Overview
The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the consolidated financial statements and footnotes thereto included elsewhere herein and in the Company's annual report on Form 10-K for the year endedDecember 31, 2021 . The Company is aMaryland corporation that operates as a self-administered, self-managed Real Estate Investment Trust ("REIT") with headquarters inFreehold, 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,UMH Sales and Finance, Inc. ("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. As ofJune 30, 2022 , the Company owned and operated 130 manufactured home communities containing approximately 24,400 developed homesites. These communities are located inNew Jersey , NewYork, Ohio ,Pennsylvania ,Tennessee ,Indiana ,Michigan ,Maryland ,Alabama andSouth Carolina . The Company also has an ownership interest in and operates one community inFlorida through its joint venture withNuveen Real Estate . 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 and revenue under cable service agreements as well as 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 withNuveen Real Estate. Management views the Company as a single segment based on its method of internal reporting in addition to its allocation of capital and resources. The Company also invests in equity securities of other REITs which the Company generally limits to no more than approximately 15% of its undepreciated assets. As ofJune 30, 2022 , the securities portfolio represented 2.7% of undepreciated assets. 24 The Company believes that its capital structure, which allows for the ownership of assets using a balanced combination of equity obtained through the issuance of common stock, preferred stock and debt, will enhance shareholder returns as the properties appreciate over time. 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 six months endedJune 30, 2022 , rental and related income increased 7% from the prior year period and Community Net Operating Income ("NOI"), as defined below, increased 5% and 7%, respectively. Same property NOI, which includes communities owned and operated as ofJanuary 1, 2021 , increased 5% for the six months endedJune 30, 2022 over the prior year period, primarily due to a rental rate increase of 5%. We have been positioning ourselves for future growth and will continue to seek opportunistic investments. In addition, on behalf of our recently-formed joint venture withNuveen 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. Sales of manufactured homes decreased 20% during the six months endedJune 30, 2022 from the prior year. Demand for quality affordable housing remains healthy while inventory is scarce. Our property type offers substantial comparative value that should result in increased demand. The macro-economic environment and current housing fundamentals continue to favor home rentals. 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 151 rental homes during the first six months of 2022. This brought the total number of rental homes to approximately 8,900 rental homes, or 36.3% of total sites. Occupied rental homes represented approximately 40.2% of total occupied sites at quarter end. Occupancy in rental homes continues to be strong and was at 94.6% as ofJune 30, 2022 . We compare favorably with other types of rental housing, including apartments, and we will continue to allocate capital to rental home purchases, as demand dictates. We anticipate adding approximately 700 - 800 rental homes in 2022. 25
The following is a summary of the communities acquired during the six months
ended
Number of Number of Occupancy at
Community Date of Acquisition State Sites Purchase Price Acres Acquisition
Center Manor March 31, 2022 PA 96 $ 5,800 18 83 % Mandell Trails May 3, 2022 PA 132 7,375 65 70 % La Vista Estates May 25, 2022 AL 139
3,878 36 6 % Total as of June 30, 2022 367$ 17,053 119 49 % See PART I, Item 1 - Business in the Company's Annual Report on Form 10-K for the year endedDecember 31, 2021 for a more complete discussion of the economic and industry-wide factors relevant to the Company and the opportunities and challenges, and risks on which the Company is focused.
Significant Accounting Policies and Estimates
The discussion and analysis of the Company's financial condition and results of operations are based upon the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted inthe United States of America ("U.S. GAAP"). The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the Company's consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions. On a regular basis, management evaluates our assumptions, judgments and estimates. Management believes there have been no material changes to the items that we disclosed as our significant accounting policies and estimates under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our Annual Report on Form 10-K for the year endedDecember 31, 2021 . Supplemental Measures In addition to the results reported in accordance with GAAP, management's discussion and analysis of financial condition and results of operations include certain non-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-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"). 26 We define Community NOI as rental and related income less community operating expenses such as real estate taxes, repairs and maintenance, community salaries, utilities, insurance and other expenses. We believe that Community NOI is helpful to investors and analysts as a direct measure of the actual operating results of our manufactured home communities, rather than our Company overall. Community NOI should not be considered a substitute for the reported results prepared in accordance with GAAP. Community NOI should not be considered as an alternative to net income (loss) as an indicator of our financial performance, or to cash flows as a measure of liquidity; nor is it indicative of funds available for our cash needs, including our ability to make cash distributions.
The Company's Community NOI for the three and six months ended
Three Months Ended Six Months Ended 6/30/22 6/30/21 6/30/22 6/30/21 Rental and Related Income$ 42,229 $ 39,341 $ 83,806 $ 78,054
Less: Community Operating Expenses 18,923 17,045 36,994
34,182 Community NOI$ 23,306 $ 22,296 $ 46,812 $ 43,872
We assess and measure our overall operating results based upon an industry performance measure referred to as Funds from Operations Attributable to Common Shareholders ("FFO"), 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 byThe National Association of Real Estate Investment Trusts ("NAREIT"), represents net income (loss) attributable to common shareholders, as defined by accounting principles generally accepted in theU.S. of America ("U.S. GAAP"), excluding extraordinary items, as defined underU.S. GAAP, 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 gains and losses realized on marketable securities investments and 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. 27 FFO and Normalized FFO (i) do not represent cash flow from operations as defined byU.S. GAAP; (ii) should not be considered as alternatives to net income (loss) as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity. The Company's FFO and Normalized FFO attributable to common shareholders for the three and six months endedJune 30, 2022 and 2021 are calculated as follows
(in thousands): Three Months Ended Six Months Ended 6/30/22 6/30/21 6/30/22 6/30/21 Net Income (Loss) Attributable to Common Shareholders$ (22,478 ) $ 8,403 $ (26,803 ) $ 15,242 Depreciation Expense 11,984 11,184 23,701 22,192 Depreciation Expense from Unconsolidated Joint Venture 86 0 167 0 (Gain) Loss on Sales of Depreciable Assets 44 (5 ) 86 18 (Increase) Decrease in Fair Value of Marketable Securities 10,044 (9,291 ) 41,794 (19,510 ) (Gain) Loss on Sales of Marketable Securities, net 0 (436 ) (30,721 ) 294 FFO Attributable to Common Shareholders (320 ) 9,855 8,224 18,236 Adjustments: Redemption of Preferred Stock 8,190 0 8,190 0 Non- Recurring Other Expense (1) 825 426 1,256 746 Normalized FFO Attributable to Common Shareholders$ 8,695 $ 10,281 $ 17,670 $ 18,982
(1) For the three and six months ended
and restricted stock grants for the
financing, which are being expensed over the vesting period (
respectively) and non-recurring expenses for the joint venture with
(
For 2021, consists of special bonus and restricted stock grants for the
over the vesting period.
The following are the cash flows provided (used) by operating, investing and
financing activities for the six months ended
Six Months Ended 6/30/22 6/30/21 Operating Activities$ 5,415 $ 33,203 Investing Activities 871 (49,573 ) Financing Activities 153,701 90,036 28
Changes In Results Of Operations
Rental and related income increased 7% from$39.3 million for the three months endedJune 30, 2021 to$42.2 million for the three months endedJune 30, 2022 . Rental and related income increased 7% from$78.1 million for the six months endedJune 30, 2021 to$83.8 million for the six months endedJune 30, 2022 . This increase was primarily due to the acquisitions made during 2021 and 2022, as well as increases in rental rates and same property occupancy and additional rental homes. The Company has been raising rental rates by approximately 3% to 4% annually at most communities. Same property occupancy remained stable at 86.7% as ofJune 30, 2021 and 2022. Occupied rental homes increased 2% from approximately 8,300 homes atJune 30, 2021 to 8,400 homes atJune 30, 2022 . Community operating expenses increased 11% from$17.0 million for the three months endedJune 30, 2021 to$18.9 million for the three months endedJune 30, 2022 . Community operating expenses increased 8% from$34.2 million for the six months endedJune 30, 2021 to$37.0 million for the six months endedJune 30, 2022 . These increases were primarily due to an increase in personnel costs, real estate taxes, insurance and water and sewer expenses. Community NOI increased 5% from$22.3 million for the three months endedJune 30, 2021 to$23.3 million for the three months endedJune 30, 2022 . Community NOI increased 7% from$43.9 million for the six months endedJune 30, 2021 to$46.8 million for the six months endedJune 30, 2022 . These increases were primarily due to the acquisitions during 2021 and 2022 and 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 44.8% and 43.3% for the three months endedJune 30, 2022 and 2021, respectively. The Company's Operating Expense Ratio was 44.1% and 43.8% for the six months endedJune 30, 2022 and 2021, respectively. Many recently acquired communities have deferred maintenance requiring higher than normal expenditures in the first few years of ownership. Because most of the community expenses consist of fixed costs, as occupancy rates increase, these expense ratios are expected to continue to improve. Since the Company has the ability to increase its rental rates annually, increasing costs due to inflation and changing prices have generally not had a material effect on revenue and income from continuing operations.
Sales of manufactured homes decreased 27% from$9.6 million , or 120 homes, for the three months endedJune 30, 2021 to$7.0 million , or 86 homes, for the three months endedJune 30, 2022 . Sales of manufactured homes decreased 20% from$14.0 million , or 193 homes, for the six months endedJune 30, 2021 to$11.3 million , or 147 homes, for the six months endedJune 30, 2022 . Cost of sales of manufactured homes amounted to$4.8 million and$7.0 million for the three months endedJune 30, 2022 and 2021, respectively. Cost of sales of manufactured homes amounted to$7.8 million and$10.5 million for the six months endedJune 30, 2022 and 2021, respectively. The gross profit percentage was 31% and 27% for the three months endedJune 30, 2022 and 2021, respectively, and 31% and 25% for the six months endedJune 30, 2022 and 2021, respectively. Selling expenses, which includes salaries, commissions, advertising and other miscellaneous expenses, amounted to$1.2 million and$1.4 million for the three months endedJune 30, 2022 and 2021, respectively, and$2.4 million and$2.5 million for the six months endedJune 30, 2022 and 2021, respectively. Gain (loss) from the sales operations (defined as sales of manufactured homes less cost of sales of manufactured homes less selling expenses less interest on the financing of inventory) amounted to a gain of$876,000 or 13% of total sales and a gain of$1.2 million or 12% of total sales for the three months endedJune 30, 2022 and 2021, respectively. Gain (loss) from the sales operations amounted to a gain of$979,000 or 9% of total sales and a gain of$929,000 or 7% of total sales for the six months endedJune 30, 2022 and 2021, respectively. Many of the costs associated with sales, such as salaries, and to an extent, advertising and
promotion, are fixed. 29 Home prices have continued their rise as fewer sellers are listing homes and inventories decline. With the passage of time, the inherent relative affordability of our property type becomes 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. General and administrative expenses increased 29% from$3.3 million for the three months endedJune 30, 2021 to$4.3 million for the three months endedJune 30, 2022 . General and administrative expenses increased 21% from$6.8 million for the six months endedJune 30, 2021 to$8.2 million for the six months endedJune 30, 2022 . These increases were mainly due to an increase in personnel costs, including an increase in stock-based compensation, including the cost of previously issued special restricted stock grants for the groundbreaking Fannie Mae financing completed in 2020, and other non-recurring expenses for the joint venture, early extinguishment of debt and other legal expenses. General and administrative expenses as a percentage of gross revenue (total income plus interest, dividends and other income) was 8.4% and 8.3% for the three and six months endedJune 30, 2022 , respectively, as compared to 6.5% and 7.4% for the three and six months endedJune 30, 2021 , respectively. Without the special bonus and restricted stock grants and the non-recurring expenses, this percentage was 6.8% and 7.0% for the three and six months endedJune 30, 2022 , respectively, as compared to 5.7% and 6.2% for the three and six months endedJune 30, 2021 , respectively. Depreciation expense increased 7% from$11.2 million for the three months endedJune 30, 2021 to$12.0 million for the three months endedJune 30, 2022 . Depreciation expense increased 7% from$22.2 million for the six months endedJune 30, 2021 to$23.7 million for the six months endedJune 30, 2022 . This increase was primarily due to the acquisitions and the increase in rental homes during 2021 and 2022.
Interest income increased 35% from$792,000 for the three months endedJune 30, 2021 to$1.1 million for the three months endedJune 30, 2022 . Interest income increased 23% from$1.6 million for the six months endedJune 30, 2021 to$2.0 million for the six months endedJune 30, 2022 . This increase was primarily due to an increase in the average balance of notes receivable from$43.8 million atJune 30, 2021 to$55.1 million atJune 30, 2022 . 30
Dividend income decreased 44% from$1.3 million for the three months endedJune 30, 2021 to$721,000 for the three months endedJune 30, 2022 . Dividend income decreased 42% from$2.6 million for the six months endedJune 30, 2021 to$1.5 million for the six months endedJune 30, 2022 . This decrease was due to reduced dividends from the reduction of our securities portfolio. Dividends received from our marketable securities investments were at a weighted average yield of approximately 5.9% and 4.2% atJune 30, 2022 and 2021, respectively. The Company recognized a gain on sales of marketable securities of$30.7 million for the six months endedJune 30, 2022 as a result of the cash consideration received in the MREIC merger. The Company recognized a gain on sales of marketable securities of$436,000 for the three months endedJune 30, 2021 and a loss on sales of marketable securities of$294,000 for the six months endedJune 30, 2021 . Increase (decrease) in fair value of marketable securities decreased from a gain of$9.3 million for the three months endedJune 30, 2021 to a loss of$10.0 million for the three months endedJune 30, 2022 . Increase (decrease) in fair value of marketable securities decreased from a gain of$19.5 million for the six months endedJune 30, 2021 to a loss of$41.8 million for the six months endedJune 30, 2022 . As ofJune 30, 2022 , the Company had total net unrealized losses of$56.1 million in its REIT securities portfolio. Interest expense, including amortization of financing costs, increased 29% from$5.0 million for the three months endedJune 30, 2021 to$6.4 million for the three months endedJune 30, 2022 . Interest expense, including amortization of financing costs, increased 22% from$9.8 million for the six months endedJune 30, 2021 to$11.9 million for the six months endedJune 30, 2022 . This increase is mainly due to interest on the Series A Bonds.
Changes in Financial Condition
Total investment property and equipment increased 3% or$43.0 million during the six months endedJune 30, 2022 . The Company acquired three communities with 367 developed homesites for approximately$17.1 million . The Company also added 151 rental homes to its communities during the first six months of 2022. The Company's occupancy rate on its rental homes portfolio was 94.6% atJune 30, 2022 as compared to 95.5% atDecember 31, 2021 .
Marketable securities decreased 59% or
Mortgages payable, net of unamortized debt issuance costs, increased 4% or$16.2 million during the six months endedJune 30, 2022 . This increase was due to a new mortgage of$25.6 million offset by principal payments of$8.8 million . Loans payable, net of unamortized debt issuance costs, increased 25% or$11.6 million during the six months endedJune 30, 2022 . This increase was due to an increase of$11.5 million on our revolving lines of credit for the financing of home sales and the purchase of inventory.
During the six months ended
31
Liquidity and Capital Resources
The Company's focus is on real estate investments, including investment in rental homes. Additionally, the Company invests in marketable debt and equity securities of other REITs. The REIT securities portfolio provides the Company with liquidity and additional income and serves as a proxy for real estate when more favorable risk adjusted returns are not available. The Company generally limits its marketable securities investments to no more than approximately
15% of its undepreciated assets. The Company's principal liquidity demands have historically been, and are expected to continue to be, distributions to the Company's shareholders, acquisitions, capital improvements, development and expansions of properties, debt service, purchases of manufactured home inventory and rental homes, financing of manufactured home sales and payments of expenses relating to real estate operations. We anticipate that the liquidity demands of the recent properties acquired will be met by the operations of these acquisitions. The Company's ability to generate cash adequate to meet these demands is dependent primarily on income from its real estate investments and marketable securities portfolio, the sale of real estate investments and marketable securities, refinancing of mortgage debt, leveraging of real estate investments, availability of bank borrowings, lines of credit, and other incurrence of indebtedness, proceeds from the DRIP, and access to the capital markets, including through its 2022 Common ATM Program. 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, the Company has implemented a 2022 Common ATM Program. The 2022 Common ATM Program 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. 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. In addition, on behalf of our recently-formed joint venture withNuveen 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. There is no guarantee that any of these additional opportunities will materialize or that the Company will be able to take advantage of such opportunities. The growth of our real estate portfolio and success of our joint venture depends on the availability of suitable properties which meet the Company's investment criteria and appropriate financing. Competition in the market areas in which the Company operates is significant. To the extent that funds or appropriate communities are not available, fewer acquisitions will
be made. 32 The Company continues to strengthen its capital and liquidity positions. During the six months endedJune 30, 2022 , the Company issued and sold 2.4 million shares of Common Stock through our Common ATM Programs, at a weighted average price of$24.29 per share, generating gross proceeds of$59.3 million and net proceeds of$58.2 million , after offering expenses.
During the six months ended
In addition, the Company raised$3.0 million from the issuance of common stock in the DRIP during the six months endedJune 30, 2022 , which included Dividend Reinvestments of$1.5 million . Dividends paid on the common stock for the six months endedJune 30, 2022 were$21.3 million , of which$1.5 million were reinvested. Dividends paid on the Series C Preferred Stock and the Series D Preferred Stock for the six months endedJune 30, 2022 totaled$15.2 million . Net cash provided by operating activities amounted to$5.4 million and$33.2 million for the six months endedJune 30, 2022 and 2021, respectively. As ofJune 30, 2022 , the Company had cash and cash equivalents of$275.8 million , marketable securities of$46.9 million , approximately$30.1 million available on our revolving lines of credit for the financing of home sales and purchases of inventory,$15 million available on our line of credit secured by rental homes and rental homes leases and$50 million available on our unsecured credit facility, with an additional$50 million potentially available pursuant to an accordion feature. Subsequent to quarter end, the Company drew down$50 million on its credit facility. OnJuly 26, 2022 , pursuant to itsJune 16, 2022 notice of redemption, the Company redeemed all 9.9 million issued and outstanding shares of its 6.75% Series C Preferred Stock at a redemption price of$25.00 per share liquidation preference plus accrued and unpaid dividends to, but not including, theJuly 26, 2022 redemption date in an amount of$0.2578 per share, for a total payment of$25.2578 per share, or$249.6 million . The Company owns 130 communities, of which 32 are unencumbered. Except for 13 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 also holds a 40% equity interest in its joint venture withNuveen Real Estate , which owns one newly developed community that is unencumbered.
As ofJune 30, 2022 , the Company had total assets of$1.4 billion and total liabilities of$901.4 million . The Company's net debt (net of unamortized debt issuance costs and cash and cash equivalents) to total market capitalization as ofJune 30, 2022 was approximately 19% and the Company's net debt, less securities to total market capitalization as ofJune 30, 2022 was approximately 17%. As ofJune 30, 2022 , the Company had mortgages totaling$58.8 million due within the next 12 months. The Company believes that it has the ability to meet its obligations and to generate funds for new investments. 33 Impact of COVID-19 The following discussion is intended to provide certain information regarding the impacts of the COVID-19 pandemic on our business and management's efforts to respond to those impacts. We continue to monitor our operations and government recommendations and have taken steps to make the safety, security and welfare of our employees, their families and our residents a top priority.
Collections are consistent with pre-pandemic levels and we have collected 93% of
The impact of the COVID-19 pandemic remains uncertain and dependent on future developments, including the possible emergence of new variants of the original virus and the ongoing roll-out of vaccines and their efficacy. We will continue to monitor these rapidly evolving developments and respond in the best interests of our employees, residents and shareholders. At this time, we believe that the COVID-19 pandemic and its consequences will not have a material adverse effect on our operations.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
Cautionary Statement Regarding Forward-Looking Statements
Statements contained in this Form 10-Q, that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about the Company's expectations, beliefs, intentions, plans, objectives, goals, strategies, future events, performance and underlying assumptions and other statements that are not historical facts. Forward-looking statements can be identified by their use of forward-looking words, such as "may," "will," "anticipate," "expect," "believe," "intend," "plan," "should," "seek" or comparable terms, or the negative use of those words, but the absence of these words does not necessarily mean that a statement is not forward-looking. 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:
? changes in the real estate market conditions and general economic conditions;
? risks and uncertainties related to the COVID-19 pandemic;
34
? the inherent risks associated with owning real estate, including local real
estate market conditions, governing laws and regulations affecting manufactured
housing communities and illiquidity of real estate investments;
? increased competition in the geographic areas in which we own and operate
manufactured housing communities;
? our ability to continue to identify, negotiate and acquire manufactured housing
communities and/or vacant land which may be developed into manufactured housing
communities on terms favorable to us;
? our ability to maintain rental rates and occupancy levels;
? changes in market rates of interest;
? inflation, including increases in commodity prices and the cost of purchasing
manufactured homes;
? our ability to purchase manufactured homes for rental or sale;
? our ability to repay debt financing obligations;
? our ability to refinance amounts outstanding under our credit facilities at
maturity on terms favorable to us;
? our ability to comply with certain debt covenants;
? our ability to integrate acquired properties and operations into existing
operations;
? the availability of other debt and equity financing alternatives;
? continued ability to access the debt or equity markets;
? the loss of any member of our management team;
? our ability to maintain internal controls and processes to ensure all
transactions are accounted for properly, all relevant disclosures and filings
are made in a timely manner in accordance with all rules and regulations, and
any potential fraud or embezzlement is thwarted or detected;
? the ability of manufactured home buyers to obtain financing;
? the level of repossessions by manufactured home lenders;
? market conditions affecting our investment securities;
? changes in federal or state tax rules or regulations that could have adverse
tax consequences;
? our ability to qualify as a real estate investment trust for federal income tax
purposes; and,
? those risks and uncertainties referenced under the heading "Risk Factors"
contained in this Form 10-Q and the Company's other filings with the Securities
and
endedDecember 31, 2021 .
You should not place undue reliance on these forward-looking statements, as events described or implied in such statements may not occur. The forward-looking statements contained in this Form 10-Q speak only as of the date hereof and the Company expressly disclaims any obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. 35
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