our XXXX core previous fully upon $X.XX our $X.XX Our covering improve

at should a we result to homes. $XX Looking rent approximately budgeted in of have ahead, XXXX home of additional and XXX an for we total expect revenue This million. rent X% site year and increase rental and growth install

operating net should $X Our by million. income increased

be team sales share optimistic that like UMH that are dedicated their growth as continue operation. great positive for are will appreciation. all sales operations in work. another our should home price this our UMH's see to our I thank business strong take a year opportunity earnings for ever. We year to of UMH as hard and should increased would XXXX,

are Anna industry. prospects and about on We quarter. of with detail the greater results optimistic the company the remain now you our for our by proud provide our results and team will our And achieved for

Anna Chew

operation or quarter for of million Thank fourth core or for FFO Core the or XXXX $X.X of $X.X items, $X.X on quarter or share you the compared was prior-year funds from diluted which $X.XX of diluted and prior-year $X.X million period. gains the million XXXX the compared share $X.XX million was diluted realized the excludes for Normalized share share $X.XX for per Sam. to other FFO, securities diluted per per to nonrecurring or $X.XX sale per fourth period.

$XX.X compared million XX%. an million $X.XX core Normalized share, to representing $XX XXXX, basis. to per XX% $X.XX compared to for diluted million diluted per $X.XX year XXXX XXXX. share share FFO million increase a income $XX.X full a For the diluted $XX.X and was $X.XX XXXX, or per-share per $XX.X share or or or year million $XX.X increase compared was Rental million on the a for diluted for ago, quarter per was for FFO related of

increased the the addition increases acquisitions, home year, for XX% by to XXXX, XXXX $XX.X occupancy. in in the related were from million million These XXXX. increase Community due full $XXX.X $XX.X from of in primarily the growth in XXXX $XXX.X rental million For NOI to and XX%. rental to million and increased an quarter income community in of

$XX $XX.X consecutive double XXXX, year, eighth of NOI NOI growth. For community the year-over-year full increased increase that to we an XXXX million is in have in XX%. achieved the This digit year million from

approximately rate debt year. at million to $XXX our we at million X.XX% of compared $XXX structure, which fixed payable. prior in turn community year-end year-end XXXX debt capital interest on was mortgage XX% to debt loans level our our X.XX% million total $XXX is debt was mortgage of rate. weighted had average in The were the we and As

for approximately million. proceeds net of corporate additional of manufactured on Redeemable lease for liquidity a facility. expansion Stock our down of homes drawn Series net customers, and B for million acquisitions feature, issuing our facility availability $XX March accordion have enhanced have from $XXX financial bringing $XX total amended an The million expanding date one-year rate. our from a in to unsecured to We interest for capacity our XXXX flexibility extension facility. credit million facility November up million. borrowing properties. renewing expanded our or UMH used to the provides We the and our purposes, new million we with $XX existing proceeds by reduced potential shares $XX extended maturity which The with X.XXX% increased increase of our XXXX, further two and communities included the year-end general of also a to revolving million Preferred At the $XX by Cumulative sale purchase

also raised have dividend UMH through We our equity. purchase of a and plan. million in stock year-end, perpetual $XXX At had reinvestment $XX.X million total preferred

with of debt to $X.X market Our debt preferred capitalization a From in capitalization credit our was combined our of and year-end. at million an net million $XXX $XXX total market stock standpoint, a approximately results XX%. of market equity in total capitalization billion

net total was less capitalization market Our securities XX%. debt to

debt net EBITDA was.X.X Our times. to adjusted

Our EBITDA to adjusted times. less was debt securities net X.X

of was $XX Our coverage times. and the of was charge and and revolving interest of cash million in coverage credit was we year purchase ended standpoint, our a million for sales recently facility X.X credit $XX the home available $X our times. equivalents, the financing available From liquidity lines on on And cash fixed inventory. our million expanded X.X

We loans. also This undepreciated in REIT $XX portfolio of in portfolio, million had securities our approximately by margin assets. X% represents million encumbered $XXX our

it underlying securities limit our estate. Although portfolio perform these long-term in than our position, initiatives. well before With the And questions. real Gene during we it high line XX% year, REIT our our turn let volatility the generally over we with me in continue assets. to We more up financial no strong for positioned market to open are now, the to the undepreciated experienced of growth

Eugene Landy

the Thank you very future. positioned for well is UMH Anna.

provided markets in to property our XX at provide owners potential future our homes rental to difficult the improve the the can has years. built the grow have portfolio by revenue, Once in of to occupancy results financing to that finance and are a selectively because give also been for homes quickly Rental obtain. much our asset-by-asset home stabilization, experience ability rents past believe us value-add we the communities in Rental with have reaches recouping invested vehicle The stabilize that home investment. program. We resulting of acquisitions. to the we community a to vacancies value. bridge is our poised levels, continue or refinance growth economic over higher community future recent We and operating

to has operation sales profitability. Our returned

we Over accomplishment, a should year, with $XXX UMH's While at which happy this X,XXX sites additional rental $XX center year. existing annualizes X%, portfolio we are an roll increases our has $XX the vacant for revenue million. rent will major believe income in approximately million vacancies. profit generate additional five million. raise can years years an and come. company sales be currently can growth to occupied, these related additional result $XX net from revenue in that be $X in Each currently rents revenue. UMH and Once in we million million in this rent on

of is housing states, constructed. shortage one is all The an is more single in housing many go that is have apartments affordable crisis. the remains are new to of only product can the housing family on to becoming simply vacant and enough being support. quality. communities. is affordable full. sites the develop highly housing market our be beginning competitive At housing a with point, they There that country to will current housing. manufactured well-positioned will manufactured In conventional The price housing Our industry develop Affordable housing housing to The help issues strong. homes some point, severe. both At much-needed not bipartisan affordable experience industry

quality We at it now to to housing. of the with of federal, be as ever The has has new UMH to mission important able develop That working communities. and local been. is are officials as always provide mission been forefront state affordable

service We company the proud we we provide. that are of the built and have very

We take questions. to now will happy be

Operator

question. our comes And Instructions]. [Operator from Please from first Rob question your ahead Janney. today Stevenson with go

Rob Stevenson

XX% sort the Sam, your you Lower? of I about you properties acquisition that about morning two sort that believe. acquiring XX% of there? have be we $XX in How Is occupancy tag, that in that? Good at should range the to guys. What's million pipeline, Higher? thinking been talked recently? price

Samuel Landy

Brett that. ahead will Brett. Go answer

Brett Taft

Yes.

blended So two The little of have XX%. rate. those occupancy a communities actually rate bit is a lower occupancy

One of at other the the properties is and is at property XX% XX%.

is an The space community. second XXX actually property

that can believe value. in some the we substantial generate So we long-term

Rob Stevenson

you in you think to over to need do you tag properties much be? have $XX are get that where How to the guys to and going million the price put above to to them

Brett Taft

some a as of acquisitions Not previous going as much back years. our few

this of lot higher a year, quality a our has on it pipeline couple mentioned we As in is earnings call past. been than earlier the the

So be capital the as our but paving infrastructure, upgrading primary as investments much of nearly will acquisitions. some in improvements streets some not rental homes and the and previous

Rob Stevenson

about Okay. this you what's was spend XXX to new Sam expect that cost And the develop to sites that talking delivering then the year?

Samuel Landy

be Sam approximately to per $XX,XXX Yes. That's site. going here.

Rob Stevenson

or doesn't And include it, the Okay. itself? just then That home on that's a putting anything right? site else

Samuel Landy

ready Correct. Right. That's site a house. having for a

Eugene Landy

we million make we And if two could to and park try where have could all $XX rental a then it for the homes it the park and that, the to we build in We to hope also homes an add park. ways. just I do sell

proud Blues project each. the first of homes and that's very all park We that's park ever build Tennessee Memphis, are which cost to the our built buy $XX,XXX We for $XX,XXX in Memphis $XX,XXX a we site rental. and

price of $XXX,XXX only bedrooms, and cost of about two know, over less it's combined bath a to bedrooms. for one sometimes more for a We have which, unit $XXX,XXX, of living or X,XXX $XXX,XXX apartment three you square than two created $XXX,XXX housing little feet, a that's an today the than if

We have three or four bedrooms.

Rob Stevenson

how that sort much month today? on where of are you there a And are is there? you adding While asset, occupancy

Brett Taft

very XX like at or first XX% the under lots. something Blues, moment phase the that. occupied be we is was right And So lots, is will next which and this XX building Memphis It's construction strong. demand

Anna Chew

And that say phase up I to within than the XXX% less months. just filled XX wanted was first

Eugene Landy

land the on are mortgage and the phase on very very have land working confident homes. that and occupancy. going there home. give be the the the a are entity And a to complete mortgage a But and us put government both to we is program get a and we are nice get to But to government and no pioneer we second sponsored government we with

Rob Stevenson

from of I when the year? guys how now year-end when guys thinking and et are Okay. new the today reporting bogey sort internal results? then XX you course XX there the is homes are the months likely the sitting occupancy are in being you portfolio purchase communities year, And that wind and install about this could rental significant cetera, the mean, of where to communities for up the bump over you

Samuel Landy

XXXX raise $X I there. to right and go and revenue we we XXXX to last homes. going a would homes removed amounts approximately old in community When before and replace new. out will rental major you major count are do $X XXXX But the rentals. million XXX XXX acquired. that rent to would are that be I units a do Those or projected project the removed. $X.X exactly add ahead homes year-end, It's benefit. That's rents those same from be did XXX those to indicates we we what fact total about we which And needed exactly communities XXX year, on million added X%, it's And the owned upgrade to we the we at ahead we think began million already target. in which So acquisitions, for we is also roll and with December to take

Eugene Landy

our on could have one that our we really And thing, we investors I community. website. all If upgraded go other add to encourage

We have videos.

can is than and the and UMH properties really ago. assure Some I the quality you, see we are much better owns that everybody it encourage years to by the first-class of three drones four or them was parks today. are done

Rob Stevenson

quarter Okay. invested market you portfolio Anna. incremental And portfolio then guys back, balance given since bounced rally. has one for the first any into securities the Have securities the Obviously, December REIT XX? capital

Anna Chew

minimal. is, That's in Monmouth. plan, year-end. we reinvest our pretty which since done we back Very dividend do do all we we our dividends reinvestment What that much have

Rob Stevenson

Okay.

new added no to the portfolio. So stocks

reinvest Just you dividend? the

Anna Chew

new names. No

Rob Stevenson

guys. Thanks it. Perfect. Appreciate Okay.

Anna Chew

problem. No

Operator

Instructions]. [Operator

Craig with next FBR. go Riley question. your B. Please comes Kucera question ahead from Our from

Craig Kucera

on little operating guys. provide morning Good the sizable. ask Hi. you additional about more same-store color which wanted was a Can increase I pretty to you expense that?

Anna Chew

Sure. One What went increase had is, bit. had we expense. that and bit a little insurance of same-store, quarter mid-year happened course four is in little an in of we had up renewals a

in it more some then which audits QX, QX because we So a in and came in QX. went little have did went in, it also up bit

if We we total at also additional, added bad also of look the had increased. in you year. year-over-year rental total, prior rental was X.XX% we look debt, XXX our that versus you increased. an at at if so X.XX% revenue, additional the And as percentage a if and same-store, you homes related look that it had in But it that

Craig Kucera

it. Got

doesn't meaningful true-up any It it drop sound was other like So items, anything? correct? or there tax was

Anna Chew

correct. No. That's

Craig Kucera

closed? And then when follow the to Or those those just second expecting in you Got close track to it. get acquisitions. still are up to you on on the Are quarter?

Brett Taft

exactly. Yes. It's hard to say

but the end We to push the are second may for the third quarter. it in hoping of off quarter,

Anna Chew

There is loan involved. assumptions

it's of say that. because So to hard

Craig Kucera

of back in pickup the with And half strong? the is trending first certainly large still sales, in it. the very quarter year, Got

Samuel Landy

of good used quarter, XXXXs in nothing we were XXXX We the that up what We back strengthening. sales activity that our sales applications to were like we continuing. And come haven't through still going have. today up But fourth XX.X% near anywhere to XX%. the An were things as trends compares XXXX. our see are, type to important approvals as the see or and Yes. point,

rental front, which occupancy. the XX%-plus the maintain the is why On XXX customer home and the of homes rental is we acceptance product by fantastic, rent our

fantastic. housing the about the house than of as it's and because understand rentals, of people have rental really a have and doing are the to that quality ever always accepted being better So that we But the excited of improvements we sales. product

Craig Kucera

the And securities is of portfolio. as relative value? were the quarter it. guys the more, as fourth recovery one Do Got moving sense far just to you have a in just current mark what to in you the where

Eugene Landy

now. which We than was drifted that, are from year-end, more XX% why but up we up about the were it's off

a be the can very pointed new Anna As securities swing we the of day. point the in under dollars portfolio But the from December was of accounting these expect report on XX. quarter profit first The volatile. low a out, rules, million to

Craig Kucera

I it. Got right. it. Thanks. All appreciate

Anna Chew

you. Thank

Operator

of Investment Group. Our comes Gesik from ahead Blake with your from Please University question. next Oregon question go

Blake Gesik

Good Hi. morning everyone.

at So the my about that. and first moving forward is just vehicles question looking mortgage

of of loans? So how the average for cost. moving the average the just that And mortgages plans was higher on are cost years, weighted thought next those substantially the wondering three the mortgages process those were forward I looking? weighted refinancing

Anna Chew

Well, loans interest four an XXXX X.X%. and are have at average that in loans approximately those weighted XXXX we and rate are coming due of

use X.XX%. again So X.XX% that will went refinance like we we we to interest and reduced expect we we rate when loans, But they loans, The when of GSEs, or the Freddie either those we have interest refinance to one from expect will Fannie rates. either that would qualify. those

we that X.X%. a expect because XXXX, but loans So increase the that we are maintain coming will minimal in at it's due

Eugene Landy

job add providing to mortgage affordable can a very that they housing to refinancing, the entities are to the on wonderful and important manufactured and does very the important I the government sponsored are nation. If for Anna industry housing

our parks if we the decade. anything so be think future. And And are continue, next proposing are programs. the projections that are They substantially refinance going our They for are able exist are we over they today. not these to to we programs great what

chance for changed We industry things entities important and period so because our and to rental the parks, understand one to it's fill increases housing programs don't government continues. think time we in be our the government was analyze UMH important is well. of people a great it's do to But us plan that there main us industries that And that's the for really plus many any the fact, depend do long them so is real that our back other when it over of will get to recycle they we use that it that Properties. In sponsored on capital and shareholders. to is

Blake Gesik

Got you.

stuff. good really Sounds

So consider the I another more and increased market portfolio? securities is volatility that the moving with exclusively about with some is you moving a forward? accounting market? fair had on aspect given forward and are Or are portfolio, Since looking long maybe question and in even exclusively portfolio of to to the stance the into going the the fixed forward. just actual you seeing, the moving What capital defensive the you process, value, income preservation changes REITs maintain going in the the liquidity thought market

Eugene Landy

We is, position for liquidity. that keep have first the we our securities maintained

believe of in companies a portfolio not if are invest properties. time And Our in we at portfolios sell as sell it's XX%. well closely. long-term, investment they have little from at right and really we discounts and and long estate them think That's estate unusual. XX% are net that And second or on a at overall and for times couple trusts position properties are is now at as bullish over the now you and industry What we the decades, history are directly. that a before the REITs, at liquid unusual, of X% buying the that we is and is you happened to have now have not that are we a in of very premiums very in been real selling really done had discount X% REIT these owning real times, watching well asset they our in the REITs REITs. value. do investing properties they whole REIT We But

Blake Gesik

you. One for last Anna. Got question

Eugene Landy

small is of the A the change in portfolio, percentage a company. this

rental so We pipeline and investing primary some structure to capital be capital parks small our make capital securities we and to portfolio are very acquisitions parks. fraction important And the and are have needs, homes, homes they acquisitions that. all us. the working and run is in the on the thing is the a existing parks, on are to we for may the the to building the changes those of of improve buy to and working $XXX to would the million in expand And

Blake Gesik

you. Perfect. Got

get Anna, last before for I So question off. you one

something be break So wondering down year, to if what to was and for came this income there that came possibility rental that looks this from and like I rental would portion related any the the of leases utility land of fees distribution try lines that the portion it split units, from on what better rest came from not that's other because or of along item, that those looks for broken understanding out get and a just and line like entirety though. currently say

Anna Chew

presentations rental average rental supplemental and income how is of units is have our approximately our in units. have have also and derived each unit. of And investor from we income XX% our many how in we much the our rental Well, we rental

would to that use. be think I good So a number

Blake Gesik

Got you.

you So going given increase are the Or try to sites that occupancy? future? that of to are to maintain hoping number and number the higher foreseeable into you also

Anna Chew

that portfolio sites that given new Given the XXX and our XXX want that to we number to will intend I believe our by a year, units of into increase put increase. rental communities, units we approximately

Blake Gesik

Got you. you. Thank Perfect.

Anna Chew

have then And lastly, sites. we vacant X,XXX only

Operator

Brian from question. go your comes from Boston with question next Partners. ahead Our Please Rohman

Brian Rohman

morning. Good Hello.

Samuel Landy

Good morning.

Brian Rohman

under it Gene doesn't have Could question. to to the answer this, answer underperformed. who you I securities different portfolio, been There A and names? questions, pressure bunch just he referenced think the securities that those questions. have of wants The whoever mention was are several

Eugene Landy

to hour have discuss only We an No. UMH.

do each cover the own portfolio. there We have We those They read reports. that XX are the six of circulate five, companies. all analysts companies reports. their We are them. And They companies. in public

it's who names to are not it's material, for companies for research the get companies. own the you think But so really practical to those welcome just And the of on me do -- your and

Brian Rohman

No.

them. of am is, I All were is or names. misunderstood. you one What like I two asking You CBL they three really, know

the on Just --

Anna Chew

Page portfolio have listing a of on in our total our XX-K We XX.

Brian Rohman

will I Fine. go there. Okay.

Anna Chew

Thank you.

Brian Rohman

have vehicle Do And XXXX? that preferred in issued, a as you in more that XXXX. the debt financing you issued anticipate some using you

Eugene Landy

the Absolutely. When of when performance, you with And increase you things leverage callable. gives be issue benefits with risk risk all vehicle. they normally of five leverage. happen. going viewpoint, get study years, Even the a it. normally they REITs capital the and engineering study of and and should are We and perpetual pillars financial one to are leverage of you bad nominal. we are think change the But one preferreds, wonderful our preferreds are you the is it in you a of preferred rates leverage in From think interest

investor, using a a it has concentrating from higher and there, rate the a a get fixed the REITs, as rate even they we by know is growth they permanent return capital For and the Storage vehicle. are market REIT, best we liquidity of perpetual. though and Public with on we enamored preferred had get such the of record the just And as of are get some if wonderful they at point view of run

now been right market last for the virtually year So has closed. the

only were preferred there point, one and XX that called at that issued REITs were four there think I preferred. probably public

approximately market money also and the take we use are really to to hopefully up time to we at sensitive we the to it. But the down be think will So open going we want preferred. we is issue are always rates going and

Brian Rohman

saying? saying are issue difficult you what that now to Is preferreds. it's right relatively you are So

Eugene Landy

front preferred of investors with we we to pay am The a in the to when of six in no I a what between issuances. could seven pay issue in the prefer preferred did and And tomorrow. at? the a want If we difference the a new get I that, last a it, to get saying of wanted do instead X.XX%? what preferred At want pay. what we front you you number, public it, would rate, to issue, But companies said. higher what

Anna Chew

X.XXX%.

Eugene Landy

Yes, X.XXX%.

Brian Rohman

you would that and significantly today it are Yes. And could if do be saying you higher?

Eugene Landy

higher. will It No. be

Brian Rohman

expect? you number also market? is by And did Okay. a your you Fine. to preferreds I the And for sorry, acquisitions it what give XXXX. am driven of access

Eugene Landy

No.

Anna Chew

No.

Samuel Landy

follow I on up just that. Yes. will

contract home we price occupied $XX $XX,XXX So $XX,XXX, million a about It's for right or about now. of per total two under X,XXX bed. XX% communities sites, have purchase

Brian Rohman

Okay.

do that So to have regardless can on of not finance the whether right And or it now? that's in market. preferreds Is what's you liquidity the you table that, correct?

Samuel Landy

That's correct.

Brian Rohman

Okay. quick just other one And then, question.

You made XX. this reference it page to noticed on I and

look homes four at per that basically you the right said acre. Is number? You

Samuel Landy

the are building Well, be, about ask there will sites if yield per do be acre, it we where you homes we four correct. think will and

Brian Rohman

that acquisitions actually XX, acre. are with per that number, page the exactly on And about up they listed line then four

Samuel Landy

three XX and one paper rate per two sites And look And XXXX star, on sites I acre. out point three will five to just star while and of white they five Housing star, star, the four star Manufactured you acre star subject with based Knight star. to seven rating, homes six star Frank acre, they nine of being Newmark is seven star, to four acre things that being the are at being per wrote four that on per per sites one communities

acquire of it, communities communities communities the additional three that capital four extent someone all four star the one age to convert and of through our and when of of acquired we are And almost to star to communities a So because our star. UMH five homes we five improvements our we might rental. call those the

Brian Rohman

with I lower property a get can think And follow-up then later. higher last Do you per density? question you and rents

Samuel Landy

factor number acre Florida have more rents per dream so with of. California, ever I the than location, or highest the seen, is homes I could Well, one take in XX the because rents

density go could of could if factor, and rents, the the that increase quality increase the be density, but is the quality location to and then lower a more could So rents. could higher

Brian Rohman

questions. Alright. Thank for my for Thanks time. you. Thanks answering your

Operator

question Our from ahead from with your Capital. Tony Carnegie go next question. Lake comes Gleeson Please

Tony Gleeson

was I folks. That's I X it is million that a on the says at count. Good Bloomberg was million. to now, see morning am two of looking A it a XX.X questions. great have little am confused right page presentation, XX.X page share couple sales glad to On of million, the turned and sign. I XX.X profit.

year-end out what's actual to as the of So count I am share trying XX/XX? figure

Samuel Landy

the looking ago, was in it moments XX But is million was looked Anna I sup. Last shares. it

Anna Chew

If you of the are looking three was at as XX.X of million page XX/XX/XX. supplemental, the

Tony Gleeson

sorry. am I

page XX.X eight? the Okay. million Alright. on And

Anna Chew

outstanding. of shares whole That's average year. of That's year the average the weighted over shares the not the weighted XXXX. at It's the end the XXXX and

Tony Gleeson

Got it.

Okay.

total right XX is now So outstanding million?

Anna Chew

Correct. Well, as of XX/XX.

Tony Gleeson

Got it.

Samuel Landy

And that's up, just this I a opened different number, because XX,XXX,XXX.

Anna Chew

weighted year. for the average the outstanding That's

Tony Gleeson

Okay.

less, of fully are because you be counted year the if in then the issuing would the number? year, are So they not as end those towards shares

Anna Chew

Correct. averaged. It's

Tony Gleeson

for you that. Thank Okay.

XXXX grow you in equity? can So the without company issuing

Eugene Landy

and policy and be good to to can a you if have When be say safe. million $XXX $XXX million And to careful we really in base preferred, coverage. capital want is have we or issue we, our to

million, have we hopefully, stated, I to We that through the for preferred dividend continued the securities. us to capital. because and we probably continual very issue flow infusion a common to going up reinvestment, add in get million nice need market are investment and we open $XXX borrow is of but prudence plan, preferred $XXX so the REIT that think buy shareholder budgeted And these a some we the homes could we expansions. stock going the do capital dictates of capital XXXX And and as to gives

Tony Gleeson

Right.

count at Okay. as revenue. that keeps Well, share the rate growing same

we So on the a share per never are getting traction basis.

crux So of question. really I think that's the my

Anna Chew

this year FFO our did XX%. normalized While XX%, up go

that in respect. are progress making we So

generate we to equity able that the we earnings. positive being in have generated, We the are to have use raised that equity order

Tony Gleeson

Yes.

Eugene Landy

lot a of just It's confusion.

the And rents, homes, is higher a going the month. We higher. value the hopeful $XXX, we XX% hopeful we we much over to rent a and XXX% them that will go to three sites years, these the month three is we products, $X,XXX occupancy and to a have because $XXX five we years, homes these five are and are over competition next of cost next produce to are the that

can So we rents. higher really we justify much think

more rents, not company is capital, But want But with much more occupancy the the we other what so position where there note so in the ship capital. the equity we ourselves a generate a that going to we issue keep get full and and with higher careful is do. So that voyage other too we a I on REITs watch issuing its income. safely shortage hand, to to great complete capital. issue we are more don't of deal

$X we keep cut Some leverage, think is leverage basis. $XX now which approximately million. leveraged to $XXX deleveraged and We Other a up. low REITs have a percentage their billion, want on billion we or the are where million REITs earnings have $X

better, same. So we don't higher goal numbers we finally be have think that the reached and of when rents, our share will think not the full we occupancy per

Tony Gleeson

to Well, makes Okay. think goes harder the I hopeful I to stock well, issuing That's equity all. but $XX it as more am do.

Eugene Landy

It one XX the industry. that Two they of is, does and And the I other respect. at, is And sell though, in performing don't times manufactured on housing everybody Sun ELS. of are the Communities course, REITs, bullish best earnings. know,

$XX. our handicap. we could size we day small hopeful be if not will a So that if are it is some But $X, make $XX,

crisis and and haven't people say, solution the only We great favorable in because the to the threshold. are two homes. manufactured we that the then see we industry And crossed public affordable that on and very there's many a well, they housing pleased reached industry what like is to so size reports are REITs,

do. seem the So security thing issuing stock more while to and be not may under studies to conventional economics

us reports. hand, favorable included the other they size write On with two to the gets when these closer the other be increased

Tony Gleeson

Okay. hear you. Well, I

the angst the tension question Second, of loss? for million management and directors' and a creating good not was certainly portfolio particularly will here, compensation year last affected be is and a Awkward the portfolio. lot year REIT $XX given

Eugene Landy

this happy done very accounting system will the European is it earnings called, the way. this Anna? answer me let be what Well, company, on, We would if be

Anna Chew

accounting. fair-market a It's

Eugene Landy

Fair-market accounting. revenues, would be fair-market fix want our that. to accounting I very mean, do use happy we to you and

sites. They the million. million value $XXX $XX securities and have We XX,XXX went go in up down

So accounting go would management vote if to for to we measure you we and fair-market think want that performance, too.

Tony Gleeson

as will I okay. no. take Well, a that

my worth the you question. in are answering think that to That would my Thank as portfolio a perspective, considering you share appreciate you. pain it's that but I a I signal shareholders be loss.

Eugene Landy

Okay.

Operator

Instructions]. [Operator

Please next question Our go ahead Craig Kucera your a follow-up B. with Riley follow-up. is from from FBR.

Craig Kucera

guys. Hi

one a Just here. quick

You mentioned recent the shorter on turnaround acquisitions. period your

it's get historically new of a from out how buy about have old level stabilized occupancy? think usually bit you I a a to Does Or a are little up on those to when rip timeframe the you homes, a cetera. that some acquisition talking and maybe three-year been you down, just could you elaborate like about quickly timeframe? two-year can you bring et of

Samuel Landy

They all does are by asset. it Again, be to different. Yes. going asset depend all

were same-store XXXX, think turnaround those you ultimately unfortunately which I in on property probably period. But if just and occupancy look you increases value. XXXX substantial three-year older, really we missed back at and look if revenue XXXX, have at generated and numbers, our your some out NOI

turnaround yes, those, period. think ultimately will evaluate or two a estimate acquisitions, to I we continue a is whether probably all closer years three-year a be on but So it two again

Craig Kucera

Thanks. Okay.

Operator

And to conference over like ladies for call any Landy would session. Samuel conclude closing turn and to gentlemen, question-and-answer at this the time we remarks. back I will today's

Samuel Landy

like thank I operator. this and would call support company. to continued on interest the in you our participants their Thank for

look available after I We Gene, follow-up Anna to to As you. quarter. our forward are Thank for and you questions. back first reporting always, any

Operator

today's please you access U.S. is you disconnect gentlemen, lines. and at attending Ladies To now one The or The conference your free for teleconference the XXX-XXX-XXXX. the will concluded. Thank be internationally presentation. XXXXXXXX. replay, using has approximately conference thank replay in please We toll do number ID available and dial X-XXX-XXX-XXXX hour.

UMH Properties (UMH) 8 Mar 192018 Q4 Earnings call transcript