UMH Properties Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 9, 2023

There are 10 speakers on the call.

Operator

Good morning, and welcome to Properties Third Quarter 2023 Earnings Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. It is now my pleasure to introduce your host, Mr.

Operator

Craig Coster, Executive Vice President and General Counsel. Thank you. Mr. Coster, you may begin.

Speaker 1

Thank you very much, operator. In addition to the 10 Q that we filed with the SEC yesterday, we have filed an unaudited 3rd quarter supplemental information presentation. This supplemental information presentation along with our 10 Q are available on the company's website at umh.reit. We'd 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 made on this call are based on our current expectations and involve various risks And uncertainties.

Speaker 1

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 Form expectations are detailed in the company's Q3 2023 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.

Speaker 1

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 Lykins, 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 Endy.

Speaker 2

Is pleased to report another quarter of sequential FFO growth. Sequentially, normalized FFO increased from $0.21 in the 2nd quarter to $0.22 in the 3rd quarter. Community net operating income increased by 16% for the quarter. Provides Quality housing for an average rent of $9.22 per month in well located communities using 3 bedroom, 2 bathroom energy efficient Factory built homes on lots that are generally 5,000 square feet. These competitively priced Rental units are in strong demand resulting in less than 30% turnover, 94% occupancy and 98% collection has the ability to provide quality housing to households with incomes Of at least $37,000 per year, most apartment and single family housing operators cannot provide housing for households earning less Then $55,000 per year.

Speaker 2

Reduces housing costs, thus improving the lives of our residents. We now have 22,300 occupied lots in our communities. 9,300 of these lots owns 25,800 home sites, allowing us the opportunity to grow revenue By filling the 3,500 vacant sites, we buy communities for as little as $25,000 per site and make improvements to the communities and add professional management and marketing to increase occupancy and revenue by selling and renting homes and financing home sales. Our homes and communities are strongly desired as evidenced by our installation and occupancy of 900 new rental homes and sales of 122 new homes year to date. Sequentially, same property occupancy increased by 172 sites or 50 basis points And year over year, it increased by 5 46 sites or 2 10 basis points to 88.4%.

Speaker 2

The growth in occupancy combined with our 5% to 6% rent increases resulted in rental and related income growth of 10% And NOI growth of 12.9 percent for the quarter. Year to date, same property rental and related income Increased 8.4% and NOI increased 10.4%. We are pleased to have achieved double digit same property NOI growth. We believe that through the continued implementation of our business plan, we will be able to generate similar same property operating results in the future. This growth in NOI directly correlates to an increase in property value.

Speaker 2

Year to date, gross home sales are $23,400,000 as compared to $20,300,000 last year, representing an increase of 15%. We have sold 264 homes, of which 122 were new home sales, Averaging $134,000 per home sale and 142 were used home sales, averaging $50,000 per home sale. We were able to achieve a 31% gross profit as compared to 30% last year. We are on track to break Our all time sales record of $28,100,000 and may reach our sales goal of $30,000,000 We anticipate further improvement in our sales division as the demand for affordable housing continues and the carrying costs of our inventory decrease. Our rental home portfolio continues to perform exceptionally well.

Speaker 2

For the 1st 9 months, we have converted 900 units from inventory to income producing rental units. These homes were occupied throughout the year, so the full year's impact This increase is not yet apparent in our financial results. We now own 9,900 rental units, which 94.2% are occupied. We continue to experience 30% or less turnover per year And our expenses are approximately $400 per unit. We anticipate adding another 800 to 900 homes next year.

Speaker 2

Backlogs from our manufacturers have returned to normal levels of 2 to 4 months, allowing us while allowing us to generate similar overall occupancy and revenue gains next year. COVID caused manufacturing backlogs that increased the cost of Each home increased the amount of inventory we carried, increased many costs associated with carrying high inventory and that is all behind us now. We are now on track to complete the construction of 2 16 expansion sites. These Expansions take time to become profitable, but they improve community appearance, create operating efficiencies and increase community value while generating sales profits. Next year, we anticipate approvals to develop 800 sites and On the acquisition front, we have 2 communities in Maryland under contract and anticipate closing in the first half of Due to climbing mortgage rates, the disparity in cost between buying and renting a home is at its most extreme since 1996.

Speaker 2

Market conditions over the next several months are expected to continue widening the gap between buying and renting, which supports the robust rental home program we have at is well positioned to serve the needs of the affordable housing market with either the option of buying or renting homes. The replacement cost for the rental homes we added for $40,000 per unit 12 years ago is now $70,000 per unit. During the quarter, our share count increased by approximately 3,100,000 shares, mainly from our issuances through the common ATM, which raised $44,500,000 in new equity. Additionally, we raised $12,400,000 of our Series D preferred stock through our preferred ATM. This capital is being rapidly invested in additional rental homes, expansion lots, community capital improvements and financed home sales.

Speaker 2

All these uses are accretive over the long term. At any point in time, has $100,000,000 or more In capital that is invested in value add acquisitions, inventory for sale or for rent, capital improvements, Expansions for our Greenfield Community Development joint venture. These investments are necessary and will add to the long term profitability of Our capital investments have made UMH a top performing provider of manufactured homes for sale or rent. Non income producing assets such as our vacant land do not currently add to FFO, but do grow in value through inflation, Demographic and Economic Growth. Mike Trout and Tiger Woods are building a golf course in Vineland, New Jersey in very close proximity to 30 acres of vacant land UMH owns.

Speaker 2

UMH continues to execute on our long term value added business plan. We have successfully acquired communities, improved their physical appearance and implemented our sales and rental programs. This business plan has allowed us to achieve higher returns through the infill of vacant sites and the correlated value creation. We have been able to generate a stable income stream derived from our 22,300 occupied home sites and 9,300 occupied rental homes. We have built a profitable sales and finance company that has the potential to grow volume and profits in the future.

Speaker 2

This year, we have installed over 1,000 homes, Rented 900 new homes and sold 122 new homes. This has resulted in improved community operating results and growing FFO. And now, Anna will provide you with greater detail on our results for the quarter.

Speaker 3

Thank you, Sam. Normalized FFO, which excludes amortization and non recurring items, was $14,400,000 or $0.22 per diluted share for the Q3 of 2023 compared to $13,100,000 or $0.24 per diluted share for 2022, resulting in an 8% per share decrease. Sequentially, normalized FFO increased from 0.21 for the Q2 to $0.22 in the 3rd quarter, representing a 5% per share increase. We were able to obtain this increase in normalized FFO despite our operating results being largely impacted is well positioned to grow FFO in the last quarter of the year as we continue to increase occupancy and revenue. Rental and related income for the quarter was $48,100,000 compared to $42,900,000 a year ago, representing an increase of 12%.

Speaker 3

This increase was primarily due to recent community acquisitions, The addition of rental homes and an increase in rental rates. Community operating expenses increased 8% during the quarter. This increase was mainly due to our recent acquisitions as well as an increase in payroll, rental home expenses, real estate taxes, Insurance, waste removal, water and sewer expenses. Community NOI increased by 16% for the quarter from $23,700,000 in 2022 to $27,500,000 in 2023. Our same property results are trending in the right direction.

Speaker 3

It is important to note that while total community operating expenses were up 8%, Same property operating expenses were only up 6%. Same property income increased by 10%, generating same property double digit percentage NOI growth of 12.9% for the quarter. As we turn to our capital structure, at quarter end, we had approximately $687,000,000 in debt, of which $442,000,000 was community level mortgage debt, dollars 145,000,000 was loans payable And $100,000,000 was our 4.72 Percent Series A Bonds. 79% of our total debt is fixed rate. The weighted average interest rate on our mortgage debt was 3.88 percent atquarterend compared to 3.87% atquarterendlast The weighted average maturity of our mortgage debt was 5 years at quarter end and 5.1 years at quarter end last year.

Speaker 3

The weighted average interest rate on our short term borrowings is 7.26% as compared to 4.97% last year. In total, the weighted average interest rate on our total debt It's 4.71% compared to 4.18% last year. We continue to explore opportunities to raise lower cost capital to pay down our short term borrowings, which would result in increased earnings per share. During the quarter, we paid down our floor plan lines to approximately $1,100,000 These lines have a weighted average interest rate of 9%. Subsequent to quarter end, we paid down $10,000,000 on our revolving line of credit secured by our eligible notes receivable.

Speaker 3

At quarter end, had a total of $279,000,000 in perpetual preferred equity. Our preferred stock, Combined with an equity market capitalization of $928,000,000 and our $687,000,000 in debt Results in a total market capitalization of approximately $1,900,000,000 at quarter end. During the quarter, we issued and sold approximately 2,800,000 shares of common stock through our common ATM program at a weighted average price of $15.93 per share, generating gross proceeds of $44,500,000 and net proceeds of $43,500,000 after offering expenses. Subsequent to quarter end, we issued and sold 190,000 shares of common stock through our common ATM program at a weighted average price of $13.98 per share, generating gross proceeds of $2,700,000 and net proceeds of $2,600,000 after offering expenses. Additionally, we issued and sold approximately 578,000 shares of our Series D preferred stock Through our preferred ATM program at a weighted average price of $21.43 per share, generating gross proceeds of $12,400,000 and net proceeds after offering expenses of $12,200,000 Subsequent to quarter end, we issued and sold approximately 44,000 shares of our Series D preferred stock through our preferred ATM program at a weighted average price of $21.08 per share, generating gross proceeds of $931,000 and net proceeds of $916,000 after offering expenses.

Speaker 3

On July 19, The company amended and expanded its revolving line of credit with OceanFirst Bank from $20,000,000 to $35,000,000 Interest is at prime with a floor of 4.75%. This line is secured by the company's eligible notes receivable. The amendment also extended the maturity date to June 1, 2025. From a credit standpoint, We ended the quarter with our net debt to total market capitalization of 34.2%. Our net debt Less securities to total market capitalization of 32.8 percent, our net debt to adjusted EBITDA of 6.5 times, Our net debt led securities to adjusted EBITDA of 6.2x, our interest coverage was 2.6x and our fixed charge coverage was 1.8x.

Speaker 3

From a liquidity standpoint, we ended the quarter With $38,600,000 in cash and cash equivalents and $80,000,000 available on our unsecured revolving credit facility with an additional $400,000,000 potentially available pursuant to an accordion feature. We also had and rental homes. Additionally, we had $27,600,000 in our REIT securities portfolio, all of which is unencumbered. This portfolio represents only approximately 1.5% of our undepreciated assets. We are committed to not increasing our investments in our REIT Securities portfolio and have in fact continued to sell certain positions.

Speaker 3

We are well positioned to continue to grow the company internally and externally. And now, let me turn it over to Gene before we open it up for questions.

Speaker 4

There is a severe shortage of affordable housing in the United States. Estimates of this shortfall are as high as 4,000,000 units, which does not even account for the mass migration now happening across the southern border. Mortgage rates are now at approximately twice We have seen in recent years. Home prices have remained elevated due to the lack of supply. Additionally, higher mortgage rates incentivize homeowners not to move further reducing supply.

Speaker 4

The homes being sold are in high demand driving prices higher. And once rates do begin to decline, pent up demand could Still support an overheated housing market. For all these reasons, demand for much needed affordable housing should continue to increase. Pioneered the rental model using new manufactured homes. Renting a home is more affordable than buying a home by a large margin.

Speaker 4

Has built the foundation to provide the nation with much needed affordable housing. Our value add acquisition has positioned the company with 3,500 vacant sites and 2,100 acres of vacant land Our vacant sites and land holdings have significant potential. As we fill the existing vacant sites and build more sites on our vacant land, these values can be realized. Additionally, our 3,800 acres of land in the Marcellus and Utica shale areas have growing potential. Global events over the past year demonstrate the importance of the United States moving towards energy independence.

Speaker 4

Our Marcellus and Utica Shale Holdings should increase in value as cracker plants, panda plants and pipelines come online. Is strategically positioned to benefit from the affordable housing and energy crisis that face the United States. Congratulations to all our staff who have executed so well on our mission statement to provide a quality affordable housing for the nation.

Operator

We will now begin the question and answer Our first question today is from Rob Stevenson with Janney. Please go ahead.

Speaker 5

Good morning, guys. Any of the 7 communities that you acquired last year where you're still forcing turnover as you improve the community, The sequential occupancy boost remains solid for you guys throughout the year here. Just wanted to figure out if there was anything that would work to offset Gains as we head into 'twenty four drive occupancy lower than near term or if that sort of 25 basis points to 50 basis point quarter over quarter increase is sustainable from here?

Speaker 6

Yes, Brett here and good morning. So we've done a lot of home removal at the acquisition from last year and a basis point improvement in occupancy quarter over quarter, all of that is going to be dependent on the ability

Speaker 2

Sam Landy here. I just want to tell you, it's important in our investor presentation to look at Page 14. From 20 '18 to 2019, we went from 6,500 Rentals to 7,400. From 2019 to 2020, We went to 8,300, which is the only other time other than now that we've added 900 rental units in a year. 2020 to 2021 went from 8,300 to 8,700, just 4 100, 2000 to 21 and 2022, 8,700 to 9,100, just 400 and now 2022 to the Q3 of 2023, 9,100 to 9,900.

Speaker 2

And I think if you look at what it did to our results, the year we went forward 900 units, 2019 2020, How strong our results are in 2021, we expect the same to follow. During the course of this year 2023, We've had all of the expenses of adding the 900 homes. It's only in this quarter and the next that you're Beginning to feel the benefit, but for all of 2024, you will have the full benefit of the 5% to 6% rent increases during 2023 plus a full year's of revenue from adding what by the end of the year should be 1,000 rental units. Just to mention one other thing while I'm talking, there were technical difficulties with the webcast. We will publish the transcript At our website, umh.

Speaker 2

Reit, and if anybody has any questions and for some reason can't As I'm on this call due to technical difficulties, you can email nmaddenumh.com and we will set up a conference call with So thank you and we'll keep going with the questions.

Speaker 5

Okay. So Brett or Sam, what quality condition are the 2 Maryland Acquisitions in, are these the typical you're going to need to take them down, remove some homes? Are these the better quality ones? And how Pervasive are rental units in those communities today?

Speaker 6

Okay. So, yes, it's 2 properties there, Neighboring properties, one of them is 49 units and very high quality multi section homes parallel to

Speaker 2

the street.

Speaker 6

The other property, 100 42 units is lower in quality, which is where we will do our typical home removal as we're able to, we're going to have to do some The 49 unit property is 100% occupied, so that's a stabilized portion of the deal, the neighboring property, the 142 unit community, it's about 75 Actually 70% occupied, so that represents the upside in the DoD. In place cap rate is expected to be about

Speaker 5

Okay. That's very, very helpful. Thank you. And what is the current status of the Georgia asset and when do you expect to see meaningful occupancy taking place there?

Speaker 6

So, the Georgia asset we acquired in January, we've been working through some permitting challenges with the municipality. We are Just about through that, we do have our first move in scheduled here over the next few weeks and we'll quickly start bringing additional homes into boost occupancy and results.

Speaker 2

Okay. It's a good time to mention how well our Southern strategy has done and how much the great percentage Increase in the rental revenue in all of our southern states. So we've seen significant increase in revenue in each state we went to in the Brett, if you want to touch on that.

Speaker 6

Yes, sure. So Deer Run-in Dothan, Alabama, we acquired that property about 30 percent occupied. It's now approximately 80% occupied and growing. We should have that property full by the end of next year. Revenue on a T12 basis is up 2 15%.

Speaker 6

The other property in South Carolina was slightly higher in occupancy when we acquired it, about 47%. We did do a lot of home removal there and that property should be 100% occupied throughout the first half of next year. So revenue there is up 199%. Both of these properties had negative NOI last year and year to date, they're both in the 300,000 range. So we're on track with where we expected to be and we look forward to continuing to improve them as we move forward.

Speaker 5

Okay. Thanks guys. Appreciate the time.

Speaker 2

Thank you. The next question

Operator

is from David Kellechan, a Private Investor. Please go ahead.

Speaker 7

Hey, good morning. I'm calling from Fort Lauderdale. I just have a question. I was wondering that if would be interested in getting like government contracts, Especially like with FEMA and stuff, due to global warming, we seem to be having a lot more natural disasters And if people needing affordable housing really quickly and on their own properties, Would be interested in something like that? It's a whole different section, but unfortunately with global warming, things seem to be getting worse and worse And people don't want to be waiting so long to get back into their homes or their original properties, which They purchased because of the environment where they love to live.

Speaker 7

Thank you.

Speaker 2

Stays focused On building, operating, renovating communities with manufactured homes for sale or rent, we're going to stay focused. We're aware That everywhere, including in Israel, there is a need for housing on an emergency basis, But the factories are the ones who have the ability to provide that housing and the government can and FEMA does store manufactured homes just for that purpose, but that's the whole separate business and we're very proud of how focused we stay on building and Renovating communities with homes for sale and rent. Okay. Thank you.

Operator

The next question is from John Massocca with B. Riley. Please go ahead.

Speaker 8

Good morning. Good morning. Apologies if I missed this earlier in the call, but any update maybe on Kind of either renter or owner credit, bad debt expense, how that's kind of trending and just kind of the outlook Maybe as you could potentially be seeing a softer macro environment, how your kind of renters or kind of looking in that environment.

Speaker 6

Yes. So, we closely monitor this and we really haven't Any material change in collections overall. Collections for the Q3 are above 98%, which is where they usually are. Our monthly collections are right in line with where they typically are at this point in the month. So we don't see an issue at this point, but we are closely monitoring it Anywhere, where there could potentially be a problem, we're really staying on top of those.

Speaker 6

But again, overall 98 plus

Speaker 2

It's an important time to note that The affordability gap continues to widen and the widening of that affordability gap makes our product that much More in demand for waiting lists for people who can pay the rent, for people doing everything in their power To pay their rent on time, when we began the turnaround property program where we buy and renovate communities and add rentals, we said that that took 3 years. The pace we're going on the southern communities indicates that pace may reduce to a year and a half Because nobody else can do what we do, which is create a rental dwelling unit for as little As $130,000 so that gap between what it costs other people to provide the housing and what it costs us to provide the housing Results in us being able to charge lower rents, strong demand, our drone videos will show you our newest drone video shows you So we don't have receivables because workforce housing is desperately needed.

Speaker 8

Okay. And then maybe as you think about some of the work that's done on the properties, where are you seeing how is kind of costs Trending there, whether it be kind of labor costs or materials, have there been any kind of let ups in those operating costs due to Changes in where kind of macro inflation is going.

Speaker 6

Yes. On the payroll front, we saw the majority of our cost increases last That's both through wages and making sure that we're fully staffed. So we're comfortable with where those numbers are and I really think that's evidenced by our Growth of 5.6 percent for the 9 months. Materials costs are increasing about in line with inflation, and we expect that to The year on the same property front, 5.6 percent expense growth and 10.4 percent NOI growth. I think it's important Note that the 900 rentals that we've set up and installed this year are not fully reflected in our 1st 9 month numbers.

Speaker 6

Our Rent roll up for November is significantly higher and overall our revenue is on a going forward basis What's in place right now about $7,000,000 higher than what was reported for the 9 months.

Speaker 8

I think in terms of like asking rents versus kind of the market rents out of a particular community, I mean, how does that Translate on a percentage basis, some of those things that aren't in maybe the same store pool.

Speaker 2

We only raised the existing rents to residents approximately 5%, we price the new rents based on what it costs to set up the house and what our market what market rents are. So new rents are coming in closer to $1,000 per month?

Speaker 6

Absolutely. And it really depends on the market and the home that we're renting. We got multi section homes that are renting for $1200,000 $13,000 $1400 in some cases a little bit higher, but your typical 3 bedroom, 2 bath single wide unit is in that $1,000 range.

Speaker 8

Okay. That's very helpful. And that's it for me. Thank you very much.

Speaker 2

Thank you.

Operator

The next question is from James Gordon with Gordon Investments.

Speaker 9

Gentlemen, I wonder if someone would comment a little bit in-depth on your sales of the preferred stock at There's a couple of questions that concern me. Until recently when loan rates started to drop, You're getting less and less in your aftermarket sales on your preferred stock. You were selling at a yield. It Look like the company would be saddled on these shares anyway on a quasi permanent basis at about 7.5% interest. First of all, there are several questions.

Speaker 9

Is there a yield that you guys will not sell at that you will close the ATM And not sell the preferred or will you just keep selling it? 2, It seems to me that with respect to all the shares you're selling, the company is kind of on a treadmill I'm dilution here, and I'm kind of puzzled about it. I know you have a great need for capital. I know you men are very good stewards of capital, but we're in a very funny environment with interest rates. And I'm wondering whether this is very expensive equity that you're selling, the cost of this equity.

Speaker 9

And so my other question is that you've done some computations as to what your returns are, your spreads over your preferred stock. You're paying $7,500,000 let's say when the price was lower. What is the spread that you're earning on this stock? How can you tell us or can you explain to us what is your thought process here in this continued selling, particularly of preferred?

Speaker 4

Let me start and I have to start with what a Serious problem the United States has for affordable housing, the amount of the shortage. It is the number 2 problem of the country And you will see as Congress goes in session for the rest of the year, this is going to be the most talked about, but that The first thing is war and peace and whatever we do that's number 1. But as far as Problems that we can do something to solve. Housing is critical and this nation has been able to Produce whatever we need, whether it's food, everything in the world. And then somehow we have gotten in a position where there's a 4,000,000 home shortage in the country and that shortage is growing Because of the fight against inflation, the other builders are cutting back instead of building.

Speaker 4

They're building 20%, 25% less homes And the affordable part of the housing market is simply closed to people and it can't be. People are entitled to shelter. They want to raise their families and they have to have a place to live. And so we at the highest levels of the government and with the Congress are working on a solution to the problem. And that solution, which the President has recognized and now had disappointed a special person To be in the sector that manufactured housing and the unique communities we build and the price we come out with it, which is simply amazing.

Speaker 4

I mean, we say very lightly that we're at $1,000 a month to rent 3 bedrooms and 2 baths and $1700 a month To get 2 bedrooms and 1 bath, which isn't sufficient housing in a conventional apartment, we are the solution And it is going to be a great business. So on the top side of it as we I've been in this business over 50 years, I started with the original communities building on the 10,000 a unit and those communities today maybe with substantially more. The amount of money we've made over the years, which is really because we've had inflation and land values have gone up It's tremendous. So when people call in and want to know if whether a 7% or 9% preferred It's too expensive. I sort of smiled about that because the communities we're building today And we are building units for $150,000 a unit, had land and homes as compared to 300 well, 350,000 foot apartment unit.

Speaker 4

We're building the better product at a lower cost On which this company is going to make a lot of money over the years. If you want to know the basic projections, it's It's not a projection. It's a plan. I want to be careful on this. We're not telling people that the Communities we've built today in 12 years are going to double in value, but that's happened in the past.

Speaker 4

So we're not when we issue the preferred, we would love to issue at a lower cost, But we want to have I think Sam wants to do 800 rental homes a year And 3 years we'll do 2,400 rental homes put into sites that we already own And I've already paid for it. So if I'm going to do 2,400 homes and it's going to cost $100,000,000 We want to do it because we're going to make a lot of money on it, whether or not we issue the preferred at 21 or 22 Versus the 25. And of course, the preferred stock is a better investment Because everything is a capital stack and our banks appreciate that the preferred stock is behind them. And as far as the common stock, it would be wonderful if we could issue as we did, most of the capital we've issued is at $20 a share. We can issue cash stock at a price higher than the market.

Speaker 4

So whatever the market is, So what I'm saying in this is that we are going to continue growing the company. We are a leader in the company And we see great opportunities in Florida with 800,000 people moving in a year. We see Need for workforce housing, we need see a need for the immigration. So we're going to allocate capital and do a 1,000 Units cost $250,000,000 So I'm not so sure if you expect the company to say, well, we're going to Because interest rates are at a little bit of a high, we're going to shut down because the market doesn't appreciate the future value of the stock. We're not Going to do that and we have great government programs now.

Speaker 4

We can get money, what way to add?

Speaker 3

It's about 6.3% right now on 10 year fixed rate

Speaker 4

mortgages. So, hi, for the government sponsored entities. So we're raising money. So what I'm saying suggesting is you have to blend all our sources of capital and we need equity to get the debt And it's highly profitable. It's one of the best businesses to be in, but you have to Take a long term view of it and we certainly want to continue meeting this housing crisis and continue to be a leader in the industry.

Speaker 4

So we're going to build at least 400 expansion units. We're going to try to put in 800 more new rentals a year. And right now, we may be able to make some really attractive acquisitions. One of the fundamental things we look at is replacement cost. And if some other company wants to sell 10,000 units below replacement cost, we're going to take a good look at that too.

Speaker 4

And if we need to raise capital, we'll do that. The manufactured housing industry is a wonderful industry, But it is capital intensive and we are going to continue to be a serious participant there.

Speaker 9

Thank you.

Operator

Please stand by as we poll for questions. Showing no further questions, this concludes our question and answer session. I would like to turn the conference back over to Samuel Landy for any closing remarks.

Speaker 2

Thank you, operator. I would like to thank the participants on this call for their continued support and interest in our company. As always, Gene, Anna, Brett and I are available for any follow-up questions. We look forward to reporting back to you in February with our Q4 year end 2023 results. Thank you.

Operator

The conference has now concluded. Thank you for attending today's presentation. The teleconference replay will be available in approximately 1 hour. To access this replay, please dial U. S.

Operator

Toll free 1-eight seventy seven-three forty four-seven thousand five hundred and twenty nine or international plus 1-four twelve-three seventeen-eighty eight. The conference access code is 5082,598. Thank you and please disconnect your lines.

Remove Ads
Powered by Quartr
Earnings Conference Call
UMH Properties Q3 2023
00:00 / 00:00
Remove Ads