UMH Properties: A Recap of 2023
UMH Properties recently revealed its operational results for the year concluded in 2023, highlighting an upsurge in the demand for manufactured home communities. These results ushered in heightened occupancy and significant rent escalation over the course of the year. Notably, the company’s market capitalization surpassed the $1 billion mark at the conclusion of 2023. Although shares witnessed a slight dip during the normal trading session on the NYSE on Jan 5, UMH’s overall trajectory has been notably impressive.
Substantial Growth and Strategic Vision
During 2023, UMH Properties successfully rented out 1,040 new homes, elevating the total homes under its ownership to a substantial 10,000. Of these, 130 homes were newly occupied during the fourth quarter. Samuel A. Landy, the company’s president and CEO, lauded this achievement as the equivalent of erecting and filling a 1,040-unit apartment complex within a year. He credited this feat to the adept acquisition of manufactured home communities with vacancies, coupled with robust capital and operational enhancements, as well as the addition of cost-effective, energy-efficient manufactured homes. With an eye to the future, UMH Properties is determined to build upon the momentum gained in 2023.
Boom in Occupancy and Revenue
Thanks to the encouraging rental trends, the overall occupancy for 2023 soared by 705 units, reaching 86.7%, while the same property occupancy increased by 632 units, hitting 88.5%. A remarkable 94% of the homes under UMH’s ownership were occupied as of the conclusion of 2023. The sustained demand for manufactured home communities enabled UMH to implement a successful strategy of escalating rents throughout 2023, resulting in a substantial increase in monthly rental income. The company recorded a notable 12% surge in rental and related charges for January 2024, translating to an annualized monthly rent roll of approximately $196 million.
Additional Revenue Streams
Being proactive, UMH Properties also managed to sell 164 new homes in 2023, with 41 of these sales occurring during the final quarter. This initiative contributed to a robust 22.9% surge in home sales revenue, reaching $31.1 million in 2023. Furthermore, the company anticipates opportunities for additional site rent, projecting expansion sites of approximately 400 for 2024.
Predictions for the Future
Amid a resurgent U.S. housing market, UMH’s preliminary 2023 results signal robust demand for manufactured home communities. Despite an ample supply of new rental units, UMH’s ability to offer competitively priced, high-quality homes is poised to sustain healthy rental demand in subsequent quarters, particularly in a market where the gap between buying and renting is projected to persist.
Looking Ahead: UMH’s Fourth-Quarter and 2023 Results
UMH’s forthcoming release of its fourth-quarter and 2023 results on Feb 27, 2024, is anticipated to provide pivotal insights into the company’s financial well-being and future prospects.
Investor Interest and Future Prospects
Shares of UMH Properties, currently holding a Zacks Rank #2 (Buy), have exhibited a solid 4.9% gain over the past three months, exceeding the industry’s growth of 5.7%. Additionally, companies such as Stag Industrial and First Industrial Realty Trust, both boasting a Zacks Rank #2, stand as other promising entities within the REIT sector.
Well-Positioned for Growth
UMH’s robust performance in 2023 lays a strong foundation for sustained growth and stable returns. The company’s innovative strategies and proactive approach in meeting the escalating demand for manufactured homes have positioned it favorably for the future. With a solid track record, bolstered by impressive occupancy gains and a notable surge in rental revenue, UMH Properties stands as a resilient player within the real estate investment trust arena.
Source: Zacks Investment Research
