UMH Properties is a developing REIT that owns and operates a portfolio of 123 prefabricated home communities, comprising 23,200 evolved home sites.
The portfolio has shown resistance to the pandemic with higher occupancy rates.
In the future, if the HMU obtains approval of GSE’s credit debt, there is a possibility of dividend coverage through a refinancing of capital assets.
The strong recovery in the broader market position has left behind many names of quality revenue sources. Looking at the functionality of the Invesco QQQ ETF (QQQ), which yielded 38% cumulatively, it turns out that investors put a lot of price on virtual assets, especially in this pandemic. As such, I think it opens up opportunities to invest in sustainable and well-positioned physical assets, such as real estate. In this article, I compare UMH Properties (UMH) to find out if it’s an exciting long-term investment, so let’s get started!
(Source: corporate website)
UMH Properties is a developing REIT that owns and operates a portfolio of 123 prefabricated home communities, comprising 23,200 evolved home sites. The company is run by the president, Eugene Landy, who founded the company, and Samuel Landy, who has held the position of CEO for more than 25 years. The CEO is also director of Monmouth Real Estate Investment Corp. (MRN). Its houses are mainly located in the northeastern and midwest regions of the United States, and more than part of its houses are located in the shale regions of Marcellus and Utica.
For reference, those two shale regions are the no. 1 and No. 3 regions of maximum production of herbal fuel in the United States (the Permian Basin is in the current place). I see this as a credit to UMH and its local economies in those regions, as herbal fuel is expected to be a component of energy consumption in the coming decades. As noted below, herbal fuel intake in the United States continues to grow year after year, with 70.8 billion cubic feet of intake consistent with this week’s day, up from 69 Gpi3/d in the same week last year.
“I mean, when we go out and talk to investors before COVID, the most common question was how would we do it in the event of a recession? And at all times we predicted that we would do as well as the apartments, but as it seems that in practice, what hurts us, we did it more because our products are so capable. Possibly there would have been some dubbing when other people who may also simply not enter our homes. People didn’t move, stayed longer and other people came to our product.”
Another positive catalyst for UMH is that it is running with GSE (government-sponsored entities) to offload the same asset type popularity in their prefabricated rental homes as in apartments. This would provide the UMH with GSE debt at rates below 3%, which would allow the company to fund $310 million in rental games purchased with similar shares.
This has the merit of reducing the capital charge for the company, as control intends to rebur similar shares with higher positions with GSE’s credit debt revenue at a lower expense. This can greatly generate merits for the FFO and the company to reduce their dividend payment ratio, as noted in the control at the last convention call (highlighted through the author):
“This would be consistent with allowing us to rebur $95 million from our preferred B Series consistently with 8% percentages, generating additional FFOs for consistent non-unusual percentage holders of approximately $0.11 consistent with consistent percentage consistent with the year. As we refinance our capital stack and continue to improve our results consistent with results, we have a prospect of driving significant profit expansion throughout this year and through 2021. By implementing these elements, we hope to make significant progress in reducing our distribution index, which will be less than one hundred consistent with up to 2021. »