Good morning, and welcome to the 2024 REIT Week UMH Properties presentation. I'm John Massocca, the senior research analyst at B. Riley Securities, and I will be moderating the presentation this morning. With me, I have Sam Landy, President and CEO of UMH, Anna Chew, CFO, and Brett Taft, COO. UMH owns 136 manufactured home communities in the eastern United States, with over 25,000 developed home sites at these properties. To tell us more about those communities and the UMH business model, I will now hand the floor over to Sam. Thank you. It's an honor to be here again. We have Eugene Landy, our chairman, who's been in the REIT industry for 55 years. He founded Monmouth Real Estate Investment Corporation and UMH Properties. Monmouth was probably the most successful REIT in history from its inception to conclusion, net leased industrials to investment-grade tenants, and UMH is affordable housing through factory-built homes for sale or rent in communities. Over the last 5 years, we've increased our total revenue by 60%, increased community NOI by 78%, increased normalized FFO by 99%, and increased normalized FFO by 99%, increased normalized FFO per share by 16%, and raised our dividend from $0.72 to $0.86. And so the giant question is: Can we do this again the next 5 years? And the answer is yes, because we're about real estate, manufactured home communities, and about location. We've picked great locations, whether it's the East Coast, where housing is expensive, the Marcellus and Utica Shale area, Nashville, or the Southeast. We always work to identify properties where we could add value or where demographics are gonna help us add value, and then we upgrade these communities with capital improvements and add modern rental homes. We take advantage of the fact that financing for the retail customer who buys the home and rents the lot dried up, but UMH found a solution, which was just rent them the houses. That worked so well that from 2011 to date, we've rented out 10,000 homes. Many individual community owners can't adopt this model because they don't have the funds to make the capital improvements or buy the rental homes, and UMH does. And then we see people who have the money, but don't have the experience to know exactly how to do it. And, you know, it's like any other business. You have to care about the customer. You have to care about your employees, your team members, your banks, and UMH has done all this for many, many years, so that what appears easy for us, we watch other people try, and it doesn't work as well for them, but it does work easily for us. So the future is very bright. Our average home sale price is $162,000, and we mark homes up about 30%, so about $50,000 from a home sale helps us pay for construction of the lot. So if we build a lot for $100,000 and make $30,000 on the sale, we're in the lot for only $70,000, but we collect lot rent based on a $100,000 value. We're trying to gross 7% on that $100,000, but we only have $70,000 out of pocket because we made some back on the profit from selling the home. In turnaround properties, we've bought lots for as little as $30,000 per site, probably did $10,000 in capital improvements, so $40,000, add a $70,000 house. So for $110,000, we have these beautiful 3 bedroom, 2 bath homes on a 5,000-square-foot lot. You can go to umh.com. You can see our drone videos of the property. Our presentation is absolutely excellent. Our team puts that together, and you can see everything about turnaround properties, how much money we've made. It's all directly in the presentation. It's at umh.com. And again, this has worked time and time again for us, and we have these 3,000 vacant sites that already exist: water, sewer, driveways, and all we have to do is put the $70,000 house on it and rent it out for $1,000 per month. And when these communities are only 80% occupied or less, they're not efficient yet. It's that last 20%, getting from 70% to 90% occupancy. Most of that revenue is profit. We're only gonna have 30% expenses. So that's why you see our expense ratio dropping, and you see our performance so strong as we fill these communities. One of our challenges is in doing acquisitions. We don't wanna do too much at one time because we don't want to slow down our trajectory of adding FFO per share. So I'm gonna go over our quarterly accomplishments, and then we'll go to questions, 'cause we have very limited time. But over the past quarter, we increased rental and related income by 11%. We increased community net operating income by 16%. We increased normalized funds from operation by 28% and normalized FFO per diluted share by 10%, increased same property NOI by 16%, increased same property occupancy by 200 basis points from 85.5% to 87.5%, improved our same property expense ratio from 42.3% in the first quarter of 2023 to 39.6% at quarter end... Subsequent to quarter end, amended our unsecured credit facility to expand available borrowings from $180 million to $260 million, syndicated, and this is important, because note who our bankers are. Syndicated with BMO Capital Markets, JPMorgan Chase, and Wells Fargo. So that's pretty incredible group of bankers. Subsequent to quarter end, raised our quarterly common stock dividend by $0.01, representing a 4.9% increase to $0.21, $0.215 per share, or $0.86 annually. So those are our quarterly accomplishments, from which we continue to grow. It's important to note, two years ago, when we were here, we had sold or rented every home we had in inventory. So our giant problem was: How are we gonna continue our growth trajectory when we were out of homes, and the factories couldn't produce them? So during the course of that year, our challenge, we had to get the factory to make us homes that we could sell or rent, and the factories had closed down from COVID, so all of this was very difficult. One year ago, when we were here, 1,000 homes were delivered to us all at once, so $70 million worth of houses, and when we ordered the homes, interest rates were about 4%. When we got the homes, they were about 8%, so that's gonna cost us $5.6 million for the year. We didn't have to wait for the homes anymore. They were there, but now we had to wait for the local governments for permitting, water hookups, sewer hookups. There was a shortage of electric transformers. So the first half of last year, we couldn't have the results that we or our investors were accustomed to because we didn't have homes to add revenue for sales or for rentals. All of these past problems are solved. The last quarter of 2023 was very good. The first quarter of 2024 was very good, and it should just continue. You know, nobody knows, is there gonna be another COVID? What's gonna happen? But, but barring circumstances like that, there's no more wait time. We're back to just-in-time inventory. Factory prices are actually going down. We're going to Washington, D.C., this weekend to show duplex manufactured homes in single section and double, which will reduce the resident, you know, the person, the working person who needs a house, can now get a 500-square-foot dwelling unit from us, probably for as little as $700 per month, brand new, 'cause we'll take the two halves, $700 and $700, get $1,400 from one unit on one lot, where currently we only get $1,000. So that's where we are today, and now, questions. Yeah, we'll open up for questions, if anyone has any. I may start off just to kinda get things going with a fairly broad one. How do your manufactured housing communities differ from people's preconceived perceptions of mobile home parks? So there are as many different views as of manufactured home communities as there are different people, right? So if, if I said, "We're in the apartment business," well, you could picture Fifth Avenue apartments, or you could picture terrible apartments. Manufactured housing is exactly the same. There are super high-quality manufactured home communities in the country. People talk about Newport Beach, California, where manufactured homes sell for $1 million, lot rents are $3,000 per month. The important thing to know is building a home in a factory is the most efficient, lowest-cost way to build a home, to create value at any price point. So our $70,000 house that we buy from the factory for $60,000 and spend $10,000 setting up, so our cost is $70,000. I wouldn't sell that house to anybody for $70,000. If I was selling, it'd be $100,000, and I wouldn't... If another community owner said to me, "I wanna do rental homes, provide us with a rental," I'm not gonna provide it to them for $70,000. We're a licensed dealer. We're buying that home from the factory and setting it up for our investors for $70,000. That's our cost. If I was selling, it'd be $100,000, but our cost to create $1,000 per month, $12,000 per year revenue stream is $70,000. Next question is, what's the cost of the lot? We got, you know, lots that needed improvement because the prior owner had a 10-year downturn. We received those lots for $30,000 and spent $10,000 fixing it up. But value is, is what we're selling, and, and we're doing homes in Maryland that are gonna retail for $300,000, and what the customer has to do is compare. What's a condo? What's a house? What's an apartment cost? If you go to redo a kitchen in any condo, anyhow, you're gonna spend $20,000, $30,000. I get an entire house for $70,000 with beautiful kitchens, beautiful bathrooms, because of the efficiency of building in a factory, the efficiency of being the largest purchaser of whether it's sinks, toilets, showers. Whatever appliance it is, the manufacturers are the largest purchasers. Flooring. So they pay the lowest price. They've got a, a workforce that, you know, comes in every day, rain, shine. They're, they're salaried. It's not like building a house on site, where people come and go. So we take all of these efficiencies and reduce the cost of the house. So somebody's image of manufactured housing, and it gets complicated. If, if somebody lives in a town of million-dollar houses, and the only manufactured home community they drive by was built in the 1970s and is metal-on-metal old homes, they have an image in their head. But that's not what manufactured housing is today. And so where you go, if you're in the Southeast, people consider manufactured homes in communities a great place to live. We're having no trouble selling, filling, renting Sebring, Florida, Columbia, Tennessee, Nashville, Tennessee. You know, different people have different perceptions. Many, many people look at our product and say, "This is a fantastic house at a fantastic price in a fantastic community. I just wanted to add to that real quick, that if you look through our presentation, you'll see a lot of great photos of our assets and our homes in our communities, and you'll see how high quality they are. I think that these images alone help to change the stigma of manufactured housing. Encourage everybody to get through there, and also view our drone videos on our website. On page 27 of the presentation, you'll see some interior shots of the kitchen and bathroom, which of course, everybody looks at. Okay, I think we have a couple questions from the crowd. I'm gonna repeat your questions just so they end up on the webcast, but just... The question is, in your presentation, you talked about having communities in areas that are shale plays. Right now, obviously, there's a war on fossil fuels, and we're trying to do away with shale. What effect is that having on those communities and this type of, you know, regulatory burden trying to push us away from fossil fuels? The question was about owning communities in shale areas and kinda the impact of ESG on that. Sure. So that, it... You know, it's very important to really understand how shale is working. The increase in natural gas usage in this country from the 1960s to date has increased sixfold. The amount of liquefied natural gas being shipped out of the country, you know, continues to grow at incredible rates. They're doing pipelines, so finally, natural gas can get to Boston. The Shell cracker plant was completed, which was a multi-billion-dollar, about $7 billion facility, that converts natural gas into plastics. They have something called Panda plants, that converts natural gas to electricity. So, you know, I know you could read the paper and believe that our country's less reliant on Marcellus and Utica Shale, but in fact, when you go to these areas, the development of A, wells, drilling is still going on. B, pipelines, 3 cracker plants, 4 Panda plants, shipping terminals to export liquefied natural gas. So it's actually a very booming industry, booming segment of the U.S. economy, and it's what turned these areas around. UMH did well. You might wanna look at the long-term UMH stock chart. It's pretty interesting. In 2006, we did great. We took 260 lot expansions, sold out the expansion lots, had $16 million in sales when we were a very small company, and made $2 million on the sales. We were doing great, but we ran into the problem that Jim Clayton talked about in his book, First a Dream. There was just no place to put the houses. We had no more expansion lots. We couldn't get approvals to build expansions. We couldn't find new communities to build. And what we were gonna - what could we do? Our sales were gonna dry up. I looked all around. I could only find one property zoned to allow a manufactured home community. We purchased it, and to this date, that community's not built because of all the fighting you have to do to get the approvals. But meanwhile, we saw in Pittsburgh and Ohio, that those areas had lost population when they lost the steel, coal, and tire jobs. So there were communities with declining occupancy. They needed capital improvements. They were becoming run down 'cause they couldn't get 100% occupancy. They couldn't make money. And we knew the value of those vacant lots. You could buy them for far less than the cost of reproducing them, and you couldn't even reproduce them, you know, even if you could spend the money, 'cause you couldn't find the lots. So we purchased those communities, and we grew from a very small company to now having over 25,000 sites, buying them in those areas, and again, as low as $30,000 per site. We saw in 2011, Marcellus and Utica Shale began. We saw the people from Texas, Florida, Louisiana, they were sending up manufactured homes that were specially built, two separate dwelling units in one, in one unit, that had air conditioners on the hitch, had offices. The Marcellus and Utica Shale people were sending up their workers. We saw that, started acquiring communities, and it worked incredibly well. I just wanted to point out that, we've acquired 19,000 sites. Many of those were in the Marcellus and Utica Shale areas. At the time of acquisition, those communities, had a weighted average occupancy rate of 73%. Our same property occupancy rate is 87.5% and growing. So these communities are experiencing strong demand. We're filling a lot of units. Because of that, obviously, occupancy and the community financials are improving, and thereby improving the property values. Do you prefer to sell homes or to rent them? And what percentage of the owned homes are rented out? The question was, do you prefer to own homes or rent them, and what the percentage was in the portfolio? So renting homes has a lot of advantages. Number 1, so many people don't understand the modern manufactured home, how energy efficient it is, what a great home it is, how great it is to look in a manufactured home community. So there's many people who would not come to a community, put 10% down, and our average cost of a house is $160,000, so they'd need $16,000 down. They'd have to be approved for financing, and they have to have faith that they're gonna be able to resell that house for what they paid for it or more. That's a lot of obstacles to filling lots quickly. When you rent a home, the person just needs 30% of their income to cover their rent, so they only need $40,000 household income, and 1 month rent, 1 month security, plus they have to qualify. So because of that, we rent out probably 8 homes for every 1 we sell. Renting fills communities quickly. It's we only have about a 30% expense ratio on those new rental homes. We only raise our rents 5% for existing residents, but on your rental home turnover, and we have about 30% rental home turnover per year, which is still much lower than apartments, but on that 30% turnover, we can mark to market, which means we get more than a 5% increase. Can be 9%, can be 10%. When we first bought rental homes in 2011, we paid only $40,000 per house, and we grossed $8,000. We grossed 20%. Well, today, replacement cost for those homes is $70,000, and those exact same homes that we're renting for $8,000 a year are now renting for over $10,000 per year. So rentals have worked out fantastically, and I point out, Warren Buffett bought Clayton Homes and made Jim Clayton a billionaire to get the finance business. Rental homes are really the finance business. The retail customer can't get approved for financing. We become the owner of the rental home. In effect, we're in the finance business. We own all those homes. We're providing them to people for monthly payment. It works incredibly well. Those rental homes will last as long as any other homes. Now, when we build a new lot, it's gonna cost us $100,000 to build that lot, and we're gonna collect the rent from that lot. If I can sell a home for $160,000, and it could be $300,000 in Maryland, and we're gonna make 30% gross profit, so call it 20% net. We're gonna make $30,000 on that $160,000 home. That $30,000 gets subtracted from the $100,000 cost of building the lot, so we're only in the lot for $70,000. But we're gonna price the rent at a $100,000 value so that, you know, we're making $7,000. We need about $800 per month lot rent on a new lot, but it works. But you're never gonna go as fast with homes that you sell, as you're gonna go with rental units. When somebody buys a home from us, we give them a lease to match the loan. So they're gonna get a 20-year lease, where the increases are only 5% or CPI, whichever is more. They're gonna pay water, sewer, garbage, taxes, and even capital improvement increases. But for us to make money and go faster, rental homes works, but I still like the fact that we're gonna sell over $30 million in homes this year and hopefully net 20%. And I like both businesses, and we finance homes still. The total amount of rental homes that we have is about 40% of our overall sites, and if we put a new rental home on every vacant site that we have, it would bring us to about 50%. We will sell some homes along there, but we'd be very comfortable getting up to 50% rentals. Thank you. Okay. Hi, do you see yourself expanding past the Eastern United States or just broadly in that? The question was, do you see yourself expanding beyond the Eastern United States? So here's what happened. Years ago, we only wanted to be where housing was expensive. If the resident owned the home and rented the lot, our product was most in demand in places like New Jersey and eastern Pennsylvania, where there was a giant differential between the cost of owning the home, you know, owning a home with land, versus owning a home in a manufactured home community. Manufactured home communities worked with the owner-occupied model, where housing was expensive. But then, when you went to, say, the Southeast, like Dothan, Alabama, Sumter, South Carolina, Albany, Georgia, that model doesn't really work. If somebody can buy a piece of land with a home, with a garage for $200,000, you know, why are they gonna buy a manufactured home for $160,000 on a lot? But then we found through COVID, when, you know, you had unemployment, people stopped working, yet we maintained a 95% rental home occupancy and 98% rental collection. And when we looked into why, we found out our customer appreciated that 1,000 square foot, 3 bedroom house, no common wall neighbor above, below, beside them. They're on a 5,000 square foot lot. They can have a garden, a pet. They have their own driveway. You park the car right in front of your house, you can see it all the time. We have individual garbage pickup. We have clubhouses. We have exercise facilities. We have dog parks. So when people lost their jobs as waiters and waitresses, they found other jobs as truck drivers and warehouse, et cetera, and they paid the rent. And then we realized, these other communities that are empty in the Southeast, it's because they're not going to the rental model. And if we think of ourselves as competing against apartments, as opposed to competing against conventional homes, to build a, a new 1,000 sq ft, 3 bedroom, 2 bath apartment, $300,000 to $350,000, yet we produce the unit, especially in the Southeast, for as low as $100,000. So they can't compete with us. So when we advertise $1,000 per month for a brand-new 3 bedroom, 2 bath house, we get waiting lists. We filled our one community in Dothan, Alabama, bought about 30% occupied. We're filling it right now. We have another one in Dothan, where we ran into permitting issues that were just resolved. We're gonna fill that one. Sumter, South Carolina, Albany, Georgia, we did one community... All military wound up moving into the rental units. So somebody left the door open on a home on a Friday. We drove by, the door was open. Nobody walks in that house. Everybody, all military, all living in the rental homes, filled the community in a year. So the rental model works. All right, I'll go to one of my questions. There's this narrative that kind of the lower income consumers are bearing the brunt of recent macroeconomic slowing. Is that something you're seeing in your communities, and, and how do you kind of insulate yourself from any of those types of pressures? Real estate, especially in housing, is extremely local. It's what's the employment situation, probably within just 5 to 10 miles of that community? Our residents are a very diverse group in all aspects. We have plenty of people over 55, who are now selling their conventional home for more than $400,000, paying off their mortgage, buying a home from us all cash, and paying lot rent to retire. That's a lot of our customers. They don't need late working income. They don't need wages. They're retired. Then you have people working. Well, the wages are way, way up, as is employees' ability to relocate. And so the demand for skilled workers at this moment is remarkably strong. You would have thought in Elkhart, Indiana, when RV shipments started drying up or boat shipments started drying up, that would cause us problems in Elkhart because less employment, but absolutely no problem, because there's so many other jobs. These people pick up so many other jobs that we're maintaining, again, 95% rental occupancy, 98% rental collection, even with the contraction in RVs and boats. How are you thinking about leverage today? And I guess maybe how do you operate in a higher for longer interest rate environment? And conversely, how would you operate if the Fed started to cut rates here in the back half of the year? So first, rising interest rates mean the economy's strong, and it widens the affordability gap, right? So a $400,000 house at 6% costs $24,000 a year, at 8%, it costs $32,000 a year. It takes that same house out of affordability for a substantial part of the population that then needs our product, because on a $160,000 house, those increased rates don't hurt as much. It creates more people that need what we sell. And in fact, in the 1970s, manufactured housing shipments hit 400,000 units per year when interest rates got in the 16%-18% stratosphere, and there was no other housing people could afford. So the higher rates are widening the affordability gap. Lower rates, you could worry it means the economy's contracting, its problems, but at the same time, one of the problems with our stock today is, you know, the REIT index, where our stock is rising and falling with the REIT index. And declining rates will mean an increased stock price, and we'll take that too, 'cause that'll help lower our cost of capital. In terms of debt to equity, the reason UMH has been around 55 years, we're very conservative, and in the presentation, we show you exactly what our debt to income... debt to asset ratio is. But in new acquisitions and in everything, we're doing an internal growth, right? 'Cause internally, we need $140 million a year for the 1,000 rental units, the capital improvements, the financed home sales, the expansions. We're gonna try to match that 50% debt to 50% equity as the conservative way to grow. Nothing's more important than survival. My father always points out, "You know, you'll get rich in real estate as long as you survive the downturns." That's the number one object: make sure your balance sheet is strong enough that you always survive the downturns. One of the hardest things for us, we see good acquisitions, especially at this moment, but we don't want to do anything to jeopardize the strength of our balance sheet, and we see the potential of more acquisitions coming to us in the future. Very quickly, because we're running out of time here, what are the broad thoughts on the dividend in terms of both kind of growth and payout ratios? Well, based on our, you know, projected operations and, and our objective, right? So just to reiterate, we, we currently have $200 million in revenue. 5% is $10 million, that's 5% is a 5% rent increase. 800 new rental units is another $10 million. So we're gonna go forward $20 million. Now, that $20 million for 2024 is already in place, 'cause we already did that in 2023. We already raised the rents 5% and added 1,000 rentals. So our belief is the FFO per share will go up, allowing us to increase the dividend and reduce the payout ratio. Only time will tell, but we built expansions in the right places, have the opportunity to increase sales, have the opportunity to increase rental revenue, and have the opportunity to increase profits, because that's that last 30% vacancy that almost all of the revenue is profit. I did want to add that over the past four years, we annually, we consecutively increased the dividend, and it went an increase of 19% over the last four years. Okay, with that, I think we have run out of time. I'm sure if you have any individual questions, management team's happy to answer them up here. But, thank you very much.