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UMH Properties' (UMH) Occupancy & Rent Rise on Solid Demand

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UMH Properties (UMH - Free Report) recently provided an update on its operating results for the year ended 2023. The results underscore the continued demand for manufactured home communities, resulting in occupancy gains and solid rent growth throughout the year. Remarkably, the company’s equity market capitalization was more than $1 billion as of the end of 2023. Shares of the company witnessed a marginal loss on the Jan 5 normal trading session on the NYSE.

Per the update, this residential real estate investment trust (REIT), specializing in the ownership and operation of manufactured home communities, rented 1,040 new homes in 2023, bringing the total number of homes under its ownership to 10,000. Notably, 130 of the total were rented out during the fourth quarter of last year.

Samuel A. Landy, president and CEO of UMH Properties, commented, “Installing and renting 1,040 new homes during the year is the equivalent of building and occupying a 1,040-unit apartment complex within one year. It’s an incredible accomplishment made possible by our success in acquiring manufactured home communities with vacancies, making capital and operational improvements, and adding cost-effective and energy-efficient manufactured homes. We look forward to building on the momentum we created in 2023.”

As a result of the encouraging renting figures, overall occupancy in 2023 climbed 705 units to 86.7%, while the same property occupancy rose 632 units to 88.5%. The occupancy rate of the total homes under UMH’s ownership was 94% as of the end of 2023.

Moreover, reflecting the continued demand for manufactured home communities, UMH was able to increase its rents throughout 2023. This strategy has paid off well, resulting in a substantial uptick in monthly rental charges. For January 2024, the rental and related charges rose by around 12%, leading to approximately $196 million of annualized monthly rent roll.

Additionally, UMH sold 164 new homes in 2023, of which 41 were sold in the fourth quarter. Home sales revenue in 2023 rose 22.9% on a year-over-year basis to $31.1 million. This creates further opportunities for site rent. Per the company’s November Investor Presentation, it anticipates expansion sites of around 400 for 2024.

Amid the rebounding U.S. housing market, UMH’s preliminary results for 2023 indicate healthy demand for manufactured home communities. Despite the elevated supply of new rental units, the company’s ability to provide competitively priced quality homes is likely to help it witness healthy rental demand in the upcoming period, especially in a market where the gap between buying and renting is expected to continue in the following quarters.

UMH’s upcoming release of its fourth-quarter and 2023 results on Feb 27, 2024, will be a key event to watch for a comprehensive understanding of its financial health and prospects.

Shares of this Zacks Rank #2 (Buy) company have gained 4.9% over the past three months, compared with the industry’s growth of 5.7%.

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Some other top-ranked stocks from the REIT sector are Stag Industrial (STAG - Free Report) and First Industrial Realty Trust (FR - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Stag Industrial’s 2023 funds from operations (FFO) per share is pegged at $2.28, suggesting year-over-year growth of 3.2%.

The Zacks Consensus Estimate for First Industrial’s 2023 FFO per share stands at $2.43, indicating an increase of 6.6% from the year-ago reported figure.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.


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