UMH Properties, Inc.

Good morning and welcome to UMH Properties' first quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, you may press star zero to the Simulink Conference Specialist. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. It is now my pleasure to introduce your host, Mr. Craig Koster, Executive Vice President and General Counsel. Mr. Koster, you may begin.

Thank you very much, Operator. In addition to the 10-Q that we filed with the SEC yesterday, we have filed an unaudited first quarter supplemental information presentation. This supplemental information presentation, along with our 10-Q, are available on the company's website at umh.reit. We would like to remind everyone that certain statements made during this conference call which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements that we make on this call are based on our current expectations and involve various risks and uncertainties. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. The risks and uncertainties that could cause actual results to differ materially from expectations are detailed in the company's first quarter 2025 earnings release and filings with the Securities and Exchange Commission. The company disclaims any obligation to update its forward-looking statements. In addition, during today's call, we will be discussing non-GAAP financial metrics, Reconciliations of these non-GAAP financial metrics to the comparable GAAP financial metrics, as well as the explanatory and cautioning language, are included in our earnings release, our supplemental information, and our historical SEC filings. Having said that, I would like to introduce management with us today. Eugene Landy, Founder and Chairman, Samuel Landy, President and Chief Executive Officer, Anna Chu, Executive Vice President and Chief Financial Officer, Brett Taft, Executive Vice President and Chief Operating Officer, Jim Likens, Vice President of Capital Markets, and Daniel Landy, Executive Vice President. It is now my pleasure to turn the call over to UMH's President and Chief Executive Officer, Samuel Landy.

Thank you very much, Craig. First, we are devastated by the passing of our director, Casey Conway. Casey was an exceptional friend, father, director, economist, and so much more. He positively impacted every organization he was involved in, and he will be greatly missed by all. UMH is pleased to report another solid quarter of operating and financial results. Our communities continue to experience strong demand, which is resulting in increased occupancy and improved community operating results. Normalized FFO for the first quarter of 2025 was 23 cents per diluted share as compared to 22 cents per diluted share last year, representing an increase of 5%. Our strong financial and operating results have given management and the Board of Directors the confidence to increase our common stock dividend by 4 cents per share annually to 90 cents per share. This represents a 4.7% increase over last year. We have now increased our dividend for five consecutive years for a cumulative annual increase of 18 cents, or 25%. Our business plan has been proven to provide investors with enduring long-term value. The acquisitions and investments we have made in our communities have improved the overall quality of housing we provide, which has allowed us to increase occupancy through the successful implementation of our rental home and sales programs. We are optimistic that we will continue to increase earnings and value through the occupancy of our 3,400 vacant sites, development of our 2,400 acres of vacant land, the increased profitability of our sales division, and through the acquisition of existing communities and development of new communities. Given the housing shortage and our position in the industry, we believe we have positioned the company for success for many years to come. Our same property results continue to meet our expectations. Rental and related revenue increased by 8%, expenses increased by 8%, and community NOI increased by 8%. Our expenses in the first quarter were elevated as a result of the difficult winter throughout our entire portfolio. That being said, we are pleased with the performance of our communities in this environment. Same property occupancy increased by 113 units year to date and 227 units over the first quarter of last year. The demand we are seeing at the community level should result in further occupancy gains throughout the remainder of the year. Gross home sales for the quarter were $6.7 million as compared to $7.4 million last year, representing a decrease of approximately 9.5%. Included in last year's sales was the liquidation and sales of inventory at a sales center that was leased to a third-party operator. Excluding these homes liquidated or sold in the sales center, sales of manufactured homes for the quarter ended March 31st, 2024 amounted to $6.4 million, or 88 homes, and cost of sales amounted to $4.2 million. Our gross sales profit for the quarter was $2.3 million, and our net profit from sales was approximately $618,000. During the quarter, we sold 71 homes, of which 26 were new, averaging $151,000 per sale, and 45 were used, averaging $60,000 per sale. Our sales results should continue to improve throughout the year as we enter our peak selling season and generate increased sales at our recently opened expansions. We continue to make progress obtaining approvals for expansion sites on our vacant land. We anticipate the development of over 150 sites this year. These sites are well located in markets where existing communities experience high occupancy levels, rental rates, and sales profits. Our vacant land and these expansion sites give us a long runway to deliver organic growth for the foreseeable future. Expansions improve the community operating results as many of the community expenses are fixed. These expansions greatly increase the value of our communities while generating sales profits and improving our community operating results. We have over $45 million invested in expansions that are not yet generating our expected yield on cost. As we sell homes and fill these sites, our occupancy rates, income, and NOI should rise accordingly. resulting in our 2,400 acres of vacant land becoming valuable. We will continue to work on expanding our existing communities in addition to exploring selling our vacant land to single-family home builders or for other higher and better uses. Our rental home program continues to perform as expected. We have strong demand throughout our portfolio and in many cases have waiting lists. Our rental home occupancy rate increased from 94% at year end to 94.6% at the end of the first quarter. During the first quarter, we converted 109 new homes from inventory to revenue generating rental homes. We anticipate adding 800 new rental homes to our portfolio this year. Our turnover rates remain low between 20 to 30%. Our rental home repair and maintenance remains at approximately $400 per home per year. On the acquisition front, we closed on the acquisition of two communities located in Mantua, New Jersey, for a total purchase price of $24.6 million, or $92,500 per site. These two communities contain 266 sites, of which 100% are owner-occupied. They are five-star age-restricted communities that we are proud to add to our portfolio. Our current acquisition pipeline contains two communities in Maryland that we hope to close in the second quarter, consisting of 191 sites that are approximately 76% occupied. The purchase price for these communities is $14.6 million, or $76,600 per site. We continue to evaluate future acquisitions and hope to grow our acquisition pipeline in the near future. We are still assessing the impact of tariffs on our business, but early indications are they will have a minimal impact on our business. We currently have over 650 homes on order with more than 500 homes delivered to our communities. The 500 homes are paid for and we don't anticipate large price increases on the balance. These homes should allow us to rapidly increase occupancy at our communities. Additionally, our rent collections remain strong and in line with our historical collection rates, application volume is up and sales demand is strong. We will continue to monitor the impact of tariffs and geopolitical issues on our business, but at the moment, all appears to be business as usual. Over the past 1, 5, and 10 years, ending December 31, 2024, UMH has been the top manufactured housing REIT. Our total shareholder return in 2024 was approximately 30% for one year, 51% over five years, and 234% over 10 years. We have a proven track record of executing our business plan. Since 2020, UMH has increased its dividend by 25%. Our business plan has positioned us with 3,400 vacant sites and 2,400 acres of vacant land to continue our organic growth. This organic growth should allow us to generate similar earnings growth and operating results for years to come. Additionally, with our strong balance sheet, we are prepared to execute on compelling acquisitions as they become available. The fundamentals of manufactured housing are strong, and UMH is well positioned to continue to grow through our established long-term business plan. And now, Anna will provide you with greater detail on our results for the quarter.