UMH PROPERTIES, INC.

Previous wording

The Company is a Maryland corporation that operates as a self-administered, self-managed REIT with headquarters in Freehold, New Jersey. The Company’s primary business is the ownership and operation of manufactured home communities, which includes leasing manufactured home spaces on an annual or month-to-month basis to residents. The Company also leases manufactured homes to residents and, through its wholly-owned taxable REIT subsidiary, S&F, sells and finances the sale of manufactured homes to residents and prospective residents of our communities and for placement on customers’ privately-owned land. During 2022, the Company also formed a qualified opportunity zone fund to acquire, develop and redevelop manufactured housing communities requiring substantial capital investment and located in areas designated as qualified opportunity zones by the Treasury Department pursuant to a program authorized under the 2017 Tax Cuts and Jobs Act to encourage long-term investment in economically distressed areas. The Company currently holds a 77% interest in the qualified opportunity zone fund. The Company also has an ownership interest in and operates two communities in Florida through its joint venture relationship with Nuveen Real Estate. In November 2023, the Company expanded its joint venture relationship with Nuveen Real Estate and formed a new joint venture entity for the development of a new manufactured housing community located in Honey Brook, Pennsylvania. The community, once complete, will contain 113 manufactured home sites situated on approximately 61 acres.

Current wording

The Company is a Maryland corporation that operates as a self-administered, self-managed REIT with headquarters in Freehold, New Jersey. The Company’s primary business is the ownership and operation of manufactured home communities, which includes leasing manufactured home spaces on an annual or month-to-month basis to residents. The Company also leases manufactured homes to residents and, through its wholly-owned taxable REIT subsidiary, S&F, sells and finances the sale of manufactured homes to residents and prospective residents of our communities and for placement on customers’ privately-owned land. During 2022, the Company also formed a qualified opportunity zone fund to acquire, develop and redevelop manufactured housing communities requiring substantial capital investment and located in areas designated as qualified opportunity zones by the Treasury Department pursuant to a program authorized under the 2017 Tax Cuts and Jobs Act to encourage long-term investment in economically distressed areas. The Company currently holds a 77% interest in the qualified opportunity zone fund. The Company also has an ownership interest in and operates two communities in Florida through its joint venture relationship with Nuveen Real Estate. In November 2023, the Company expanded its joint venture relationship with Nuveen Real Estate and formed a new joint venture entity for the development of a new manufactured housing community located in Honey Brook, Pennsylvania. The community is expected to open at the end of the second quarter of 2025 and, once complete, will contain 113 manufactured home sites situated on approximately 61 acres.

Previous wording

The Company is in preliminary discussions with a leading national homebuilder regarding the potential formation of a joint venture to develop approximately 131 acres of undeveloped land adjacent to one of the Company’s existing manufactured home communities in southern New Jersey. If necessary governmental approvals can be obtained, the purpose of the joint venture would be to construct roads, infrastructure and other site improvements on the property and then sell the improved lots to an affiliate of the Company’s joint venture partner, which would construct luxury single family residential homes to sell to purchasers. It is envisioned that the joint venture partner would fully fund the costs of required site improvements and obtain all approvals. The Company would contribute the real property to the joint venture and receive a percentage of the sale price of each home. If the parties elect to proceed, it is anticipated that the joint venture partner would seek preliminary subdivision and site plan approvals over the next two years and, if these approvals are obtained, the joint venture would then be formally established. Pursuit of this project would be contingent upon execution of definitive documentation setting forth the terms of an agreement between the parties and a 90-day due diligence review period for the benefit of the joint venture partner. There can be no assurance that the Company and its potential joint venture partner will reach agreement or proceed with this arrangement or that required governmental approvals can be obtained.

Current wording

The Company recently entered into a preliminary agreement with a leading national homebuilder regarding the potential formation of a joint venture to develop approximately 131 acres of undeveloped land adjacent to one of the Company’s existing manufactured home communities in southern New Jersey (See Note 11 of the Notes to Consolidated Financial Statements).

Previous wording

The Company earns income from the operation of its manufactured home communities, leasing of manufactured homesites, the rental of manufactured homes, the sale and finance of manufactured homes and the brokering of home sales, self-storage leases, oil and gas leases, cable service agreements and from appreciation in the values of the manufactured home communities and vacant land owned by the Company. In addition, the Company receives property management and other fees from its joint venture arrangements with Nuveen and from its opportunity zone fund. Management views the Company as a single segment based on its method of internal reporting in addition to its allocation of capital and resources.

Current wording

The Company earns income from the operation of its manufactured home communities, leasing of manufactured homesites, the rental of manufactured homes, the sale and finance of manufactured homes and the brokering of home sales, self-storage leases, oil and gas leases, cable service agreements and from appreciation in the values of the manufactured home communities and vacant land owned by the Company. In addition, the Company receives property management and other fees from its joint venture arrangements with Nuveen and from its opportunity zone fund.

Previous wording

The Company intends to continue to increase its real estate investments. Our business plan includes acquiring communities that over time are expected to yield in excess of our cost of funds and then investing in physical improvements, including adding rental homes onto otherwise vacant sites. This has resulted in increased occupancy rates and improved operating results. For the three and nine months ended September 30, 2024, rental and related income increased 8% and 9%, respectively, from the prior year periods and Community Net Operating Income (“NOI”), as defined below, increased 7% and 11%, respectively. Same property NOI, which includes communities owned and operated as of January 1, 2023 (excluding Memphis Blues, Duck River Estates and River Bluff Estates), increased 7% and 11% for the three and nine months ended September 30, 2024, respectively, over the prior year period driven by a 70 basis point increase in occupancy, to 87.7%, and a rental rate increase of 4.5%. We have been positioning ourselves for future growth and will continue to seek opportunistic investments. In addition, on behalf of our joint venture arrangement with Nuveen Real Estate, we will seek opportunities to acquire manufactured home communities that are under development and/or newly developed and meet certain other investment guidelines. We will also seek additional opportunities, through our opportunity zone fund, to acquire communities that require substantial capital investment and are located in qualified opportunity zones.

Current wording

The Company intends to continue to increase its real estate investments. Our business plan includes acquiring communities that over time are expected to yield in excess of our cost of funds and then investing in physical improvements, including adding rental homes onto otherwise vacant sites. This has resulted in increased occupancy rates and improved operating results. For the three months ended March 31, 2025, rental and related income increased 8% from the prior year period and Community Net Operating Income (“NOI”), as defined below, increased 8%. Same property NOI, which includes communities owned and operated as of January 1, 2024 (excluding Memphis Blues, Duck River Estates and River Bluff Estates), increased 8% for the three months ended March 31, 2025 over the prior year period driven by a 70 basis point increase in occupancy, to 87.9%, and rental rate increases of 4.3%. We have been positioning ourselves for future growth and will continue to seek opportunistic investments. In addition, on behalf of our joint venture arrangement with Nuveen Real Estate, we will seek opportunities to acquire manufactured home communities that are under development and/or newly developed and meet certain other investment guidelines. We will also seek additional opportunities, through our opportunity zone fund, to acquire communities that require substantial capital investment and are located in qualified opportunity zones.

Previous wording

The macro-economic environment and current housing fundamentals continue to favor home rentals. Due to high mortgage rates and lack of inventory, the higher cost of buying a home versus renting one is at its most extreme since 1996. Despite mortgage rates hitting a two-year low this past September as they moved toward 6%, rates are still too high for many buyers and according to the National Association of Realtors, sales of existing homes are on track for their worst year since 1995 for the second year in a row. Even if this year’s sales slightly exceed last year’s level, sales are still on track for the worst two-year period since the mid-1990s, when the country’s population was considerably smaller. Rental homes in a manufactured home community allow the resident to obtain the efficiencies of factory-built housing and the amenities of community living for less than the cost of other forms of affordable housing. We continue to see strong demand for rental homes. We have added an additional 284 rental homes during the first nine months of 2024, net of home sales. This brought the total number of rental homes to approximately 10,300 rental homes, or 39.7% of total sites. Occupied rental homes represented approximately 42.9% of total occupied sites at quarter end. Occupancy in rental homes continues to be strong and was at 94.4% as of September 30, 2024. Our manufactured home communities compare favorably with other types of rental housing, including apartments, and we will continue to allocate capital to rental home purchases, as demand dictates.

Current wording

The macro-economic environment and current housing fundamentals continue to favor home rentals. Due to high mortgage rates and lack of inventory, the higher cost of buying a home versus renting one is at its most extreme since 1996. According to the National Association of Realtors, reported sales of existing homes fell to 4.06 million in 2024, the lowest level in nearly 30 years. We believe rental homes in a manufactured home community allow the resident to obtain the efficiencies of factory-built housing and the amenities of community living for less than the cost of other forms of affordable housing. We continue to see strong demand for rental homes. We have added an additional 72 rental homes during the first three months of 2025, net of rental home sales. This brought the total number of rental homes to approximately 10,400 rental homes, or 39.9% of total sites. Occupied rental homes represented approximately 42.9% of total occupied sites at quarter end. Occupancy in rental homes continues to be strong and was at 94.6% as of March 31, 2025. Our manufactured home communities compare favorably with other types of rental housing, including apartments, and we will continue to allocate capital to rental home purchases, as demand dictates.

Previous wording

In addition to the results reported in accordance with U.S. GAAP, management’s discussion and analysis of financial condition and results of operations include certain non-U.S. GAAP financial measures that in management’s view of the business we believe are meaningful as they allow the investor the ability to understand key operating details of our business both with and without regard to certain accounting conventions or items that may not always be indicative of recurring annual cash flow of the portfolio. These non-U.S. GAAP financial measures as determined and presented by us may not be comparable to related or similarly titled measures reported by other companies, and include Community Net Operating Income (“Community NOI”), Funds from Operations Attributable to Common Shareholders (“FFO”) and Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”).

Current wording

In addition to the results reported in accordance with U.S. GAAP, management’s discussion and analysis of financial condition and results of operations include certain non-U.S. GAAP financial measures that in management’s view of the business we believe are meaningful as they allow the investor the ability to understand key operating details of our business both with and without regard to certain accounting conventions or items that may not always be indicative of recurring annual cash flows of the portfolio. These non-U.S. GAAP financial measures as determined and presented by us may not be comparable to related or similarly titled measures reported by other companies, and include Community Net Operating Income (“Community NOI”), Funds from Operations Attributable to Common Shareholders (“FFO”) and Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”).

Previous wording

The Company’s Community NOI for the three and nine months ended September 30, 2024 and 2023 is calculated as follows*(in thousands)*:

Current wording

The Company’s Community NOI for the three months ended March 31, 2025 and 2024 is calculated as follows*(in thousands)*:

Previous wording

We assess and measure our overall operating results based upon FFO, an industry performance measure which management believes is a useful indicator of our operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. FFO, as defined by Nareit, represents net income (loss) attributable to common shareholders, as defined by accounting principles generally accepted in the U.S. (“U.S. GAAP”), excluding gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, the change in the fair value of marketable securities, and the gain or loss on the sale of marketable securities plus certain non-cash items such as real estate asset depreciation and amortization. Included in the Nareit FFO White Paper - 2018 Restatement, is an option pertaining to assets incidental to our main business in the calculation of Nareit FFO to make an election to include or exclude gains and losses on the sale of these assets, such as marketable equity securities, and include or exclude mark-to-market changes in the value recognized on these marketable equity securities. In conjunction with the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude the change in the fair value of marketable securities from our FFO calculation. Nareit created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance. We define Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), as FFO, excluding certain one-time charges. FFO and Normalized FFO should be considered as supplemental measures of operating performance used by REITs. FFO and Normalized FFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis. However, other REITs may use different methodologies to calculate FFO and Normalized FFO and, accordingly, our FFO and Normalized FFO may not be comparable to all other REITs. The items excluded from FFO and Normalized FFO are significant components in understanding the Company’s financial performance.

Current wording

We assess and measure our overall operating results based upon FFO, an industry performance measure which management believes is a useful indicator of our operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. FFO, as defined by Nareit, represents net income (loss) attributable to common shareholders, as defined by accounting principles generally accepted in the U.S. (“U.S. GAAP”), excluding certain gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, the change in the fair value of marketable securities, and the gain or loss on the sale of marketable securities plus certain non-cash items such as real estate asset depreciation and amortization. Included in the Nareit FFO White Paper - 2018 Restatement, is an option pertaining to assets incidental to our main business in the calculation of Nareit FFO to make an election to include or exclude gains and losses on the sale of these assets, such as marketable equity securities, and include or exclude mark-to-market changes in the value recognized on these marketable equity securities. In conjunction with the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude the change in the fair value of marketable securities from our FFO calculation. Nareit created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance. We define Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), as FFO, excluding certain one-time charges. FFO and Normalized FFO should be considered as supplemental measures of operating performance used by REITs. FFO and Normalized FFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis. However, other REITs may use different methodologies to calculate FFO and Normalized FFO and, accordingly, our FFO and Normalized FFO may not be comparable to all other REITs. The items excluded from FFO and Normalized FFO are significant components in understanding the Company’s financial performance.

Previous wording

The Company’s FFO and Normalized FFO attributable to common shareholders for the three and nine months ended September 30, 2024 and 2023 are calculated as follows*(in thousands)*:

Current wording

The Company’s FFO and Normalized FFO attributable to common shareholders for the three months ended March 31, 2025 and 2024 are calculated as follows*(in thousands)*:

Previous wording

The following are the cash flows provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2024 and 2023*(in thousands)*:

Current wording

The following are the cash flows provided by (used in) operating, investing and financing activities for the three months ended March 31, 2025 and 2024*(in thousands)*:

Previous wording

Rental and related income increased 8% from $48.1 million for the three months ended September 30, 2023 to $51.9 million for the three months ended September 30, 2024. Rental and related income increased 9% from $140.5 million for the nine months ended September 30, 2023 to $153.8 million for the nine months ended September 30, 2024. This increase was due to increases in rental rates and same property occupancy and additional rental homes. The Company has been raising rental rates by approximately 5% to 6% annually at most communities. Same property occupancy has increased 70 basis points from 87.0% as of September 30, 2023 to 87.7% at September 30, 2024. Occupied rental homes increased 4% from approximately 9,300 homes at September 30, 2023 to 9,700 homes at September 30, 2024.

Current wording

Rental and related income increased 8% from $50.3 million for the three months ended March 31, 2024 to $54.6 million for the three months ended March 31, 2025. This increase was due to increases in rental rates and same property occupancy and additional rental homes. The Company has been raising rental rates by approximately 5% to 6% annually at most communities. Same property occupancy has increased 70 basis points from 87.2% as of March 31, 2024 to 87.9% at March 31, 2025. Occupied rental homes increased 4% from approximately 9,500 homes at March 31, 2024 to 9,900 homes at March 31, 2025.

Previous wording

Community operating expenses increased 9% from $20.7 million for the three months ended September 30, 2023 to $22.5 million for the three months ended September 30, 2024. Community operating expenses increased 7% from $60.8 million for the nine months ended September 30, 2023 to $65.2 million for the nine months ended September 30, 2024. These increases were due to an increase in payroll costs, real estate taxes, rental home expenses and storm cleanup.

Current wording

Community operating expenses increased 9% from $21.1 million for the three months ended March 31, 2024 to $23.0 million for the three months ended March 31, 2025. These increases were due to an increase in payroll costs, real estate taxes, snow removal and water and sewer costs.

Previous wording

Community NOI increased 7% from $27.5 million for the three months ended September 30, 2023 to $29.4 million for the three months ended September 30, 2024. Community NOI increased 11% from $79.7 million for the nine months ended September 30, 2023 to $88.6 million for the nine months ended September 30, 2024. These increases were primarily due to increases in rental rates, occupancy and rental homes. The Company’s operating expense ratio (defined as community operating expenses divided by rental and related income) was 43.3% and 42.4% for the three and nine months ended September 30, 2024 and 42.9% and 43.3% for the three and nine months ended September 30, 2023, respectively. Many recently acquired communities have deferred maintenance requiring higher than normal expenditures in the first few years of ownership. Since most of the community expenses consist of fixed costs, as occupancy rates increase, these expense ratios are expected to continue to improve. Due to the Company’s ability to increase its rental rates annually (subject to limitations on rent increases in certain jurisdictions), increasing costs due to inflation and changing prices have generally not had a material effect on revenue and income from continuing operations.

Current wording

Community NOI increased 8% from $29.2 million for the three months ended March 31, 2024 to $31.5 million for the three months ended March 31, 2025. These increases were primarily due to increases in rental rates, occupancy and rental homes. The Company’s operating expense ratio (defined as community operating expenses divided by rental and related income) was 41.9% and 42.2% for the three months ended March 31, 2024 and 2025, respectively. Many recently acquired communities have deferred maintenance requiring higher than normal expenditures in the first few years of ownership. Since most of the community expenses consist of fixed costs, as occupancy rates increase, these expense ratios are expected to continue to improve. Due to the Company’s ability to increase its rental rates annually (subject to limitations on rent increases in certain jurisdictions), increasing costs due to inflation and changing prices have generally not had a material effect on revenue and income from continuing operations.

Previous wording

Sales of manufactured homes increased 10% from $7.9 million, or 90 homes, for the three months ended September 30, 2023 to $8.7 million, or 100 homes, for the three months ended September 30, 2024. Sales of manufactured homes increased 6% from $23.4 million, or 264 homes, for the nine months ended September 30, 2023 to $24.9 million, or 300 homes, for the nine months ended September 30, 2024. Cost of sales of manufactured homes amounted to $5.4 million and $5.3 million for the three months ended September 30, 2024 and 2023, respectively. Cost of sales of manufactured homes amounted to $16.5 million and $16.1 million for the nine months ended September 30, 2024 and 2023, respectively. The gross profit percentage was 38% and 33% for the three months ended September 30, 2024 and 2023, respectively, and 34% and 31% for the nine months ended September 30, 2024 and 2023, respectively. Selling expenses, which includes salaries, commissions, advertising and other miscellaneous expenses, amounted to $1.8 million for the three months ended September 30, 2024 and 2023, and $5.2 million and $5.3 million for the nine months ended September 30, 2024 and 2023, respectively. Gain from the sales operations (defined as sales of manufactured homes, less cost of sales of manufactured homes, less selling expenses), excluding interest on the financing of inventory, amounted to $1.5 million or 17% of total sales and $783,000 or 10% of total sales for the three months ended September 30, 2024 and 2023, respectively. Gain from the sales operations, excluding interest on the financing of inventory, amounted to $3.3 million or 13% of total sales and $2.1 million or 9% of total sales for the nine months ended September 30, 2024 and 2023, respectively. Many of the costs associated with sales, such as salaries, and to an extent, advertising and promotion, are fixed.

Current wording

Sales of manufactured homes decreased 10% from $7.4 million, or 95 homes, for the three months ended March 31, 2024 to $6.7 million, or 71 homes, for the three months ended March 31, 2025. Cost of sales of manufactured homes amounted to $4.3 million and $5.6 million for the three months ended March 31, 2025 and 2024, respectively. The gross profit percentage was 35% and 24% for the three months ended March 31, 2025 and 2024, respectively. Included in these amounts for the three months ended March 31, 2024 was the liquidation of inventory at a sales center that was leased to a third-party operator. Excluding these liquidations, sales of manufactured homes amounted to $6.4 million, or 88 homes, cost of sales amounted to $4.2 million, and the gross profit percentage was 34% for the three months ended March 31, 2024. Selling expenses, which includes salaries, commissions, advertising and other miscellaneous expenses, amounted to $1.6 million for the three months ended March 31, 2025 and 2024. Gain from the sales operations (defined as sales of manufactured homes, less cost of sales of manufactured homes, less selling expenses), excluding interest on the financing of inventory, amounted to $691,000 or 10% of total sales and $149,000 or 2% of total sales for the three months ended March 31, 2025 and 2024, respectively. Many of the costs associated with sales, such as salaries, and to an extent, advertising and promotion, are fixed.

Previous wording

Despite high mortgage rates, home prices have continued to rise as fewer sellers are listing homes and inventories decline resulting in the inherent relative affordability of our property type becoming more and more apparent, which should result in increased demand. The Company continues to be optimistic about future sales and rental prospects given the fundamental need for affordable housing. The Company believes that sales of new homes produce new rental revenue and represent an investment in the upgrading of our communities.

Current wording

Conventional home prices have flattened as sellers begin to outnumber buyers. However, housing market supply remains tight nationally and interest rates remain elevated. The inherent relative affordability of our property type has become more and more apparent, which should result in increased demand. The Company continues to be optimistic about future sales and rental prospects given the fundamental need for affordable housing. The Company believes that sales of new homes produce new rental revenue and represent an investment in the upgrading of our communities.

Previous wording

General and administrative expenses remained relatively stable from the three months ended September 30, 2023 to September 30, 2024. General and administrative expenses increased 5% from $14.7 million for the nine months ended September 30, 2023 to $15.3 million for the nine months ended September 30, 2024, primarily due to an increase in meeting costs as a result of our biennial in-person employee training meeting (which was not held last year) and an increase in payroll and related personnel cost. Although general and administrative expenses increased for the nine months, general and administrative expenses as a percentage of gross revenue (total income plus interest, dividends and other income) was down for both the three and the nine months ended September 30, 2024 as compared to same periods ended September 30, 2023. These percentages were 7.1% and 8.3% for the three and nine months ended September 30, 2024, respectively, as compared to 7.7% and 8.6% for the three and nine months ended September 30, 2023, respectively.

Current wording

General and administrative expenses increased 12% from $5.4 million for the three months ended March 31, 2024 to $6.0 million for the three months ended March 31, 2025. General and administrative expenses increased primarily due to an increase in payroll and related personnel costs and professional fees. General and administrative expenses as a percentage of gross revenue (total income plus interest, dividend and other income) were in-line from the prior year at 9.4% and 9.0% at March 31, 2025 and 2024, respectively.

Previous wording

Depreciation expense increased 4% from $14.1 million for the three months ended September 30, 2023 to $14.7 million for the three months ended September 30, 2024. Depreciation expense increased 8% from $41.3 million for the nine months ended September 30, 2023 to $44.4 million for the nine months ended September 30, 2024. This increase was primarily due to the increase in rental homes during 2023 and 2024.

Current wording

Depreciation expense increased 13% from $14.7 million for the three months ended March 31, 2024 to $16.7 million for the three months ended March 31, 2025. This increase was primarily due to the increase in rental homes and expansions during 2024 and 2025.

Previous wording

Interest income increased 39% from $1.3 million for the three months ended September 30, 2023 to $1.8 million for the three months ended September 30, 2024. Interest income increased 33% from $3.7 million for the nine months ended September 30, 2023 to $4.9 million for the nine months ended September 30, 2024. This increase was primarily due to an increase in the average balance of notes receivable from $68.9 million at September 30, 2023 to $79.2 million at September 30, 2024. The weighted average interest rate earned on these notes receivable increased 20 basis points and were approximately 7.1% and 6.9% as of September 30, 2024 and 2023, respectively.

Current wording

Interest income increased 44% from $1.6 million for the three months ended March 31, 2024 to $2.3 million for the three months ended March 31, 2025. This increase was primarily due to an increase in the average balance of notes receivable from $74.1 million at March 31, 2024 to $90.4 million at March 31, 2025 and interest earned on excess cash during 2025. The weighted average interest rate earned on notes receivable increased 20 basis points and was approximately 7.2% and 7.0% as of March 31, 2025 and 2024, respectively.

Previous wording

The Company recognized a loss on sales of marketable securities of $3.8 million for the nine months ended September 30, 2024. The Company recognized a gain on sales of marketable securities of $226,000 and $183,000 for the three and nine months ended September 30, 2023, respectively. The increase (decrease) in fair value of marketable securities amounted to an increase of $5.5 million and a decrease of $5.5 million for the three months ended September 30, 2024 and 2023, respectively. The increase (decrease) in fair value of marketable securities amounted to an increase of $3.5 million and a decrease of $10.4 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, the Company had total net unrealized losses of $36.2 million in its REIT securities portfolio.

Current wording

The decrease in fair value of marketable securities amounted to $1.6 million and 5.4 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had total net unrealized losses of $40.1 million in its REIT securities portfolio.

Previous wording

Interest expense, including amortization of financing costs, decreased 15% from $7.7 million for the three months ended September 30, 2023 to $6.5 million for the three months ended September 30, 2024. Interest expense, including amortization of financing costs, decreased 13% from $24.7 million for the nine months ended September 30, 2023 to $21.4 million for the nine months ended September 30, 2024. This decrease was due to a decrease in the average balance of mortgages and loans from $624.6 million at September 30, 2023 to $552.1 million at September 30, 2024. The weighted average interest rate on our total debt decreased from 4.7% at September 30, 2023 to 4.4% at September 30, 2024, respectively.

Current wording

Interest expense, including amortization of financing costs, decreased 21% from $7.5 million for the three months ended March 31, 2024 to $5.9 million for the three months ended March 31, 2025. This decrease was due to a decrease in the average balance of mortgages and loans from $580.6 million at March 31, 2024 to $509.5 million at March 31, 2025. The weighted average interest rate on our total debt decreased from 4.6% at March 31, 2024 to 4.4% at March 31, 2025, respectively.

Previous wording

Total investment property increased 4% or $58.0 million during the nine months ended September 30, 2024. In addition to adding 284 rental homes, net of 202 rental homes sold to its communities during the nine months ended September 30, 2024, the Company is preparing sites for additional homes to be added during the year. Occupied rentals increased by 310 rental homes from December 31, 2023 to September 30, 2024. The Company’s occupancy rate on its rental homes portfolio increased 40 basis points and was 94.4% at September 30, 2024 as compared to 94.0% at December 31, 2023.

Current wording

Total investment property increased 3% or $43.8 million during the three months ended March 31, 2025. In addition to adding 109 rental homes, net of 37 rental homes sold, to its communities during the most recent quarter, the Company is preparing sites for additional homes to be added during the year. The Company also purchased two communities for approximately $24.6 million during the three months ended March 31, 2025. Occupied rentals increased by 158 rental homes from December 31, 2024 to March 31, 2025. The Company’s occupancy rate on its rental homes portfolio increased 60 basis points and was 94.6% at March 31, 2025 as compared to 94.0% at December 31, 2024.

Previous wording

Mortgages payable, net of unamortized debt issuance costs, decreased 2% or $8.2 million during the nine months ended September 30, 2024 due to principal payments.

Current wording

Mortgages payable, net of unamortized debt issuance costs, decreased 2% or $9.2 million during the three months ended March 31, 2025 due to principal payments. On February 28, 2025, the Company paid off one mortgage totaling $6.4 million.

Previous wording

In addition to cash generated through operations, the Company uses a variety of sources to fund its cash needs, including acquisitions. The Company may sell marketable securities from its investment portfolio, borrow on its unsecured credit facility or lines of credit, incur other indebtedness, finance and refinance its properties, and/or raise capital through the DRIP and capital markets, including through the Company’s ATM Programs. In order to provide financial flexibility to opportunistically access the capital markets, on March 12, 2024, the Company implemented its 2024 March Common ATM Program which allowed the Company to offer and sell shares of the Company’s Common Stock, having an aggregate sales price of up to $150 million, from time to time through the Distribution Agents. In addition, on September 16, 2024, the Company terminated its successful 2024 March Common ATM Program and implemented a new 2024 September Common ATM Program which allows the Company to offer and sell shares of the Company’s Common Stock, having an aggregate sales price of up to $150 million, from time to time through the Distribution Agents. Additionally, during 2024 the Company expanded the borrowing capacity on its unsecured revolving credit facility from $180 million in available borrowings to $260 million in available borrowings.

Current wording

In addition to cash generated through operations, the Company uses a variety of sources to fund its cash needs, including acquisitions. The Company may sell marketable securities from its investment portfolio, borrow on its unsecured credit facility or lines of credit, incur other indebtedness, finance and refinance its properties, and/or raise capital through the DRIP and capital markets, including through the Company’s ATM Programs. In order to provide financial flexibility to opportunistically access the capital markets, on September 16, 2024, the Company terminated its successful then-existing at-the-market Common Stock ATM Program and implemented a new September 2024 Common ATM Program which allows the Company to offer and sell shares of the Company’s Common Stock, having an aggregate sales price of up to $150 million, from time to time through the Distribution Agents. As of March 31, 2025, $80.4 million of common stock remained eligible for sale under the September 2024 Common ATM Program. Additionally, on March 5, 2025, the Company terminated its then-existing 2023 Preferred ATM Program and implemented a new 2025 Preferred ATM Program which allows the Company to offer and sell shares of the Company’s Series D Preferred Stock having an aggregate sales price of up to $100 million from time to time through B. Riley, as Distribution Agent.

Previous wording

The Company continues to strengthen its capital and liquidity positions. During the nine months ended September 30, 2024, the Company issued and sold 9.4 million shares of Common Stock through our Common ATM Programs, at a weighted average price of $17.55 per share, generating gross proceeds of $166.0 million and net proceeds of $163.2 million, after offering expenses. Subsequent to quarter end, the Company issued and sold an additional 170,000 shares of its Common Stock under the 2024 September Common ATM Program at a weighted average price of $18.92 per share, generating net proceeds of $3.2 million, after offering expenses.

Current wording

The Company continues to strengthen its capital and liquidity positions. During the three months ended March 31, 2025, the Company issued and sold 515,000 shares of Common Stock through our September 2024 Common ATM Program, at a weighted average price of $18.21 per share, generating gross proceeds of $9.4 million and net proceeds of $9.2 million, after offering expenses. Subsequent to quarter end, the Company issued and sold an additional 1.2 million shares of its Common Stock under the September 2024 Common ATM Program at a weighted average price of $17.89 per share, generating gross proceeds of $21.8 million and net proceeds, after offering expenses, of $21.5 million.

Previous wording

In addition, during the nine months ended September 30, 2024, the Company issued and sold 664,000 shares of Series D Preferred Stock through our 2023 Preferred ATM Program, at a weighted average price of $23.35 per share, generating gross proceeds of $15.5 million and net proceeds of $15.3 million, after offering expenses. Subsequent to quarter end, the Company issued and sold an additional 247,000 shares of its Series D Preferred Stock under the 2023 Preferred ATM Program at a weighted average price of $23.90 per share, generating net proceeds of $5.8 million, after offering expenses.

Current wording

In addition, during the three months ended March 31, 2025, the Company issued and sold 49,000 shares of Series D Preferred Stock through our Preferred ATM Program, at a weighted average price of $23.03 per share, generating gross proceeds of $1.1 million and net proceeds of $982,000, after offering expenses.

Previous wording

The Company also raised $7.6 million from the issuance of common stock in the DRIP during the nine months ended September 30, 2024, which included dividend reinvestments of $2.4 million. Dividends paid on the common stock for the nine months ended September 30, 2024 were $45.3 million, of which $2.4 million were reinvested. Dividends paid on the Series D Preferred Stock for the nine months ended September 30, 2024 totaled $14.2 million.

Current wording

The Company also raised $2.6 million from the issuance of common stock in the DRIP during the three months ended March 31, 2025, which included dividend reinvestments of $836,000. Dividends paid on the common stock for the three months ended March 31, 2025 were $17.7 million, including the $836,000 reinvested. Dividends paid on the Series D Preferred Stock for the three months ended March 31, 2025 totaled $5.1 million.

Previous wording

Net cash provided by operating activities amounted to $54.3 million and $91.1 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, the Company had cash and cash equivalents of $66.7 million, marketable securities of $34.2 million and $260 million available on our credit facility. We also had approximately $147 million available on our revolving lines of credit for the financing of home sales and purchases of inventory and $55 million available on our line of credit secured by rental homes and rental homes leases.

Current wording

Net cash provided by operating activities amounted to $12.8 million and $19.0 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had cash and cash equivalents of $35.2 million, marketable securities of $30.3 million and $260 million available on our credit facility. We also had approximately $137 million available on our revolving lines of credit for the financing of home sales and purchases of inventory and $55 million available on our line of credit secured by rental homes and rental homes leases.

Previous wording

The Company owns and operates 139 communities (including two communities owned by the Company’s joint venture with Nuveen), of which 52 are unencumbered. Except for communities in the borrowing base for our unsecured credit facility, these unencumbered communities can be used to raise additional funds. Our marketable securities, unencumbered properties, and lines of credit provide the Company with additional liquidity. The Company holds a 40% equity interest in the entities formed under its joint venture with Nuveen, which owns two newly developed communities that are unencumbered and one community in the process of being developed that is also unencumbered.

Current wording

The Company owns 141 communities (including two communities owned by the Company’s joint venture with Nuveen, in which the Company has a minority interest), of which 55 are unencumbered. Except for communities in the borrowing base for our unsecured credit facility, these unencumbered communities can be used to raise additional funds. Our marketable securities, unencumbered properties, and lines of credit provide the Company with additional liquidity. The Company holds a 40% equity interest in the entities formed under its joint venture with Nuveen, which owns two newly developed communities that are unencumbered and one community in the process of being developed that is also unencumbered.

Previous wording

As of September 30, 2024, the Company had total assets of $1.5 billion and total liabilities of $643.1 million. The Company’s net debt (net of unamortized debt issuance costs and cash and cash equivalents) to total market capitalization as of September 30, 2024 was approximately 22% and the Company’s net debt, less securities to total market capitalization as of September 30, 2024 was approximately 21%. As of September 30, 2024, the Company had eighteen mortgages totaling $84.4 million due within the next 12 months and twenty-four mortgages totaling $120.8 million within the next 18 months. The Company believes that it has the ability to meet its obligations and to generate funds for new investments.

Current wording

As of March 31, 2025, the Company had total assets of $1.5 billion and total liabilities of $635.1 million. The Company’s net debt (net of unamortized debt issuance costs and cash and cash equivalents) to total market capitalization as of March 31, 2025 was approximately 23% and the Company’s net debt, less securities to total market capitalization as of March 31, 2025 was approximately 22%. As of March 31, 2025, the Company had twenty-three mortgages totaling $112.5 million due within the next 12 months. Subsequent to quarter end, the Company paid down nine mortgages totaling $39.3 million and drew down $40 million on its unsecured line of credit. The Company believes that it has the ability to meet its obligations and to generate funds for new investments.

Previous wording

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these factors are described below and under the headings “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These and other risks, uncertainties and factors could cause our actual results to differ materially from those included in any forward-looking statements we make. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that could cause actual results to differ materially from our expectations include, among others:

Current wording

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these factors are described below and under the headings “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”in our periodic reports filed with the Securities and Exchange Commission. These and other risks, uncertainties and factors could cause our actual results to differ materially from those included in any forward-looking statements we make. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that could cause actual results to differ materially from our expectations include, among others: