UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period ____________________ to _____________________

Commission File Number 001-12690

UMH Properties, Inc.

(Exact name of registrant as specified in its charter)

Maryland	22-1890929
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer identification number)

3499 Route 9, Suite 3C, Freehold, New Jersey	07728
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code (732) 577-9997

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $.10 par value	UMH	New York Stock Exchange
6.75% Series C Cumulative Redeemable Preferred Stock, $.10 par value	UMH PRC	New York Stock Exchange
6.375% Series D Cumulative Redeemable Preferred Stock, $.10 par value	UMH PRD	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

Based upon the assumption that directors and executive officers of the registrant are not affiliates of the registrant, the aggregate market value of the voting stock of the registrant held by nonaffiliates of the registrant at June 30, 2021 was $1.0 billion. Presuming that such directors and executive officers are affiliates of the registrant, the aggregate market value of the voting stock of the registrant held by nonaffiliates of the registrant at June 30, 2021 was $961.1 million.

The number of shares outstanding of issuer’s common stock as of February 22, 2022 was 52,029,801 shares.

Documents Incorporated by Reference:

-Part III incorporates certain information by reference from the Registrant’s definitive proxy statement for the 2022 annual meeting of shareholders, which will be filed no later than 120 days after the close of the Registrant’s fiscal year ended December 31, 2021.

TABLE OF CONTENTS

PART I	3
Item 1 – Business	3
Item 1A – Risk Factors	8
Item 1B – Unresolved Staff Comments	23
Item 2 – Properties	23
Item 3 – Legal Proceedings	33
Item 4 – Mine Safety Disclosures	33
PART II	34
Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	34
Item 6 – Reserved	35
Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 7A – Quantitative and Qualitative Disclosures about Market Risk	46
Item 8 – Financial Statements and Supplementary Data	47
Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	47
Item 9A – Controls and Procedures	47
Item 9B – Other Information	50
Item 9C – Disclosure Regarding Foreign Jurisdiction that Prevent Inspections	50
PART III	50
Item 10 – Directors, Executive Officers and Corporate Governance	50
Item 11 – Executive Compensation	50
Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	50
Item 13 – Certain Relationships and Related Transactions, and Director Independence	50
Item 14 – Principal Accountant Fees and Services	50
PART IV	51
Item 15 – Exhibits, Financial Statement Schedules	51
Item 16 – Form 10-K Summary	55
SIGNATURES	56

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PART I

Item 1 – Business

General Development of Business

UMH Properties, Inc. (“UMH”), together with its predecessors and consolidated subsidiaries, are referred to herein as “we”, “us”, “our”, or “the Company”, unless the context requires otherwise.

UMH is a Maryland corporation that operates as a self-administered and self-managed qualified real estate investment trust (“REIT”) under Sections 856-860 of the Internal Revenue Code (the “Code”). The Company elected REIT status effective January 1, 1992 and intends to maintain its qualification as a REIT in the future. As a qualified REIT, with limited exceptions, the Company will not be taxed under Federal and certain state income tax laws at the corporate level on taxable income that it distributes to its shareholders. For special tax provisions applicable to REITs, refer to Sections 856-860 of the Code.

UMH was incorporated in the state of New Jersey in 1968. On September 29, 2003, UMH changed its state of incorporation from New Jersey to Maryland by merging with and into a Maryland corporation. Our executive office is located in Freehold, NJ.

Description of Business

The Company’s primary business is the ownership and operation of manufactured home communities – leasing manufactured homesites to private manufactured home owners. 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.

We have expanded our portfolio of manufactured home communities through numerous acquisitions. During 2021, the Company purchased three communities totaling 543 homesites, located in Alabama, Ohio and South Carolina, for a total purchase price of $18.3 million. During 2021, the Company also purchased one community in Florida, totaling 219 homesites, through its joint venture with Nuveen Real Estate for a total purchase price of $22.2 million. As of December 31, 2021, the Company owned and operated 127 manufactured home communities containing approximately 24,000 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan, Maryland, Alabama and South Carolina. The Company also has an ownership interest in and operates one community in Florida through its joint venture with Nuveen Real Estate (See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 5 “Investment in Joint Venture” of the Notes to Consolidated Financial Statements).

A manufactured home community is designed to accommodate detached, single-family manufactured homes. These manufactured homes are produced off-site by manufacturers and installed on sites within the communities. These homes may be improved with the addition of features constructed on-site, including garages, screened rooms and carports. Manufactured homes are available in a variety of designs and floor plans, offering many amenities and custom options. Each manufactured home owner leases the site on which the home is located from the Company. Generally, the Company owns the underlying land, utility connections, streets, lighting, driveways, common area amenities and other capital improvements and is responsible for enforcement of community guidelines and maintenance.

Manufactured homes are accepted by the public as a viable and economically attractive alternative to conventional site-built single-family housing. The affordability of the modern manufactured home makes it a very attractive housing alternative. Depending on the region of the country, prices per square foot for a new manufactured home average up to 50 percent less than a comparable site-built home, excluding the cost of land. This is due to a number of factors, including volume purchase discounts, inventory control of construction materials and control of all aspects of the construction process, which is generally a more efficient and streamlined process as compared to a site-built home.

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Modern residential land lease communities are similar to typical residential subdivisions containing central entrances, paved well-lit streets, curbs and gutters. Generally, modern manufactured home communities contain buildings for recreation, green areas, and other common area facilities, all of which are the property of the community owner. In addition to such general improvements, certain manufactured home communities include recreational improvements such as swimming pools, tennis courts and playgrounds. Municipal water and sewer services are available in some manufactured home communities, while other communities supply these facilities on-site.

Typically, our leases are on an annual or month-to-month basis, and renewable upon the consent of both parties. The community manager interviews prospective residents, collects rent and finance payments, ensures compliance with community regulations, maintains common areas and community facilities and is responsible for the overall appearance of the community. The homeowner is responsible for the maintenance of the home and leased site. As a result, our capital expenditures tend to be less significant relative to multi-family rental apartments. Manufactured home communities produce predictable income streams and provide protection from inflation due to the ability to annually increase rents.

Many of our communities compete with other manufactured home community properties located in the same or nearby markets that are owned and operated by other companies in our business. We generally monitor the rental rates and other terms being offered by our competitors and consider this information as a factor in determining our own rental rates. In addition to competing with other manufactured home community properties, our communities also compete with alternative forms of housing (such as apartments and single-family homes).

In connection with the operation of its communities, UMH also leases homes to prospective tenants. As of December 31, 2021, UMH owned a total of 8,700 rental homes, representing approximately 36% of its developed homesites. The Company engages in the rental of manufactured homes primarily in areas where the communities have existing vacancies. The rental homes produce income from both the home and the site which might otherwise be non-income producing.

Inherent in the operation of a manufactured home community is the development, redevelopment, and expansion of our communities. The Company sells and finances, through a third party lending program, the sale of manufactured homes in our communities through S&F. S&F was established to potentially enhance the value of our communities by filling sites that would otherwise be vacant. The home sales business is operated as it is with traditional homebuilders, with sales centers, model homes, an inventory of completed homes and the ability to supply custom designed homes based upon the requirements of the new homeowners. In addition, our sales centers earn a profit by selling homes to customers for placement on their own private land.

Investment and Other Policies

The Company may invest in improved and unimproved real property and may develop unimproved real property. Such properties may be located throughout the U.S. but the Company has generally concentrated on the Northeast, Midwest and Southeast. Since 2010, we have tripled the number of developed homesites by purchasing 99 communities containing approximately 17,200 homesites. We are focused on acquiring communities with significant upside potential and leveraging our expertise to build long-term capital appreciation.

Our growth strategy involves purchasing well located communities in our target markets. During 2021, we entered the Alabama and South Carolina markets by acquiring communities in those markets and acquired one community in Florida through our joint venture with Nuveen Real Estate. As part of our growth strategy, we intend to evaluate potential opportunities to expand into additional geographic markets, including certain other markets in the southeastern United States.

The Company also evaluates our properties for expansion opportunities. Development of the additional acreage available for expansion allows us to leverage existing communities and amenities. We believe our ability to complete expansions translates to greater value creation and cash flow through operating efficiencies. The Company has approximately 1,800 acres of additional land potentially available for future development. See PART I, Item 2 – Properties, for a list of our additional acreage.

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The Company seeks to finance acquisitions with the most appropriate available source of capital, including purchase money mortgages or other financing, which may be first liens, wraparound mortgages or subordinated indebtedness, sales of investments, and issuance of additional equity securities. In connection with its ongoing activities, the Company may issue notes, mortgages or other senior securities. The Company intends to use both secured and unsecured lines of credit. The Company’s joint venture with Nuveen Real Estate also provides a source of financing for acquisitions of newly developed communities.

The Company may repurchase or reacquire its shares from time to time if, in the opinion of the Board of Directors, such an acquisition is advantageous to the Company. During the year ended December 31, 2021, the Company did not repurchase any shares of its Common Stock.

In addition to its manufactured home communities, the Company also owns a portfolio of investment securities, consisting of marketable equity securities issued by other REITs, which represented 7.2% of undepreciated assets (which is the Company’s total assets excluding accumulated depreciation) at year end. The Company generally limits the portfolio to no more than approximately 15% of its undepreciated assets. These liquid real estate holdings provide diversification, additional liquidity and income, and serve as a proxy for real estate when more favorable risk adjusted returns are not available. The Company, from time to time, may purchase these securities on margin when the interest and dividend yields exceed the cost of funds.

Regulations, Insurance and Property Maintenance and Improvement

Manufactured home communities are subject to various laws, ordinances and regulations, including regulations relating to recreational facilities such as swimming pools, clubhouses and other common areas, and regulations relating to operating water and wastewater treatment facilities at several of our communities. We believe that each community has all necessary operating permits and approvals.

Our properties are insured against risks that may cause property damage and business interruption including events such as fire, business interruption, general liability and if applicable, flood. Our insurance policies contain deductible requirements, coverage limits and particular exclusions. It is the policy of the Company to maintain adequate insurance coverage on all of our properties; and, in the opinion of management, all of our properties are adequately insured. We also obtain title insurance insuring fee title to the properties in an aggregate amount which we believe to be adequate.

State and local rent control laws in certain jurisdictions may dictate the structure of rent increases and limit our ability to recover increases in operating expenses and the costs of capital improvements. In 2019, the State of New York enacted the Housing Stability and Tenant Protection Act of 2019, which, among other things, set maximum collectible rent increases. Rent control also affects two of our manufactured home communities in New Jersey. Enactment of such laws has been considered at various times in other jurisdictions. We presently expect to continue to maintain properties, and may purchase additional properties, in markets that are either subject to rent control or in which rent related legislation exists or may be enacted.

It is the policy of the Company to properly maintain, modernize, expand and make improvements to its properties when required. The Company anticipates that renovation expenditures with respect to its present properties during 2022 will be approximately $10 - $15 million.

Human Capital

The attraction, motivation and retention of our employees are critical factors in furthering the growth and financial success of the Company. We recognize that our ability to achieve the high standards we set for ourselves can best be accomplished by having a diverse team. We are committed to promoting diversity, equity and inclusion and our benefits programs are designed to achieve employee satisfaction and advancement. As of February 22, 2022, the Company had approximately 430 employees, including officers. Approximately half of our management team and 45% of our total employee population are female. Over 34% of our employees are 40 years of age or older and 31% are over 60 years of age. During each year, the Company hires additional part-time and seasonal employees as grounds keepers and lifeguards and to conduct emergency repairs.

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Our employees are fairly compensated as compared to employees of our competitors and are routinely recognized for outstanding performance. They are offered regular opportunities to participate in professional development programs which focus on building their skills and capabilities. We conduct regional training sessions and are committed to providing a safe and healthy workplace that is free from violence, intimidation and other unsafe or disruptive practices. We hold an annual employee meeting that includes safety training, as required under the federal Occupational, Safety and Health Act, as well as harassment training. The Company also offers a robust wellness program to its employees that incorporates health benefits, including incentives for enrolling in exercise classes and for gym memberships. This encourages our employees to improve their mental and physical well-being.

Information about our Executive Officers

The following table sets forth information with respect to the executive officers of the Company as of December 31, 2021:

Name	Age	Position
Eugene W. Landy	88	Chairman of the Board of Directors and Founder
Samuel A. Landy	61	President and Chief Executive Officer
Anna T. Chew	63	Vice President, Chief Financial and Accounting Officer and Treasurer
Craig Koster	46	General Counsel and Secretary
Brett Taft	32	Vice President and Chief Operating Officer

Environmental, Social and Governance (“ESG”) Considerations

The Company’s mission is to address the fundamental need of providing affordable housing and in doing so, create sustainable and environmentally friendly communities that have a positive societal impact. We recognize our obligation, as well as that of our industry, to reduce our impact on the environment and to conserve natural resources. We continually invest in energy-efficient technology where practicable, including water and energy conservation initiatives, and are committed to incorporating environmental and social considerations into our business practices to create value and enhance the communities where our residents live. We also recognize the importance of good corporate governance in ensuring the Company’s continued success and maintaining the confidence of our shareholders and financing sources. Our policies and practices are endorsed and supported by the Company’s executive management, including its Director of ESG, and are regularly reviewed by the Board of Directors and its Nominating and Corporate Governance Committee.

Summary of Risk Factors

The following is a summary of the principal risk factors associated with an investment in us. These are not the only risks we face. You should carefully consider these risk factors, together with the risk factors set forth in Item 1A. of this Annual Report on Form 10-K and other reports and documents filed by us with the SEC.

Real Estate Industry Risks:

● General economic conditions and the concentration of our properties in certain states may affect our ability to generate revenue.

● We may be unable to compete with our larger competitors for acquisitions, which may increase prices for communities.

● We may not be able to integrate or finance our acquisitions and our acquisitions may not perform as expected.

● We may be unable to finance or accurately estimate or anticipate costs and timing associated with expansion activities.

● We may be unable to sell properties when appropriate because real estate investments are illiquid.

● Our ability to sell manufactured homes may be affected by various factors, which may in turn adversely affect our profitability.

● Licensing laws and compliance could affect our profitability.

● The termination of our third party lending program could adversely affect us.

● Costs associated with taxes and regulatory compliance may reduce our revenue.

● Rent control legislation may harm our ability to increase rents.

● Environmental liabilities could affect our profitability.

● Some of our properties are subject to potential natural or other disasters.

● Climate change may adversely affect our business.

● Actions by our competitors may decrease or prevent increases in the occupancy and rental rates of our properties which could adversely affect our business.

● Losses in excess of our insurance coverage or uninsured losses could adversely affect our cash flow.

● Our investments are concentrated in the manufactured housing/residential sector and our business would be adversely affected by an economic downturn in that sector.

● Our joint venture with Nuveen Real Estate may subject us to risks, including limitations on our decision-making authority and the risk of disputes, which could adversely affect us.

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Financing Risks:

● We face risks generally associated with our debt.

● We mortgage our properties, which subjects us to the risk of foreclosure in the event of non-payment.

● We face risks associated with our dependence on external sources of capital.

● We may become more highly leveraged, resulting in increased risk of default on our obligations and an increase in debt service requirements which could adversely affect our financial condition and results of operations and our ability to pay distributions.

● Fluctuations in interest rates could materially affect our financial results.

● We may be adversely affected by the market transition away from LIBOR.

● Covenants in our credit agreements and other debt instruments could limit our flexibility and adversely affect our financial condition.

● A change in the U.S. government policy with regard to Fannie Mae and Freddie Mac could impact our financial condition.

● We face risks associated with the financing of home sales to customers in our manufactured home communities.

Risks Related to our Status as a REIT:

● If our leases are not respected as true leases for federal income tax purposes, we would fail to qualify as a REIT.

● Failure to make required distributions would subject us to additional tax.

● We may not have sufficient cash available from operations to pay distributions to our stockholders, and, therefore, distributions may be made from borrowings.

● We may be required to pay a penalty tax upon the sale of a property.

● We may be adversely affected if we fail to qualify as a REIT.

● To qualify as a REIT, we must comply with certain highly technical and complex requirements.

● There is a risk of changes in the tax law applicable to REITs.

● We may be unable to comply with the strict income distribution requirements applicable to REITs.

● Our taxable REIT subsidiary (“TRS”) is subject to special rules that may result in increased taxes.

● Notwithstanding our status as a REIT, we are subject to various federal, state and local taxes on our income and property.

General Risk Factors

● We face risks and uncertainties related to public health crises, including the COVID-19 pandemic.

● Global and regional economic conditions could materially adversely affect our business, results of operations, financial condition and growth.

● We may not be able to obtain adequate cash to fund our business.

● We are dependent on key personnel.

● Some of our directors and officers may have conflicts of interest with respect to related party transactions and other business interests.

● We may amend our business policies without stockholder approval.

● The market value of our preferred and common stock could decrease based on our performance and market perception and conditions.

● The market price and trading volume of our common stock, Series C Preferred Stock and Series D Preferred Stock may fluctuate significantly.

● The future issuance or sale of additional shares of Common Stock or Preferred Stock could adversely affect the trading prices of our outstanding Common Stock and Preferred Stock.

● Future issuances of our debt securities, which would be senior to our Series C Preferred Stock and Series D Preferred Stock upon liquidation, or preferred equity securities which may be senior to our Series C Preferred Stock and Series D Preferred Stock for purposes of dividend distributions or upon liquidation, may adversely affect the per-share trading prices of our Series C Preferred Stock or Series D Preferred Stock.

● There are restrictions on the transfer of our capital stock.

● The dual listing of our Common Stock on the NYSE and the Tel Aviv Stock Exchange (TASE) may result in price variations that could adversely affect liquidity of the market for our Common Stock.

● The existing mechanism for the dual listing of securities on the NYSE and the TASE may be eliminated or modified in a manner that may subject us to additional regulatory burden and additional costs.

● Our earnings are dependent, in part, upon the performance of our investment portfolio.

● We are subject to restrictions that may impede our ability to effect a change in control.

● We may not be able to pay distributions regularly.

● Dividends on our capital stock do not qualify for the reduced tax rates available for some dividends.

● We are subject to risks arising from litigation.

● Future terrorist attacks and military conflicts could have a material adverse effect on general economic conditions, consumer confidence and market liquidity.

● Disruptions in the financial markets could affect our ability to obtain financing on reasonable terms and have other adverse effects on us and the market price of our capital stock.

● We face risks relating to cybersecurity attacks which could adversely affect our business, cause loss of confidential information and disrupt operations.

● We are dependent on continuous access to the Internet to use our cloud-based applications.

● We face risks relating to expanding use of social media mediums.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Annual Report on Form 10-K 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.

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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;

● 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;

● 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-K and the Company’s filings with the Securities and Exchange Commission (“SEC”).

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 Annual Report on Form 10-K 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.

Available Information

Additional information about the Company can be found on the Company’s website which is located at www.umh.reit. Information contained on or hyperlinked from our website is not incorporated by reference into and should not be considered part of this Annual Report on Form 10-K or our other filings with the SEC. The Company makes available, free of charge, on or through its website, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

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Item 1A – Risk Factors

Our business faces many risks. The following risk factors may not be the only risks we face but address what we believe may be the material risks concerning our business at this time. If any of the risks discussed in this report were to occur, our business, prospects, financial condition, results of operation and our ability to service our debt and make distributions to our shareholders could be materially and adversely affected and the market price per share of our stock could decline significantly. Some statements in this report, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

Real Estate Industry Risks

General economic conditions and the concentration of our properties in certain states may affect our ability to generate sufficient revenue. The market and economic conditions in our current markets may significantly affect manufactured home occupancy or rental rates. Occupancy and rental rates, in turn, may significantly affect our revenues, and if our communities do not generate revenues sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and ability to pay or refinance our debt obligations could be adversely affected. As a result of the geographic concentration of our properties in ten states in the Eastern United States, we are exposed to the risks of downturns in the local economy or other local real estate market conditions which could adversely affect occupancy rates, rental rates, and property values in these markets.

Other factors that may affect general economic conditions or local real estate conditions include:

● the national and local economic climate, including that of the energy-market dependent Marcellus and Utica Shale regions, may be adversely impacted by, among other factors, potential restrictions on drilling, plant closings, and industry slowdowns;

● local real estate market conditions such as the oversupply of manufactured homesites or a reduction in demand for manufactured homesites in an area;

● the number of repossessed homes in a particular market;

● the lack of an established dealer network;

● the rental market which may limit the extent to which rents may be increased to meet increased expenses without decreasing occupancy rates;

● the safety, convenience and attractiveness of our properties and the neighborhoods where they are located;

● zoning or other regulatory restrictions;

● competition from other available manufactured home communities and alternative forms of housing (such as apartment buildings and single-family homes);

● our ability to provide adequate management, maintenance and insurance;

● a pandemic or other health crisis, such as the outbreak of COVID-19;

● increased operating costs, including insurance premiums, real estate taxes and utilities; and

● the enactment of rent control laws or laws taxing the owners of manufactured homes.

Our income would also be adversely affected if tenants were unable to pay rent or if sites were unable to be rented on favorable terms. If we were unable to promptly relet or renew the leases for a significant number of sites, or if the rental rates upon such renewal or reletting were significantly lower than expected rates, then our business and results of operations could be adversely affected. In addition, certain expenditures associated with each property (such as real estate taxes and maintenance costs) generally are not reduced when circumstances cause a reduction in income from the property.

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We may be unable to compete with our larger competitors for acquisitions, which may increase prices for communities. The real estate business is highly competitive. We compete for manufactured home community investments with numerous other real estate entities, such as individuals, corporations, REITs and other enterprises engaged in real estate activities. In many cases, the competing competitors may be larger and better financed than we are, making it difficult for us to secure new manufactured home community investments. Competition among private and institutional purchasers of manufactured home community investments has resulted in increases in the purchase price paid for manufactured home communities and consequently higher fixed costs. To the extent we are unable to effectively compete in the marketplace, our business may be adversely affected.

We may not be able to integrate or finance our acquisitions and our acquisitions may not perform as expected. We acquire and intend to continue to acquire manufactured home communities on a select basis. Our acquisition activities and their success are subject to risks, including the following:

● if we enter into an acquisition agreement for a property, it is usually subject to customary conditions to closing, including completion of due diligence investigations to our satisfaction, which may not be satisfied;

● we may be unable to finance acquisitions on favorable terms;

● acquired properties may fail to perform as expected;

● the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates;

● acquired properties may be located in new markets where we face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area and unfamiliarity with local governmental and permitting procedures; and

● we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations.

If any of the above were to occur, our business and results of operations could be adversely affected.

In addition, we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were to be asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our cash flow.

We may be unable to finance or accurately estimate or anticipate costs and timing associated with expansion activities. We periodically consider expansion of existing communities and development of new communities. Our expansion and development activities are subject to risks such as:

● we may not be able to obtain financing with favorable terms for community development which may make us unable to proceed with the development;

● we may be unable to obtain, or may face delays in obtaining, necessary zoning, building and other governmental permits and authorizations, which could result in increased costs and delays, and even require us to abandon development of a community entirely if we are unable to obtain such permits or authorizations;

● we may abandon development opportunities that we have already begun to explore and as a result we may not recover expenses already incurred in connection with exploring such development opportunities;

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● we may be unable to complete construction and lease-up of a community on schedule resulting in increased debt service expense and construction costs;

● we may incur construction and development costs for a community which exceed our original estimates due to increased materials, labor or other costs, which could make completion of the community uneconomical and we may not be able to increase rents to compensate for the increase in development costs which may impact our profitability;

● we may be unable to secure long-term financing on completion of development resulting in increased debt service and lower profitability; and

● occupancy rates and rents at a newly developed community may fluctuate depending on several factors, including market and economic conditions, which may result in the community not being profitable.

If any of the above were to occur, our business and results of operations could be adversely affected.

We may be unable to sell properties when appropriate because real estate investments are illiquid. Real estate investments generally cannot be sold quickly and, therefore, will tend to limit our ability to vary our property portfolio promptly in response to changes in economic or other conditions. In addition, the Code limits our ability to sell our properties. The inability to respond promptly to changes in the performance of our property portfolio could adversely affect our financial condition and ability to service our debt and make distributions to our stockholders.

Our ability to sell manufactured homes may be affected by various factors, which may in turn adversely affect our profitability. S&F operates in the manufactured home market offering homes for sale to tenants and prospective tenants of our communities. The market for the sale of manufactured homes may be adversely affected by the following factors:

● downturns in economic conditions which adversely impact the housing market;

● an oversupply of, or a reduced demand for, manufactured homes;

● the ability of manufactured home manufacturers to adapt to change in the economic climate and the availability of units from these manufacturers;

● the difficulty facing potential purchasers in obtaining affordable financing as a result of heightened lending criteria; and

● an increase or decrease in the rate of manufactured home repossessions which provide aggressively priced competition to new manufactured home sales.

Any of the above listed factors could adversely impact our rate of manufactured home sales, which would result in a decrease in profitability.

Licensing laws and compliance could affect our profitability. Our subsidiary S&F is subject to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), which requires that we obtain appropriate licenses pursuant to the Nationwide Mortgage Licensing System & Registry in each state where S&F conducts business. There are extensive federal and state requirements mandated by the SAFE Act and other laws pertaining to financing, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and there can be no assurance that we will obtain or renew our SAFE Act licenses, which could result in fees and penalties and have an adverse impact on our ability to continue with our home financing activities.

The termination of our third party lending program could adversely affect us. S&F currently relies exclusively on its third-party lending program for all loan origination and servicing activity. As a result, the termination of our third-party lending program could impact our ability to continue with our home financing activities.

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Costs associated with taxes and regulatory compliance may reduce our revenue. We are subject to significant regulation that inhibits our activities and may increase our costs. Local zoning and use laws, environmental statutes and other governmental requirements may restrict expansion, rehabilitation and reconstruction activities. These regulations may prevent us from taking advantage of economic opportunities. Legislation such as the Americans with Disabilities Act may require us to modify our properties at a substantial cost and noncompliance could result in the imposition of fines or an award of damages to private litigants. Future legislation may impose additional requirements. We cannot predict what requirements may be enacted or amended or what costs we will incur to comply with such requirements. Costs resulting from changes in real estate laws, income taxes, service or other taxes may adversely affect our funds from operations and our ability to pay or refinance our debt. Similarly, changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures, which would adversely affect our business and results of operations.

Laws and regulations also govern the provision of utility services. Such laws regulate, for example, how and to what extent owners or operators of property can charge renters for provision of utilities. Such laws can also regulate the operations and performance of utility systems and may impose fines and penalties on real property owners or operators who fail to comply with these requirements. The laws and regulations may also require capital investment to maintain compliance.

Rent control legislation may harm our ability to increase rents. State and local rent control laws in certain jurisdictions may limit our ability to increase rents and to recover increases in operating expenses and the costs of capital improvements. In 2019, the State of New York enacted the Housing Stability and Tenant Protection Act of 2019, which, among other things, set maximum collectible rent increases. Rent control also affects two of our manufactured home communities in New Jersey. Enactment of such laws has been considered at various times in other jurisdictions. We presently expect to continue to maintain properties, and may purchase additional properties, in markets that are either subject to rent control or in which rent related legislation exists or may be enacted.

Environmental liabilities could affect our profitability. Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate is liable for the costs of removal or remediation of certain hazardous substances at, on, under or in such property, as well as certain other potential costs relating to hazardous or toxic substances. Such laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous substances. A conveyance of the property, therefore, does not relieve the owner or operator from liability. As a current or former owner and operator of real estate, we may be required by law to investigate and clean up hazardous substances released at or from the properties we currently own or operate or have in the past owned or operated. We may also be liable to the government or to third parties for property damage, investigation costs and cleanup costs. In addition, some environmental laws create a lien on the contaminated site in favor of the government for damages and costs the government incurs in connection with the contamination. Contamination may adversely affect our ability to sell or lease real estate or to borrow using the real estate as collateral. Persons who arrange for the disposal or treatment of hazardous substances also may be liable for the costs of removal or remediation of such substances at a disposal or treatment facility owned or operated by another person. In addition, certain environmental laws impose liability for the management and disposal of asbestos-containing materials and for the release of such materials into the air. These laws may provide for third parties to seek recovery from owners or operators of real properties for personal injury associated with asbestos-containing materials. In connection with the ownership, operation, management, and development of real properties, we may be considered an owner or operator of such properties and, therefore, are potentially liable for removal or remediation costs, and also may be liable for governmental fines and injuries to persons and property. When we arrange for the treatment or disposal of hazardous substances at landfills or other facilities owned by other persons, we may be liable for the removal or remediation costs at such facilities. We are not aware of any environmental liabilities relating to our investment properties which would have a material adverse effect on our business, assets, or results of operations. However, we cannot assure you that environmental liabilities will not arise in the future and that such liabilities will not have a material adverse effect on our business, assets or results of operations.

Of the 127 manufactured home communities we operated as of December 31, 2021, 47 have their own wastewater treatment facility or water distribution system, or both. At these locations, we are subject to compliance with monthly, quarterly and yearly testing for contaminants as outlined by the individual state’s Department of Environmental Protection Agencies. Currently, our community-owned manufactured homes are not subject to radon or asbestos monitoring requirements.

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Additionally, in connection with the management of the properties or upon acquisition or financing of a property, the Company authorizes the preparation of Phase I or similar environmental reports (which involves general inspections without soil sampling or ground water analysis) completed by independent environmental consultants. Based upon such environmental reports and the Company’s ongoing review of its properties, as of the date of this Annual Report, the Company is not aware of any environmental condition with respect to any of its properties which it believes would be reasonably likely to have a material adverse effect on its financial condition and/or results of operations. However, these reports cannot reflect conditions arising after the studies were completed, and no assurances can be given that existing environmental studies reveal all environmental liabilities, that any prior owner or operator of a property or neighboring owner or operator did not create any material environmental condition not known to us, or that a material environmental condition does not otherwise exist as to any one or more properties.

Some of our properties are subject to potential natural or other disasters. Certain of our manufactured home communities are located in areas that may be subject to natural disasters, including our manufactured home communities in flood plains, in areas that may be adversely affected by tornados and in coastal regions that may be adversely affected by increases in sea levels or in the frequency or severity of hurricanes, tropical storms or other severe weather conditions. The occurrence of natural disasters may delay redevelopment or development projects, increase investment costs to repair or replace damaged properties, increase future property insurance costs and negatively impact the tenant demand for lease space. To the extent insurance is unavailable to us or is unavailable on acceptable terms, or our insurance is not adequate to cover losses from these events, our financial condition and results of operations could be adversely affected.

Climate change may adversely affect our business. To the extent that significant changes in the climate occur in areas where our properties are located, we may experience extreme weather and changes in precipitation and temperature, all of which may result in physical damage to or a decrease in demand for properties located in these areas or affected by these conditions. Should the impact of climate change be material in nature, including significant property damage to or destruction of our properties, or occur for lengthy periods of time, our financial condition or results of operations may be adversely affected. In addition, changes in federal, state and local legislation and regulations based on concerns about climate change could result in increased capital expenditures on our properties (for example, to improve their energy efficiency and/or resistance to inclement weather) without a corresponding increase in revenue, resulting in adverse impacts to our net income.

Actions by our competitors may decrease or prevent increases in the occupancy and rental rates of our properties which could adversely affect our business. We compete with other owners and operators of manufactured home community properties, some of which own properties similar to ours in the same submarkets in which our properties are located. The number of competitive manufactured home community properties in a particular area could have a material adverse effect on our ability to attract tenants, lease sites and maintain or increase rents charged at our properties or at any newly acquired properties. In addition, other forms of multi-family residential properties, such as private and federally funded or assisted multi-family housing projects and single-family housing, provide housing alternatives to potential tenants of manufactured home communities. If our competitors offer housing at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose potential tenants, and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants when our tenants’ leases expire.

Losses in excess of our insurance coverage or uninsured losses could adversely affect our cash flow. We generally maintain insurance policies related to our business, including casualty, general liability and other policies covering business operations, employees and assets. However, we may be required to bear all losses that are not adequately covered by insurance. In addition, there are certain losses that are not generally insured because it is not economically feasible to insure against them, including losses due to riots, acts of war or other catastrophic events. If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of our properties, then we could lose the capital we invested in the properties, as well as the anticipated profits and cash flow from the properties and, in the case of debt which is with recourse to us, we would remain obligated for any mortgage debt or other financial obligations related to the properties. Although we believe that our insurance programs are adequate, no assurance can be given that we will not incur losses in excess of our insurance coverage, or that we will be able to obtain insurance in the future at acceptable levels and reasonable cost.

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Our investments are concentrated in the manufactured housing/residential sector and our business would be adversely affected by an economic downturn in that sector. Our investments in real estate assets are primarily concentrated in the manufactured housing/residential sector. This concentration may expose us to the risk of economic downturns in this sector to a greater extent than if our business activities included a more significant portion of other sectors of the real estate industry.

Our joint venture with Nuveen Real Estate may subject us to risks, including limitations on our decision-making authority and the risk of disputes, which could adversely affect us. We have entered into a joint venture with Nuveen Real Estate to acquire manufactured home communities that are recently developed or under development. We are required to contribute 40% of the capital required for investments by this joint venture. It is possible that our joint venture partner, Nuveen Real Estate, may have business interests or goals that are different from our business interests or goals. Although we manage the joint venture and its properties, we do not have full control over decisions and require approval of Nuveen Real Estate for major decisions. As a result, we may face the risk of disputes, including potential deadlocks in making decisions. In addition, the joint venture agreement provides that until the capital contributions to the joint venture are fully funded or the joint venture is terminated, and unless Nuveen declines an acquisition proposed by us, the joint venture will be the exclusive vehicle for us to acquire any manufactured home communities that meet the joint venture’s investment guidelines.   Nuveen Real Estate will have the right to remove and replace us as managing member of the joint venture and manager of the joint venture’s properties if we breach certain obligations or certain events occur, in which event Nuveen Real Estate may elect to buy out our interest in the joint venture at 98% of its value.  There are also significant restrictions on our ability to exit the joint venture. Any of these provisions could adversely affect us.

Financing Risks

We face risks generally associated with our debt. We finance a portion of our investments in properties and marketable securities through debt. We are subject to the risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest. In addition, debt creates other risks, including:

● rising interest rates on our variable rate debt;

● inability to repay or refinance existing debt as it matures, which may result in forced disposition of assets on disadvantageous terms;

● refinancing terms less favorable than the terms of existing debt; and

● failure to meet required payments of principal and/or interest.

To the extent we cannot refinance debt on favorable terms or at all, we may be forced to dispose of properties on disadvantageous terms or pay higher interest rates, either of which would have an adverse impact on our financial performance and ability to service debt and make distributions.

We mortgage our properties, which subjects us to the risk of foreclosure in the event of non-payment. We mortgage many of our properties to secure payment of indebtedness. If we are unable to meet mortgage payments, then the property could be foreclosed upon or transferred to the mortgagee with a consequent loss of income and asset value. A foreclosure of one or more of our properties could adversely affect our financial condition, results of operations, cash flow, ability to service debt and make distributions and the market price of our preferred and common stock and any other securities we issue.

We face risks associated with our dependence on external sources of capital. In order to qualify as a REIT, we are required each year to distribute to our stockholders at least 90% of our REIT taxable income, and we are subject to tax on our income to the extent it is not distributed. Because of this distribution requirement, we may not be able to fund all future capital needs from cash retained from operations. As a result, to fund capital needs, we rely on third-party sources of capital, which we may not be able to obtain on favorable terms, if at all. Our access to third-party sources of capital depends upon a number of factors, including (i) general market conditions; (ii) the market’s perception of our growth potential; (iii) our current and potential future earnings and cash distributions; and (iv) the market price of our preferred and common stock. Additional debt financing may substantially increase our debt-to-total capitalization ratio. Additional equity issuance may dilute the holdings of our current stockholders.

We may become more highly leveraged, resulting in increased risk of default on our obligations and an increase in debt service requirements which could adversely affect our financial condition and results of operations and our ability to pay distributions. We have incurred, and may continue to incur, indebtedness in furtherance of our activities. Our governing documents do not limit the amount of indebtedness we may incur. Accordingly, our Board of Directors may vote to incur additional debt and would do so, for example, if it were necessary to maintain our status as a REIT. We could therefore become more highly leveraged, resulting in an increased risk of default on our obligations and in an increase in debt service requirements, which could adversely affect our financial condition and results of operations and our ability to pay distributions to stockholders.

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Fluctuations in interest rates could materially affect our financial results. Because a portion of our debt bears interest at variable rates, increases in interest rates could materially increase our interest expense. Interest rates currently remain substantially below historical long-term averages and may increase in the future. If the U.S. Federal Reserve increases short-term interest rates, this may have a significant upward impact on the interest rates that our variable rate debt is based upon. Potential future increases in interest rates and credit spreads may increase our interest expense and therefore negatively affect our financial condition and results of operations, and reduce our access to the debt or equity capital markets. Additionally, if we choose to hedge any interest rate risk, we cannot assure that any such hedge will be effective or that our hedging counterparty will meet its obligations to us. As a result, any increases in future interest rates could adversely affect us.

We may be adversely affected by the market transition away from the London Interbank Offered Rate (“LIBOR”). A portion of our debt bears interest at variable rates based on LIBOR for deposits of U.S. dollars. The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced that it intends to stop encouraging or requiring banks to submit LIBOR rates after 2021. On March 5, 2021, ICE Benchmark Administration (“IBA”), the administrator of LIBOR, announced plans to cease publication of USD LIBOR on December 31, 2021 for only the one week and two month USD LIBOR tenors, and on June 30, 2023 for all other USD LIBOR tenors. While this announcement extends the transition period to June 2023, it is likely that, over time, LIBOR may be replaced by the Secured Overnight Financing Rate (“SOFR”) published by the Federal Reserve Bank of New York or another alternative benchmark. We are monitoring these developments and evaluating the related risks. Although the full impact of such reforms and actions, together with the transition away from LIBOR, alternative reference rates or other reforms, remains unclear, these changes may have a material adverse impact on the availability of financing, including variable rate loans, and as a result on our financing costs.

Covenants in our credit agreements and other debt instruments could limit our flexibility and adversely affect our financial condition. The terms of our various credit agreements and other indebtedness require us to comply with a number of customary financial and other covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage. These covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness even if we had satisfied our payment obligations. If we were to default under our credit agreements, our financial condition would be adversely affected.

A change in the U.S. government policy with regard to Fannie Mae and Freddie Mac could impact our financial condition. Fannie Mae and Freddie Mac are major sources of financing for the manufactured housing real estate sector. We depend frequently on Fannie Mae and Freddie Mac to finance growth by purchasing or guaranteeing manufactured housing community loans. A decision by the government to eliminate Fannie Mae or Freddie Mac, or reduce their acquisitions or guarantees of our mortgage loans, may adversely affect interest rates, capital availability and our ability to refinance our existing mortgage obligations as they come due and obtain additional long-term financing for the acquisition of additional communities on favorable terms or at all.

We face risks associated with the financing of home sales to customers in our manufactured home communities. To produce new rental revenue and to upgrade our communities, we sell homes to customers in our communities at competitive prices and finance these home sales through S&F. We allow banks and outside finance companies the first opportunity to finance these sales. We are subject to the following risks in financing these homes:

● the borrowers may default on these loans and not be able to make debt service payments or pay principal when due;

● the default rates may be higher than we anticipate;

● demand for consumer financing may not be as great as we anticipate or may decline;

● the value of property securing the installment notes receivable may be less than the amounts owed; and

● interest rates payable on the installment notes receivable may be lower than our cost of funds.

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Additionally, there are many regulations pertaining to our home sales and financing activities. There are significant consumer protection laws and the regulatory framework may change in a manner which may adversely affect our operating results. The regulatory environment and associated consumer finance laws create a risk of greater liability from our home sales and financing activities and could subject us to additional litigation. We are also dependent on licenses granted by state and other regulatory authorities, which may be withdrawn or which may not be renewed and which could have an adverse impact on our ability to continue with our home sales and financing activities.

Risks Related to our Status as a REIT

If our leases are not respected as true leases for federal income tax purposes, we would fail to qualify as a REIT. To qualify as a REIT, we must, among other things, satisfy two gross income tests, under which specified percentages of our gross income must be certain types of passive income, such as rent. For the rent paid pursuant to our leases to qualify for purposes of the gross income tests, the leases must be respected as true leases for federal income tax purposes and not be treated as service contracts, joint ventures or some other type of arrangement. We believe that our leases will be respected as true leases for federal income tax purposes. However, there can be no assurance that the Internal Revenue Service (“IRS”) will agree with this view. If the leases are not respected as true leases for federal income tax purposes, we would not be able to satisfy either of the two gross income tests applicable to REITs, and we could lose our REIT status.

Failure to make required distributions would subject us to additional tax. In order to qualify as a REIT, we must, among other requirements, distribute, each year, to our stockholders at least 90% of our taxable income, excluding net capital gains. To the extent that we satisfy the 90% distribution requirement, but distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed income. In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions (or deemed distributions) in any year are less than the sum of:

● 85% of our ordinary income for that year;

● 95% of our capital gain net earnings for that year; and

● 100% of our undistributed taxable income from prior years.

To the extent we pay out in excess of 100% of our taxable income for any tax year, we may be able to carry forward such excess to subsequent years to reduce our required distributions for purposes of the 4% nondeductible excise tax in such subsequent years. We intend to pay out our income to our stockholders in a manner intended to satisfy the 90% distribution requirement. Differences in timing between the recognition of income and the related cash receipts or the effect of required debt amortization payments could require us to borrow money or sell assets to pay out enough of our taxable income to satisfy the 90% distribution requirement and to avoid corporate income tax.

We may not have sufficient cash available from operations to pay distributions to our stockholders, and, therefore, distributions may be made from borrowings. The actual amount and timing of distributions to our stockholders will be determined by our Board of Directors in its discretion and typically will depend on the amount of cash available for distribution, which will depend on items such as current and projected cash requirements, limitations on distributions imposed by law on our financing arrangements and tax considerations. As a result, we may not have sufficient cash available from operations to pay distributions as required to maintain our status as a REIT. Therefore, we may need to borrow funds to make sufficient cash distributions in order to maintain our status as a REIT, which may cause us to incur additional interest expense as a result of an increase in borrowed funds for the purpose of paying distributions.

We may be required to pay a penalty tax upon the sale of a property. The federal income tax provisions applicable to REITs provide that any gain realized by a REIT on the sale of property held as inventory or other property held primarily for sale to customers in the ordinary course of business is treated as income from a “prohibited transaction” that is subject to a 100% penalty tax. Under current law, unless a sale of real property qualifies for a safe harbor, the question of whether the sale of real estate or other property constitutes the sale of property held primarily for sale to customers is generally a question of the facts and circumstances regarding a particular transaction. We intend that we and our subsidiaries will hold the interests in the real estate for investment with a view to long-term appreciation, engage in the business of acquiring and owning real estate, and make occasional sales as are consistent with our investment objectives. We do not intend to engage in prohibited transactions. We cannot assure you, however, that we will only make sales that satisfy the requirements of the safe harbors or that the IRS will not successfully assert that one or more of such sales are prohibited transactions.

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We may be adversely affected if we fail to qualify as a REIT. If we fail to qualify as a REIT, we will not be allowed to deduct distributions to shareholders in computing our taxable income and will be subject to federal income tax at regular corporate rates and possibly increased state and local taxes. In addition, we might be barred from qualification as a REIT for the four years following the year of disqualification. The additional tax incurred at regular corporate rates would reduce significantly the cash flow available for distribution to shareholders and for debt service. Furthermore, we would no longer be required to make any distributions to our shareholders as a condition to REIT qualification. Any distributions to shareholders would be taxable as ordinary income to the extent of our current and accumulated earnings and profits, although such dividend distributions to non-corporate shareholders would be subject to a maximum federal income tax rate of 20% (and potentially a Medicare tax of 3.8%), provided applicable requirements of the Code are satisfied. Furthermore, corporate shareholders may be eligible for the dividends received deduction on the distributions, subject to limitations under the Code. Additionally, if we fail to qualify as a REIT, non-corporate stockholders would no longer be able to deduct up to 20% of our dividends (other than capital gain dividends and dividends treated as qualified dividend income), as would otherwise generally be permitted for taxable years beginning after December 31, 2017 and before January 1, 2026.

To qualify as a REIT, we must comply with certain highly technical and complex requirements. We cannot be certain we have complied, and will always be able to comply, with the requirements to qualify as a REIT because there are few judicial and administrative interpretations of these provisions. In addition, facts and circumstances that may be beyond our control may affect our ability to continue to qualify as a REIT. We cannot assure you that new legislation, regulations, administrative interpretations or court decisions will not change the tax laws significantly with respect to our qualification as a REIT or with respect to the Federal income tax consequences of qualification. We believe that we have qualified as a REIT since our inception and intend to continue to qualify as a REIT. However, we cannot assure you that we are so qualified or will remain so qualified.

There is a risk of changes in the tax law applicable to REITs. Because the IRS, the U.S. Treasury Department and Congress frequently review federal income tax legislation, we cannot predict whether, when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted. Numerous changes to the U.S. federal income tax laws are proposed on a regular basis. Any of such legislative action may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us and/or our investors. Additionally, the REIT rules are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department, which may result in revisions to regulations and interpretations in addition to statutory changes. Furthermore, members of the U.S. Congress and the Biden administration have expressed intent to pass legislation to change or repeal parts of currently enacted tax law, including, in particular, legislation that will increase corporate tax rates from the current flat rate of 21%. If enacted, certain proposed changes could have an adverse impact on our business and financial results. Importantly, legislation has been proposed in several states specifically taxing REITs. If such legislation were to be enacted, our income from such states would be adversely impacted.

The act popularly known as the Tax Cuts and Jobs Act of 2017 (the “TCJA”), as amended by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), has significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their shareholders. On March 27, 2020, the CARES Act, federal legislation intended to ameliorate the economic impact of the COVID-19 pandemic, was signed into law. The CARES Act made technical corrections, or temporary modifications, to certain of the provisions of the TCJA. The individual and collective impact of the changes made by the TCJA and the CARES Act on REITs and their security holders are uncertain and may not become evident for some period of time. It is also possible that additional legislation could be enacted in the future as a result of the ongoing COVID-19 pandemic which may affect the holders of our securities. Changes made by the TCJA and the CARES Act that could affect us and our shareholders include:

● temporarily reducing individual U.S. federal income tax rates on ordinary income; the highest individual U.S. federal income tax rate has been reduced from 39.6% to 37% for taxable years beginning after December 31, 2017 and before January 1, 2026;

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● permanently eliminating the progressive corporate tax rate structure, with a maximum corporate tax rate of 35%, and replacing it with a flat corporate tax rate of 21%;

● permitting a deduction for certain pass-through business income, including dividends received by our shareholders from us that are not designated by us as capital gain dividends or qualified dividend income, which will allow individuals, trusts, and estates to deduct up to 20% of such amounts for taxable years beginning after December 31, 2017 and before January 1, 2026;

● reducing the highest rate of withholding with respect to our distributions to non-U.S. stockholders that are treated as attributable to gains from the sale or exchange of U.S. real property interests from 35% to 21%;

● limiting our deduction for net operating losses (“NOLs”) to 80% of REIT taxable income (prior to the application of the dividends paid deduction) (this was modified by the CARES Act as discussed below);

● generally limiting the deduction for net business interest expense in excess of a specified percentage (50% for taxable years beginning in 2019 and 2020 and 30% for subsequent taxable years) of a business’s adjusted taxable income except for taxpayers that engage in certain real estate businesses and elect out of this rule (provided that such electing taxpayers must use an alternative depreciation system for certain property). The CARES Act increases this interest limitation to 50% for taxable years beginning in 2019 or 2020 (with special rules applicable to interest allocation from entities treated as partnerships for tax purposes) and permits an entity to elect to use its 2019 adjusted taxable income to calculate the applicable limitation for its 2020 taxable year; and

● eliminating the corporate alternative minimum tax.

The CARES Act significantly modified the treatment of NOLs. Generally, a corporate taxpayer must pay tax on its net capital gain at ordinary corporate rates and may deduct capital losses only to the extent of capital gains, though excess capital losses may be carried forward indefinitely. As discussed above, under the TCJA, corporate NOLs arising in tax years beginning after December 31, 2017, can only offset 80% of taxable income (before the dividends paid deduction). These NOLs can now be carried forward indefinitely instead of the previous 20-year limitation, and carrybacks of these losses are no longer permitted. NOLs arising in tax years beginning before December 31, 2017 retain the same rules, and can be carried back two years and forward 20 years. There is no taxable income limit to usage of such losses. The CARES Act repeals the above 80% limitation for taxable years beginning before January 1, 2021, and allows a five-year carryback for NOLs arising in 2018, 2019 or 2020. This NOL carryback does not apply directly to REITs, however, taxable REIT subsidiaries are eligible to carry back NOLs and may benefit from this provision.

The TCJA and the CARES Act are subject to potential amendments and technical corrections, as well as interpretations and implementing regulations by the United States Treasury Department and the IRS, any of which could lessen or increase certain impacts of the TCJA and/or the CARES Act. Some technical corrections, proposed regulations and final regulations have already been promulgated, some of which specifically address REITs. It is unclear how these U.S. federal income tax changes will affect state and local taxation in various states and localities, which often use federal taxable income as a starting point for computing state and local tax liabilities. You are urged to consult with your tax advisor with respect to the status of legislative, regulatory, judicial or administrative developments and proposals and their potential effect on an investment in our securities.

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We may be unable to comply with the strict income distribution requirements applicable to REITs. To maintain qualification as a REIT under the Code, a REIT must annually distribute to its stockholders at least 90% of its REIT taxable income, excluding the dividends paid deduction and net capital gains. This requirement limits our ability to accumulate capital. We may not have sufficient cash or other liquid assets to meet the distribution requirements. Difficulties in meeting the distribution requirements might arise due to competing demands for our funds or to timing differences between tax reporting and cash receipts and disbursements, because income may have to be reported before cash is received, because expenses may have to be paid before a deduction is allowed, because deductions may be disallowed or limited or because the IRS may make a determination that adjusts reported income. In those situations, we might be required to borrow funds or sell properties on adverse terms in order to meet the distribution requirements and interest and penalties could apply which could adversely affect our financial condition. If we fail to make a required distribution, we could cease to be taxed as a REIT.

Our taxable REIT subsidiary (“TRS”) is subject to special rules that may result in increased taxes. As a REIT, we must pay a 100% penalty tax on certain payments that we receive or on certain deductions taken if the economic arrangements between us and our TRS are not comparable to similar arrangements between unrelated parties. The IRS may successfully assert that the economic arrangements of any of our inter-company transactions are not comparable to similar arrangements between unrelated parties, and may assess the above 100% penalty tax or make other reallocations of income or loss. This would result in unexpected tax liability which would adversely affect our cash flows.

Notwithstanding our status as a REIT, we are subject to various federal, state and local taxes on our income and property. For example, we will be taxed at regular corporate rates on any undistributed taxable income, including undistributed net capital gains; provided, however, that properly designated undistributed capital gains will effectively avoid taxation at the stockholder level. We may be subject to other Federal income taxes and may also have to pay some state income or franchise taxes because not all states treat REITs in the same manner as they are treated for federal income tax purposes.

General Risk Factors

We face various risks and uncertainties related to public health crises, including the ongoing COVID-19 pandemic. The COVID-19 pandemic and its consequences may have a material adverse effect on us. We face various risks and uncertainties related to public health crises, including the ongoing global COVID-19 pandemic, which has disrupted financial markets and significantly impacted worldwide economic activity. The future effects of the evolving impact of the COVID-19 pandemic as well as mandatory and voluntary actions taken to mitigate the public health impact of the pandemic may have a material adverse effect on our financial condition. The COVID-19 pandemic and social and governmental responses to the pandemic have caused, and may continue to cause, severe economic, market and other disruptions worldwide. Although the COVID-19 pandemic and related societal and government responses have not, to date, had a material impact on our business or financial results, the extent to which COVID-19 and related actions may, in the future, impact our operations cannot be predicted with any degree of confidence. As a result, we cannot at this time predict the direct or indirect impact on us of the COVID-19 pandemic, but it could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.

Global and regional economic conditions could materially adversely affect the Company’s business, results of operations, financial condition and growth. Adverse macroeconomic conditions, including inflation, slower growth or recession, tighter credit, higher interest rates and high unemployment could materially adversely affect the Company’s business, results of operations, financial condition and growth. In addition, uncertainty about, or a decline in, global or regional economic conditions could have a significant impact on the Company’s suppliers.  

We may not be able to obtain adequate cash to fund our business. Our business requires access to adequate cash to finance our operations, distributions, capital expenditures, debt service obligations, development and redevelopment costs and property acquisition costs, if any. We expect to generate the cash to be used for these purposes primarily with operating cash flow, borrowings under secured and unsecured loans, proceeds from sales of strategically identified assets and, when market conditions permit, through the issuance of debt and equity securities from time to time. We may not be able to generate sufficient cash to fund our business, particularly if we are unable to renew leases, lease vacant space or re-lease space as leases expire according to our expectations.

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We are dependent on key personnel. Our executive and other senior officers have a significant role in our success. Our ability to retain our management group or to attract suitable replacements should any members of the management group leave is dependent on the competitive nature of the employment market. The loss of services from key members of the management group or a limitation in their availability could adversely affect our financial condition and cash flow. Further, such a loss could be negatively perceived in the capital markets.

Some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests. Mr. Eugene W. Landy, the Founder and Chairman of the Board of Directors of the Company, owns a 24% interest in the entity that is the landlord of the property where the Company’s corporate office space is located. Effective October 1, 2019, the Company entered into a new lease for its executive offices in Freehold, New Jersey which combines the existing corporate office space with additional adjacent office space. This new lease extends our existing lease through April 30, 2027 and requires monthly lease payments of $23,098 through April 30, 2022 and $23,302 from May 1, 2022 through April 30, 2027. The Company is also responsible for its proportionate share of real estate taxes and common area maintenance. Mr. Eugene Landy may have a conflict of interest with respect to his obligations as our officer and/or director and his ownership interest in the landlord of the property.

We may amend our business policies without stockholder approval. Our Board of Directors determines our growth, investment, financing, capitalization, borrowing, REIT status, operations and distributions policies. Although our Board of Directors has no present intention to change or reverse any of these policies, they may be amended or revised without notice to stockholders. Accordingly, stockholders may not have control over changes in our policies. We cannot assure you that changes in our policies will serve fully the interests of all stockholders.

The market value of our preferred and common stock could decrease based on our performance and market perception and conditions. The market value of our preferred and common stock may be based primarily upon the market’s perception of our growth potential and current and future cash dividends, and may be secondarily based upon the real estate market value of our underlying assets. The market price of our preferred and common stock is influenced by their respective distributions relative to market interest rates. Rising interest rates may lead potential buyers of our stock to expect a higher distribution rate, which could adversely affect the market price of our stock. In addition, rising interest rates would result in increased expense, thereby adversely affecting cash flow and our ability to service our indebtedness and pay distributions.

The market price and trading volume of our common stock may fluctuate significantly. The per-share trading price of our common stock may fluctuate. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. If the per-share trading price of our common stock declines significantly, investors in our common stock may be unable to resell their shares at or above their purchase price. We cannot provide any assurance that the per-share trading price of our common stock will not fluctuate or decline significantly in the future.

Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our stock include:

● actual or anticipated variations in our quarterly operating results or dividends;

● changes in our funds from operations or earnings estimates;

● publication of research reports about us or the real estate industry;

● prevailing interest rates;

● the market for similar securities;

● changes in market valuations of similar companies;

● adverse market reaction to any additional debt we incur in the future;

● additions or departures of key management personnel;

● actions by institutional stockholders;

● speculation in the press or investment community;

● the extent of investor interest in our securities;

● the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate-based companies;

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● our underlying asset value;

● investor confidence in the stock and bond markets, generally;

● changes in tax laws;

● future equity issuances;

● failure to meet earnings estimates;

● failure to maintain our REIT status;

● changes in valuation of our REIT securities portfolio;

● general economic and financial market conditions;

● war, terrorist acts and epidemic disease, including the ongoing COVID-19 pandemic;

● our issuance of debt or preferred equity securities;

● our financial condition, results of operations and prospects; and

● the realization of any of the other risk factors presented in this Annual Report on Form 10-K.

In the past, securities class action litigation has often been instituted against companies following periods of volatility in the price of their common stock. This type of litigation could result in substantial costs and divert our management’s attention and resources, which could have an adverse effect on our financial condition, results of operations, cash flow and per-share trading price of our common stock.

The market prices and trading volumes of our Series C Preferred Stock and Series D Preferred Stock may fluctuate significantly. Although our Series C Preferred Stock and Series D Preferred Stock are listed and traded on the NYSE, the trading markets for the Series C Preferred Stock and Series D Preferred Stock are limited. Since the Series C Preferred Stock and the Series D Preferred Stock have no maturity dates, investors seeking liquidity may elect to sell their shares of Series C Preferred Stock or Series D Preferred Stock in the secondary market. If an active trading market does not exist, the market price and liquidity of the Series C Preferred Stock or Series D Preferred Stock may be adversely affected by such sales. Even if an active public market exists, we cannot guarantee that the market price for the Series C Preferred Stock or the Series D Preferred Stock will equal or exceed the price that investors in the Series C Preferred Stock or the Series D Preferred Stock paid for their shares.

The future issuance or sale of additional shares of Common Stock or Preferred Stock could adversely affect the trading prices of our outstanding Common Stock and Preferred Stock. Future issuances or sales of substantial numbers of shares of our Common Stock or Preferred Stock in the public market, or the perception that such issuances or sales might occur, could adversely affect the per-share trading prices of our Common Stock, Series C Preferred Stock or Series D Preferred Stock. The per-share trading price of our Common Stock, Series C Preferred Stock or Series D Preferred Stock may decline significantly upon the sale or registration of additional shares of our Common Stock, Series C Preferred Stock or Series D Preferred Stock.

Future issuances of our debt securities, which would be senior to our Series C Preferred Stock and Series D Preferred Stock upon liquidation, or preferred equity securities which may be senior to our Series C Preferred Stock and Series D Preferred Stock for purposes of dividend distributions or upon liquidation, may adversely affect the per-share trading prices of our Series C Preferred Stock or Series D Preferred Stock. In the future, we may attempt to increase our capital resources by issuing additional debt securities and/or additional classes or series of preferred stock. Upon liquidation, holders of our debt securities and lenders with respect to other borrowings will be entitled to receive our available assets prior to any distribution to holders of our Series C Preferred Stock or Series D Preferred Stock. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our Series C Preferred Stock or Series D Preferred Stock. Any shares of preferred stock that we issue in the future could have a preference on liquidating distributions or a preference on dividend payments that could limit our ability to pay dividends to holders of our Series C Preferred Stock or Series D Preferred Stock. Any such future issuances may adversely affect the trading price of our Series C Preferred Stock or Series D Preferred Stock.

There are restrictions on the transfer of our capital stock. To maintain our qualification as a REIT under the Code, no more than 50% in value of our outstanding capital stock may be owned, actually or by attribution, by five or fewer individuals, as defined in the Code to also include certain entities, during the last half of a taxable year. Accordingly, our charter contains provisions restricting the transfer of our capital stock. These restrictions may discourage a tender offer or other transaction, or a change in management or of control of us that might involve a premium price for our common stock or preferred stock or that our shareholders otherwise believe to be in their best interests, and may result in the transfer of shares acquired in excess of the restrictions to a trust for the benefit of a charitable beneficiary and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares.

The dual listing of our Common Stock on the New York Stock Exchange (“NYSE”) and the Tel Aviv Stock Exchange (“TASE”) may result in price variations that could adversely affect liquidity of the market for our Common Stock. Our common stock is listed and trades on both the NYSE and the TASE. The dual listing may result in price variations of our common stock between the two exchanges due to various factors, including the use of different currencies and the different days and hours of trading for the two exchanges. Any decrease in the trading price of our common stock in one market could cause a decrease in the trading price on the other market. In addition, the dual-listing may adversely affect liquidity and trading prices on one or both of the exchanges as a result of circumstances that may be outside of our control. For example, transfers by holders of our securities from trading on one exchange to the other could result in increases or decreases in liquidity and or trading prices on either or both of the exchanges. Holders could also seek to sell or buy our Common Stock to take advantage of any price differences between the two markets through a practice referred to as arbitrage. Any such arbitrage activity could create volatility in both the price and volume of trading of our Common Stock.

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The existing mechanism for the dual listing of securities on the NYSE and the TASE may be eliminated or modified in a manner that may subject us to additional regulatory burden and additional costs. The current Israeli regulatory regime provides a mechanism for the dual-listing of securities traded on the NYSE and the TASE that does not impose any significant regulatory burden or significant costs on us. If this dual-listing regime is eliminated or modified, it may become more difficult for us to comply with the regulatory requirements, and this could result in additional costs. In such event, we may consider delisting of our common stock from the TASE.

Our earnings are dependent, in part, upon the performance of our investment portfolio. As permitted by the Code, we invest in and own securities of other REITs, which we generally limit to no more than approximately 15% of our undepreciated assets. To the extent that the value of those investments decline or those investments do not provide a return, our earnings and cash flow could be adversely affected.

We are subject to restrictions that may impede our ability to effect a change in control. Certain provisions contained in our charter and bylaws and certain provisions of Maryland law may have the effect of discouraging a third party from making an acquisition proposal for us and thereby inhibit a change in control. These provisions include the following:

● Our charter provides for three classes of directors with the term of office of one class expiring each year, commonly referred to as a “staggered board.” By preventing common stockholders from voting on the election of more than one class of directors at any annual meeting of stockholders, this provision may have the effect of keeping the current members of our Board of Directors in control for a longer period of time than stockholders may desire.

● Our charter generally limits any holder from acquiring more than 9.8% (in value or in number, whichever is more restrictive) of our outstanding equity stock (defined as all of our classes of capital stock, except our excess stock). While this provision is intended to assure our ability to remain a qualified REIT for Federal income tax purposes, the ownership limit may also limit the opportunity for stockholders to receive a premium for their shares of common stock that might otherwise exist if an investor was attempting to assemble a block of shares in excess of 9.8% of the outstanding shares of equity stock or otherwise effect a change in control.

● The request of stockholders entitled to cast at least a majority of all votes entitled to be cast at such meeting is necessary for stockholders to call a special meeting. We also require advance notice by common stockholders for the nomination of directors or proposals of business to be considered at a meeting of stockholders.

● Our Board of Directors may authorize and cause us to issue securities without shareholder approval. Under our charter, the board has the power to classify and reclassify any of our unissued shares of capital stock into shares of capital stock with such preferences, rights, powers and restrictions as the Board of Directors may determine.

● “Business combination” provisions that provide that, unless exempted, a Maryland corporation may not engage in certain business combinations, including mergers, dispositions of 10% or more of its assets, certain issuances of shares of stock and other specified transactions, with an “interested shareholder” or an affiliate of an interested shareholder for five years after the most recent date on which the interested shareholder became an interested shareholder, and thereafter unless specified criteria are met. An interested shareholder is defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof or an affiliate or associate of ours who was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our then outstanding voting stock at any time within the two-year period immediately prior to the date in question. In our charter, we have expressly elected that the Maryland Business Combination Act not govern or apply to any transaction with our affiliated company, Monmouth Real Estate Investment Corporation (“MREIC”), a Maryland corporation.

● The duties of directors of a Maryland corporation do not require them to, among other things (a) accept, recommend or respond to any proposal by a person seeking to acquire control of the corporation, (b) authorize the corporation to redeem any rights under, or modify or render inapplicable, any shareholders rights plan, (c) make a determination under the Maryland Business Combination Act or the Maryland Control Share Acquisition Act to exempt any person or transaction from the requirements of those provisions, or (d) act or fail to act solely because of the effect of the act or failure to act may have on an acquisition or potential acquisition of control of the corporation or the amount or type of consideration that may be offered or paid to the shareholders in an acquisition.

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We cannot assure you that we will be able to pay distributions regularly. Our ability to pay distributions in the future is dependent on our ability to operate profitably and to generate cash from our operations and the operations of our subsidiaries and is subject to limitations under our financing arrangements and Maryland law. Under the Maryland General Corporation Law, a Maryland corporation generally may not make a distribution if, after giving effect to the distribution, the corporation would not be able to pay its debts as the debts became due in the usual course of business, or the corporation’s total assets would be less than the sum of its total liabilities plus, unless the charter permits otherwise, the amount that would be needed if the corporation were to be dissolved at the time of the distribution to satisfy the preferential rights upon dissolution of stockholders whose preferential rights on dissolution are superior to those receiving the distribution. Accordingly, we cannot guarantee that we will be able to pay distributions on a regular quarterly basis in the future.

Dividends on our capital stock do not qualify for the reduced tax rates available for some dividends. Income from “qualified dividends” payable to U.S. stockholders that are individuals, trusts and estates are generally subject to tax at preferential rates. Dividends payable by REITs, however, generally are not eligible for the preferential tax rates applicable to qualified dividend income. Although these rules do not adversely affect our taxation or the dividends payable by us, to the extent that the preferential rates continue to apply to regular corporate qualified dividends, investors who are individuals, trusts and estates may perceive an investment in us to be relatively less attractive than an investment in the stock of a non-REIT corporation that pays dividends, which could materially and adversely affect the value of the shares of, and per share trading price of, our capital stock. It should be noted that the TCJA provides for a deduction from income for individuals, trusts and estates up to 20% of certain REIT dividends, which reduces the effective tax rate on such dividends below the effective tax rate on interest, though the deduction is generally not as favorable as the preferential rate on qualified dividends. The deduction for certain REIT dividends, unlike the favorable rate for qualified dividends, expires after 2025.

We are subject to risks arising from litigation. We may become involved in litigation. Litigation can be costly, and the results of litigation are often difficult to predict. We may not have adequate insurance coverage or contractual protection to cover costs and liability in the event we are sued, and to the extent we resort to litigation to enforce our rights, we may incur significant costs and ultimately be unsuccessful or unable to recover amounts we believe are owed to us. We may have little or no control of the timing of litigation, which presents challenges to our strategic planning.

Future terrorist attacks and military conflicts could have a material adverse effect on general economic conditions, consumer confidence and market liquidity. Among other things, it is possible that interest rates may be affected by these events. An increase in interest rates may increase our costs of borrowing, leading to a reduction in our earnings. Terrorist acts affecting our properties could also result in significant damages to, or loss of, our properties. Additionally, we may be unable to obtain adequate insurance coverage on acceptable economic terms for losses resulting from acts of terrorism. Our lenders may require that we carry terrorism insurance even if we do not believe this insurance is necessary or cost effective. Should an act of terrorism result in an uninsured loss or a loss in excess of insured limits, we could lose capital invested in a property, as well as the anticipated future revenues from a property, while remaining obligated for any mortgage indebtedness or other financial obligations related to the property. Any loss of these types would adversely affect our financial condition.

Disruptions in the financial markets could affect our ability to obtain financing on reasonable terms and have other adverse effects on us and the market price of our capital stock. Uncertainty in the stock and credit markets may negatively impact our ability to access additional financing at reasonable terms, which may negatively affect our ability to acquire properties and otherwise pursue our investment strategy. A prolonged downturn in the stock or credit markets may cause us to seek alternative sources of potentially less attractive financing, and may require us to adjust our investment strategy accordingly. These types of events in the stock and credit markets may make it more difficult or costly for us to raise capital through the issuance of the common stock, preferred stock or debt securities. The potential disruptions in the financial markets may have a material adverse effect on the market value of the common stock and preferred stock, or the economy in general. In addition, the national and local economic climate, including that of the energy-market dependent Marcellus and Utica Shale regions, may be adversely impacted by, among other factors, potential restrictions on drilling, plant closings and industry slowdowns, which may have a material adverse effect on the return we receive on our properties and investments, as well as other unknown adverse effects on us.

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We face risks relating to cybersecurity attacks which could adversely affect our business, cause loss of confidential information and disrupt operations. We rely extensively on information technology to process transactions and manage our business. In the ordinary course of our business, we collect and store sensitive data, including our business information and that of our tenants, clients, vendors and employees on our network. This data is hosted on internal, as well as external, computer systems. Our external systems are hosted by third-party service providers that may have access to such information in connection with providing necessary information technology and security and other business services to us. This information may include personally identifiable information such as social security numbers, banking information and credit card information. We employ a number of measures to prevent, detect and mitigate potential breaches or disclosure of this confidential information. We have established a Cybersecurity Subcommittee of our Audit Committee to review and provide high level guidance on cybersecurity related issues of importance to the Company. We also maintain cyber risk insurance to provide some coverage for certain risks arising out of data and network breaches. While we continue to improve our cybersecurity and take measures to protect our business, we and our third-party service providers may be vulnerable to attacks by hackers (including through malware, ransomware, computer viruses, and email phishing schemes) or breached due to employee error, malfeasance, fire, flood or other physical event, or other disruptions. Any such breach or disruption could compromise the confidential information of our employees, customers and vendors to the extent such information exists on our systems or on the systems of third-party providers. Such an incident could result in potential liability or a loss of confidence and legal claims or proceedings; damage our reputation, competitiveness, stock price and long-term value; increase remediation, cybersecurity protection and insurance premium costs; disrupt and affect our business operations; or have material adverse effects on our business.

We are dependent on continuous access to the Internet to use our cloud-based applications. Damage or failure to our information technology systems, including as a result of any of the reasons described above, could adversely affect our results of operations as we may incur significant costs or data loss. We continually assess new and enhanced information technology solutions to manage risk of system failure or interruption.

We face risks relating to expanding use of social media mediums. The use of social media could cause us to suffer brand damage or information leakage. Negative posts or comments about us or our properties on any social networking website could damage our, or our properties’ reputations. In addition, employees or others might disclose non-public sensitive information relating to our business through external media channels. The continuing evolution of social media may present us with new challenges and risks. The considerable increase in the use of social media over recent years has greatly expanded the potential scope and scale, and increased the rapidity of the dissemination of negative publicity that could be generated by negative posts and comments.

Item 1B – Unresolved Staff Comments

None.

Item 2 – Properties

UMH Properties, Inc. is engaged in the ownership and operation of manufactured home communities. As of December 31, 2021, the Company owned 127 manufactured home communities containing approximately 24,000 developed sites, located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan, Maryland, Alabama and South Carolina. The Company also has an ownership interest in and operates one community in Florida through its joint venture. The rents collectible from the land in our communities ultimately depend on the value of the home and land. Therefore, fewer but more expensive homes can actually produce the same or greater rents. There is a long-term trend toward larger manufactured homes. Existing manufactured home communities designed for older manufactured homes must be modified to accommodate modern, wider and longer manufactured homes. These changes may decrease the number of homes that may be accommodated in a manufactured home community. For this reason, the number of developed sites operated by the Company is subject to change, and the number of developed sites listed is always an approximate number. The following table sets forth certain information concerning the Company’s real estate investments as of December 31, 2021.

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Name of Community	Number of Developed Sites		Occupancy Percentage at 12/31/21			Occupancy Percentage at 12/31/20			Acreage Developed		Additional Acreage		Weighted Average Monthly Rent Per Site at 12/31/21
Allentown		434		97	%		97	%		87		18	$	513
4912 Raleigh-Millington Road
Memphis, TN 38128
Arbor Estates		230		97	%		94	%		31		-0-	$	784
1081 North Easton Road
Doylestown, PA 18902
Auburn Estates		42		95	%		93	%		13		-0-	$	394
919 Hostetler Road
Orrville, OH 44667
Bayshore Estates		206		84	%		N/A			56		-0-	$	367
105 West Shoreway Drive
Sandusky, OH 44870
Birchwood Farms		143		95	%		95	%		28		-0-	$	500
8057 Birchwood Drive
Birch Run, MI 48415
Boardwalk		195		98	%		97	%		45		-0-	$	419
2105 Osolo Road
Elkhart, IN 46514
Broadmore Estates		390		93	%		90	%		93		19	$	505
148 Broadmore Estates
Goshen, IN 46528
Brookside Village		170		82	%		80	%		37		2	$	501
107 Skyline Drive
Berwick, PA 18603
Brookview Village		172		92	%		92	%		46		64	$	580
2025 Route 9N, Lot 137
Greenfield Center, NY 12833
Camelot Village		95		96	%		92	%		32		50	$	324
2700 West 38th Street
Anderson, IN 46013
Camelot Woods		149		55	%		54	%		32		-0-	$	311
500 Earnhardt Dr.
Altoona, PA 16601
Candlewick Court		211		70	%		72	%		40		-0-	$	521
1800 Candlewick Drive
Owosso, MI 48867
Carsons		131		85	%		84	%		14		4	$	458
649 North Franklin St. Lot 116
Chambersburg, PA 17201

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Name of Community	Number of Developed Sites		Occupancy Percentage at 12/31/21			Occupancy Percentage at 12/31/20			Acreage Developed		Additional Acreage		Weighted Average Monthly Rent Per Site at 12/31/21
Catalina		462		73	%		66	%		75		26	$	476
6501 Germantown Road
Middletown, OH 45042
Cedarcrest Village		283		99	%		96	%		71		30	$	693
1976 North East Avenue
Vineland, NJ 08360
Chambersburg I & II		99		76	%		78	%		11		-0-	$	430
5368 Philadelphia Ave Lot 34
Chambersburg, PA 17201
Chelsea		84		99	%		96	%		12		-0-	$	464
459 Chelsea Lane
Sayre, PA 18840
Cinnamon Woods		62		100	%		98	%		10		67	$	569
70 Curry Avenue
Conowingo, MD 21918
City View		57		96	%		95	%		20		2	$	370
110 Fort Granville Lot C5
Lewistown, PA 17044
Clinton Mobile Home Resort		116		99	%		100	%		23		1	$	464
60 N State Route 101
Tiffin, OH 44883
Collingwood		102		85	%		90	%		20		-0-	$	504
358 Chambers Road Lot 001
Horseheads, NY 14845
Colonial Heights		160		96	%		88	%		31		1	$	370
917 Two Ridge Road
Wintersville, OH 43953
Countryside Estates		164		85	%		80	%		44		20	$	399
1500 East Fuson Road
Muncie, IN 47302
Countryside Estates		142		96	%		95	%		27		-0-	$	397
6605 State Route 5
Ravenna, OH 44266
Countryside Village/ Duck River Estates		376		92	%		89	%		79		103	$	436
200 Early Road
Columbia, TN 38401
Cranberry Village		187		98	%		98	%		36		-0-	$	639
100 Treesdale Drive
Cranberry Township, PA 16066
Crestview		98		92	%		95	%		19		-0-	$	426
Wolcott Hollow Rd & Route 220
Athens, PA 18810

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Name of Community	Number of Developed Sites		Occupancy Percentage at 12/31/21			Occupancy Percentage at 12/31/20			Acreage Developed		Additional Acreage		Weighted Average Monthly Rent Per Site at 12/31/21
Cross Keys Village		132		93	%		89	%		21		2	$	517
259 Brown Swiss Circle
Duncansville, PA 16635
Crossroads Village		34		76	%		79	%		9		-0-	$	423
549 Chicory Lane
Mount Pleasant, PA 15666
Dallas Mobile Home Community		145		92	%		86	%		21		-0-	$	298
1104 N 4th Street
Toronto, OH 43964
Deer Meadows		98		94	%		95	%		22		8	$	373
1291 Springfield Road
New Springfield, OH 44443
Deer Run		195		31	%		N/A			33		-0-	$	175
3142 Flynn Road Lot 194
Dothan, AL 36303
D & R Village		234		95	%		94	%		44		-0-	$	647
430 Route 146 Lot 65A
Clifton Park, NY 12065
Evergreen Estates		55		96	%		98	%		10		3	$	393
425 Medina Street
Lodi, OH 44254
Evergreen Manor		68		90	%		90	%		7		-0-	$	369
26041 Aurora Avenue
Bedford, OH 44146
Evergreen Village		50		86	%		92	%		10		4	$	419
9249 State Route 44
Mantua, OH 44255
Fairview Manor		317		96	%		95	%		66		132	$	729
2110 Mays Landing Road
Millville, NJ 08332
Fifty-One Estates		171		89	%		86	%		42		6	$	467
Hayden Boulevard
Elizabeth, PA 15037
Forest Creek		167		96	%		95	%		37		-0-	$	534
855 E. Mishawaka Road
Elkhart, IN 46517
Forest Park Village		246		94	%		95	%		79		-0-	$	581
102 Holly Drive
Cranberry Township, PA 16066
Fox Chapel Village		120		97	%		92	%		23		2	$	405
7 Greene Drive
Cheswick, PA 15024

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Name of Community	Number of Developed Sites		Occupancy Percentage at 12/31/21			Occupancy Percentage at 12/31/20			Acreage Developed		Additional Acreage		Weighted Average Monthly Rent Per Site at 12/31/21
Frieden Manor		193		97	%		92	%		42		22	$	535
102 Frieden Manor
Schuylkill Haven, PA 17972
Friendly Village		824		52	%		49	%		101		-0-	$	428
27696 Oregon Road
Perrysburg, OH 43551
Green Acres		24		92	%		96	%		6		-0-	$	450
4496 Sycamore Grove Road
Chambersburg, PA 17201
Gregory Courts		39		97	%		90	%		9		-0-	$	713
1 Mark Lane
Honey Brook, PA 19344
Hayden Heights		115		99	%		98	%		19		-0-	$	448
5501 Cosgray Road
Dublin, OH 43016
Heather Highlands		408		74	%		74	%		79		-0-	$	508
109 Main Street
Inkerman, PA 18640
High View Acres		154		84	%		83	%		43		-0-	$	423
399 Blue Jay Lane
Apollo, PA 15613
Highland		246		90	%		88	%		42		-0-	$	437
1875 Osolo Road
Elkhart, IN 46514
Highland Estates		317		98	%		97	%		98		65	$	653
60 Old Route 22
Kutztown, PA 19530
Hillcrest Crossing		198		80	%		75	%		60		16	$	357
100 Lorraine Drive
Lower Burrell, PA 15068
Hillcrest Estates		219		98	%		96	%		46		45	$	479
14200 Industrial Parkway
Marysville, OH 43040
Hillside Estates		89		92	%		95	%		29		20	$	394
Snyder Avenue
Greensburg, PA 15601
Holiday Village		319		79	%		90	%		36		29	$	514
201 Grizzard Avenue
Nashville, TN 37207
Holiday Village		326		87	%		85	%		53		2	$	527
1350 Co Road 3
Elkhart, IN 46514

-28-

Name of Community	Number of Developed Sites		Occupancy Percentage at 12/31/21			Occupancy Percentage at 12/31/20			Acreage Developed		Additional Acreage		Weighted Average Monthly Rent Per Site at 12/31/21
Holly Acres Estates		153		96	%		93	%		30		9	$	428
7240 Holly Dale Drive
Erie, PA 16509
Hudson Estates		159		94	%		91	%		19		-0-	$	353
100 Keenan Road
Peninsula, OH 44264
Huntingdon Pointe		76		97	%		91	%		45		4	$	329
240 Tee Drive
Tarrs, PA 15688
Independence Park		92		96	%		91	%		36		15	$	431
355 Route 30
Clinton, PA 15026
Iris Winds		142		44	%		N/A			24		-0-	$	195
1230 South Pike East Lot 144
Sumter, SC 29153
Kinnebrook		250		100	%		98	%		66		8	$	654
351 State Route 17B
Monticello, NY 12701
Lake Erie Estates		162		69	%		70	%		21		-0-	$	412
3742 East Main Street, Apt 1
Fredonia, NY 14757
Lake Sherman Village		250		95	%		94	%		63		34	$	515
7227 Beth Avenue, SW
Navarre, OH 44662
Lakeview Meadows		79		96	%		99	%		21		32	$	405
11900 Duff Road, Lot 58
Lakeview, OH 43331
Laurel Woods		208		82	%		76	%		43		-0-	$	462
1943 St. Joseph Street
Cresson, PA 16630
Little Chippewa		62		97	%		92	%		13		-0-	$	409
11563 Back Massillon Road
Orrville, OH 44667
Maple Manor		318		79	%		82	%		71		-0-	$	437
18 Williams Street
Taylor, PA 18517
Marysville Estates		306		67	%		65	%		58		-0-	$	440
548 North Main Street
Marysville, OH 43040
Meadowood		122		93	%		93	%		20		-0-	$	467
9555 Struthers Road
New Middletown, OH 44442

-29-

Name of Community	Number of Developed Sites		Occupancy Percentage at 12/31/21			Occupancy Percentage at 12/31/20			Acreage Developed		Additional Acreage		Weighted Average Monthly Rent Per Site at 12/31/21
Meadows		335		80	%		77	%		61		-0-	$	459
11 Meadows
Nappanee, IN 46550
Meadows of Perrysburg		191		97	%		93	%		47		8	$	449
27484 Oregon Road
Perrysburg, OH 43551
Melrose Village		293		95	%		91	%		71		-0-	$	410
4400 Melrose Drive, Lot 301
Wooster, OH 44691
Melrose West		29		100	%		100	%		27		3	$	422
4455 Cleveland Road
Wooster, OH 44691
Memphis Blues (1)		90		92	%		69	%		16		78	$	478
1401 Memphis Blues Avenue
Memphis, TN 38127
Monroe Valley		44		95	%		98	%		11		-0-	$	569
15 Old State Road
Jonestown, PA 17038
Moosic Heights		149		93	%		93	%		35		-0-	$	452
118 1st Street
Avoca, PA 18641
Mount Pleasant Village		114		95	%		97	%		19		-0-	$	367
549 Chicory Lane
Mount Pleasant, PA 15666
Mountaintop		39		90	%		92	%		11		2	$	656
Mountain Top Lane
Narvon, PA 17555
Mountain View (2)		-0-		N/A			N/A			-0-		220	$	-0-
Van Dyke Street
Coxsackie, NY 12501
New Colony		113		74	%		68	%		16		-0-	$	471
3101 Homestead Duquesne Road
West Mifflin, PA 15122
Northtowne Meadows		380		90	%		87	%		85		-0-	$	435
6255 Telegraph Road
Erie, MI 48133
Oak Ridge Estates		205		99	%		96	%		40		-0-	$	529
1201 Country Road 15 (Apt B)
Elkhart, IN 46514
Oakwood Lake Village		78		74	%		67	%		40		-0-	$	513
308 Gruver Lake
Tunkhannock, PA 18657

-30-

Name of Community	Number of Developed Sites		Occupancy Percentage at 12/31/21			Occupancy Percentage at 12/31/20			Acreage Developed		Additional Acreage		Weighted Average Monthly Rent Per Site at 12/31/21
Olmsted Falls		124		98	%		97	%		15		-0-	$	465
26875 Bagley Road
Olmsted Township, OH 44138
Oxford Village		224		99	%		98	%		59		2	$	750
2 Dolinger Drive
West Grove, PA 19390
Parke Place		364		98	%		97	%		94		15	$	425
2331 Osolo Road
Elkhart, IN 46514
Perrysburg Estates		133		95	%		88	%		26		7	$	393
23720 Lime City Road
Perrysburg, OH 43551
Pikewood Manor		490		88	%		84	%		86		31	$	461
1780 Lorain Boulevard
Elyria, OH 44035
Pine Ridge Village/Pine Manor		194		89	%		88	%		50		30	$	597/$612
100 Oriole Drive
Carlisle, PA 17013
Pine Valley Estates		213		82	%		77	%		38		-0-	$	413
1283 Sugar Hollow Road
Apollo, PA 15613
Pleasant View Estates		110		85	%		81	%		21		9	$	443
6020 Fort Jenkins Lane
Bloomsburg, PA 17815
Port Royal Village		476		63	%		63	%		101		-0-	$	515
485 Patterson Lane
Belle Vernon, PA 15012
Redbud Estates		580		96	%		94	%		128		21	$	280
1800 West 38th Street
Anderson, IN 46013
River Valley Estates		231		86	%		85	%		60		-0-	$	433
2066 Victory Road
Marion, OH 43302
Rolling Hills Estates		90		96	%		90	%		31		1	$	426
14 Tip Top Circle
Carlisle, PA 17015
Rostraver Estates		66		91	%		89	%		17		66	$	510
1198 Rostraver Road
Belle Vernon, PA 15012
Sandy Valley Estates		364		75	%		74	%		102		10	$	468
11461 State Route 800 N.E.
Magnolia, OH 44643

-31-

Name of Community	Number of Developed Sites		Occupancy Percentage at 12/31/21			Occupancy Percentage at 12/31/20			Acreage Developed		Additional Acreage		Weighted Average Monthly Rent Per Site at 12/31/21
Shady Hills		212		89	%		91	%		25		-0-	$	499
1508 Dickerson Pike #L1
Nashville, TN 37207
Somerset Estates/Whispering Pines		249		84	%		82	%		74		24	$	427/$509
1873 Husband Road
Somerset, PA 15501
Southern Terrace		118		99	%		100	%		26		4	$	395
1229 State Route 164
Columbiana, OH 44408
Southwind Village		250		99	%		99	%		36		-0-	$	614
435 E. Veterans Highway
Jackson, NJ 08527
Spreading Oaks Village		148		95	%		92	%		37		24	$	459
7140-29 Selby Road
Athens, OH 45701
Springfield Meadows		123		95	%		97	%		43		77	$	403
4100 Troy Road
Springfield, OH 45502
Suburban Estates		200		96	%		95	%		36		-0-	$	440
33 Maruca Drive
Greensburg, PA 15601
Summit Estates		141		97	%		98	%		25		1	$	404
3305 Summit Road
Ravenna, OH 44266
Summit Village		100		87	%		85	%		25		33	$	277
246 North 500 East
Marion, IN 46952
Sunny Acres		207		95	%		94	%		55		3	$	436
272 Nicole Lane
Somerset, PA 15501
Sunnyside		63		84	%		86	%		8		1	$	747
2901 West Ridge Pike
Eagleville, PA 19403
Trailmont		129		95	%		92	%		32		-0-	$	508
122 Hillcrest Road
Goodlettsville, TN 37072
Twin Oaks I & II		141		97	%		96	%		21		-0-	$	566
27216 Cook Road Lot 1-A
Olmsted Township, OH 44138
Twin Pines		219		92	%		84	%		48		2	$	498
2011 West Wilden Avenue
Goshen, IN 46528

-32-

Name of Community	Number of Developed Sites		Occupancy Percentage at 12/31/21			Occupancy Percentage at 12/31/20			Acreage Developed		Additional Acreage		Weighted Average Monthly Rent Per Site at 12/31/21
Valley High		75		87	%		95	%		13		16	$	393
229 Fieldstone Lane
Ruffs Dale, PA 15679
Valley Hills		267		97	%		98	%		66		67	$	398
4364 Sandy Lake Road
Ravenna, OH 44266
Valley Stream		143		78	%		77	%		37		6	$	384
60 Valley Stream
Mountaintop, PA 18707
Valley View I		104		98	%		98	%		19		-0-	$	579
1 Sunflower Drive
Ephrata, PA 17522
Valley View II		43		100	%		100	%		7		-0-	$	597
1 Sunflower Drive
Ephrata, PA 17522
Valley View – Honey Brook		144		92	%		90	%		28		13	$	703
1 Mark Lane
Honey Brook, PA 19344
Voyager Estates		259		68	%		65	%		72		20	$	391
1002 Satellite Drive
West Newton, PA 15089
Waterfalls Village		196		83	%		82	%		35		-0-	$	634
3450 Howard Road Lot 21
Hamburg, NY 14075
Wayside		82		94	%		93	%		16		5	$	355
1000 Garfield Avenue
Bellefontaine, OH 43331
Weatherly Estates		271		100	%		96	%		41		-0-	$	463
271 Weatherly Drive
Lebanon, TN 37087
Wellington Estates		206		84	%		72	%		46		1	$	336
58 Tanner Street
Export, PA 15632
Woodland Manor		148		72	%		71	%		77		-0-	$	415
338 County Route 11, Lot 165
West Monroe, NY 13167
Woodlawn Village		156		92	%		91	%		14		-0-	$	706
265 Route 35
Eatontown, NJ 07724
Woods Edge		599		59	%		58	%		151		50	$	437
1670 East 650 North
West Lafayette, IN 47906

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Name of Community	Number of Developed Sites		Occupancy Percentage at 12/31/21			Occupancy Percentage at 12/31/20			Acreage Developed		Additional Acreage		Weighted Average Monthly Rent Per Site at 12/31/21
Wood Valley		160		71	%		68	%		31		56	$	386
2 West Street
Caledonia, OH 43314
Worthington Arms		222		94	%		92	%		36		-0-	$	637
5277 Columbus Pike
Lewis Center, OH 43035
Youngstown Estates		89		64	%		66	%		14		59	$	397
999 Balmer Road
Youngstown, NY 14174
Total		24,025		86.0	%		85.0	%		5,150		1,830	$	480

(1) Community was closed due to unusual flooding throughout the region in May 2011. We are currently working on the redevelopment of this community. The total redevelopment will be 134 sites. Phase I, consisting of 39 sites, was 100% occupied as of December 31, 2018. Phase II, consisting of 51 sites, was recently completed in 2020 and in the process of being occupied. Phase III, consisting of 44 sites, is in the process of being developed.

(2) We are currently seeking site plan approvals for approximately 360 sites for this property.

The Company also has 1,830 undeveloped acres that may be developed into approximately 7,300 sites. We have approximately 3,500 sites in various stages of the approval process that may be developed over the next 7 years. Due to the uncertainties involved in the approval and construction process, it is difficult to predict the number of sites which will be completed in a given year.

In addition to the communities owned by the Company listed above, the Company’s recently-formed joint venture with Nuveen Real Estate owns a newly-developed all-age, manufactured home community named Sebring Square, located in Sebring, Florida, which was acquired in December 2021. This community contains 219 developed homesites situated on approximately 39 acres and is now open for presales.

Significant Properties

The Company operated manufactured home properties with an approximate cost of $1.2 billion as of December 31, 2021. These properties consist of 127 separate manufactured home communities and related improvements (excluding the Sebring Square community in Florida acquired in December 2021, which is operated by the Company and owned by the Company’s joint venture with Nuveen Real Estate). No single community constitutes more than 10% of the total assets of the Company. Our larger properties consist of: Friendly Village (Ohio) with 824 developed sites, Woods Edge (Indiana) with 599 developed sites, Redbud Estates (Indiana) with 580 developed sites, Pikewood Manor (Ohio) with 490 developed sites, and Port Royal Village (Pennsylvania) with 476 developed sites.

Mortgages on Properties

The Company has mortgages on many of its properties. The maturity dates of these mortgages range from 2022 to 2031, with a weighted average term of 5.2 years. Interest on these mortgages is payable at fixed rates ranging from 2.62% to 6.35%. The weighted average interest rate on our mortgages, not including the effect of unamortized debt issuance costs, was approximately 3.8% at both December 31, 2021 and 2020. The aggregate balances of these mortgages, net of unamortized debt issuance costs, totaled $452.6 million and $471.5 million at December 31, 2021 and 2020, respectively. (For additional information, see Part IV, Item 15(a) (1) (vi), Note 6 of the Notes to Consolidated Financial Statements – Loans and Mortgages Payable).

Joint Venture with Nuveen Real Estate

In December 2021, the Company and Nuveen Real Estate (“Nuveen Real Estate”), a part of Nuveen Global Investments LLC, established a joint venture for the purpose of acquiring manufactured housing and/or recreational vehicle communities that are under development and/or newly developed and meet certain other investment guidelines. Nuveen Real Estate and the Company agreed to initially fund up to $70 million of equity capital for acquisitions during a 24-month commitment period, with Nuveen Real Estate having the option, subject to certain conditions, to elect to increase the parties’ total commitments by up to an additional $100 million and to extend the commitment period for up to an additional four years. Committed capital will be funded 60% by Nuveen Real Estate and 40% by the Company on a parity basis. The Company serves as managing member of the joint venture and is responsible for day-to-day operations of the joint venture and management of its properties, subject to obtaining approval of Nuveen Real Estate for major decisions (including investments, dispositions, financings, major capital expenditures and annual budgets). The Company receives property management and other fees from the joint venture. On December 22, 2021, the joint venture closed on the acquisition of a newly developed all-age, manufactured home community named Sebring Square, located in Sebring, Florida, for a total purchase price of $22.2 million. This community contains 219 developed homesites situated on approximately 39 acres. For additional information about the Company’s joint venture with Nuveen Real Estate, see Note 5, “Investments in Joint Venture,” of the Notes to Consolidated Financial Statements.

Item 3 – Legal Proceedings

The Company is subject to claims and litigation in the ordinary course of business. For additional information about legal proceedings, see Part IV, Item 15(a)(1)(vi), Note 13 of the Notes to Consolidated Financial Statements – Commitments, Contingencies and Legal Matters.

Item 4 – Mine Safety Disclosures

Not Applicable.

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PART II

Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

The Company’s common stock and its Series C Preferred Stock and Series D Preferred Stock are traded on the New York Stock Exchange (“NYSE”), under the symbols “UMH”, “UMHPRC” and “UMHPRD”, respectively. Effective February 9, 2022, the Company’s common stock also began trading on the Tel Aviv Stock Exchange.

Shareholder Information

As of February 18, 2022, there were 1,292 registered shareholders of the Company’s common stock based on the number of record owners. Because many shares of the Company’s common stock are held by brokers and other institutions on behalf of their clients, we believe there are considerably more beneficial holders of our common stock than record holders.

Dividends

During the year ended December 31, 2021, the Company paid quarterly cash dividends to holders of its common stock of $0.19 per share. On January 12, 2022, the Company’s Board of Directors approved an increase in the quarterly cash dividend to $0.20 per share, representing an annualized dividend rate of $0.80 per share. The increase will be effective commencing with the payment to be made on March 15, 2022 to shareholders of record as of the close of business on February 15, 2022.

Recent Sales of Unregistered Equity Securities

None.

Issuer Purchases of Equity Securities

On January 13, 2021, the Board of Directors reaffirmed our Common Stock Repurchase Program (the “Repurchase Program”) that authorized us to repurchase up to $25 million in the aggregate of the Company’s common stock. Purchases under the Repurchase Program were permitted to be made using a variety of methods, which may include open market purchases, privately negotiated transactions or block trades, or by any combination of such methods, in accordance with applicable insider trading and other securities laws and regulations. The size, scope and timing of any purchases would be based on business, market and other conditions and factors, including price, regulatory and contractual requirements or consents, and capital availability. The Repurchase Program did not require the Company to acquire any particular amount of common stock and may be suspended, modified or discontinued at any time at the Company’s discretion without prior notice. Although the Repurchase Program remains in effect, during 2021, the Company did not repurchase any shares of its Common Stock.

Comparative Stock Performance

The following line graph compares the total return of the Company’s common stock for the last five years to the FTSE NAREIT All REITs Index published by the National Association of Real Estate Investment Trusts (“NAREIT”) and to the S&P 500 Index for the same period. The graph assumes a $100 investment in our common stock and in each of the indexes listed below on December 31, 2016 and the reinvestment of all dividends. The total return reflects stock price appreciation and dividend reinvestment for all three comparative indices. The information herein has been obtained from sources believed to be reliable, but neither its accuracy nor its completeness is guaranteed. Our stock performance shown in the graph below is not necessarily indicative of future stock performance.

-35-

Item 6 – Reserved

Not applicable.

Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

2021 Accomplishments

During 2021, UMH made substantial progress on multiple fronts – generating solid operating results, achieving strong growth and improving our financial position. We have:

● Increased Rental and Related Income by 11%;

● Increased Community Net Operating Income (“NOI”) by 13%;

● Increased Normalized Funds from Operations (“Normalized FFO”) by 41% and Normalized FFO per share by 24%;

● Improved our Operating Expense ratio by 130 basis points to 42.8%;

● Increased Same Property NOI by 13%;

● Increased Same Property Occupancy by 413 sites from 85.4% to 87.1% or 170 basis points;

● Increased our rental home portfolio by 454 homes to approximately 8,700 total rental homes, representing an increase of 6%;

● Increased rental home occupancy by 90 basis points from 94.6% to 95.5%;

● Increased Sales of Manufactured Homes by 34%;

● Acquired three communities containing approximately 543 homesites for a total cost of approximately $18.3 million (in addition to one community acquired in December 2021 by our joint venture with Nuveen Real Estate);

● Increased our Total Market Capitalization by 50% to $2.4 billion at yearend;

● Increased our Equity Market Capitalization by 127% to $1.4 billion at yearend;

● Reduced our Net Debt to Total Market Capitalization from 34% at 2020 to 16% at 2021;

● Issued and sold approximately 8.2 million shares of Common Stock through At-the-Market Sale Programs for our Common Stock at a weighted average price of $22.14 per share, generating gross proceeds of $182.0 million and net proceeds of $179.1 million, after offering expenses;

● Issued and sold, through an At-the-Market Sale Program for our Preferred Stock, 2.2 million shares of Series D Preferred Stock at a weighted average price of $24.89 per share, generating total gross proceeds of $54.1 million and total net proceeds of $53.2 million, after offering expenses; and

● Entered into a joint venture with Nuveen Real Estate, a TIAA company, for the purpose of development or acquisition of new manufactured housing communities, with an initial capital commitment by the joint venture partners of at least $70 million and potentially up to $170 million, 60% of which would be provided by Nuveen Real Estate and 40% of which would be provided by the Company. The joint venture acquired one community, containing approximately 219 developed home sites, for a total purchase price of $22.2 million.

-36-

Refer to the discussion below in this Item 7, Management’s Discussion and Analysis of Financial Condition, Results of Operations, and Non-GAAP Measures, contained in this Form 10-K for information regarding the presentation of community NOI, and for the presentation and reconciliation of funds from operations and normalized funds from operations to net income (loss) attributable to common shareholders.

Overview

The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the historical Consolidated Financial Statements and Notes thereto included elsewhere in this Form 10-K.

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.

As of December 31, 2021, we owned and operated 127 manufactured home communities containing approximately 24,000 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan, Maryland, Alabama and South Carolina. UMH has continued to execute our growth strategy of purchasing well-located communities in our target markets, including the energy-rich Marcellus and Utica Shale regions. During the year ended December 31, 2021, we purchased three manufactured home communities, located in Alabama, Ohio and South Carolina, for an aggregate purchase price of $18.3 million. These acquisitions added approximately 543 developed homesites to our portfolio. The Company also operates one community in Florida owned by the Company’s joint venture with Nuveen Real Estate that was formed in December 2021.

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 with Nuveen 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.

Occupancy in our properties, as well as our ability to increase rental rates, directly affects revenues. In 2021, total income increased 14% from the prior year due to the acquisition and rental programs, rent increases and the growth of our sales business and Community NOI (as defined below) increased 13% from the prior year. Overall occupancy was 86.0% and 85.0% at December 31, 2021 and 2020, respectively. Overall occupancy includes communities acquired in 2021 with an average occupancy of 59%. Same property occupancy, which includes communities owned and operated as of January 1, 2020, increased from 85.4% at December 31, 2020 to 87.1% at December 31, 2021. (Unless expressly indicated, information in this report with respect to the Company’s properties, including financial and operating results for the year ended December 31, 2021, does not include the property owned by the Company’s joint venture with Nuveen Real Estate.)

Sales of manufactured homes performed well during 2021, increasing by 34% year-over-year. Demand for quality affordable housing remains healthy. Conventional single-family home prices continue their rise supported by low inventories and increasing sales. As for-sale inventory remains limited, a large share of housing demand will be looking at alternative forms of housing. 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. During 2021, our portfolio of rental homes increased by 454 homes. Occupied rental homes represent approximately 40.2% of total occupied sites. Occupancy in rental homes continues to be strong and is at 95.5% as of December 31, 2021. 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.

-37-

The Company holds a portfolio of marketable equity securities of other REITs with a fair value of $113.7 million at December 31, 2021, representing 7.2% of our undepreciated assets (total assets excluding accumulated depreciation). The REIT securities portfolio provides the Company with additional diversification, liquidity and income, and serves as a proxy for real estate when more favorable risk adjusted returns are not available. As of December 31, 2021, 2% of the Company’s portfolio consisted of REIT preferred stocks and 98% consisted of REIT common stocks.

The Company invests in these REIT securities and, from time to time, may use margin debt when an adequate yield spread can be obtained. The Company’s weighted average yield on the securities portfolio was approximately 4.4% at December 31, 2021. At December 31, 2021, the Company had unrealized losses of $14.3 million in its REIT securities portfolio. During 2021, the Company sold positions in securities, generating realized gains of 2.3 million. It is our intent to hold these securities for investment on a long-term basis.

The Company continues to strengthen its balance sheet. During 2021, the Company raised approximately $9.8 million in new capital through the Dividend Reinvestment and Stock Purchase Plan (“DRIP”). During the year ended December 31, 2021, through an At-the-Market Sale Program for our Series C Preferred Stock and Series D Preferred Stock (the “2020 Preferred ATM Program”), the Company issued and sold a total of 2.2 million shares of our Series D Preferred Stock, generating gross proceeds of $54.1 million and net proceeds of $53.2 million, after offering expenses.

During the year ended December 31, 2021, through an At-the-Market Sale Program for our Common Stock (the “2020 Common ATM Program”), that we commenced in June 2020 and an At-the-Market Sale Program (the “2021 Common ATM Program”) that we commenced in August 2021, the Company issued and sold a total of 8.2 million shares of our Common Stock, generating gross proceeds of $182.0 million and net proceeds of $179.1 million, after offering expenses.

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.

At December 31, 2021, the Company had approximately $116.2 million in cash and cash equivalents and $50 million available on our credit facility, with an additional $50 million potentially available pursuant to an accordion feature. We also had $31.6 million available on our revolving lines of credit for the financing of home sales and the purchase of inventory and $15 million available on our line of credit secured by rental homes and rental homes leases. Subsequent to year end, the Company completed an offering to investors in Israel of $102.7 million principal amount of its 4.72% Series A Bonds due February 28, 2027.

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 making physical improvements, including adding rental homes onto otherwise vacant sites. In 2020 and 2021, we added a total of five manufactured home communities to our portfolio, encompassing approximately 850 developed sites. These manufactured home communities were acquired with an average occupancy rate of 61%. The Company will utilize the rental home program to seek to increase occupancy rates and improve operating results at these communities. In addition, on behalf of our recently-formed joint venture 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. There is no guarantee that acquisition opportunities will continue to materialize or that the Company will be able to take advantage of such opportunities. The growth of our real estate portfolio and success of the 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 and affects acquisitions, occupancy levels, rental rates and operating expenses of certain properties.

See PART I, Item 1- Business and Item 1A – Risk Factors for a more complete discussion of the economic and industry-wide factors relevant to the Company, the Company’s lines of business and principal products and services, and the opportunities, challenges and risks on which the Company is focused.

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Acquisitions in 2021 and 2020

The following table lists the property acquisitions completed by the Company during the years ended December 31, 2021 and 2020:

Community	Date of Acquisition		State		Number of Sites		Purchase Price (in thousands)		Number of Acres		Occupancy at Acquisition
Acquisitions in 2021
Deer Run		January 8, 2021		AL		195	$	4,555		33		37	%
Iris Winds		January 21, 2021		SC		142		3,445		24		49	%
Bayshore Estates		June 1, 2021		OH		206		10,300		56		86	%
Total 2021						543	$	18,300		113		59	%
Acquisitions in 2020
Camelot Woods		July 24, 2020		PA		147	$	3,340		27		56	%
Lake Erie Estates		September 21, 2020		NY		163		4,500		21		71	%
Total 2020						310	$	7,840		48		64	%

In addition to the acquisitions shown above, on December 22, 2021, the Company, on behalf of its joint venture with Nuveen Real Estate, closed on the acquisition of Sebring Square, a newly developed manufactured home community located in Sebring, Florida containing 219 developed homesites, for a total purchase price of $22.2 million. This community is situated on approximately 39 acres and is now open for occupancy. The joint venture realized minimal revenue from this community during 2021.

Results of Operations

2021 vs. 2020

Rental and related income increased from $143.3 million for the year ended December 31, 2020 to $159.0 million for the year ended December 31, 2021, or 11%. This increase was due to the acquisitions during 2020 and 2021, as well as an increase in rental rates, same property occupancy and additional rental homes. During 2021, the Company raised rental rates by 3% to 4% at most communities. Rent increases vary depending on overall market conditions and demand. Occupancy, as well as the ability to increase rental rates, directly affects revenues. The Company has been acquiring communities with vacant sites that can potentially be occupied and earn income in the future. Overall occupancy was 86.0% and 85.0% at December 31, 2021 and 2020, respectively. Overall occupancy includes communities acquired in 2021 and 2020, which had an average occupancy of 59% and 64%, respectively, at the time of acquisition. Same property occupancy has increased from 85.4% at December 31, 2020 to 87.1% at December 31, 2021. (The same property occupancy rate is exclusive of the sites at Memphis Blues, which is under redevelopment due to a flood in 2011.) Demand for rental homes continues to be strong. As of December 31, 2021, we had approximately 8,700 rental homes with an occupancy rate of 95.5%. We continue to evaluate the demand for rental homes and will invest in additional homes as demand dictates.

Community operating expenses increased from $63.2 million for the year ended December 31, 2020 to $68.0 million for the year ended December 31, 2021, or 8%. This increase was primarily due to new acquisitions, and increases in snow removal costs, tree removal, water and sewer, real estate taxes and payroll and personnel costs.

Community NOI increased from $80.2 million for the year ended December 31, 2020 to $91.0 million for the year ended December 31, 2021, or 13%. This increase was primarily due to the acquisitions during 2020 and 2021 and an increase in rental rates, occupancy and rental homes. The operating expense ratio (defined as community operating expenses divided by rental and related income) improved from 44.1% in 2020 to 42.8% for 2021. Many recently acquired communities have deferred maintenance requiring higher than normal expenditures in the first few years of ownership. In addition, expansions of our communities may require investments in infrastructure before we can generate revenue from additional sites. 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 revenues and income from continuing operations.

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Sales of manufactured homes increased from $20.3 million for the year ended December 31, 2020 to $27.1 million for the year ended December 31, 2021, or 34%. The total number of homes sold was 370 homes in 2021 as compared to 323 homes in 2020. There were 182 new homes sold in 2021 as compared to 140 in 2020. The Company’s average sales price was approximately $73,000 and $63,000 for the years ended December 31, 2021 and 2020, respectively. Cost of sales of manufactured homes increased from $14.4 million for the year ended December 31, 2020 to $20.1 million for the year ended December 31, 2021, or 39%. The gross profit percentage was 26% and 29% for 2021 and 2020, respectively. Selling expenses decreased from $4.9 million for the year ended December 31, 2020 to $4.8 million for the year ended December 31, 2021, or 3%. Gain 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) increased from a gain of $768,000 for the year ended December 31, 2020 to a gain of $2.0 million for the year ended December 31, 2021. Many of the costs associated with sales, such as rent, salaries, and to an extent, advertising and promotion, are fixed. The National Association of Realtors reported that in December 2021, sales of existing homes grew 9% from December 2020. 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 revenue and represent an investment in the upgrading of our communities.

General and administrative expenses increased from $11.1 million for the year ended December 31, 2020 to $14.1 million for the year ended December 31, 2021, or 27%. These increases were due to an increase in personnel costs, including an increase in the bonus accrual based on FFO metrics and an increase in stock-based compensation, including special restricted stock grants for the 2020 groundbreaking Fannie Mae financing. General and administrative expenses, excluding non-recurring expenses, as a percentage of gross revenue (total income plus interest, dividend and other income) was 6.2% and 6.4% at December 31, 2021 and 2020, respectively.

Depreciation expense increased from $41.7 million for the year ended December 31, 2020 to $45.1 million for the year ended December 31, 2021, or 8%. This increase was primarily due to the acquisitions and the increase in rental homes during 2021 and 2020.

Interest income increased from $2.9 million for the year ended December 31, 2020 to $3.4 million for the year ended December 31, 2021, or 15%. This increase was primarily due to an increase in the average balance of notes receivable from $40.4 million for the year ended December 31, 2020 to $48.6 million for the year ended December 31, 2021.

Dividend income decreased from $5.7 million for the year ended December 31, 2020 to $5.1 million for the year ended December 31, 2021, or 11%. This decrease was primarily due to reduced dividends from our securities holdings. Dividends received from our marketable securities investments were at a weighted average yield of approximately 4.4% and 4.7% at December 31, 2021 and 2020, respectively.

Gain on sales of marketable securities amounted to $2.3 million for the year ended December 31, 2021. Increase (decrease) in fair value of marketable securities increased from an unrealized loss of $14.1 million for the year ended December 31, 2020 to an unrealized gain of $25.1 million for the year ended December 31, 2021. As of December 31, 2021, the Company had total net unrealized losses of $14.3 million in its REIT securities portfolio.

Interest expense, including amortization of financing costs, increased from $18.3 million for the year ended December 31, 2020 to $19.2 million for the year ended December 31, 2021, or 5%. The average balance of mortgages payable was approximately $462.0 million during 2021 as compared to approximately $421.5 million during 2020. The weighted average interest rate on mortgages, not including the effect of unamortized debt issuance costs, was 3.8% at both December 31, 2021 and 2020.

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2020 vs. 2019

Rental and related income increased from $128.6 million for the year ended December 31, 2019 to $143.3 million for the year ended December 31, 2020, or 11%. This increase was due to the acquisitions during 2019 and 2020, as well as an increase in rental rates, same property occupancy and additional rental homes. During 2020, the Company raised rental rates by 3% to 4% at most communities. Rent increases vary depending on overall market conditions and demand. Occupancy, as well as the ability to increase rental rates, directly affects revenues. The Company has been acquiring communities with vacant sites that can potentially be occupied and earn income in the future. Overall occupancy was 85.0% and 82.0% at December 31, 2020 and 2019, respectively. Overall occupancy includes communities acquired in 2020 and 2019, which had an average occupancy of 64% and 62%, respectively, at the time of acquisition. Same property occupancy increased from 83.6% at December 31, 2019 to 86.8% at December 31, 2020. The same property occupancy rate is exclusive of the sites at Memphis Blues, which is under redevelopment due to a flood in 2011. As of December 31, 2020, we had approximately 8,300 rental homes with an occupancy of 94.6%.

Community operating expenses remained relatively stable increasing from $61.7 million for the year ended December 31, 2019 to $63.2 million for the year ended December 31, 2020, or 2%.

Community NOI increased from $66.9 million for the year ended December 31, 2019 to $80.2 million for the year ended December 31, 2020, or 20%. This increase was primarily due to the acquisitions during 2019 and 2020 and an increase in rental rates, occupancy and rental homes. The operating expense ratio (defined as community operating expenses divided by rental and related income) was 47.5% and 44.1%, excluding non-recurring operating expenses, for the years ended December 31, 2019 and 2020, respectively.

Sales of manufactured homes increased from $18.0 million for the year ended December 31, 2019 to $20.3 million for the year ended December 31, 2020, or 13%. The total number of homes sold was 323 homes in 2020 as compared to 299 homes in 2019. There were 140 new homes sold in 2020 as compared to 135 in 2019. The Company’s average sales price was approximately $63,000 and $60,000 for the years ended December 31, 2020 and 2019, respectively. Cost of sales of manufactured homes increased from $12.9 million for the year ended December 31, 2019 to $14.4 million for the year ended December 31, 2020, or 11%. The gross profit percentage was 29% and 28% for 2020 and 2019, respectively. Selling expenses decreased from $5.1 million for the year ended December 31, 2019 to $4.9 million for the year ended December 31, 2020, or 3%. Gain 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) increased from a loss of $290,000 for the year ended December 31, 2019 to a gain of $768,000 for the year ended December 31, 2020. Many of the costs associated with sales, such as rent, salaries, and to an extent, advertising and promotion, are fixed. The National Association of Realtors reported that in December 2020, sales of existing homes grew 22% from December 2019.

General and administrative expenses increased from $10 million for the year ended December 31, 2019 to $11.1 million for the year ended December 31, 2020, or 10%. These increases were due to an increase in personnel costs, including an increase in incentive compensation based on FFO metrics and an increase in matching contributions associated with our 401(k) Plan. General and administrative expenses, excluding non-recurring expenses, as a percentage of gross revenue (total income plus interest, dividend and other income) was 6.4% and 6.3% at December 31, 2020 and 2019, respectively.

Depreciation expense increased from $36.8 million for the year ended December 31, 2019 to $41.7 million for the year ended December 31, 2020, or 13%. This increase was primarily due to the acquisitions and the increase in rental homes during 2020 and 2019.

Interest income increased from $2.6 million for the year ended December 31, 2019 to $2.9 million for the year ended December 31, 2020, or 11%. This increase was primarily due to an increase in the average balance of notes receivable from $33.1 million for the year ended December 31, 2019 to $40.4 million for the year ended December 31, 2020.

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Dividend income decreased from $7.5 million for the year ended December 31, 2019 to $5.7 million for the year ended December 31, 2020, or 24%. This decrease was primarily due to reduced dividends from our securities holdings, as many REITs reduced their dividends in 2020 due to the COVID-19 pandemic. Dividends received from our marketable securities investments were at a weighted average yield of approximately 4.7% and 6.3% at December 31, 2020 and 2019, respectively.

Increase (decrease) in fair value of marketable securities decreased from an unrealized gain of $14.9 million for the year ended December 31, 2019 to an unrealized loss of $14.1 million for the year ended December 31, 2020. This decrease was due to the effects of the COVID-19 pandemic on prices in the securities market. As of December 31, 2020, the Company had total net unrealized losses of $39.4 million in its REIT securities portfolio.

Interest expense, including amortization of financing costs, increased from $17.8 million for the year ended December 31, 2019 to $18.3 million for the year ended December 31, 2020, or 3%. This increase was primarily due to the $106 million Fannie Mae credit facility we entered into during August 2020. The average balance of mortgages payable was approximately $421.5 million during 2020 as compared to approximately $352.4 million during 2019. The weighted average interest rate on mortgages, not including the effect of unamortized debt issuance costs, was 3.8% at December 31, 2020 as compared to 4.1% at December 31, 2019.

Non-GAAP 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”).

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 is calculated as follows (in thousands):

	2021			2020			2019
Rental and Related Income	$	159,010		$	143,344		$	128,611
Community Operating Expenses		(68,046	)		(63,175	)		(61,708	)
Community NOI	$	90,964		$	80,169		$	66,903

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 extraordinary items, as defined under U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, and the change in the fair value 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 gains and losses realized on marketable securities investments and 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.

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FFO and Normalized FFO (i) do not represent Cash Flow from Operations as defined by GAAP; (ii) should not be considered as an alternative 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. FFO and Normalized FFO, as calculated by the Company, may not be comparable to similarly titled measures reported by other REITs.

The Company’s FFO and Normalized FFO attributable to common shareholders are calculated as follows (in thousands except footnotes):

	2021			2020			2019
Net Income (Loss) Attributable to Common Shareholders	$	21,249		$	(29,759	)	$	2,566
Depreciation Expense		45,124			41,707			36,811
Loss on Sales of Investment Property and Equipment		170			216			111
(Increase) Decrease in Fair Value of Marketable Securities		(25,052	)		14,119			(14,915	)
Gain on Sales of Marketable Securities, net		(2,342	)		-0-			-0-
FFO Attributable to Common Shareholders		39,149			26,283			24,573
Adjustments:
Redemption of Preferred Stock		-0-			2,871			-0-
Non-Recurring Other Expense (1)		1,995			-0-			634
Normalized FFO Attributable to Common Shareholders	$	41,144		$	29,154		$	25,207

(1) Consists of special bonus and restricted stock grants for the August 2020 groundbreaking Fannie Mae financing, which are being expensed over the vesting period ($1.8 million) and non-recurring expenses for the joint venture ($171,000) in 2021, utility billing dispute over a prior 10-year period ($375,000), emergency windstorm tree removal expenses in three communities ($179,000) and costs associated with acquisitions not completed ($80,000) in 2019.

Liquidity and Capital Resources

The Company operates as a REIT deriving its income primarily from real estate rental operations. 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. 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 or lines of credit, proceeds from the DRIP and access to the capital markets. In addition to cash generated through operations, the Company uses a variety of sources to fund its cash needs, including acquisitions. Specifically, the Company may sell marketable securities from its investment portfolio, borrow on its unsecured credit facility or lines of credit, finance and refinance its properties, and/or raise capital through the DRIP and capital markets. In order to provide financial flexibility to opportunistically access the capital markets, the Company has implemented At-the-Market Sales Programs for both our common and preferred stock. The 2021 Common ATM Program, commenced in August 2021, allowed the Company to offer and sell shares of the Company’s common stock, having an aggregate sales price of up to $100 million from time to time through the Distribution Agents for the 2021 Common ATM Program. All shares of Common Stock available to be sold under the 2021 Common ATM Program have been sold. The Company intends to commence a new At-the-Market Sales Program for its common stock during the first quarter of 2022. The Company’s 2020 Preferred ATM Program allows the Company to offer and sell shares of the Company’s Series C Preferred Stock and/or Series D Preferred Stock, having an aggregate sales price of up to $100 million from time to time.

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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 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. 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.

The Company continues to strengthen its capital and liquidity positions and maintains financial flexibility. Through our 2020 Preferred ATM Program, the Company issued and sold a total of 2.2 million shares of our Series D Preferred Stock generating gross proceeds of $54.1 million and net proceeds after offering expenses of $53.2 million during the year ended December 31, 2021.

During the year ended December 31, 2021, the Company issued and sold 8.2 million shares of Common Stock through our 2020 Common ATM Program and our 2021 Common ATM Program at a weighted average price of $22.14 per share, generating gross proceeds of $182.0 million and net proceeds of $179.1 million, after offering expenses.

As of December 31, 2021, $4.0 million of common stock remained available for sale under the 2021 Common ATM Program and $12.2 million in shares of Series C Preferred Stock and/or Series D Preferred Stock remained available for sale under the 2020 Preferred ATM Program. Subsequent to year end, in January 2022, the Company issued and sold 300,000 shares of Common Stock under the 2021 Common ATM Program for gross proceeds of $8.0 million.

In addition, the Company has a DRIP in which participants can purchase original issue shares of common stock from the Company at a price of approximately 95% of market. During 2021, amounts received under the DRIP, including dividends reinvested of $3.5 million, totaled $9.8 million. The Company issued a total of 503,000 shares under the DRIP during 2021.

The Company also has the ability to finance home sales, inventory purchases and rental home purchases. The Company has a $20 million revolving line of credit for the financing of homes, of which $6 million was utilized at December 31, 2021, and revolving credit facilities totaling $28.5 million to finance inventory purchases, of which $10.9 million was utilized at December 31, 2021.

As of December 31, 2021, the Company had $116.2 million of cash and cash equivalents and marketable securities of $113.7 million. The Company owned 127 communities of which 28 are unencumbered. The Company’s marketable securities and non-mortgaged properties provide us with additional liquidity. As of December 31, 2021, the Company also held a 40% equity interest in its joint venture with Nuveen Real Estate, which owns one newly developed community that is unencumbered. Subsequent to year end, the Company completed an offering to investors in Israel of $102.7 million of its new unsecured 4.72% Series A Bonds due February 28, 2027. The Company believes that cash on hand, funds generated from operations, the DRIP and capital markets, the funds available on the lines of credit, together with the ability to finance and refinance its properties will provide sufficient funds to adequately meet its obligations over the next several years.

The Company’s focus is on real estate investments. The Company has historically financed purchases of real estate primarily through mortgages. During 2021, total investment property, including rental homes, increased 9% or $96.6 million. The Company made acquisitions of three manufactured home communities totaling 543 developed sites at an aggregate purchase price of $18.3 million. These acquisitions were funded by the use of our unsecured credit facility. See Note 3 of the Notes to Consolidated Financial Statements for additional information on our acquisitions and Note 6 of the Notes to Consolidated Financial Statements for related debt transactions. In addition, in December 2021, the Company’s joint venture with Nuveen Real Estate acquired one newly-developed community in Florida containing 219 developed homesites, for a total purchase price of $22.2 million, 40% of which was funded by the Company. The Company continues to evaluate acquisition opportunities. The funds for these acquisitions (including the Company’s 40% share of acquisition costs that may be incurred by the joint venture with Nuveen Real Estate) may come from bank borrowings, proceeds from the DRIP, and private placements or public offerings of debt, common or preferred stock, including under a new ATM Program for the Company’s common stock expected to be commenced in the first quarter of 2022 or the 2020 Preferred ATM Program. To the extent that funds or appropriate properties are not available, fewer acquisitions will be made.

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The Company owned approximately 8,700 rental homes, or approximately 36% of our total homesites as of December 31, 2021. During 2021, our rental home portfolio increased by 454 homes or $33.7 million. The Company markets these rental homes for sale to existing residents. The Company estimates that in 2022 it will order approximately 700-800 manufactured homes to use as rental units at its properties for a total cost, including setup, of approximately $56 million. Rental home rates on new homes range from approximately $650-$1,500 per month, including lot rent, depending on size, location and market conditions. During 2021, the Company also invested approximately $25 million in other improvements to its communities.

Additionally, the Company has investments in marketable equity securities of other REITs. The REIT securities portfolio provides the Company with additional liquidity and 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. During 2021, the securities portfolio increased 10% or $10.6 million primarily due to a net unrealized gain of $25.1 million, realized gain of $2.3 million partially offset by sales of $14.5 million. The Company had dividend income earned of $5.1 million. The Company from time to time may purchase these securities on margin when there is an adequate yield spread.

The following table summarizes cash flow activity for the years ended December 31, 2021, 2020 and 2019 (in thousands):

	2021			2020			2019
Net Cash Provided by Operating Activities	$	65,163		$	66,839		$	38,516
Net Cash Used in Investing Activities		(94,364	)		(103,770	)		(122,350	)
Net Cash Provided by Financing Activities		125,634			46,528			90,053
Net Increase in Cash, Cash Equivalents and Restricted Cash	$	96,433		$	9,597		$	6,219

Net cash provided by operating activities remained relatively stable in 2020 and 2021. Net cash provided by operating activities increased by $28.3 million in 2020 to $66.8 million. This increase was primarily due to an increase in Community NOI and a decrease in inventory in 2020 compared to an increase in 2019.

Net cash used in investing activities decreased by $9.4 million in 2021, primarily due to a decrease in acquisitions of manufactured homes and the proceeds from sales of marketable securities offset by the increase in purchase of manufactured home communities and investment in the joint venture. Net cash used in investing activities decreased by $18.6 million in 2020, primarily due to a decrease in acquisitions of manufactured homes.

Net cash provided by financing activities increased by $79.1 million in 2021 to $125.6 million. The Company received $9.8 million, including dividends reinvested, through the DRIP. In addition, the Company issued and sold 2.2 million shares of its Series D Preferred Stock during 2021 through the 2020 Preferred ATM Program, raising net proceeds of approximately $53.2 million. The Company also issued and sold 8.2 million shares of its Common Stock during 2021 through the 2020 Common ATM Program and 2021 Common ATM Program, raising net proceeds of approximately $179.1 million. During 2021, the Company distributed to our common shareholders a total of $35.0 million, including dividends reinvested. In addition, the Company also paid $29.8 million in preferred dividends.

Net cash provided by financing activities decreased by $43.5 million in 2020 to $46.5 million. The Company obtained new mortgages of $106 million. The Company also received $9.2 million, including dividends reinvested, through the DRIP. In addition, in 2020 the Company issued and sold 134,000 shares of its Series C Preferred Stock and 3.8 million shares of its Series D Preferred Stock through the 2019 Preferred ATM Program (described below) and the 2020 Preferred ATM Program, raising net proceeds during 2020 of approximately $96.1 million. The Company also issued and sold 135,000 shares of its Common Stock through the 2020 Common ATM Program, raising net proceeds of approximately $1.7 million. In October 2020, the Company voluntarily redeemed all of its Series B Preferred Stock for approximately $96.1 million. During 2020, the Company distributed to our common shareholders a total of $29.8 million, including dividends reinvested. In addition, the Company also paid $31.9 million in preferred dividends.

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Cash flows were primarily used for purchases of manufactured home communities, capital improvements, payment of dividends, purchases of marketable securities, purchase of inventory and rental homes, loans to customers for the sales of manufactured homes, and expansion of existing communities. The Company meets maturing mortgage obligations by using a combination of cash flows and refinancing. The dividend payments were primarily made from cash flows from operations.

Cash flows used for capital improvements include amounts needed to meet environmental and regulatory requirements in connection with the manufactured home communities that provide water or sewer service. Excluding expansions and rental home purchases, the Company is budgeting approximately $15 million in capital improvements for 2022.

The Company’s significant commitments and contractual obligations relate to its mortgages, loans payable and other indebtedness, acquisitions of manufactured home communities, retirement benefits, and the lease on its corporate offices as described in Note 9 to the Consolidated Financial Statements.

The Company has approximately 1,800 acres of undeveloped land which it could develop over the next several years. The Company continues to analyze the best use of its vacant land.

As of December 31, 2021, the Company had total assets of $1.3 billion and total liabilities of $528.7 million. Our net debt (net of cash and cash equivalents) to total market capitalization as of December 31, 2021 and 2020 was approximately 16% and 34%, respectively. Our net debt, less securities (net of cash and cash equivalents and marketable securities) to total market capitalization as of December 31, 2021 and 2020 was approximately 11% and 28%, respectively.

The Company believes that it has the ability to meet its obligations and to generate funds for new investments.

Contractual Obligations

The Company has an investment in its joint venture with Nuveen Real Estate which is accounted for under the equity method of accounting as we have the ability to exercise significant influence, but not control, over the operating and financial decisions for the joint venture. The terms of the joint venture require the Company to fund 40% of the total capital contributions made by the members to the joint venture. See Note 5, “Investments in Joint Venture,” of the Notes to Consolidated Financial Statements for additional information.

Our other primary contractual obligations relate to our loans and mortgages payable and other indebtedness and our operating lease obligations. See Note 2 “Summary of Significant Accounting Policies”, Note 6 “Loans and Mortgages Payable” and Note 9 “Related Party Transactions and Other Matters” of the Notes to Consolidated Financial Statements for additional information.

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 94% of January 2022 site and home rent as of today’s date. Some of our residents benefitted from the federal government’s funding of the Emergency Rental Assistance Programs that were enacted in each state.

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.

Critical 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 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.

Significant accounting policies are defined as those that involve significant judgment and potentially could result in materially different results under different assumptions and conditions. Management believes the following critical accounting policy is affected by our more significant judgments and estimates used in the preparation of the Company’s consolidated financial statements. For a detailed description of this and other accounting policies, see Note 2 of the Notes to Consolidated Financial Statements included in this Form 10-K.

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Impairment in Real Estate Investments

The Company applies Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10, Property, Plant & Equipment (“ASC 360-10”) to measure impairment in real estate investments. The Company’s primary indicator of potential impairment is based on net operating income trends year over year. Rental properties are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (on an undiscounted basis without interest) from a rental property is less than the carrying value under its historical net cost basis. These expected future cash flows consider factors such as future operating income, trends and prospects as well as the effects of leasing demand, competition and other factors. Upon determination that an other than temporary impairment has occurred, rental properties are reduced to their fair value. For properties to be disposed of, an impairment loss is recognized when the fair value of the property, less the estimated cost to sell, is less than the carrying amount of the property measured at the time there is a commitment to sell the property and/or it is actively being marketed for sale. A property to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Subsequent to the date that a property is held for disposition, depreciation expense is not recorded.

The Company conducted a comprehensive review of all real estate asset classes in accordance with ASC 360-10-35-21, which indicates that asset values should be analyzed whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. The process entailed the analysis of property for instances where the net book value exceeds the estimated fair value. In accordance with ASC 360-10-35-17, an impairment loss shall be recognized if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. The Company utilizes the experience and knowledge of its internal valuation team to derive certain assumptions used to determine an operating property’s cash flow. Such assumptions include lease-up rates, rental rates, rental growth rates, and capital expenditures. The Company reviewed its operating properties in light of the requirements of ASC 360-10 and determined that, as of December 31, 2021, the undiscounted cash flows over the holding period for these properties were in excess of their carrying values and, therefore, no impairment charges were required.

Recent Accounting Pronouncements

See Note 2 of the Notes to Consolidated Financial Statements.

Item 7A – Quantitative and Qualitative Disclosures about Market Risk

As of December 31, 2021, we were exposed to risks associated with adverse changes in market prices and interest rates. The Company’s principal market risk exposure is interest rate risk. The Company’s future income, cash flows and fair values relevant to financial instruments are dependent upon prevalent market interest rates. Many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond the Company’s control contribute to interest rate risk. The Company mitigates this risk by maintaining prudent amounts of leverage, minimizing capital costs and interest expense while continuously evaluating all available debt and equity resources and following established risk management policies and procedures, which may include the periodic use of derivatives. The Company’s primary strategy in entering into derivative contracts is to minimize the variability that changes in interest rates could have on its future cash flows. The Company generally employs derivative instruments that effectively convert a portion of its variable rate debt to fixed rate debt. The Company does not enter into derivative instruments for speculative purposes.

The following table sets forth information as of December 31, 2021, concerning the Company’s mortgages and loans payable, including principal cash flow by scheduled maturity, weighted average interest rates and estimated fair value (in thousands).

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	Mortgages Payable					Loans Payable
	Carrying Value		Weighted Average Interest Rate			Carrying Value		Weighted Average Interest Rate
2022	$	6,523		4.75	%	$	46,945		2.66	%
2023		63,437		3.88	%		-0-		-0-	%
2024		-0-		-0-	%		-0-		-0-	%
2025		128,501		4.06	%		-0-		-0-	%
2026		39,388		4.04	%		-0-		-0-	%
Thereafter		218,853		2.20	%		-0-		-0-	%
Total	$	456,702		3.75	%(1)	$	46,945		2.66	%(1)
Estimated Fair Value	$	458,389				$	46,945

⁽¹⁾ Weighted average interest rate, not including the effect of unamortized debt issuance costs. The weighted average interest rate, including the effect of unamortized debt issuance costs, at December 31, 2021 was 3.79% for mortgages payable and 2.67% for loans payable.

All mortgage loans are at fixed rates. The Company has approximately $46.9 million in variable rate loans payable. If short-term interest rates increased or decreased by 1%, interest expense would have increased or decreased by approximately $469,000.

The Company invests in equity securities of other REITs and is primarily exposed to market price risk from adverse changes in market rates and conditions. The Company generally limits its marketable securities investments to no more than approximately 15% of its undepreciated assets. All securities are carried at fair value.

Item 8 – Financial Statements and Supplementary Data

The financial statements and supplementary data listed in Part IV, Item 15(a)(1) and included immediately following the signature pages to this report are incorporated herein by reference.

Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There were no changes in, or any disagreements with, the Company’s independent registered public accounting firm on accounting principles and practices or financial disclosure during the years ended December 31, 2021 and 2020.

Item 9A – Controls and Procedures

Disclosure Controls and Procedures

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Securities Exchange Act of 1934 Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information that would potentially be subject to disclosure under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder as of December 31, 2021.

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Internal Control over Financial Reporting

(a) Management’s Annual Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). The Company’s internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, including the possibility of collusion or improper management override of controls, internal control over financial reporting may not prevent or detect misstatements.

Management assessed the Company’s internal control over financial reporting as of December 31, 2021. This assessment was based on criteria for effective internal control over financial reporting established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013 framework). Based on this assessment, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2021.

PKF O’Connor Davies, LLP, the Company’s independent registered public accounting firm, has issued their report on their audit of the Company’s internal control over financial reporting, a copy of which is included herein.

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(b) Attestation Report of the Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

UMH Properties, Inc.

Opinion on Internal Control over Financial Reporting

We have audited UMH Properties, Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control–Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, and the related consolidated statements of income (loss), comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and our report dated February 24, 2022, expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

	/s/ PKF O’Connor Davies, LLP
February 24, 2022
New York, New York

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(c) Changes in Internal Control over Financial Reporting

There have been no changes to our internal control over financial reporting during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Item 9B – Other Information

None.

Item 9C – Disclosure Regarding Foreign Jurisdiction that Prevent Inspections

Not applicable.

PART III

Item 10 – Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated herein by reference to the definitive proxy statement for the Company’s 2022 annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A and the information included under the caption “ Information about our Executive Officers” in Part I hereof, in accordance with General Instruction G(3) to Form 10-K.

Item 11 – Executive Compensation

The information required by this item is incorporated herein by reference to the definitive proxy statement for the Company’s 2022 annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A, in accordance with General Instruction G(3) to Form 10-K.

Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated herein by reference to the definitive proxy statement for the Company’s 2022 annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A, in accordance with General Instruction G(3) to Form 10-K.

Item 13 – Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated herein by reference to the definitive proxy statement for the Company’s 2022 annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A, in accordance with General Instruction G(3) to Form 10-K.

Item 14 – Principal Accountant Fees and Services

The information required by this item is incorporated herein by reference to the definitive proxy statement for the Company’s 2022 annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A, in accordance with General Instruction G(3) to Form 10-K.

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PART IV

Item 15 – Exhibits, Financial Statement Schedules

			Page(s)
(a) (1)		The following Financial Statements are filed as part of this report.
	(i)	Report of Independent Registered Public Accounting Firm (PCAOB ID No. 127)	57-58
	(ii)	Consolidated Balance Sheets as of December 31, 2021 and 2020	59-60
	(iii)	Consolidated Statements of Income (Loss) for the years ended December 31, 2021, 2020 and 2019	61-62
	(iv)	Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2021, 2020 and 2019	63-64
	(v)	Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019	65
	(vi)	Notes to Consolidated Financial Statements	66-96
(a) (2)		The following Financial Statement Schedule is filed as part of this report:
	(i)	Schedule III – Real Estate and Accumulated Depreciation as of December 31, 2021	97-106

All other schedules are omitted for the reason that they are not required, are not applicable, or the required information is set forth in the consolidated financial statements or notes thereto.

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(a) (3) The Exhibits set forth in the following index of Exhibits are filed as part of this Report.

Exhibit No.	Description
(2)	Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
2.1	Agreement and Plan of Merger dated as of June 23, 2003 (incorporated by reference from the Company’s Definitive Proxy Statement as filed with the Securities and Exchange Commission on July 10, 2003, Registration No. 001-12690).
(3)	Articles of Incorporation and By-Laws
3.1	Articles of Incorporation of UMH Properties, Inc., a Maryland corporation (incorporated by reference from the Company’s Definitive Proxy Statement as filed with the Securities and Exchange Commission on July 10, 2003, Registration No. 001-12690).
3.2	Amendment to Articles of Incorporation (incorporated by reference to the 8-K as filed by the Registrant with the Securities and Exchange Commission on April 3, 2006, Registration No. 001-12690).
3.3	Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on May 26, 2011, Registration No. 001-12690).
3.4	Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on May 26, 2011, Registration No. 001-12690).
3.5	Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on April 10, 2012, Registration No. 001-12690).
3.6	Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on April 10, 2012, Registration No. 001-12690).
3.7	Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 31, 2012, Registration No. 001-12690).
3.8	Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 31, 2012, Registration No. 001-12690).
3.9	Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 20, 2015, Registration No. 001-12690).
3.10	Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 20, 2015, Registration No. 001-12690).
3.11	Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on April 5, 2016, Registration No. 001-12690).

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Exhibit No.	Description
3.12	Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on April 5, 2016, Registration No. 001-12690).
3.13	Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on August 11, 2016, Registration No. 001-12690).
3.14	Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on June 5, 2017, Registration No. 001-12690).
3.15	Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on July 26, 2017, Registration No. 001-12690).
3.16	Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on July 26, 2017, Registration No. 001-12690).
3.17	Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on January 22, 2018, Registration No. 001-12690).
3.18	Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on April 29, 2019, Registration No. 001-12690).
3.19	Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on April 29, 2019, Registration No. 001-12690).
3.20	Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 22, 2019, Registration No. 001-12690).
3.21	Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 22, 2019, Registration No. 001-12690).
3.22	Amendment to Articles of Incorporation (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on May 18, 2020, Registration No. 001-12690).
3.23	Articles Supplementary (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on July 16, 2020, Registration No. 001-12690).
3.24	Bylaws of the Company, as amended and restated, dated March 31, 2014 (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on March 31, 2014, Registration No. 001-12690).
(4)	Instruments Defining the Rights of Security Holders, Including Indentures

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Exhibit No.		Description
4.1		Specimen certificate of common stock of UMH Properties, Inc. (incorporated by reference to Exhibit 4.1 to the Form S-3 as filed by the Registrant with the Securities and Exchange Commission on December 21, 2010, Registration No. 333-171338).
4.2		Specimen certificate representing the Series C Preferred Stock of UMH Properties, Inc. (incorporated by reference to Exhibit 4.2 to the Form 8-A12B as filed by the Registrant with the Securities and Exchange Commission on July 26, 2018, Registration No. 001-12690).
4.3		Specimen certificate representing the Series D Preferred Stock of UMH Properties, Inc. (incorporated by reference to Exhibit 4.2 to the Form 8-A12B as filed by the Registrant with the Securities and Exchange Commission on January 22, 2018, Registration No. 001-12690).
4.4	*	Deed of Trust for the 4.72% Series A Bonds due 2027 between UMH Properties, Inc. and Reznik Paz Nevo Trusts Ltd., as trustee, dated as of January 31, 2022
4.5	*	Description of the Company’s Securities Registered Under Section 12 of the Securities Exchange Act of 1934.
(10)		Material Contracts
10.1	+	Employment Agreement with Mr. Eugene W. Landy dated December 14, 1993 (incorporated by reference to the Company’s 1993 Form 10-K as filed with the Securities and Exchange Commission on March 28, 1994).
10.2	+	Amendment to Employment Agreement with Mr. Eugene W. Landy effective January 1, 2004 (incorporated by reference to the Company’s 2004 Form 10-K/A as filed with the Securities and Exchange Commission on March 30, 2005, Registration No. 001-12690).
10.3	+	Second Amendment to Employment Agreement of Eugene W. Landy, dated April 14, 2008 (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on April 16, 2008, Registration No. 001-12690).
10.4	+	Third Amendment to Employment Agreement with Mr. Eugene W. Landy effective October 1, 2014 (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 8, 2014, Registration No. 001-12690).
10.5	+	Amended and Restated Employment Agreement Effective January 1, 2018, between UMH Properties, Inc. and Samuel A. Landy (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on April 13, 2018, Registration No. 001-12690).
10.6	+	Amended and Restated Employment Agreement Effective January 1, 2018, between UMH Properties, Inc. and Anna T. Chew (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on April 13, 2018, Registration No. 001-12690).
10.7	+	Form of Indemnification Agreement between UMH Properties, Inc. and its Directors and Executive Officers (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on April 23, 2012, Registration No. 001-12690).
10.8	+	UMH Properties, Inc. Amended and Restated 2013 Incentive Award Plan (incorporated by reference to the Company’s Definitive Proxy Statement (DEF 14A) as filed with the Securities and Exchange Commission on April 20, 2018, Registration No. 001-12690).
10.9		Reserved.
10.10		Dividend Reinvestment and Stock Purchase Plan (incorporated by reference to the Company’s Registration Statement filed on Form S-3D as filed with the Securities and Exchange Commission on June 17, 2019, Registration No. 333-232162).

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Exhibit No.		Description
10.11		Amended and Restated Credit Agreement by and among UMH Properties, Inc. and Bank of Montreal dated March 28, 2018 (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 4, 2018, Registration No. 001-12690).
10.12		Equity Distribution Agreement by and between UMH Properties, Inc. and BMO Capital Markets Corp., B. Riley FBR, Inc., Compass Point Research & Trading LLC, D.A. Davidson & Co., Janney Montgomery Scott LLC, and J.P. Morgan Securities LLC (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on June 30, 2020, Registration No. 001-12690).
10.13		At-the-Market Sales Agreement by and between UMH Properties, Inc. and B. Riley Securities, Inc. (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on July 22, 2020, Registration No. 001-12690).
10.14		Equity Distribution Agreement by and between UMH Properties, Inc. and BMO Capital Markets Corp., B. Riley FBR, Inc., Compass Point Research & Trading LLC, Janney Montgomery Scott LLC, and J.P. Morgan Securities LLC (incorporated by reference to the Form 8-K as filed by the Registrant with the Securities and Exchange Commission on August 17, 2021, Registration No. 001-12690).
(21)	*	Subsidiaries of the Registrant.
(23)	*	Consent of PKF O’Connor Davies, LLP.
(31.1)	*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(31.2)	*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32)	*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(101)		Interactive Data File
	++	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	++	Inline XBRL Taxonomy Extension Schema Document
101.CAL	++	Inline XBRL Taxonomy Extension Calculation Document
101.LAB	++	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	++	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF 104	++ ++	Inline XBRL Taxonomy Extension Definition Linkbase Document Cover Page Interactive Data File (embedded within the Inline XBRL document)
*		Filed herewith.
+		Denotes a management contract or compensatory plan or arrangement.
++		Pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not “filed” or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act, is deemed not “filed” for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

Item 16 – Form 10-K Summary

Not applicable.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

UMH PROPERTIES, INC.
BY:	/s/ Samuel A. Landy
	SAMUEL A. LANDY
	President, Chief Executive Officer and Director (Principal Executive Officer)
BY:	/s/ Anna T. Chew
	ANNA T. CHEW
	Vice President, Chief Financial and Accounting Officer, Treasurer and Director (Principal Financial and Accounting Officer)

Dated: February 24, 2022

Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, this report has been duly signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

	Title	Date
/s/ Eugene W. Landy	Chairman of the Board	February 24, 2022
EUGENE W. LANDY
/s/ Samuel A. Landy	President, Chief Executive Officer and	February 24, 2022
SAMUEL A. LANDY	Director
/s/ Anna T. Chew	Vice President, Chief Financial and	February 24, 2022
ANNA T. CHEW	Accounting Officer, Treasurer and Director
/s/ Amy Butewicz	Director	February 24, 2022
AMY BUTEWICZ
/s/ Jeffrey A. Carus	Director	February 24, 2022
JEFFREY A. CARUS
/s/ Matthew Hirsch	Director	February 24, 2022
MATTHEW HIRSCH
/s/ Michael P. Landy	Director	February 24, 2022
MICHAEL P. LANDY
/s/ Stuart Levy	Director	February 24, 2022
STUART LEVY
/s/ William Mitchell	Director	February 24, 2022
WILLIAM MITCHELL
/s/ Angela Pruitt	Director	February 24, 2022
ANGELA PRUITT
/s/ Kenneth K. Quigley, Jr.	Director	February 24, 2022
KENNETH K. QUIGLEY
/s/ Stephen B. Wolgin	Director	February 24, 2022
STEPHEN B. WOLGIN

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of

UMH Properties Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of UMH Properties, Inc. and subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of income (loss), shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and schedule listed in the Index at Item 15(a)(2)(i) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 24, 2022, expressed an unqualified opinion.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Valuation of Investment in Property and Equipment

At December 31, 2021, the Company’s net consolidated investment property and equipment totaled $913 million. As discussed in note 2 to the consolidated financial statements, the Company’s investment property and equipment is evaluated annually or whenever events or changes in circumstances indicates possible impairment.

The Company reviews investment properties for indicators of impairment through an analysis of net operating income trends period over period. In the event that any impairment indicators are present, the Company undertakes additional analyses utilizing expected undiscounted future cash flows for identified investment properties considering factors such as future operating income, trends and prospects as well as the effects of leasing demand, competition and other factors. For the year ended December 31, 2021, the Company’s net operating income trend analysis did not result in investment properties requiring undiscounted cash flow analysis. Therefore, no indicators of impairment were identified as a result of the Company’s review for impairment.

Auditing management’s evaluation of investment property and equipment for impairment was complex and highly subjective due to the high degree of subjective auditor judgment necessary in evaluating management’s identification of indicators of potential impairment.

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls related to the Company’s process for evaluating investment in real estate for impairment, including management’s review of the operations and financial performance of investment properties.

To test the Company’s process for evaluating investment property and equipment for impairment, we performed audit procedures that included, among others, assessing the methodologies, evaluating the significant assumptions of the matters discussed above and testing the completeness and accuracy of the underlying data used by the Company in its analysis.

	/s/ PKF O’Connor Davies, LLP
February 24, 2022
New York, New York
We have served as the Company’s auditor since 2008.

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UMH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2021 and 2020

(in thousands except per share amounts)

	2021			2020
-ASSETS-
Investment Property and Equipment
Land	$	74,963		$	73,491
Site and Land Improvements		716,211			657,301
Buildings and Improvements		30,450			28,106
Rental Homes and Accessories		383,467			349,585
Total Investment Property		1,205,091			1,108,483
Equipment and Vehicles		24,437			22,572
Total Investment Property and Equipment		1,229,528			1,131,055
Accumulated Depreciation		(316,073	)		(272,823	)
Net Investment Property and Equipment		913,455			858,232
Other Assets
Cash and Cash Equivalents		116,175			15,336
Marketable Securities at Fair Value		113,748			103,172
Inventory of Manufactured Homes		23,659			25,450
Notes and Other Receivables, net		55,359			46,414
Prepaid Expenses and Other Assets		17,135			19,984
Land Development Costs		22,352			20,825
Investment in Joint Venture		8,937			-0-
Total Other Assets		357,365			231,181
TOTAL ASSETS	$	1,270,820		$	1,089,413

See Accompanying Notes to Consolidated Financial Statements

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UMH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

AS OF DECEMBER 31, 2021 and 2020

(in thousands except per share amounts)

	2021			2020
- LIABILITIES AND SHAREHOLDERS’ EQUITY -
LIABILITIES:
Mortgages Payable, net of unamortized debt issuance costs	$	452,567		$	471,477
Other Liabilities:
Accounts Payable		4,274			4,390
Loans Payable, net of unamortized debt issuance costs		46,757			87,009
Accrued Liabilities and Deposits		17,162			17,296
Tenant Security Deposits		7,920			7,433
Total Other Liabilities		76,113			116,128
Total Liabilities		528,680			587,605
Commitments and Contingencies
Shareholders’ Equity:
Series C – 6.75% Cumulative Redeemable Preferred Stock, par value $0.10 per share, 13,750 shares authorized; 9,884 shares issued and outstanding as of December 31, 2021 and 2020		247,100			247,100
Series D – 6.375% Cumulative Redeemable Preferred Stock, par value $0.10 per share, 9,300 shares authorized; 8,609 and 6,434 shares issued and outstanding as of December 31, 2021 and 2020, respectively		215,219			160,854
Common Stock - $0.10 par value per share, 144,164 shares authorized; 51,651 and 41,920 shares issued and outstanding as of December 31, 2021 and 2020, respectively		5,165			4,192
Excess Stock - $0.10 par value per share, 3,000 shares authorized; no shares issued or outstanding as of December 31, 2021 and 2020		-0-			-0-
Additional Paid-In Capital		300,020			115,026
Undistributed Income (Accumulated Deficit)		(25,364	)		(25,364	)
Total Shareholders’ Equity		742,140			501,808
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,270,820		$	1,089,413

See Accompanying Notes to Consolidated Financial Statements

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UMH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019

(in thousands)

	2021			2020			2019
INCOME:
Rental and Related Income	$	159,010		$	143,344		$	128,611
Sales of Manufactured Homes		27,089			20,265			17,980
Total Income		186,099			163,609			146,591
EXPENSES:
Community Operating Expenses		68,046			63,175			61,708
Cost of Sales of Manufactured Homes		20,091			14,417			12,938
Selling Expenses		4,807			4,941			5,079
General and Administrative Expenses		14,095			11,056			10,046
Depreciation Expense		45,124			41,707			36,811
Total Expenses		152,163			135,296			126,582
OTHER INCOME (EXPENSE):
Interest Income		3,362			2,917			2,619
Dividend Income		5,098			5,729			7,535
Gain on Sales of Marketable Securities, net		2,342			-0-			-0-
Increase (Decrease) in Fair Value of Marketable Securities		25,052			(14,119	)		14,915
Other Income		626			718			588
Interest Expense		(19,158	)		(18,287	)		(17,805	)
Total Other Income (Expense)		17,322			(23,042	)		7,852
Income Before Loss on Sales of Investment Property and Equipment		51,258			5,271			27,861
Loss on Sales of Investment Property and Equipment		(170	)		(216	)		(111	)
Net Income		51,088			5,055			27,750
Less: Preferred Dividends		(29,839	)		(31,943	)		(25,184	)
Less: Redemption of Preferred Stock		-0-			(2,871	)		-0-
Net Income (Loss) Attributable to Common Shareholders	$	21,249		$	(29,759	)	$	2,566

See Accompanying Notes to Consolidated Financial Statements

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UMH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019

(in thousands except per share amounts)

	2021			2020			2019
Basic Income (Loss) Per Share:
Net Income	$	1.10		$	0.12		$	0.70
Less: Preferred Dividends		(0.64	)		(0.77	)		(0.63	)
Less: Redemption of Preferred Stock		-0-			(0.07	)		-0-
Net Income (Loss) Attributable to Common Shareholders	$	0.46		$	(0.72	)	$	0.07
Diluted Income (Loss) Per Share:
Net Income	$	1.08		$	0.12		$	0.69
Less: Preferred Dividends		(0.63	)		(0.77	)		(0.63	)
Less: Redemption of Preferred Stock		-0-			(0.07	)		-0-
Net Income (Loss) Attributable to Common Shareholders	$	0.45		$	(0.72	)	$	0.06
Weighted Average Common Shares Outstanding:
Basic		46,332			41,395			39,909
Diluted		47,432			41,395			40,203

See Accompanying Notes to Consolidated Financial Statements

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UMH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019

(in thousands)

	Common Stock						Preferred			Preferred
	Issued and Outstanding						Stock			Stock
	Number			Amount			Series B			Series C
Balance December 31, 2018		38,320		$	3,832		$	95,030		$	143,750
Common Stock Issued with the DRIP		2,468			247			0			0
Common Stock Issued through Restricted/ Unrestricted Stock Awards		122			12			0			0
Common Stock Issued through Stock Options		240			24			0			0
Repurchase of Common Stock		(20	)		(2	)		0			0
Preferred Stock Issued through Underwritten Registered Public Offering, net		0			0			0			100,000
Preferred Stock Issued in connection with At-The-Market Offerings, net		0			0			0			0
Distributions		0			0			0			0
Stock Compensation Expense		0			0			0			0
Net Income		0			0			0			0
Balance December 31, 2019		41,130			4,113			95,030			243,750
Common Stock Issued with the DRIP		720			72			0			0
Common Stock Issued through Restricted/ Unrestricted Stock Awards		46			5			0			0
Common Stock Issued through Stock Options		63			6			0			0
Common Stock Issued in connection with At-The-Market Offerings, net		135			13			0			0
Repurchase of Common Stock		(174	)		(17	)		0			0
Repurchase of Preferred Stock		0			0			(13	)		0
Preferred Stock Issued in connection with At-The-Market Offerings, net		0			0			0			3,350
Redemption of Preferred Stock		0			0			(95,017	)		0
Distributions		0			0			0			0
Stock Compensation Expense		0			0			0			0
Net Income		0			0			0			0
Balance December 31, 2020		41,920			4,192			0			247,100
Common Stock Issued with the DRIP		503			50			0			0
Common Stock Issued through Restricted/ Unrestricted Stock Awards		297			30			0			0
Common Stock Issued through Stock Options		710			71			0			0
Common Stock Issued in connection with At-The-Market Offerings, net		8,221			822			0			0
Preferred Stock Issued in connection with At-The-Market Offerings, net		0			0			0			0
Distributions		0			0			0			0
Stock Compensation Expense		0			0			0			0
Net Income		0			0			0			0
Balance December 31, 2021		51,651		$	5,165		$	0		$	247,100

See Accompanying Notes to Consolidated Financial Statements

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UMH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY, CONTINUED

FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019

(in thousands)

	Preferred Stock		Additional Paid-In			Undistributed Income (Accumulated			Total Shareholders’
	Series D		Capital			Deficit)			Equity
Balance December 31, 2018	$	50,000	$	157,450		$	(25,364	)	$	424,698
Common Stock Issued with the DRIP		0		31,256			0			31,503
Common Stock Issued through Restricted/ Unrestricted Stock Awards		0		(12	)		0			0
Common Stock Issued through Stock Options		0		2,579			0			2,603
Repurchase of Common Stock		0		(235	)		0			(237	)
Preferred Stock Issued through Underwritten Registered Public Offering, net		0		(3,312	)		0			96,688
Preferred Stock Issued in connection with At-The-Market Offerings, net		16,268		(337	)		0			15,931
Distributions		0		(26,786	)		(27,750	)		(54,536	)
Stock Compensation Expense		0		1,939			0			1,939
Net Income		0		0			27,750			27,750
Balance December 31, 2019		66,268		162,542			(25,364	)		546,339
Common Stock Issued with the DRIP		0		9,082			0			9,154
Common Stock Issued through Restricted/ Unrestricted Stock Awards		0		(5	)		0			0
Common Stock Issued through Stock Options		0		653			0			659
Common Stock Issued in connection with At-The-Market Offerings, net		0		1,730			0			1,743
Repurchase of Common Stock		0		(1,813	)		0			(1,830	)
Repurchase of Preferred Stock		0		1			0			(12	)
Preferred Stock Issued in connection with At-The-Market Offerings, net		94,586		(1,795	)		0			96,141
Redemption of Preferred Stock		0		2,871			(2,871	)		(95,017	)
Distributions		0		(59,567	)		(2,184	)		(61,751	)
Stock Compensation Expense		0		1,327			0			1,327
Net Income		0		0			5,055			5,055
Balance December 31, 2020		160,854		115,026			(25,364	)		501,808
Common Stock Issued with the DRIP		0		9,723			0			9,773
Common Stock Issued through Restricted/ Unrestricted Stock Awards		0		(30	)		0			0
Common Stock Issued through Stock Options		0		8,530			0			8,601
Common Stock Issued in connection with At-The-Market Offerings, net		0		178,247			0			179,069
Preferred Stock Issued in connection with At-The-Market Offerings, net		54,365		(1,152	)		0			53,213
Distributions		0		(13,771	)		(51,088	)		(64,859	)
Stock Compensation Expense		0		3,447			0			3,447
Net Income		0		0			51,088			51,088
Balance December 31, 2021	$	215,219	$	300,020		$	(25,364	)	$	742,140

See Accompanying Notes to Consolidated Financial Statements

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UMH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 and 2019

(in thousands)

	2021			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	51,088		$	5,055		$	27,750
Non-cash items included in Net Income:
Depreciation		45,124			41,707			36,811
Amortization of Financing Costs		1,001			1,027			758
Stock Compensation Expense		3,447			1,327			1,939
Provision for Uncollectible Notes and Other Receivables		1,213			1,546			1,408
Gain on Sales of Marketable Securities, net		(2,342	)		-0-			-0-
(Increase) Decrease in Fair Value of Marketable Securities		(25,052	)		14,119			(14,915	)
Loss on Sales of Investment Property and Equipment		170			216			111
Changes in Operating Assets and Liabilities:
Inventory of Manufactured Homes		1,791			6,517			(8,264	)
Notes and Other Receivables, net of notes acquired with acquisitions		(9,957	)		(9,965	)		(7,909	)
Prepaid Expenses and Other Assets		(1,557	)		(2,058	)		(3,817	)
Accounts Payable		(116	)		(182	)		699
Accrued Liabilities and Deposits		(134	)		6,720			3,164
Tenant Security Deposits		487			810			781
Net Cash Provided by Operating Activities		65,163			66,839			38,516
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Manufactured Home Communities, net of mortgages assumed		(18,405	)		(5,320	)		(36,654	)
Purchase of Investment Property and Equipment		(59,270	)		(76,761	)		(64,535	)
Proceeds from Sales of Investment Property and Equipment		2,859			2,657			2,745
Additions to Land Development Costs		(27,428	)		(23,241	)		(22,231	)
Purchase of Marketable Securities		(18	)		(1,105	)		(1,800	)
Proceeds from Sales of Marketable Securities		16,835			-0-			125
Investment in Joint Venture		(8,937	)		-0-			-0-
Net Cash Used in Investing Activities		(94,364	)		(103,770	)		(122,350	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages, net of mortgages assumed		6,070			105,984			44,850
Net Proceeds (Payments) from Short Term Borrowings		(40,448	)		3,309			(24,373	)
Principal Payments of Mortgages and Loans		(25,618	)		(7,115	)		(21,624	)
Financing Costs on Debt		(167	)		(4,737	)		(752	)
Proceeds from Issuance of Preferred Stock, net of offering costs		-0-			-0-			96,688
Proceeds from At-The-Market Preferred Equity Program, net of offering costs		53,213			96,141			15,931
Redemption of 8.0% Series B Preferred Stock		-0-			(95,017	)		-0-
Proceeds from At-The-Market Common Equity Program, net of offering costs		179,069			1,743			-0-
Proceeds from Issuance of Common Stock in the DRIP, net of
dividend reinvestments		6,267			6,003			23,796
Repurchase of Preferred Stock, net		-0-			(12	)		-0-
Repurchase of Common Stock, net		-0-			(1,830	)		(237	)
Proceeds from Exercise of Stock Options		8,601			659			2,603
Preferred Dividends Paid		(29,839	)		(31,943	)		(25,709	)
Common Dividends Paid, net of dividend reinvestments		(31,514	)		(26,657	)		(21,120	)
Net Cash Provided by Financing Activities		125,634			46,528			90,053
Net Increase in Cash, Cash Equivalents and Restricted Cash		96,433			9,597			6,219
Cash, Cash Equivalents and Restricted Cash at Beginning of Year		28,593			18,996			12,777
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR	$	125,026		$	28,593		$	18,996

See Accompanying Notes to Consolidated Financial Statements

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UMH PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 and 2020

NOTE 1 – ORGANIZATION

UMH Properties, Inc., a Maryland corporation, and its subsidiaries (the “Company”) operates as a real estate investment trust (“REIT”) deriving its income primarily from real estate rental operations. The Company, through its wholly-owned taxable subsidiary, UMH Sales and Finance, Inc. (“S&F”), also sells manufactured homes to residents and prospective residents in our communities. Inherent in the operations of manufactured home communities are site vacancies. S&F was established to fill these vacancies and enhance the value of the communities. The Company also owns a portfolio of REIT securities which the Company generally limits to no more than approximately 15% of its undepreciated assets (which is the Company’s total assets excluding accumulated depreciation). Management views the Company as a single segment based on its method of internal reporting in addition to its allocation of capital and resources.

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. The Company’s 127 residential communities remain open and operational. The effects of the COVID-19 pandemic did not significantly impact the Company’s operating results for the year ended December 31, 2021. However, the future effects of the evolving impact of the COVID-19 pandemic are uncertain.

Description of the Business

As of December 31, 2021, the Company owned and operated 127 manufactured home communities containing approximately 24,000 developed sites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan, Maryland, Alabama and South Carolina.

These manufactured home communities are listed by trade names as follows:

MANUFACTURED HOME COMMUNITY	LOCATION
Allentown	Memphis, Tennessee
Arbor Estates	Doylestown, Pennsylvania
Auburn Estates	Orrville, Ohio
Bayshore Estates	Sandusky, Ohio
Birchwood Farms	Birch Run, Michigan
Boardwalk	Elkhart, Indiana
Broadmore Estates	Goshen, Indiana
Brookside Village	Berwick, Pennsylvania
Brookview Village	Greenfield Center, New York
Camelot Village	Anderson, Indiana
Camelot Woods	Altoona, Pennsylvania
Candlewick Court	Owosso, Michigan
Carsons	Chambersburg, Pennsylvania
Catalina	Middletown, Ohio
Cedarcrest Village	Vineland, New Jersey
Chambersburg I & II	Chambersburg, Pennsylvania
Chelsea	Sayre, Pennsylvania
Cinnamon Woods	Conowingo, Maryland
City View	Lewistown, Pennsylvania
Clinton Mobile Home Resort	Tiffin, Ohio
Collingwood	Horseheads, New York
Colonial Heights	Wintersville, Ohio
Countryside Estates	Muncie, Indiana
Countryside Estates	Ravenna, Ohio
Countryside Village	Columbia, Tennessee
Cranberry Village	Cranberry Township, Pennsylvania

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MANUFACTURED HOME COMMUNITY	LOCATION
Crestview	Athens, Pennsylvania
Cross Keys Village	Duncansville, Pennsylvania
Crossroads Village	Mount Pleasant, Pennsylvania
Dallas Mobile Home Community	Toronto, Ohio
Deer Meadows	New Springfield, Ohio
Deer Run	Dothan, Alabama
D & R Village	Clifton Park, New York
Evergreen Estates	Lodi, Ohio
Evergreen Manor	Bedford, Ohio
Evergreen Village	Mantua, Ohio
Fairview Manor	Millville, New Jersey
Fifty One Estates	Elizabeth, Pennsylvania
Forest Creek	Elkhart, Indiana
Forest Park Village	Cranberry Township, Pennsylvania
Fox Chapel Village	Cheswick, Pennsylvania
Frieden Manor	Schuylkill Haven, Pennsylvania
Friendly Village	Perrysburg, Ohio
Green Acres	Chambersburg, Pennsylvania
Gregory Courts	Honey Brook, Pennsylvania
Hayden Heights	Dublin, Ohio
Heather Highlands	Inkerman, Pennsylvania
High View Acres	Apollo, Pennsylvania
Highland	Elkhart, Indiana
Highland Estates	Kutztown, Pennsylvania
Hillcrest Crossing	Lower Burrell, Pennsylvania
Hillcrest Estates	Marysville, Ohio
Hillside Estates	Greensburg, Pennsylvania
Holiday Village	Nashville, Tennessee
Holiday Village	Elkhart, Indiana
Holly Acres Estates	Erie, Pennsylvania
Hudson Estates	Peninsula, Ohio
Huntingdon Pointe	Tarrs, Pennsylvania
Independence Park	Clinton, Pennsylvania
Iris Winds	Sumter, South Carolina
Kinnebrook	Monticello, New York
Lake Erie Estates	Fredonia, New York
Lake Sherman Village	Navarre, Ohio
Lakeview Meadows	Lakeview, Ohio
Laurel Woods	Cresson, Pennsylvania
Little Chippewa	Orrville, Ohio
Maple Manor	Taylor, Pennsylvania
Marysville Estates	Marysville, Ohio
Meadowood	New Middletown, Ohio
Meadows	Nappanee, Indiana
Meadows of Perrysburg	Perrysburg, Ohio
Melrose Village	Wooster, Ohio
Melrose West	Wooster, Ohio
Memphis Blues	Memphis, Tennessee
Monroe Valley	Jonestown, Pennsylvania
Moosic Heights	Avoca, Pennsylvania
Mount Pleasant Village	Mount Pleasant, Pennsylvania
Mountaintop	Narvon, Pennsylvania
New Colony	West Mifflin, Pennsylvania
Northtowne Meadows	Erie, Michigan
Oak Ridge Estates	Elkhart, Indiana
Oakwood Lake Village	Tunkhannock, Pennsylvania

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MANUFACTURED HOME COMMUNITY	LOCATION
Olmsted Falls	Olmsted Township, Ohio
Oxford Village	West Grove, Pennsylvania
Parke Place	Elkhart, Indiana
Perrysburg Estates	Perrysburg, Ohio
Pikewood Manor	Elyria, Ohio
Pine Ridge Village/Pine Manor	Carlisle, Pennsylvania
Pine Valley Estates	Apollo, Pennsylvania
Pleasant View Estates	Bloomsburg, Pennsylvania
Port Royal Village	Belle Vernon, Pennsylvania
Redbud Estates	Anderson, Indiana
River Valley Estates	Marion, Ohio
Rolling Hills Estates	Carlisle, Pennsylvania
Rostraver Estates	Belle Vernon, Pennsylvania
Sandy Valley Estates	Magnolia, Ohio
Shady Hills	Nashville, Tennessee
Somerset Estates/Whispering Pines	Somerset, Pennsylvania
Southern Terrace	Columbiana, Ohio
Southwind Village	Jackson, New Jersey
Spreading Oaks Village	Athens, Ohio
Springfield Meadows	Springfield, Ohio
Suburban Estates	Greensburg, Pennsylvania
Summit Estates	Ravenna, Ohio
Summit Village	Marion, Indiana
Sunny Acres	Somerset, Pennsylvania
Sunnyside	Eagleville, Pennsylvania
Trailmont	Goodlettsville, Tennessee
Twin Oaks I & II	Olmsted Township, Ohio
Twin Pines	Goshen, Indiana
Valley High	Ruffs Dale, Pennsylvania
Valley Hills	Ravenna, Ohio
Valley Stream	Mountaintop, Pennsylvania
Valley View I	Ephrata, Pennsylvania
Valley View II	Ephrata, Pennsylvania
Valley View Honeybrook	Honey Brook, Pennsylvania
Voyager Estates	West Newton, Pennsylvania
Waterfalls Village	Hamburg, New York
Wayside	Bellefontaine, Ohio
Weatherly Estates	Lebanon, Tennessee
Wellington Estates	Export, Pennsylvania
Woodland Manor	West Monroe, New York
Woodlawn Village	Eatontown, New Jersey
Woods Edge	West Lafayette, Indiana
Wood Valley	Caledonia, Ohio
Worthington Arms	Lewis Center, Ohio
Youngstown Estates	Youngstown, New York

In addition to the manufactured home communities owned by the Company listed above, the Company’s recently-formed joint venture with Nuveen Real Estate owns a newly-developed manufactured home community named Sebring Square, located in Sebring, Florida, which was acquired in December 2021.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The Company prepares its financial statements under the accrual basis of accounting, in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s subsidiaries are all 100% wholly-owned. The consolidated financial statements of the Company include all of these subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

A subsidiary of the Company is the managing member of the Company’s joint venture with Nuveen Real Estate.

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Use of Estimates

In preparing the consolidated financial statements in accordance with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as contingent assets and liabilities as of the dates of the consolidated balance sheets and revenue and expenses for the years then ended. These estimates and assumptions include the allowance for doubtful accounts, valuation of inventory, depreciation, valuation of securities, accounting for land development, reserves and accruals, and stock compensation expense. Actual results could differ from these estimates and assumptions.

Investment Property and Equipment and Depreciation

Property and equipment are carried at cost less accumulated depreciation. Depreciation for Sites and Buildings is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 15 to 27.5 years). Depreciation of Improvements to Sites and Buildings, Rental Homes and Equipment and Vehicles is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 3 to 27.5 years). Land Development Costs are not depreciated until they are put in use, at which time they are capitalized as Site and Land Improvements. Interest Expense pertaining to Land Development Costs are capitalized. Maintenance and Repairs are charged to expense as incurred and improvements are capitalized. The Company uses its professional judgement in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. The Company’s business plan includes the purchase of value-add communities, redevelopment, development and expansion of communities. During 2021 and 2020, we acquired 5 value-add communities containing 853 sites and developed 271 expansions sites. The Company capitalizes payroll for those individuals responsible for and who spend their time on the execution and supervision of development activities and capital projects. Salaries and benefits capitalized to land development were approximately $2.6 and $2.5 million for the years ended December 31, 2021 and 2020, respectively. The costs and related accumulated depreciation of property sold or otherwise disposed of are removed from the financial statements and any gain or loss is reflected in the current year’s results of operations.

The Company applies Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10, Property, Plant & Equipment (“ASC 360-10”) to measure impairment in real estate investments. The Company’s primary indicator of potential impairment is based on net operating income trends year over year. Rental properties are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (on an undiscounted basis without interest) from a rental property is less than the carrying value under its historical net cost basis. These expected future cash flows consider factors such as future operating income, trends and prospects as well as the effects of leasing demand, competition and other factors. Upon determination that an other than temporary impairment has occurred, rental properties are reduced to their fair value. For properties to be disposed of, an impairment loss is recognized when the fair value of the property, less the estimated cost to sell, is less than the carrying amount of the property measured at the time there is a commitment to sell the property and/or it is actively being marketed for sale. A property to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Subsequent to the date that a property is held for disposition, depreciation expense is not recorded.

The Company conducted a comprehensive review of all real estate asset classes in accordance with ASC 360-10-35-21. The process entailed the analysis of property for instances where the net book value exceeded the estimated fair value. The Company utilizes the experience and knowledge of its internal valuation team to derive certain assumptions used to determine an operating property’s cash flow. Such assumptions include lease-up rates, rental rates, rental growth rates, and capital expenditures. The Company reviewed its operating properties in light of the requirements of ASC 360-10 and determined that, as of December 31, 2021, the undiscounted cash flows over the expected holding period for these properties were in excess of their carrying values and, therefore, no impairment charges were required.

Acquisitions

The Company accounts for acquisitions in accordance with ASC 805, Business Combinations (“ASC 805”) and allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, site and land improvements, buildings and improvements and rental homes. The Company allocates the purchase price of an acquired property generally determined by internal evaluation as well as third-party appraisal of the property obtained in conjunction with the purchase.

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In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business”. ASU 2017-01 seeks to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, intangible assets and consolidation. The adoption of ASU 2017-01 was effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments should be applied prospectively on or after the effective dates. Early adoption is permitted. The Company adopted this standard effective January 1, 2017, on a prospective basis. The Company evaluated its acquisitions and has determined that its acquisitions of manufactured home communities during 2020 and 2021 should be accounted for as acquisitions of assets. As such, transaction costs, primarily consisting of broker fees, transfer taxes, legal, accounting, valuation, and other professional and consulting fees, related to acquisitions are capitalized as part of the cost of the acquisitions, which is then subject to a purchase price allocation based on relative fair value. Prior to the adoption of ASU 2017-01, the Company’s acquisitions were considered an acquisition of a business and therefore, the acquisition costs were expensed.

Investment in Joint Venture

The Company accounts for its investment in its joint venture with Nuveen Real Estate under the equity method of accounting in accordance with ASC 323, Investments – Equity Method and Joint Ventures. The Company has the ability to exercise significant influence, but not control, over the operating and financial decisions of the joint venture. Under the equity method of accounting, the cost of an investment is adjusted for the Company’s share of the equity in net income or loss from the date of acquisition, reduced by distributions received and increased by contributions made. The income or loss is allocated in accordance with the provisions of the operating agreement. The carrying value of the investment in joint venture is reviewed for other than temporary impairment whenever events or changes in circumstances indicate a possible impairment. Financial condition, operational performance, and other economic trends are among the factors that are considered in evaluation of the existence of impairment indicators (See Note 5).

Cash and Cash Equivalents

Cash and cash equivalents include all cash and investments with an original maturity of three months or less. The Company maintains its cash in bank accounts in amounts that may exceed federally insured limits. The Company has not experienced any losses in these accounts in the past. The fair value of cash and cash equivalents approximates their current carrying amounts since all such items are short-term in nature.

Marketable Securities

Investments in marketable securities consist of marketable common and preferred stock securities of other REITs, which the Company generally limits to no more than approximately 15% of its undepreciated assets. These marketable securities are all publicly traded and purchased on the open market, through private transactions or through dividend reinvestment plans. The Company normally holds REIT securities on a long-term basis and has the ability and intent to hold securities to recovery, therefore as of December 31, 2021 and 2020, gains or losses on the sale of securities are based on average cost and are accounted for on a trade date basis.

Inventory of Manufactured Homes

Inventory of manufactured homes is valued at the lower of cost or net realizable value and is determined by the specific identification method. All inventory is considered finished goods.

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Accounts and Notes Receivables

The Company’s accounts, notes and other receivables are stated at their outstanding balance and reduced by an allowance for uncollectible accounts. The Company evaluates the recoverability of its receivables whenever events occur or there are changes in circumstances such that management believes it is probable that it will be unable to collect all amounts due according to the contractual terms of the notes receivable or lease agreements. The collectability of notes receivable is measured based on the present value of the expected future cash flow discounted at the notes receivable effective interest rate or the fair value of the collateral if the notes receivable is collateral dependent. At December 31, 2021 and 2020, the reserves for uncollectible accounts, notes and other receivables were $2.1 million and $1.6 million, respectively. For the years ended December 31, 2021, 2020 and 2019 the provisions for uncollectible notes and other receivables were $1.2 million, $1.5 million and $1.4 million, respectively. Charge-offs and other adjustments related to repossessed homes for the years ended December 31, 2021, 2020 and 2019 amounted to $712,000, $1.2 million and $1.2 million, respectively. In 2020, the Company adopted ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” See “Recently Adopted Accounting Pronouncements” below for additional information regarding the adoption of this ASU.

The Company’s notes receivable primarily consists of installment loans collateralized by manufactured homes with principal and interest payable monthly. The weighted average interest rate on these loans is approximately 6.9% and the average maturity is approximately 9 years.

Unamortized Financing Costs

Costs incurred in connection with obtaining mortgages and other financings and refinancings are deferred and presented in the consolidated balance sheet as a direct deduction from the carrying amount of that debt liability. These costs are amortized on a straight-line basis which approximates the effective interest method over the term of the related obligations, and included as a component of interest expense. Unamortized costs are charged to expense upon prepayment of the obligation. Upon amendment of the line of credit or refinancing of mortgage debt, unamortized deferred financing fees are accounted for in accordance with ASC 470-50-40, Modifications and Extinguishments. As of December 31, 2021 and 2020, accumulated amortization amounted to $7.2 million and $6.2 million, respectively. The Company estimates that aggregate amortization expense will be approximately $1.0 million for 2022, $722,000 for 2023, $676,000 for 2024, $543,000 for 2025, $397,000 for 2026 and $978,000 thereafter.

Leases

We account for our leases under ASC 842, “Leases.” Our primary source of revenue is generated from lease agreements for our sites and homes, where we are the lessor. These leases are generally for one-year or month-to-month terms and renewable by mutual agreement from us and the resident, or in some cases, as provided by jurisdictional statute.

We are the lessee in other arrangements, primarily for our corporate office and a ground lease at one community. As of December 31, 2021, the right-of-use assets and corresponding lease liabilities of $3.5 million are included in Prepaid Expenses and Other Assets and Accrued Liabilities and Deposits on the Consolidated Balance Sheets.

Future minimum lease payments under these leases over the remaining lease terms are as follows (in thousands):

2022	$	423
2023		391
2024		391
2025		391
2026		391
Thereafter		19,105
Total Lease Payments	$	21,092

The weighted average remaining lease term for these leases is 164.0 years. The right of use assets and lease liabilities was calculated using an interest rate of 5%.

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Restricted Cash

The Company’s restricted cash consists of amounts primarily held in deposit for tax, insurance and repair escrows held by lenders in accordance with certain debt agreements. Restricted cash is included in Prepaid Expenses and Other Assets on the Consolidated Balance Sheets.

The following table reconciles beginning of period and end of period balances of cash, cash equivalents and restricted cash for the periods shown (in thousands):

	12/31/21		12/31/20		12/31/19		12/31/18
Cash and Cash Equivalents	$	116,175	$	15,336	$	12,902	$	7,433
Restricted Cash		8,851		13,257		6,094		5,344
Cash, Cash Equivalents
And Restricted Cash	$	125,026	$	28,593	$	18,996	$	12,777

Revenue Recognition

On January 1, 2018, the Company adopted ASU 2014-09 “Revenue from Contracts with Customers (Topic 606)” (ASC 606). For transactions in the scope of ASC 606, we recognize revenue when control of goods or services transfers to the customer, in the amount that we expect to receive for the transfer of goods or provision of services.

Rental and related income is generated from lease agreements for our sites and homes. The lease component of these agreements is accounted for under ASC 842 “Leases.” The non-lease components of our lease agreements consist primarily of utility reimbursements, which are accounted for with the site lease as a single lease under ASC 842.

Revenue from sales of manufactured homes is recognized in accordance with the core principle of ASC 606, at the time of closing when control of the home transfers to the customer. After closing of the sale transaction, we generally have no remaining performance obligation.

Interest income is primarily from notes receivables for the previous sales of manufactured homes. Interest income on these receivables is accrued based on the unpaid principal balances of the underlying loans on a level yield basis over the life of the loans.

Dividend income and gain (loss) on sales of marketable securities are from our investments in marketable securities and are presented separately but are not in the scope of ASC 606.

Other income primarily consists of brokerage commissions for arranging for the sale of a home by a third party and other miscellaneous income. This income is recognized when the transactions are completed and our performance obligations have been fulfilled.

Notes Receivables

On January 1, 2020, the Company adopted ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and supportable forecasts that affect the collectability of the reported amount. As of December 31, 2021 and 2020, the Company had notes receivable of $51.9 million and $43.4 million, net of a fair value adjustment of $1.0 million and $0.9 million, respectively. Notes receivables are presented as a component of notes and other receivables, net on our consolidated balance sheets. These receivables represent balances owed to us for previously completed performance obligations for sales of manufactured homes.

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Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period (46.3 million, 41.4 million and 39.9 million in 2021, 2020 and 2019, respectively). Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding plus the weighted average number of net shares that would be issued upon exercise of stock options pursuant to the treasury stock method. For the year ended December 31, 2021, common stock equivalents resulting from employee stock options to purchase 3.3 million shares of common stock amounted to 1.1 million shares, which were included in the computation of Diluted Net Income (Loss) per Share. For the year ended December 31, 2019, common stock equivalents resulting from employee stock options to purchase 2.6 million shares of common stock amounted to 294,000 shares, which were included in the computation of Diluted Net Income (Loss) per Share. For the year ended December 31, 2020, employee stock options to purchase 3.3 million shares of common stock were excluded from the computation of Diluted Net Income (Loss) per Share as their effect would be anti-dilutive.

Stock Compensation Plan

The Company accounts for awards of stock, stock options and restricted stock in accordance with ASC 718-10, Compensation-Stock Compensation. ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). The compensation cost for stock option grants are determined using option pricing models, intended to estimate the fair value of the awards at the grant date less estimated forfeitures. The compensation expense for restricted stock are recognized based on the fair value of the restricted stock awards less estimated forfeitures. The fair value of restricted stock awards are equal to the fair value of the Company’s stock on the grant date. Compensation costs, which is included in General and Administrative Expenses, of $3.4 million, $1.3 million and $1.9 million have been recognized in 2021, 2020 and 2019, respectively. During 2021, 2020 and 2019, compensation costs included a one-time charge of $44,000, $127,000 and $179,000, respectively, for restricted stock and stock option grants awarded to participants who were of retirement age and therefore the entire amount of measured compensation cost has been recognized at grant date. Included in Note 7 to these consolidated financial statements are the assumptions and methodology used to calculate the fair value of stock options and restricted stock awards.

Income Tax

The Company has elected to be taxed as a REIT under the applicable provisions of Sections 856 to 860 of the Internal Revenue Code. Under such provisions, the Company will not be taxed on that portion of its income which is distributed to shareholders, provided it distributes at least 90% of its taxable income, has at least 75% of its assets in real estate or cash-type investments and meets certain other requirements for qualification as a REIT. The Company has and intends to continue to distribute all of its income currently, and therefore no provision has been made for income or excise taxes. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates and may not be able to qualify as a REIT for four subsequent taxable years. The Company is also subject to certain state and local income, excise or franchise taxes. In addition, the Company has a taxable REIT Subsidiary (“TRS”) which is subject to federal and state income taxes at regular corporate tax rates (See Note 11).

The Company follows the provisions of ASC Topic 740, Income Taxes, that, among other things, defines a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Based on its evaluation, the Company determined that it has no uncertain tax positions and no unrecognized tax benefits as of December 31, 2021. The Company records interest and penalties relating to unrecognized tax benefits, if any, as interest expense. As of December 31, 2021, the tax years 2018 through and including 2021 remain open to examination by the Internal Revenue Service. There are currently no federal tax examinations in progress.

Reclassifications

Certain amounts in the consolidated financial statements for the prior years have been reclassified to conform to the financial statement presentation for the current year.

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Other Recent Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying Consolidated Financial Statements.

NOTE 3 – INVESTMENT PROPERTY AND EQUIPMENT

Acquisitions in 2021

On January 8, 2021, the Company acquired Deer Run, located in Dothan, Alabama, for approximately $4.6 million. This community contains a total of 195 developed homesites that are situated on approximately 33 total acres. At the date of acquisition, the average occupancy for this community was approximately 37%.

On January 21, 2021, the Company acquired Iris Winds, located in Sumter, South Carolina, for approximately $3.4 million. This community contains a total of 142 developed homesites that are situated on approximately 24 total acres. At the date of acquisition, the average occupancy for this community was approximately 49%.

On June 1, 2021, the Company acquired Bayshore Estates, located in Sandusky, Ohio, for approximately $10.3 million. This community contains a total of 206 developed homesites that are situated on approximately 56 total acres. At the date of acquisition, the average occupancy for this community was approximately 86%.

Acquisitions in 2020

On July 24, 2020, the Company acquired Camelot Woods, located in Altoona, Pennsylvania, for approximately $3.3 million. This all-age community contains a total of 147 developed homesites that are situated on approximately 27 total acres. At the date of acquisition, the average occupancy for this community was approximately 56%.

On September 21, 2020, the Company acquired Lake Erie Estates, located in Fredonia, New York, for approximately $4.5 million. This community contains a total of 163 developed homesites that are situated on approximately 21 total acres. At the date of acquisition, the average occupancy for this community was approximately 71%. In conjunction with this acquisition, the Company assumed a mortgage of approximately $2.7 million on this property (See Note 5).

The Company has evaluated these acquisitions and has determined that they should be accounted for as acquisitions of assets. As such, we have allocated the total cash consideration, including transaction costs of approximately $109,000 for 2021 and $223,000 for 2020, to the individual assets acquired on a relative fair value basis. The following table summarizes our purchase price allocation for the assets acquired for the years ended December 31, 2021 and 2020, respectively (in thousands):

	2021 Acquisitions		2020 Acquisitions
Assets Acquired:
Land	$	986	$	693
Depreciable Property		17,223		7,301
Notes Receivable and Other		197		-0-
Total Assets Acquired	$	18,406	$	7,994

Total Income, Community Net Operating Income (“Community NOI”)* and Net Income (Loss) for communities acquired in 2021 and 2020, which are included in our Consolidated Statements of Income (Loss) for the years ended December 31, 2021 and 2020, are as follows (in thousands):

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	2021 Acquisitions			2020 Acquisitions
	2021			2021			2020
Total Income	$	1,134		$	1,092		$	374
Community NOI *	$	235		$	474		$	158
Net Income (Loss)	$	(740	)	$	(238	)	$	(73	)

* Community NOI is defined as rental and related income less community operating expenses.

See Note 6 for additional information relating to Loans and Mortgages Payable and Note 17 for the Unaudited Pro Forma Financial Information relating to these acquisitions.

In addition to the acquisitions listed above made by the Company, the Company’s newly-formed joint venture with Nuveen Real Estate consummated its first acquisition in December 2021. (See Note 5.)

Accumulated Depreciation

The following is a summary of accumulated depreciation by major classes of assets (in thousands):

	December 31, 2021		December 31, 2020
Site and Land Improvements	$	199,482	$	175,219
Buildings and Improvements		10,020		8,860
Rental Homes and Accessories		87,104		71,112
Equipment and Vehicles		19,467		17,632
Total Accumulated Depreciation	$	316,073	$	272,823

NOTE 4 – MARKETABLE SECURITIES

The Company’s marketable securities primarily consist of common and preferred stock of other REITs. The Company does not own more than 10% of the outstanding shares of any of these securities, nor does it have controlling financial interest. The Company generally limits its investment in marketable securities to no more than approximately 15% of its undepreciated assets. The REIT securities portfolio provides the Company with additional liquidity and additional income and serves as a proxy for real estate when more favorable risk adjusted returns are not available.

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The following is a listing of marketable securities at December 31, 2021 (in thousands):

			Interest			Number				Market
	Series		Rate			of Shares		Cost		Value
Equity Securities:
Preferred Stock:
Cedar Realty Trust, Inc.		B		7.250	%		10	$	237	$	264
Cedar Realty Trust, Inc.		C		6.500	%		20		494		505
Centerspace		C		6.625	%		20		500		522
Pennsylvania Real Estate Investment Trust		B		7.375	%		40		1,000		304
Pennsylvania Real Estate Investment Trust		D		6.875	%		20		498		145
Total Preferred Stock									2,729		1,740
Common Stock:
CBL & Associates Properties, Inc.							12		18,230		361
Five Star Senior Living							12		45		34
Franklin Street Properties Corporation							220		2,219		1,309
Industrial Logistics Properties Trust							87		1,729		2,186
Kimco Realty Corporation							890		16,677		21,939
Monmouth Real Estate Investment Corporation (1)							2,655		25,031		55,778
Office Properties Income Trust							562		36,418		13,948
Orion Office REIT, Inc.							18		293		345
Pennsylvania Real Estate Investment Trust							222		2,316		226
Diversified HealthCare Trust							171		2,920		528
Urstadt Biddle Properties, Inc.							100		2,049		2,130
Realty Income Corporation							185		10,910		13,224
Washington Prime Group							3		6,489		-0-
Total Common Stock									125,326		112,008
Total Marketable Securities								$	128,055	$	113,748

(1) Related entity – See Note 9.

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The following is a listing of marketable securities at December 31, 2020 (in thousands):

			Interest			Number				Market
	Series		Rate			of Shares		Cost		Value
Equity Securities:
Preferred Stock:
CBL & Associates Properties, Inc.		D		7.375	%		2	$	50	$	2
CBL & Associates Properties, Inc.		E		6.625	%		63		1,487		50
Cedar Realty Trust, Inc.		B		7.250	%		10		219		206
Cedar Realty Trust, Inc.		C		6.500	%		20		494		428
Colony Capital Inc.		I		7.150	%		20		500		472
Centerspace		C		6.625	%		20		500		520
Pennsylvania Real Estate Investment Trust		B		7.375	%		40		1,000		404
Pennsylvania Real Estate Investment Trust		D		6.875	%		20		498		206
Urstadt Biddle Properties, Inc.		H		6.250	%		13		313		313
Total Preferred Stock									5,061		2,601
Common Stock:
CBL & Associates Properties, Inc.							1,600		16,692		66
Diversified Healthcare Trust							171		2,920		704
Five Star Senior Living							12		45		80
Franklin Street Properties Corporation							220		2,219		961
Industrial Logistics Properties Trust							502		9,951		11,698
Kimco Realty Corporation							910		17,052		13,659
Monmouth Real Estate Investment Corporation (1)							2,655		25,031		45,982
Office Properties Income Trust							562		36,418		12,757
Pennsylvania Real Estate Investment Trust							222		2,316		222
Tanger Factory Outlet							180		4,229		1,793
Urstadt Biddle Properties, Inc.							100		2,049		1,413
Vereit, Inc.							282		12,059		10,657
Washington Prime Group							89		6,489		579
Total Common Stock									137,470		100,571
Total Marketable Securities								$	142,531	$	103,172

(1) Related entity – See Note 9.

The Company normally holds REIT securities long term and has the ability and intent to hold securities to recovery. As of December 31, 2021, 2020 and 2019, the securities portfolio had net unrealized holding losses of $14.3 million, $39.4 million and $25.2 million, respectively.

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NOTE 5- INVESTMENT IN JOINT VENTURE

On December 8, 2021, the Company and Nuveen Real Estate, a part of Nuveen Global Investments LLC (“Nuveen”), established a joint venture for the purpose of acquiring manufactured housing and/or recreational vehicle communities that are under development and/or newly developed and meet certain other investment guidelines. The terms of the joint venture are set forth in a Limited Liability Company Agreement dated as of December 8, 2021 (the “LLC Agreement”) entered into between a wholly owned subsidiary of the Company and an affiliate of Nuveen. The LLC Agreement provides for the parties to initially fund up to $70 million of equity capital for acquisitions during a 24-month commitment period, with Nuveen having the option, subject to certain conditions, to elect to increase the parties’ total commitments by up to an additional $100 million and to extend the commitment period for up to an additional four years. Committed capital will be funded 60% by Nuveen and 40% by the Company on a parity basis. The Company serves as managing member of the joint venture and will be responsible for day-to-day operations of the joint venture and management of its properties, subject to obtaining Nuveen’s approval of major decisions (including investments, dispositions, financings, major capital expenditures and annual budgets). For its role as managing member and property manager, the Company will receive asset management and property management fees. In addition, the Company will be entitled to receive a promote percentage once each member of the joint venture has recouped its invested capital and received a 7.5% net unlevered internal rate of return.

After December 8, 2024 or, if later, the second anniversary of the joint venture’s acquisition and placing in service of a manufactured housing or recreational vehicle community, Nuveen will have a right to initiate the sale of one or more of the communities owned by the joint venture. If Nuveen elects to initiate such a sale process, the Company may exercise a right of first refusal to acquire Nuveen’s interest in the community or communities to be sold for a purchase price corresponding to the greater of the appraised value of such communities or the amount required to provide a 7.5% net unlevered internal rate of return on Nuveen’s investment. In addition, the Company will have the right to buy out Nuveen’s interest in the joint venture at any time after December 8, 2031 at a purchase price corresponding to the greater of the appraised value of the portfolio or the amount required to provide a 7.5% net unlevered internal rate of return on Nuveen’s investment.

The LLC Agreement provides that until the capital contributions to the joint venture are fully funded or the joint venture is terminated, the joint venture will be the exclusive vehicle for the Company to acquire any manufactured housing communities and/or recreational vehicle communities that meet the joint venture’s investment guidelines. These guidelines call for the joint venture to acquire manufactured housing and recreational vehicle communities that have been developed within the previous two years and are less than 20% occupied, are located in certain geographic markets, are projected to meet certain cash flow and internal rate of return targets, and satisfy certain other criteria. The Company has agreed to offer Nuveen the opportunity to have the joint venture acquire any manufactured housing community or recreational vehicle community that meets these investment guidelines. If Nuveen determines not to pursue or approve any such acquisition, the Company would be permitted to acquire the property outside the joint venture. Except for investment opportunities that are offered to and declined by Nuveen, the Company will be prohibited from developing, owning, operating or managing manufactured housing communities or recreational vehicle communities within a 10-mile radius of any community owned by the joint venture. However, this restriction will not apply with respect to investments by the Company in existing communities operated by the Company.

Nuveen will have the right to remove and replace the Company as managing member of the joint venture and manager of the joint venture’s properties if the Company breaches certain obligations or certain events occur. Upon such removal, Nuveen may elect to buy out the Company’s interest in the joint venture at 98% of the value of the Company’s interest in the joint venture. If Nuveen does not exercise such buy-out right, the Company may, at specified times, elect to initiate a sale of the communities owned by the joint venture, subject to a right of first refusal on the part of Nuveen. The LLC Agreement contains restrictions on a party’s right to transfer its interest in the joint venture without the approval of the other party.

While the Company considers the LLC Agreement with Nuveen to be an important agreement, the Company has concluded that the LLC Agreement does not fall within the definition of a “material contract” as defined by SEC rules.  The LLC Agreement requires the Company to offer Nuveen the opportunity to have the joint venture acquire a manufactured housing community or recreational vehicle community that meets the investment guidelines.  If Nuveen decides not to acquire the community through the joint venture, however, the Company is free to purchase the community on its own outside of the joint venture.  Based upon this, and in light of the Company’s relationship and its dealings with Nuveen since entering into the LLC Agreement, the Company has concluded that there is no meaningful restriction on the Company’s ability to acquire communities that meet the investment guidelines and that the other provisions of the LLC Agreement do not impose any material obligations or restrictions on the Company.

On December 22, 2021, the Company, through its joint venture with Nuveen Real Estate, closed on the acquisition of a newly developed all-age, manufactured home community located in Sebring, Florida for a total purchase price of $22.2 million. This community contains 219 developed homesites. It is situated on approximately 39 acres. The Company manages this community on behalf of the joint venture. See Note 13 for additional information.

NOTE 6 – LOANS AND MORTGAGES PAYABLE

Loans Payable

The Company may purchase securities on margin. The interest rates charged on the margin loans at December 31, 2021 and 2020 was 0.75%. These margin loans are due on demand. At December 31, 2021 and 2020, the margin loans amounted to $-0- and $17.6 million, respectively, and are collateralized by the Company’s securities portfolio. The Company must maintain a coverage ratio of approximately 2 times.

The Company has revolving credit agreements totaling $28.5 million with 21^st Mortgage Corporation (“21^st Mortgage”), Customers Bank and Northpoint Commercial Finance to finance inventory purchases. Interest rates on these agreements range from 4.15% to prime with a minimum of 6%. As of December 31, 2021 and 2020, the total amount outstanding on these lines was $10.9 million and $13.1 million, respectively, with a weighted average interest rate of 4.38% and 4.44%, respectively.

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In June 2020, the Company expanded its revolving line of credit with OceanFirst Bank (“OceanFirst Line”) from $15 million to $20 million. This line is secured by the Company’s eligible notes receivable. Interest was reduced from prime plus 25 basis points to prime with a floor of 3.25%. The amendment also extended the maturity date from June 1, 2020 to June 1, 2022, with a one year extension at the Bank’s option. As of December 31, 2021 and 2020, the amount outstanding on this revolving line of credit was $6 million and the interest rate was 3.25%.

On October 7, 2020, the Company entered into a revolving line of credit with FirstBank secured by rental homes and rental home leases in several of our manufactured home communities. This facility allows for proceeds of $20 million and is expandable to $30 million with an accordion feature. The facility has a maturity date of November 29, 2022, with a one-year extension available at the Company’s option. Interest is payable at prime plus 25 basis points with a floor of 3.5%. As of December 31, 2021 and 2020, the amount outstanding on this revolving line of credit was $5 million and the interest rate was 3.5%.

Unsecured Line of Credit

On November 29, 2018, the Company entered into a First Amendment to Amended and Restated Credit Agreement (the “Amendment”) to expand and extend its existing unsecured revolving credit facility (the “Facility”). The Facility is syndicated with two banks led by BMO Capital Markets Corp. (“BMO”), as sole lead arranger and sole book runner, with Bank of Montreal as administrative agent, and includes JPMorgan Chase Bank, N.A. (“J.P. Morgan”) as the sole syndication agent. The Amendment provided for an increase from $50 million in available borrowings to $75 million in available borrowings with a $50 million accordion feature, bringing the total potential availability up to $125 million, subject to certain conditions including obtaining commitments from additional lenders. The Amendment also extended the maturity date of the Facility from March 27, 2020 to November 29, 2022, with a one-year extension available at the Company’s option, subject to certain conditions including payment of an extension fee. Availability under the Facility is limited to 60% of the value of the unencumbered communities which the Company has placed in the Facility’s unencumbered asset pool (“Borrowing Base”). The First Amendment increased the value of the Borrowing Base communities by reducing the capitalization rate applied to the Net Operating Income (“NOI”) generated by the communities in the Borrowing Base from 7.5% to 7.0%. On February 5, 2021, the Company entered into a Second Amendment to Amended and Restated Credit Agreement with BMO to further reduce the capitalization rate from 7.0% to 6.5%.

Interest rates on borrowings are based on the Company’s overall leverage ratio and decreased from LIBOR plus 1.75% to 2.50% or BMO’s prime lending rate plus 0.75% to 1.50%, at the Company’s option, to LIBOR plus 1.50% to 2.20%, or BMO’s prime lending rate plus 0.50% to 1.20%. Based on the Company’s current leverage ratio, borrowings under the Facility will bear interest at LIBOR plus 1.60% or at BMO’s prime lending rate plus 0.60%, which results in an interest rate of 1.60% and 1.65% at December 31, 2021 and 2020, respectively.

As of December 31, 2021 and 2020, the amount outstanding under this Facility was $25 million and $45 million, respectively.

The aggregate principal payments of all loans payable, including the Credit Facility, are scheduled as follows (in thousands):

Year Ended December 31,
2022	$	46,945
2023		-0-
2024		-0-
2025		-0-
2026		-0-
Thereafter		-0-
Total Loans Payable		46,945
Unamortized Debt Issuance Costs		(188	)
Total Loans Payable, net of Unamortized Debt Issuance Costs	$	46,757

Mortgages Payable

Mortgages Payable represents the principal amounts outstanding, net of unamortized debt issuance costs. Interest is payable on these mortgages at fixed rates ranging from 2.62% to 6.35%. The weighted average interest rate was 3.8% and 3.9% as of December 31, 2021 and 2020, respectively, including the effect of unamortized debt issuance costs. The weighted average interest rate as of December 31, 2021 and 2020 was 3.8%, respectively, not including the effect of unamortized debt issuance costs. The weighted average loan maturity of the Mortgage Notes Payable was 5.2 and 6.0 years at December 31, 2021 and 2020, respectively.

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The following is a summary of mortgages payable at December 31, 2021 and 2020 (in thousands):

	At December 31, 2021				Balance at December 31,
Property	Due Date	Interest Rate			2021			2020
Allentown	10/01/25		4.06	%	$	12,295		$	12,587
Brookview Village	04/01/25		3.92	%		2,539			2,603
Candlewick Court	09/01/25		4.10	%		4,104			4,201
Catalina	08/19/25		3.00	%		4,586			4,853
Cedarcrest Village	04/01/25		3.71	%		10,956			11,238
Clinton Mobile Home Resort	10/01/25		4.06	%		3,227			3,303
Cranberry Village	04/01/25		3.92	%		6,965			7,139
D & R Village	03/01/25		3.85	%		7,013			7,191
Fairview Manor	11/01/26		3.85	%		14,739			15,076
Forest Park Village	09/01/25		4.10	%		7,652			7,833
Friendly Village	05/06/23		4.618	%		6,650			6,906
Hayden Heights	04/01/25		3.92	%		1,914			1,962
Highland Estates	06/01/27		4.12	%		15,419			15,744
Holiday Village	09/01/25		4.10	%		7,282			7,454
Holiday Village- IN	11/01/25		3.96	%		7,811			7,998
Holly Acres Estates	09/01/31		3.21	%		6,031			2,077
Kinnebrook Village	04/01/25		3.92	%		3,700			3,792
Lake Erie Estates	07/06/25		5.16	%		2,604			2,657
Lake Sherman Village	09/01/25		4.10	%		5,060			5,180
Meadows of Perrysburg	10/06/23		5.413	%		2,825			2,888
Northtowne Meadows	09/06/26		4.45	%		11,576			11,818
Olmsted Falls	04/01/25		3.98	%		1,915			1,962
Oxford Village	07/01/29		3.41	%		14,985			15,301
Perrysburg Estates	09/06/25		4.98	%		1,526			1,558
Pikewood Manor	11/29/28		5.00	%		13,766			14,103
Shady Hills	04/01/25		3.92	%		4,563			4,677
Springfield Meadows	10/06/25		4.83	%		2,914			2,975
Suburban Estates	10/01/25		4.06	%		5,126			5,248
Sunny Acres	10/01/25		4.06	%		5,706			5,842
Trailmont	04/01/25		3.92	%		3,042			3,118
Twin Oaks	10/01/29		3.37	%		5,809			5,930
Valley Hills	06/01/26		4.32	%		3,152			3,220
Waterfalls	06/01/26		4.38	%		4,293			4,386
Weatherly Estates	04/01/25		3.92	%		7,422			7,607
Wellington Estates	01/01/23		6.35	%		2,205			2,263
Woods Edge	01/07/26		3.25	%		5,627			5,940
Worthington Arms	09/01/25		4.10	%		8,580			8,783
Various (2 properties)	02/01/27		4.56	%		13,073			13,335
Various (2 properties)	08/01/28		4.27	%		12,661			12,902
Various (2 properties)	07/01/29		3.41	%		21,907			22,368
Various (4 properties)	07/01/23		4.975	%		7,418			7,596
Various (5 properties)	01/01/22		4.25	%		-0-			12,694
Various (5 properties)	12/06/22		4.75	%		6,523			6,692
Various (6 properties)	08/01/27		4.18	%		12,320			12,581
Various (13 properties)	03/01/23		4.065	%		44,339			45,588
Various (28 properties)	09/01/30		2.62	%		102,882			105,221
Total Mortgages Payable						456,702			476,390
Unamortized Debt Issuance Costs						(4,135	)		(4,913	)
Total Mortgages Payable, net of Unamortized Debt Issuance Costs					$	452,567		$	471,477

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At December 31, 2021 and 2020, mortgages were collateralized by real property with a carrying value of $950.9 million and $932.5 million, respectively, before accumulated depreciation and amortization. Interest costs amounting to $1.5 million, $1.3 million and $1.5 million were capitalized during 2021, 2020 and 2019, respectively, in connection with the Company’s expansion program. At December 31, 2021, the Company owned 127 communities of which 28 are unencumbered.

Recent Financing Transactions

During the year ended December 31, 2021

On August 17, 2021, the Company obtained a Federal Home Loan Mortgage Corporation (“Freddie Mac”) mortgage totaling $6.1 million through Wells Fargo Bank, N.A. (“Wells Fargo”) on Holly Acres. The interest rate on this mortgage is fixed at 3.21%. This mortgage matures on September 1, 2031, with principal repayments based on a 30-year amortization schedule.

During the year ended December 31, 2020

On August 20, 2020, the Company completed the financing of 28 of its previously unencumbered communities, containing approximately 4,100 sites, through Wells Fargo Bank, N. A. for total proceeds of approximately $106 million. This Federal National Mortgage Association (“Fannie Mae”) credit facility has a 10-year maturity with a 30-year amortization schedule. Interest is at a fixed rate of 2.62%.

On September 21, 2020, the Company assumed a mortgage loan with a balance of approximately $2.7 million, in conjunction with its acquisition of Lake Erie Estates in Fredonia, New York. The interest rate on this mortgage is fixed at 5.16%. This mortgage matures on July 6, 2025.

The aggregate principal payments of all mortgages payable are scheduled as follows (in thousands):

Year Ended December 31,
2022	$	17,870
2023		71,368
2024		10,182
2025		138,969
2026		35,863
Thereafter		182,450
Total	$	456,702

Subsequent to year end, the Company issued $102.7 million of its 4.72% Series A Bonds due 2027. (See Note 16.)

NOTE 7 – STOCK COMPENSATION PLAN

On June 13, 2013, the shareholders approved and ratified the Company’s 2013 Stock Option and Stock Award Plan (the “2013 Plan”) authorizing the grant of stock options or restricted stock awards to directors, officers and key employees of options to purchase up to 3 million shares of common stock. The 2013 Plan replaced the Company’s 2003 Stock Option Plan (the “2003 Plan”), which, pursuant to its terms, terminated in 2013. The outstanding options under the 2003 Plan, as amended, remain outstanding until exercised, forfeited or expired.

On June 14, 2018, the shareholders approved and ratified an amendment and restatement (and renaming) of the 2013 Plan (now referred to as the Amended and Restated 2013 Incentive Award Plan) (the “Amended and Restated 2013 Plan”) The amendment and restatement made two substantive changes: (1) provide an additional 2 million common shares for future grant of option awards, restricted stock awards, or other stock-based awards; and (2) allow for the issuance of other stock-based awards.

On June 16, 2021, the shareholders approved and ratified an amendment of the Company’s Amended and Restated 2013 Plan. The amendment provides for an additional 3 million common shares for future grants of option awards, restricted stock awards, or other stock-based awards.

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The Compensation Committee has the exclusive authority to administer and construe the Amended and Restated 2013 Plan and shall determine, among other things: persons eligible for awards and who shall receive them; the terms and conditions of the awards; the time or times and conditions subject to which awards may become vested, deliverable, exercisable, or as to which any may apply, be accelerated or lapse; and amend or modify the terms and conditions of an award with the consent of the participant.

Generally, the term of any stock option may not be more than 10 years from the date of grant. The option price may not be below the fair market value at date of grant. If and to the extent that an award made under the Amended and Restated 2013 Plan is forfeited, terminated, expires or is canceled unexercised, the number of shares associated with the forfeited, terminated, expired or canceled portion of the award shall again become available for additional awards under the Amended and Restated 2013 Plan.

The Company accounts for stock options and restricted stock in accordance with ASC 718-10, Compensation-Stock Compensation. ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period).

Stock Options

During the year ended December 31, 2021, forty-six employees were granted options to purchase a total of 767,900 shares. During the year ended December 31, 2020, forty-one employees were granted options to purchase a total of 715,000 shares. During the year ended December 31, 2019, forty-one employees were granted options to purchase a total of 644,000 shares. The fair value of these options for the years ended December 31, 2021, 2020 and 2019 was approximately $2.1 million, $686,000 and $1.1 million, respectively, based on assumptions noted below and is being amortized over the vesting period. The remaining unamortized stock option expense was $2.3 million as of December 31, 2021, which will be expensed ratably through 2026.

The Company calculates the fair value of each option grant on the grant date using the Black-Scholes option-pricing model which requires the Company to provide certain inputs, as follows:

● The assumed dividend yield is based on the Company’s expectation of an annual dividend rate for regular dividends over the estimated life of the option.

● Expected volatility is based on the historical volatility of the Company’s stock over a period relevant to the related stock option grant.

● The risk-free interest rate utilized is the interest rate on U.S. Government Bonds and Notes having the same life as the estimated life of the Company’s option awards.

● Expected life of the options granted is estimated based on historical data reflecting actual hold periods.

● Estimated forfeiture is based on historical data reflecting actual forfeitures.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the following years:

	2021			2020			2019
Dividend yield		4.66	%		5.33	%		5.13	%
Expected volatility		24.59	%		24.57	%		24.04	%
Risk-free interest rate		1.44	%		0.89	%		2.50	%
Expected lives		10			10			10
Estimated forfeitures		-0-			-0-			-0-

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During the year ended December 31, 2021, options to thirty-five employees to purchase a total of 709,980 shares were exercised. During the year ended December 31, 2020, options to ten employees to purchase a total of 62,500 shares were exercised. During the year ended December 31, 2019, options to sixteen employees to purchase a total of 240,000 shares were exercised. During the year ended December 31, 2021, options to one employee to purchase a total of 400 shares were forfeited. During the year ended December 31, 2020, options to two employees to purchase a total of 23,000 shares were forfeited or expired. During the year ended December 31, 2019, options to one employee to purchase a total of 20,000 shares were forfeited.

A summary of the status of the stock options outstanding under the Company’s stock compensation plans as of December 31, 2021, 2020 and 2019 and changes during the years then ended are as follows (in thousands):

	2021					2020					2019
				Weighted-					Weighted-					Weighted-
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Outstanding at beginning of year		3,266		$	12.03		2,637		$	12.05		2,253		$	12.09
Granted		768			21.90		715			9.84		644			13.67
Exercised		(710	)		12.11		(63	)		10.55		(240	)		10.84
Forfeited		-0-			19.36		(11	)		11.65		(20	)		13.50
Expired		-0-			-0-		(12	)		11.29		-0-			-0-
Outstanding at end of year		3,324			14.25		3,266			12.03		2,637			12.05
Options exercisable at end of year		2,556					2,556					1,196
Weighted average fair value of options granted during the year				$	2.77				$	0.96				$	1.72

The following is a summary of stock options outstanding as of December 31, 2021 (in thousands):

Date of Grant	Number of Employees		Number of Shares			Option Price		Expiration Date
06/11/14		4		136			9.85	06/11/22
06/24/15		5		195			9.82	06/24/23
04/05/16		8		237			9.77	04/05/24
01/19/17		2		60			14.25	01/19/27
04/04/17		21		422			15.04	04/04/27
04/02/18		17		301			13.09	04/02/28
07/09/18		4		40			15.75	07/09/28
12/10/18		1		25			12.94	12/10/28
01/02/19		2		60			11.42	01/02/29
04/02/19		19		419			13.90	04/02/29
01/17/20		1		10			16.37	01/17/30
03/25/20		39		637			9.70	03/25/30
05/20/20		2		14			11.80	05/20/30
03/18/21		41		159	*		19.36	03/18/31
07/14/21		46		609	*		22.57	07/14/31
				3,324

* Unexercisable

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The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for the options that were in-the-money. The aggregate intrinsic value of options outstanding as of December 31, 2021, 2020 and 2019 was $42.9 million, $9.3 million and $8.3 million, respectively, of which $39.9 million, $5.7 million and $6.9 million relate to options exercisable. The intrinsic value of options exercised in 2021, 2020 and 2019 was $3.6 million, $283,000 and $914,000, respectively, determined as of the date of option exercise. The weighted average remaining contractual term of the above options was 10.7, 9.9 and 9.1 years as of December 31, 2021, 2020 and 2019, respectively. For the years ended December 31, 2021, 2020 and 2019, amounts charged to stock compensation expense relating to stock option grants, which is included in General and Administrative Expenses, totaled $325,000, $396,000 and $1.2 million, respectively.

Restricted Stock

On January 29, 2021, the Company awarded special restricted stock grants totaling 146,572 shares to five employees for their successful efforts on the August 2020 groundbreaking Federal National Mortgage Association (“Fannie Mae”) financing at 2.62%, the proceeds of which were used to redeem our 8% Series B Cumulative Redeemable Preferred Stock, Liquidation Preference $25.00 per share. The grant date fair value of the restricted stock grants awarded on January 29, 2021 was $4.3 million, which will be expensed over the vesting period. Vesting of these grants is subject to both time and performance-based vesting criteria as follows:

Vesting Date	Performance Goal to be Met (1)	Percent of Shares Vested
June 30, 2023	Growth in cumulative Normalized Funds from Operations (“Normalized FFO”) over the past 3 years is 2% or greater	100%
June 30, 2023	Growth in cumulative Normalized FFO over the past 3 years is 5% or greater	Bonus of 50% of the Restricted Stock (total of 150%)
June 30, 2023	Growth in cumulative Normalized FFO over the past 3 years is 20% or greater	Bonus of 100% of the Restricted Stock (total of 200%)

⁽¹⁾ Growth in cumulative Normalized FFO is measured as the trailing 12-month Normalized FFO per share at June 30, 2023 divided by the trailing 12-month Normalized FFO per share at June 30, 2020, which amount is $0.64/share at June 30, 2020.

On January 13, 2021, the Company awarded a total of 25,000 shares of restricted stock to five employees. On March 18, 2021, the Company awarded a total of 108,500 shares of restricted stock to four employees. On January 8, 2020, the Company awarded a total of 15,000 shares of restricted stock to three employees. On October 23, 2020, the Company awarded a total of 19,700 shares of restricted stock to two participants, pursuant to their employment agreements. On April 2, 2019, the Company awarded a total of 118,000 shares of restricted stock to two participants, pursuant to their employment agreements. The grant date fair value of the restricted stock grants awarded to participants (other than the performance based awards granted in January 2021) was $2.5 million, $512,000 and $1.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. These grants primarily vest in equal installments over five years. As of December 31, 2021, there remained a total of $5.9 million of unrecognized restricted stock compensation related to outstanding non-vested restricted stock grants awarded and outstanding at that date. Restricted stock compensation is expected to be expensed over a remaining weighted average period of 2.3 years. For the years ended December 31, 2021, 2020 and 2019, amounts charged to stock compensation expense related to restricted stock grants, which is included in General and Administrative Expenses, totaled $3.1 million, 931,000 and $723,000, respectively.

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A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2021, 2020 and 2019, and changes during the year ended December 31, 2021, 2020 and 2019 are presented below (in thousands):

	2021					2020					2019
				Weighted-					Weighted-					Weighted-
				Average					Average					Average
				Grant Date					Grant Date					Grant Date
	Shares			Fair Value		Shares			Fair Value		Shares			Fair Value
Non-vested at beginning of year		212		$	13.69		238		$	13.33		161		$	12.44
Granted		280			16.51		35			14.75		118			11.12
Dividend Reinvested Shares		15			21.68		11			12.91		11			13.51
Vested		(73	)		8.48		(72	)		12.87		(52	)		5.69
Non-vested at end of year		434		$	16.66		212		$	13.69		238		$	13.33

Other Stock-Based Awards

Effective June 20, 2018, a portion of our quarterly directors’ fee was paid with our unrestricted common stock. During 2021, 16,500 unrestricted shares of common stock were granted as directors’ fees with a weighted average fair value on the grant date of $14.78 per share. During 2020, 11,000 unrestricted shares of common stock were granted as directors’ fees with a weighted average fair value on the grant date of $16.13 per share. During 2019, 4,000 unrestricted shares of common stock were granted as directors’ fees with a weighted average fair value on the grant date of $13.52 per share.

As of December 31, 2021, there were 2.4 million shares available for grant as stock options, restricted stock or other stock-based awards under the 2013 Plan.

NOTE 8 – 401(k) PLAN

All full-time employees who are over 21 years old are eligible for the Company’s 401(k) Plan (“Plan”). Under this Plan, an employee may elect to defer his/her compensation, subject to certain maximum amounts, and have it contributed to the Plan. Employer contributions to the Plan are at the discretion of the Company. During 2021, 2020 and 2019, the Company made matching contributions to the Plan of up to 100% of the first 3% of employee salary and 50% of the next 2% of employee salary. The total expense relating to the Plan, including matching contributions amounted to $752,000, $1.1 million and $376,000 in 2021, 2020 and 2019, respectively.

NOTE 9 – RELATED PARTY TRANSACTIONS AND OTHER MATTERS

Transactions with Monmouth Real Estate Investment Corporation

There are four Directors of the Company who are also Directors and shareholders of MREIC. The Company holds common stock of MREIC in its securities portfolio. As of December 31, 2021, the Company owned a total of 2.7 million shares of MREIC common stock, representing 2.7% of the total MREIC shares outstanding at December 31, 2021 (See Note 4). The Company shares one officer (Chairman of the Board) with MREIC. In November 2021, MREIC entered into a merger agreement pursuant to which, subject to satisfaction of certain closing conditions, a third party agreed to acquire MREIC in an all-cash merger, which, if consummated, would result in the Company and MREIC’s other shareholders receiving a cash payment of $21.00 per share in cancellation of their MREIC common shares. (See Note 16.)

Employment Agreements and Compensation

The Company has three-year employment agreements with Mr. Eugene W. Landy, Mr. Samuel A. Landy and Ms. Anna T. Chew. The agreements provide for base compensation aggregating approximating $1.4 million. In addition, the agreements call for incentive bonuses, and an extension of services and severance payments upon certain future events, such as a change in control.

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Other Matters

Mr. Eugene W. Landy, the Founder and Chairman of the Board of Directors of the Company, owns a 24% interest in the entity that is the landlord of the property where the Company’s corporate office space is located. On October 1, 2019, the Company entered into a new lease for its executive offices in Freehold, New Jersey which combines the existing corporate office space with additional adjacent office space. This new lease extends our existing lease through April 30, 2027 and requires monthly lease payments of $23,098 through April 30, 2022 and $23,302 from May 1, 2022 through April 30, 2027. The Company is also responsible for its proportionate share of real estate taxes and common area maintenance. Management believes that the aforesaid rents are no more than what the Company would pay for comparable space elsewhere.

NOTE 10 – SHAREHOLDERS’ EQUITY

As of December 31, 2021, the Company’s authorized capital stock consists of 170.4 million shares, classified as 144.2 million shares of common stock, par value $0.10 per share, 199,000 shares of 8.00% Series B Cumulative Redeemable Preferred Stock (“Series B Preferred Stock”), 13.8 million shares of Series C Preferred Stock, 9.3 million shares of Series D Preferred Stock, and 3.0 million shares of excess stock. The excess stock is designed to help us protect our status as a REIT under the Internal Revenue Code.

Common Stock

The Company has a Dividend Reinvestment and Stock Purchase Plan (“DRIP”), as amended. Under the terms of the DRIP, shareholders who participate may reinvest all or part of their dividends in additional shares of the Company at a discounted price (approximately 95% of market value) directly from the Company, from authorized but unissued shares of the Company’s common stock. Shareholders may also purchase additional shares at this discounted price by making optional cash payments monthly. Optional cash payments must be not less than $500 per payment nor more than $1,000 unless a request for waiver has been accepted by the Company. On January 15, 2020, the Company increased the monthly maximum for the purchase of shares for cash under its DRIP from $1,000 to $5,000. On February 11, 2021, the Company reduced the monthly maximum from $5,000 to $1,000.

Amounts received in connection with the DRIP for the years ended December 31, 2021, 2020 and 2019 were as follows (in thousands):

	2021			2020			2019
Amounts Received	$	9,773		$	9,154		$	31,503
Less: Dividends Reinvested		(3,506	)		(3,151	)		(7,705	)
Amounts Received, net	$	6,267		$	6,003		$	23,798
Number of Shares Issued		503			720			2,468

Common Stock At-The-Market Sales Program

On June 30, 2020, the Company entered into an Equity Distribution Agreement (the “2020 Common ATM Program”) with BMO Capital Markets Corp., B. Riley FBR, Inc. (“B Riley”), Compass Point Research & Trading, LLC, D.A. Davidson & Co., Janney Montgomery Scott LLC, and J.P. Morgan Securities LLC, as distribution agents (the “2020 Distribution Agents”) under which the Company was permitted to offer and sell shares of the Company’s Common Stock, having an aggregate sales price of up to $100 million from time to time through the 2020 Distribution Agents. Sales of the shares of Common Stock under the 2020 Common ATM Program were made in “at the market offerings” as defined in Rule 415 under the Securities Act, including, without limitation, sales made directly on or through the NYSE or on any other existing trading market for the Common Stock, as applicable, or to or through a market maker or any other method permitted by law, including, without limitation, negotiated transactions and block trades. Shares of Common Stock sold under the 2020 Common ATM Program were offered pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-238321), filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2020, and declared effective on June 1, 2020 (the “2020 Registration Statement”), and the prospectus dated June 1, 2020 included in the 2020 Registration Statement and the related prospectus supplement dated June 30, 2020. During 2021, 4.2 million shares of Common Stock were issued and sold at a weighted average price of $20.26 per share, generating gross proceeds of $86.0 million and net proceeds of $84.7 million, after offering expenses, under the 2020 Common ATM Program. The Company discontinued the sale of shares under the 2020 Common ATM Program prior to July 31, 2021.

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On August 16, 2021, the Company entered into a new Equity Distribution Agreement (the “2021 Common ATM Program”) with BMO Capital Markets Corp., J.P. Morgan Securities LLC, B. Riley Securities, Inc., Compass Point Research & Trading, LLC, and Janney Montgomery Scott LLC, as distribution agents (the “2021 Distribution Agents”) under which the Company was permitted to offer and sell shares of the Company’s Common Stock, having an aggregate sales price of up to $100 million from time to time through the 2021 Distribution Agents. Sales of the shares of Common Stock under the 2021 Common ATM Program were made in “at the market offerings” as defined in Rule 415 under the Securities Act, including, without limitation, sales made directly on or through the NYSE or on any other existing trading market for the Common Stock, as applicable, or to or through a market maker or any other method permitted by law, including, without limitation, negotiated transactions and block trades. The shares of Common Stock sold under the 2020 Common ATM Program were offered and sold pursuant to the 2020 Registration Statement and pursuant to the Company’s prospectus dated June 1, 2020 included in the 2020 Registration Statement and the related prospectus supplement, dated August 16, 2021. The 2021 Common ATM Program replaced the Company’s previous 2020 Common ATM Program. The Company began selling shares under the 2021 Common ATM Program on August 24, 2021 and through December 31, 2021, 4.0 million shares of Common Stock were issued and sold at a weighted average price of $24.15 per share, generating gross proceeds of $96.0 million and net proceeds of $94.4 million, after offering expenses, under the 2021 Common ATM Program. As of December 31, 2021, $4.0 million of common stock remained eligible for sale under the 2021 Common ATM Program. The additional shares of common stock remaining available for sale under the 2021 Common ATM Program were sold during 2022 and the 2021 Common ATM Program is no longer available.

Issuer Purchases of Equity Securities

On January 13, 2021, the Board of Directors reaffirmed our Common Stock Repurchase Program (the “Repurchase Program”) that authorized us to repurchase up to $25 million in the aggregate of the Company’s common stock. Purchases under the Repurchase Program were permitted to be made using a variety of methods, which may include open market purchases, privately negotiated transactions or block trades, or by any combination of such methods, in accordance with applicable insider trading and other securities laws and regulations. The size, scope and timing of any purchases would be based on business, market and other conditions and factors, including price, regulatory and contractual requirements or consents, and capital availability. The Repurchase Program did not require the Company to acquire any particular amount of common stock and may be suspended, modified or discontinued at any time at the Company’s discretion without prior notice. Although the Repurchase Program remains in effect, the Company did not make any repurchases of common stock during 2021.

Preferred Stock

8.0% Series B Cumulative Redeemable Preferred Stock

On October 20, 2020, the Company voluntarily redeemed all 3.8 million issued and outstanding shares of its 8.0% Series B Preferred Stock at a redemption price equal to the $25.00 per share liquidation preference plus accrued and unpaid dividends to, but not including, the October 20, 2020 redemption date in an amount of $0.2722 per share, for a total payment of $25.2722 per share, or $96.1 million. As a result of our redemption notice, the Company recognized a preferred share redemption charge of approximately $2.9 million related to the original issuance costs. Upon the redemption, all 3.8 million outstanding shares of Series B Preferred reverted to authorized unissued shares of Common Stock.

6.75% Series C Cumulative Redeemable Preferred Stock

On July 26, 2017, the Company issued 5 million shares of its new 6.75% Series C Cumulative Redeemable Preferred Stock, Liquidation Preference $25.00 per share (“Series C Preferred Stock”) at an offering price of $25.00 per share in an underwritten registered public offering. The Company received net proceeds from the sale of these 5 million shares, after deducting the underwriting discount and other estimated offering expenses, of approximately $120.8 million. On August 2, 2017, the Company issued an additional 750,000 shares of Series C Preferred Stock pursuant to the underwriters’ exercise of their overallotment option and received additional net proceeds of approximately $18.2 million.

Dividends on the Series C Preferred Stock shares are cumulative at an annual rate of $1.6875 per share and will be payable quarterly in arrears on March 15, June 15, September 15, and December 15.

The Series C Preferred Stock, par value $0.10 per share, has no maturity and will remain outstanding indefinitely unless redeemed or otherwise repurchased. Except in limited circumstances relating to the Company’s qualification as a REIT, and as described below, the Series C Preferred Stock is not redeemable prior to July 26, 2022. On and after July 26, 2022, the Series C Preferred Stock will be redeemable at the Company’s option for cash, in whole or, from time to time, in part, at a price per share equal to $25.00, plus all accrued and unpaid dividends (whether or not declared) to the date of redemption. The Series C Preferred Stock ranks on a parity with the Company’s Series D Preferred Stock with respect to dividend rights and rights upon liquidation, dissolution or winding up.

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Upon the occurrence of a Delisting Event or Change of Control, each as defined in the Prospectus pursuant to which the shares of Series C Preferred Stock were offered, each holder of the Series C Preferred Stock will have the right to convert all or part of the shares of the Series C Preferred Stock held into common stock of the Company, unless the Company elects to redeem the Series C Preferred Stock.

Holders of the Series C Preferred Stock generally have no voting rights, except if the Company fails to pay dividends for nine or more quarterly periods, whether or not consecutive, or with respect to certain specified events.

In conjunction with the issuance in July and August 2017 of the Company’s Series C Preferred Stock, the Company filed with the Maryland SDAT, an amendment to the Company’s charter to increase the authorized number of shares of the Company’s common stock by 30.8 million shares. Immediately following this amendment, the Company filed with the Maryland SDAT Articles Supplementary setting forth the rights, preferences and terms of the Series C Preferred Stock and reclassifying 5.8 million shares of Common Stock as shares of Series C Preferred Stock. Additionally, upon the redemption on August 31, 2017 of all 3.7 million outstanding shares of the Company’s Series A Preferred Stock, the authorized shares of Series A Preferred automatically reverted to authorized Common Stock, which increased our authorized Common Stock by that amount.

On April 29, 2019, the Company issued and sold a total of 4 million shares, including as a result of the underwriters’ exercise in full of their overallotment option of 400,000 shares, of our Series C Preferred Stock at an offering price of $25.00 per share in an underwritten registered public offering. The additional shares of Series C Preferred Stock form a single series with, have the same terms as, and vote as a single class with, the 5.8 million previously outstanding shares of Series C Preferred Stock issued in July 2017 and rank on a parity with the Company’s outstanding Series B Preferred Stock and its outstanding 6.375% Series D Cumulative Redeemable Preferred Stock. After giving effect to the April 2019 offering, the Company had a total of 9.8 million shares of Series C Preferred Stock outstanding.

The Company received net proceeds from the sale of the 4 million shares of Series C Preferred Stock of approximately $96.7 million, after deducting the underwriting discount and other estimated offering expenses, and used the proceeds for general corporate purposes, which included purchase of manufactured homes for sale or lease to customers, expansion of its existing communities, acquisitions of additional properties and repayment of indebtedness on a short-term basis.

In conjunction with the issuance in April 2019 of the Company’s Series C Preferred Stock, on April 26, 2019 the Company filed with the Maryland SDAT, an amendment to the Company’s charter to increase the authorized number of shares of the Company’s common stock by 16 million shares.

Immediately following this amendment, the Company filed with the Maryland SDAT Articles Supplementary reclassifying 4 million shares of Common Stock as shares of Series C Preferred Stock.

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6.375% Series D Cumulative Redeemable Preferred Stock

On January 22, 2018, the Company issued 2 million shares of its new 6.375% Series D Cumulative Redeemable Preferred Stock, Liquidation Preference $25.00 Per Share (“Series D Preferred Stock”) at an offering price of $25.00 per share in an underwritten registered public offering. The Company received net proceeds from the sale of these 2 million shares, after deducting the underwriting discount and other estimated offering expenses, of approximately $48.2 million and has used the net proceeds of the offering for general corporate purposes, which included the purchase of manufactured homes for sale or lease to customers, expansion of its existing communities, acquisitions of additional properties and repayment of indebtedness on a short-term basis.

Dividends on the Series D Preferred Stock shares are cumulative from January 22, 2018 and are payable quarterly in arrears on March 15, June 15, September 15, and December 15 at an annual rate of $1.59375 per share.

The Series D Preferred Stock, par value $0.10 per share, has no maturity and will remain outstanding indefinitely unless redeemed or otherwise repurchased. Except in limited circumstances relating to the Company’s qualification as a REIT, and as described below, the Series D Preferred Stock is not redeemable prior to January 22, 2023. On and after January 22, 2023, the Series D Preferred Stock will be redeemable at the Company’s option for cash, in whole or, from time to time, in part, at a price per share equal to $25.00, plus all accrued and unpaid dividends (whether or not declared) to the date of redemption. The Series D Preferred Stock shares rank on a parity with the Company’s Series C Preferred Stock shares with respect to dividend rights and rights upon liquidation, dissolution or winding up.

Upon the occurrence of a Delisting Event or Change of Control, each as defined in the Prospectus pursuant to which the shares of Series D Preferred Stock were offered, each holder of the Series D Preferred Stock will have the right to convert all or part of the shares of the Series D Preferred Stock held into common stock of the Company, unless the Company elects to redeem the Series D Preferred Stock.

Holders of the Series D Preferred Stock generally have no voting rights, except if the Company fails to pay dividends for nine or more quarterly periods, whether or not consecutive, or with respect to certain specified events.

In conjunction with the issuance of the Company’s Series D Preferred Stock, in January 2018 the Company filed with the Maryland SDAT Articles Supplementary setting forth the rights, preferences and terms of the Series D Preferred Stock shares and reclassifying 2.3 million shares of Common Stock as shares of Series D Preferred Stock.

During 2019, 2020 and 2021, the Company sold additional shares of Series D Preferred Stock pursuant to its at-the-market sales programs, and amended its charter in connection therewith, as described below.

Preferred Stock At-The-Market Sales Programs

On October 21, 2019, the Company entered into a Preferred Stock At-The-Market Sales Program (“2019 Preferred ATM Program”) with B. Riley, as distribution agent, under which the Company was permitted to offer and sell shares of the Company’s Series C Preferred Stock and/or Series D Preferred Stock, having an aggregate sales price of up to $100 million. Sales of shares under the 2019 Preferred ATM Program were made in “at the market offerings” as defined in Rule 415 under the Securities Act, including, without limitation, sales made directly on or through the NYSE, or on any other existing trading market for the Series C Preferred Stock or Series D Preferred Stock, as applicable, or to or through a market maker or any other method permitted by law, including, without limitation, negotiated transactions and block trades. The Company began selling shares under the 2019 Preferred ATM Program on October 22, 2019 and through June 30, 2020, 3.2 million shares of Series D Preferred Stock were issued and sold under the 2019 Preferred ATM Program at a weighted average price of $25.09 per share, generating gross proceeds of $80.5 million and net proceeds of $79.1 million, after offering expenses. Of these amounts, during 2020, we issued and sold 2.6 million shares of Series D Preferred Stock at a weighted average price of $25.06 per share, generating gross proceeds of $64.1 million and net proceeds after offering expenses of $63.1 million. The Company discontinued the sale of shares under the 2019 Preferred ATM Program prior to June 30, 2020.

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On July 15, 2020, the Company filed with the Maryland SDAT Articles Supplementary reclassifying and designating 3.3 million shares of the Company’s Common Stock as shares of Series D Preferred Stock. Following the filing of the Articles Supplementary, the authorized capital stock of the Company consisted of 140.4 million shares of Common Stock, 4.0 million shares of Series B Preferred Stock, 13.8 million shares of Series C Preferred Stock, 9.3 million shares of Series D Preferred Stock and 3 million shares of excess stock, par value $0.10 per share. Additionally, upon the redemption on October 20, 2020 of all 3.7 million outstanding shares of the Company’s Series B Preferred Stock, the authorized shares of Series B Preferred Stock automatically reverted to authorized Common Stock, which increased our authorized Common Stock by 3.7 million shares.

On July 22, 2020, the Company entered into a new Preferred ATM Stock At-The-Market Sales Program (“2020 Preferred ATM Program”) with B. Riley, as distribution agent, under which the Company may offer and sell shares of the Company’s Series C Preferred Stock and/or Series D Preferred Stock, having an aggregate sales price of up to $100 million. Sales of shares under the 2020 Preferred ATM Program are “at the market offerings” as defined in Rule 415 under the Securities Act, including, without limitation, sales made directly on or through the NYSE, or on any other existing trading market for the Series C Preferred Stock or Series D Preferred Stock, as applicable, or to or through a market maker or any other method permitted by law, including, without limitation, negotiated transactions and block trades. Shares of Series C Preferred Stock and/or Series D Preferred Stock sold under the 2020 Preferred ATM Program are offered pursuant to the Company’s 2020 Registration Statement and are sold and issued pursuant to the Company’s prospectus dated June 1, 2020 included in the 2020 Registration Statement and the related prospectus supplement dated July 22, 2020. The 2020 Preferred ATM Program replaced the 2019 Preferred ATM Program. During 2021, 2.2 million shares of Series D Preferred Stock were issued and sold at a weighted average price of $24.89 per share, generating total gross proceeds of $54.1 million and total net proceeds of $53.2 million, after offering expenses. As of December 31, 2021, $12.2 million in shares of Series C Preferred Stock and/or Series D Preferred Stock remained eligible for sale under the 2020 Preferred ATM Program.

NOTE 11 – DISTRIBUTIONS

Common Stock

The following cash distributions, including dividends reinvested, were paid to common shareholders during the three years ended December 31, 2021, 2020 and 2019 (in thousands):

	2021				2020				2019
Quarter Ended	Amount		Per Share		Amount		Per Share		Amount		Per Share
March 31	$	8,048	$	0.19	$	7,417	$	0.18	$	6,980	$	0.18
June 30		8,629		0.19		7,417		0.18		7,159		0.18
September 30		9,016		0.19		7,454		0.18		7,322		0.18
December 31		9,327		0.19		7,520		0.18		7,364		0.18
	$	35,020	$	0.76	$	29,808	$	0.72	$	28,825	$	0.72

These amounts do not include the discount on shares purchased through the Company’s DRIP.

On January 12, 2022, the Company declared a 5.3% increase in the cash dividend, raising it from a quarterly $0.19 per share to $0.20 per share, beginning with the dividend to be paid on March 15, 2022 to shareholders of record as of the close of business on February 15, 2022.

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Preferred Stock

The following dividends were paid to holders of our Series B Preferred Stock during the years ended December 31, 2020 and 2019:

  

Declaration Date	Record Date	Payment Date	Dividend		Dividend per Share
1/15/2020	2/18/2020	3/16/2020	$	1,900,600	$	0.50
4/2/2020	5/15/2020	6/15/2020		1,900,335		0.50
7/1/2020	8/17/2020	9/15/2020		1,900,335		0.50
9/11/2020	9/11/2020	10/20/2020		1,034,541		0.2722
			$	6,735,811	$	1.7722
1/15/2019	2/15/2019	3/15/2019	$	1,900,600	$	0.50
4/1/2019	5/15/2019	6/17/2019		1,900,600		0.50
7/1/2019	8/15/2019	9/16/2019		1,900,600		0.50
10/1/2019	11/15/2019	12/16/2019		1,900,600		0.50
			$	7,602,400	$	2.00

The following dividends were paid to holders of our Series C Preferred Stock during the years ended December 31, 2021, 2020 and 2019:

Declaration Date	Record Date	Payment Date	Dividend		Dividend per Share
1/15/2021	2/16/2021	3/15/2021	$	4,169,813	$	0.421875
4/1/2021	5/17/2021	6/15/2021		4,169,813		0.421875
7/1/2021	8/15/2021	9/15/2021		4,169,813		0.421875
10/1/2021	11/15/2021	12/15/2021		4,169,813		0.421875
			$	16,679,252	$	1.68750
1/15/2020	2/18/2020	3/16/2020	$	4,113,281	$	0.421875
4/2/2020	5/15/2020	6/15/2020		4,113,281		0.421875
7/1/2020	8/17/2020	9/15/2020		4,127,330		0.421875
10/1/2020	11/16/2020	12/15/2020		4,169,813		0.421875
			$	16,523,705	$	1.68750
1/15/2019	2/15/2019	3/15/2019	$	2,425,781	$	0.421875
4/1/2019	5/15/2019	6/17/2019		4,113,281		0.421875
7/1/2019	8/15/2019	9/16/2019		4,113,281		0.421875
10/1/2019	11/15/2019	12/16/2019		4,113,281		0.421875
			$	14,765,624	$	1.68750

On January 12, 2022, the Board of Directors declared a quarterly dividend of $0.421875 per share for the period from December 1, 2021 through February 28, 2022, on the Company’s Series C Preferred Stock payable March 15, 2022 to shareholders of record as of the close of business on February 15, 2022.

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The following dividends were paid to holders of our Series D Preferred Stock during the years ended December 31, 2021, 2020 and 2019:

Declaration Date	Record Date	Payment Date	Dividend		Dividend per Share
1/15/2021	2/16/2021	3/15/2021	$	2,869,321	$	0.3984375
4/1/2021	5/17/2021	6/15/2021		3,430,045		0.3984375
7/1/2021	8/15/2021	9/15/2021		3,430,045		0.3984375
10/1/2021	11/15/2021	12/15/2021		3,430,045		0.3984375
			$	13,159,456	$	1.59375
1/15/2020	2/18/2020	3/16/2020	$	2,076,126	$	0.3984375
4/2/2020	5/15/2020	6/15/2020		2,076,126		0.3984375
7/1/2020	8/17/2020	9/15/2020		2,081,704		0.3984375
10/1/2020	11/16/2020	12/15/2020		2,449,415		0.3984375
			$	8,683,371	$	1.59375
1/15/2019	2/15/2019	3/15/2019	$	796,876	$	0.3984375
4/1/2019	5/15/2019	6/17/2019		796,876		0.3984375
7/1/2019	8/15/2019	9/16/2019		796,876		0.3984375
10/1/2019	11/15/2019	12/16/2019		950,760		0.3984375
			$	3,341,388	$	1.59375

On January 12, 2022, the Board of Directors declared a quarterly dividend of $0.3984375 per share for the period from December 1, 2021 through February 28, 2022, on the Company’s Series D Preferred Stock payable March 15, 2022 to shareholders of record as of the close of business on February 15, 2022.

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NOTE 12 – FEDERAL INCOME TAXES

Characterization of Distributions

The following table characterizes the distributions paid for the years ended December 31, 2021, 2020 and 2019:

	2021					2020					2019
	Amount		Percent			Amount		Percent			Amount		Percent
Common Stock
Ordinary income	$	0.024636		3.24	%	$	0		0	%	$	0		0	%
Capital gains		0.002008		0.26	%		0		0	%		0		0	%
Return of capital		0.733356		96.50	%		0.72		100.00	%		0.72		100.00	%
	$	0.76		100.00	%	$	0.72		100.00	%	$	0.72		100.00	%
Preferred Stock - Series B
Ordinary income	$	0		0	%	$	0.661633		37.33	%	$	1.18476		59.24	%
Capital gains		0		0	%		0		0	%		0.05394		2.70	%
Return of capital		0		0	%		1.110567		62.67	%		0.76130		38.06	%
	$	0		0	%	$	1.772200		100.00	%	$	2.00000		100.00	%
Preferred Stock - Series C
Ordinary income	$	1.560268		92.46	%	$	0.630008		37.33	%	$	0.999640		59.24	%
Capital gains		0.127232		7.54	%		0		0	%		0.045508		2.70	%
Return of capital		0		0	%		1.057492		62.67	%		0.642352		38.06	%
	$	1.687500		100.00	%	$	1.687500		100.00	%	$	1.687500		100.00	%

Preferred Stock - Series D
Ordinary income	$	1.473586	92.46	%	$	0.595008	37.33	%	$	0.94410	59.24	%
Capital gains		0.120164	7.54	%		0	0	%		0.04298	2.70	%
Return of capital		0	0	%		0.998742	62.67	%		0.60667	38.06	%
	$	1.593750	100.00	%	$	1.593750	100.00	%	$	1.593750	100.00	%

In addition to the above, taxable income from non-REIT activities conducted by S&F, a Taxable REIT Subsidiary (“TRS”), is subject to federal, state and local income taxes. Deferred income taxes pertaining to S&F are accounted for using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities and their respective tax bases and for operating loss and tax credit carryforwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including tax planning strategies and other factors. For the years ended December 31, 2021, 2020 and 2019, S&F had operating losses for financial reporting purposes of $1.4 million, $273,000 and $1.3 million, respectively. Therefore, a valuation allowance has been established against any deferred tax assets relating to S&F. For the years ended December 31, 2021, 2020 and 2019, S&F recorded $10,000, $10,000 and $8,000, respectively, in federal, state and franchise taxes.

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NOTE 13 – COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS

The Company is subject to claims and litigation in the ordinary course of business. Management does not believe that any such claim or litigation will have a material adverse effect on the business, assets, or results of operations of the Company.

The Company and S&F have an agreement with 21st Mortgage Corporation (“21st Mortgage”) under which 21st Mortgage can provide financing for home purchasers in the Company’s communities. The Company does not receive referral fees or other cash compensation under the agreement. If 21st Mortgage makes loans to purchasers and those purchasers default on their loans and 21st Mortgage repossesses the homes securing such loans, the Company has agreed to purchase from 21st Mortgage each such repossessed home for a price equal to 80% to 95% of the amount under each such loan, subject to certain adjustments. This agreement may be terminated by either party with 30 days written notice. As of December 31, 2021, the total loan balance under this agreement was approximately $1.3 million. Additionally, 21st Mortgage previously made loans to purchasers in certain communities we acquired. In conjunction with these acquisitions, the Company has agreed to purchase from 21st Mortgage each repossessed home, if those purchasers default on their loans. The purchase price ranges from 55% to 100% of the amount under each such loan, subject to certain adjustments. As of December 31, 2021, the total loan balance owed to 21st Mortgage with respect to homes in these acquired communities was approximately $1.5 million. Although this agreement is still active, this program is not being utilized by the Company’s new customers as a source of financing.

S&F entered into a Chattel Loan Origination, Sale and Servicing Agreement (“COP Program”) with Triad Financial Services, effective January 1, 2016. Neither the Company, nor S&F, receive referral fees or other cash compensation under the agreement. Customer loan applications are initially submitted to Triad for consideration by Triad’s portfolio of outside lenders. If a loan application does not meet the criteria for outside financing, the application is then considered for financing under the COP Program. If the loan is approved under the COP Program, then it is originated by Triad, assigned to S&F and then assigned by S&F to the Company. Included in Notes and Other Receivables is approximately $46.0 million of loans that the Company acquired under the COP Program as of December 31, 2021.

The Company and one of its subsidiaries are parties to a Limited Liability Company Agreement dated as of December 8, 2021 with an affiliate of Nuveen Real Estate, which governs the joint venture formed between the Company and Nuveen Real Estate. The LLC Agreement provides for the parties to initially fund up to $70 million of equity capital for acquisitions during a 24-month commitment period, with Nuveen having the option, subject to certain conditions, to elect to increase the parties’ total commitments by up to an additional $100 million and to extend the commitment period for up to an additional four years.   The Company is required to fund 40% of the committed capital and Nuveen is required to fund 60%. All such funding will be on a parity basis. (See Note 5).

NOTE 14 - FAIR VALUE MEASUREMENTS

The Company follows ASC 825, Fair Value Measurements, for financial assets and liabilities recognized at fair value on a recurring basis. The Company measures certain financial assets and liabilities at fair value on a recurring basis, including marketable securities. The fair value of these certain financial assets and liabilities was determined using the following inputs at December 31, 2021 and 2020 (in thousands):

	Fair Value Measurements at Reporting Date Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2021:
Equity Securities - Preferred Stock	$	1,740	$	1,740	$	0	$	0
Equity Securities - Common Stock		112,008		112,008		0		0
Total	$	113,748	$	113,748	$	0	$	0
December 31, 2020:
Equity Securities - Preferred Stock	$	2,601	$	2,601	$	0	$	0
Equity Securities - Common Stock		100,571		100,571		0		0
Total	$	103,172	$	103,172	$	0	$	0

In addition to the Company’s investment in Marketable Securities at Fair Value, the Company is required to disclose certain information about fair values of its other financial instruments, as defined in ASC 825-10, Financial Instruments. Estimates of fair value are made at a specific point in time, based upon, where available, relevant market prices and information about the financial instrument. Such estimates do not include any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. All of the Company’s marketable securities have quoted market prices. However, for a portion of the Company’s other financial instruments, no quoted market value exists. Therefore, estimates of fair value are necessarily based on a number of significant assumptions (many of which involve events outside the control of management). Such assumptions include assessments of current economic conditions, perceived risks associated with these financial instruments and their counterparties, future expected loss experience and other factors. Given the uncertainties surrounding these assumptions, the reported fair values represent estimates only and, therefore, cannot be compared to the historical accounting model. Use of different assumptions or methodologies is likely to result in significantly different fair value estimates.

-95-

The fair value of cash and cash equivalents and notes receivables approximates their current carrying amounts since all such items are short-term in nature. The fair value of marketable securities is primarily based upon quoted market values. The fair value of variable rate mortgages payable and loans payable approximate their current carrying amounts since such amounts payable are at approximately a weighted average current market rate of interest. The estimated fair value of fixed rate mortgage notes payable is based on discounting the future cash flows at a year-end risk adjusted borrowing rate currently available to the Company for issuance of debt with similar terms and remaining maturities. These fair value measurements fall within level 2 of the fair value hierarchy. As of December 31, 2021, the fair and carrying value of fixed rate mortgages payable amounted to $458.4 million and $456.7 million, respectively. As of December 31, 2020, the fair and carrying value of fixed rate mortgages payable amounted to $487.7 million and $476.4 million, respectively.

NOTE 15 – SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for interest during the years ended December 31, 2021, 2020 and 2019 was $19.7 million, $18.3 million and $18.4 million, respectively. Interest cost capitalized to land development during the years ended December 31, 2021, 2020 and 2019 was $1.5 million, $1.3 million and $1.5 million, respectively.

During the years ended December 31, 2020 and 2019, the Company assumed mortgages totaling $2.7 million and $19.4 million, respectively, for the acquisition of communities.

During the years ended December 31, 2021, 2020 and 2019, land development costs of $25.9 million, $14.4 million and $19.7 million, respectively were transferred to investment property and equipment and placed in service.

During the years ended December 31, 2021, 2020 and 2019, the Company had dividend reinvestments of $3.5 million, $3.2 million and $7.7 million, respectively which required no cash transfers.

NOTE 16 – SUBSEQUENT EVENTS

Management has evaluated subsequent events for disclosure and/or recognition in the financial statements through the date that the financial statements were issued.

Restricted Stock Awards

On January 12, 2022, the Company awarded approximately 25,000 shares of restricted stock to five employees.

Issuance of Series A Bonds

On February 6, 2022, the Company issued $102.7 million of its new  4.72% Series A Bonds due 2027, or the 2027 Bonds, in an offering to investors in Israel. The Company received $98.7 million, net of offering expenses. The 2027 Bonds are unsecured obligations of the Company denominated in Israeli shekels (NIS) and were issued pursuant to a Deed of Trust dated January 31, 2022 between the Company and Reznik Paz Nevo Trusts Ltd., an Israeli trust company, as trustee. The 2027 Bonds will pay interest at a rate of 4.72% per year. Interest on the 2027 Bonds is payable semi-annually on August 31, 2022, and on February 28 and August 31 of the years 2023-2026 (inclusive) and on the final maturity date of February 28, 2027. The principal and interest will be linked to the U.S. Dollar. In the event of a future downgrade by two or more notches in the rating of the 2027 Bonds or a failure by the Company to comply with certain covenants in the Deed of Trust, the interest rate on the 2027 Bonds will be subject to increase. However, any such increases, in the aggregate, would not exceed 1.25% per annum.

Under the Deed of Trust, the Company has the right to redeem the 2027 Bonds, in whole or in part, at any time on or after 60 days from February 9, 2022, the date on which the 2027 Bonds were listed for trading on the Tel Aviv Stock Exchange (the “TASE”). Any such voluntary early redemption by the Company will require payment of the applicable early redemption amount calculated in accordance with the Deed of Trust. Upon the occurrence of an event of default or certain other events, including a delisting of the 2027 Bonds by the TASE, the Company may be required to effect an early repayment or redemption of all or a portion of the 2027 Bonds at their par value plus accrued and unpaid interest. The Deed of Trust permits the Company, subject to certain conditions, to issue additional 2027 Bonds without obtaining approval of the holders of the 2027 Bonds.

The 2027 Bonds are general unsecured obligations of the Company and rank equal in right of payment with all of the Company’s existing and future unsecured indebtedness. The Deed of Trust includes certain customary covenants, including financial covenants requiring the Company to maintain certain ratios of debt to net operating income, to shareholders equity and to earnings, and customary events of default.

The 2027 Bonds were offered solely to investors outside the United States and were not offered to, or for the account or benefit of, U.S. Persons (as defined in Regulation S under the Securities Act of 1933).

Listing of Common Stock on the TASE

On February 8, 2022, the Company’s common stock was approved for listing on the TASE. Trading of the common stock on the TASE began on February 9, 2022.

MREIC

On February 17, 2022, the shareholders of MREIC approved a proposed sale of MREIC pursuant to a merger agreement with a third party, whereby such third party would acquire MREIC in an all-cash merger and the Company and MREIC’s other shareholders would receive a cash payment of $21.00 per share in cancellation of their MREIC common shares. As of December 31, 2021, the Company owned 2.7 million shares of MREIC common stock. This transaction is expected to be consummated by February 28, 2022.

NOTE 17– PRO FORMA FINANCIAL INFORMATION (UNAUDITED)

The following unaudited pro forma condensed financial information reflects the acquisitions during 2020 and through 2021. This information has been prepared utilizing the historical financial statements of the Company and the effect of additional revenue and expenses from the properties acquired during this period, after giving effect to certain adjustments including (a) rental and related income; (b) community operating expenses; (c) interest expense resulting from the assumed increase in mortgages and loans payable related to the new acquisitions and (d) depreciation expense related to the new acquisitions. The unaudited pro forma condensed financial information is not indicative of the results of operations that would have been achieved had the acquisitions reflected herein been consummated on the dates indicated or that will be achieved in the future (in thousands).

-96-

	For the years ended December 31,
	2021		2020
Rental and Related Income	$	159,465	$	145,658
Community Operating Expenses		68,254		64,692
Net Income (Loss) Attributable to Common Shareholders		21,290		(30,273	)
Net Income (Loss) Attributable to Common Shareholders per Share:
Basic		0.46		(0.73	)
Diluted		0.45		(0.73	)

-97-

UMH PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2021 (in thousands)

Column A		Column B				Column C				Column D
Description						Initial Cost
								Site, Land
								& Building		Capitalization
								Improvements		Subsequent
Name	Location	Encumbrances				Land		and Rental Homes		to Acquisition
Allentown	Memphis, TN	$	12,295			$	250	$	2,569	$	14,003
Arbor Estates	Doylestown, PA			(2	)		2,650		8,266		2,581
Auburn Estates	Orrville, OH			(4	)		114		1,174		896
Bayshore Estates	Sandusky, OH		-0-				561		9,553		2,067
Birchwood Farms	Birch Run, MI			(2	)		70		2,797		4,219
Boardwalk	Elkhart, IN		13,073	(6	)		1,796		4,768		216
Broadmore Estates	Goshen, IN		44,339	(2	)		1,120		11,136		12,006
Brookside	Berwick, PA		-0-				372		4,776		3,892
Brookview	Greenfield Ctr, NY		2,539				38		233		11,529
Camelot Village	Anderson, IN			(7	)		824		2,480		518
Camelot Woods	Altoona, PA		-0-				573		2,767		1,567
Candlewick Court	Owosso, MI		4,104				159		7,087		5,910
Carsons	Chambersburg, PA			(1	)		176		2,411		2,655
Catalina	Middletown, OH		4,586				1,008		11,735		12,567
Cedarcrest Village	Vineland, NJ		10,956				320		1,866		3,614
Chambersburg	Chambersburg, PA			(1	)		108		2,397		818
Chelsea	Sayre, PA			(3	)		124		2,049		2,220
Cinnamon Woods	Conowingo, MD			(1	)		1,884		2,116		1,117
City View	Lewistown, PA		-0-				137		613		1,530
Clinton	Tiffin, OH		3,227				142		3,302		484
Collingwood	Horseheads, NY			(1	)		196		2,318		3,426
Colonial Heights	Wintersville, OH			(2	)		67		2,383		8,076
Countryside Estates	Muncie, IN		-0-				174		1,926		6,057
Countryside Estates	Ravenna, OH			(1	)		205		2,896		5,934
Countryside Village	Columbia, TN		102,881	(1	)		394		6,917		11,537
Cranberry	Cranberry Twp, PA		6,965				182		1,923		4,489
Crestview	Athens, PA			(1	)		188		2,258		3,086
Cross Keys	Duncansville, PA		-0-				61		378		4,731
Crossroads Village	Mount Pleasant, PA			(1	)		183		1,403		220
D&R Village	Clifton Park, NY		7,013				392		704		3,728
Dallas Mobile Home	Toronto, OH			(1	)		276		2,729		3,500
Deer Meadows	New Springfield, OH			(1	)		226		2,299		3,861
Deer Run	Dothan, AL		-0-				298		4,242		1,610
Evergreen Estates	Lodi, OH			(1	)		99		1,121		586
Evergreen Manor	Bedford, OH		-0-				49		2,372		1,522
Evergreen Village	Mantua, OH			(1	)		105		1,277		1,202
Fairview Manor	Millville, NJ		14,739				216		1,167		11,029
Fifty One Estates	Elizabeth, PA			(1	)		1,214		5,746		2,892
Forest Creek	Elkhart, IN			(2	)		440		7,004		2,479
Forest Park	Cranberry Twp, PA		7,652				75		977		9,623
Fox Chapel Village	Cheswick, PA		-0-				372		4,082		3,574
Frieden Manor	Schuylkill Haven, PA		12,320	(3	)		643		5,294		4,670
Friendly Village	Perrysburg, OH		6,650				1,215		18,141		9,510
Green Acres	Chambersburg, PA		-0-				63		584		147
Gregory Courts	Honey Brook, PA			(2	)		370		1,220		1,266
Hayden Heights	Dublin, OH		1,914				248		2,148		948
Heather Highlands	Inkerman, PA		-0-				573		2,152		14,406
High View Acres	Apollo, PA			(1	)		825		4,264		592
Highland	Elkhart, IN			(2	)		510		7,084		5,980
Highland Estates	Kutztown, PA		15,419				145		1,695		12,724
Hillcrest Crossing	Lower Burrell, PA			(1	)		961		1,464		8,736
Hillcrest Estates	Marysville, OH			(1	)		1,277		3,034		5,630

-98-

UMH PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2021 (in thousands)

Column A		Column B				Column C				Column D
Description						Initial Cost
								Site, Land
								&Building		Capitalization
								Improvements		Subsequent
Name	Location	Encumbrances				Land		and Rental Homes		to Acquisition
Hillside Estates	Greensburg, PA	$		(5	)	$	484	$	2,679	$	3,648
Holiday Village	Nashville, TN		7,282				1,632		5,618		13,300
Holiday Village	Elkhart, IN		7,811				491		13,808		8,593
Holly Acres	Erie, PA		6,031				194		3,591		1,288
Hudson Estates	Peninsula, OH			(1	)		141		3,516		5,900
Huntingdon Pointe	Tarrs, PA			(1	)		399		865		2,173
Independence Park	Clinton, PA		7,418	(5	)		686		2,784		4,996
Iris Winds	Sumter, SC		-0-				121		3,324		699
Kinnebrook	Monticello, NY		3,700				236		1,403		14,731
Lake Erie Estates	Fredonia, NY		2,604				104		4,391		2,600
Lake Sherman	Navarre, OH		5,060				290		1,458		14,582
Lakeview Meadows	Lakeview, OH			(1	)		574		1,104		1,999
Laurel Woods	Cresson, PA		-0-				433		2,070		5,721
Little Chippewa	Orrville, OH			(4	)		113		1,135		2,739
Maple Manor	Taylor, PA		-0-				674		9,433		7,845
Marysville Estates	Marysville, OH			(1	)		810		4,556		7,962
Meadowood	New Middletown, OH			(2	)		152		3,191		5,140
Meadows	Nappanee, IN		-0-				549		6,721		10,904
Meadows of Perrysburg	Perrysburg, OH		2,825				2,146		5,541		1,004
Melrose Village	Wooster, OH		6,523	(4	)		767		5,429		7,526
Melrose West	Wooster, OH			(4	)		94		1,040		118
Memphis Blues	Memphis, TN		-0-				78		810		12,023
Monroe Valley	Jonestown, PA			(3	)		114		994		715
Moosic Heights	Avoca, PA		-0-				330		3,794		3,902
Mount Pleasant Village	Mount Pleasant, PA			(1	)		280		3,502		1,528
Mountaintop	Narvon, PA			(3	)		134		1,665		1,593
New Colony	West Mifflin, PA			(1	)		429		4,129		1,712
Northtowne Meadows	Erie, PA		11,576				1,272		23,859		2,732
Oak Ridge	Elkhart, IN			(2	)		500		7,524		3,553
Oakwood Lake	Tunkhannock, PA		-0-				379		1,639		2,352
Olmsted Falls	Olmsted Township, OH		1,915				569		3,031		2,362
Oxford	West Grove, PA		14,985				175		991		2,885
Parke Place	Elkhart, IN			(6	)		4,317		10,341		6,267
Perrysburg Estates	Perrysburg, OH		1,526				399		4,047		5,834
Pikewood Manor	Elyria, OH		13,766				1,053		22,068		16,100
Pine Ridge/Pine Manor	Carlisle, PA		-0-				38		198		10,757
Pine Valley	Apollo, PA		-0-				670		1,337		8,979
Pleasant View	Bloomsburg, PA		-0-				282		2,175		2,924
Port Royal	Belle Vernon, PA		-0-				150		2,492		16,011
Redbud Estates	Anderson, IN		12,661	(7	)		1,739		15,091		6,251
River Valley	Marion, OH		-0-				236		785		8,943
Rolling Hills Estates	Carlisle, PA			(1	)		301		1,419		2,415
Rostraver Estates	Belle Vernon, PA			(5	)		814		2,204		2,565
Sandy Valley	Magnolia, OH		-0-				270		1,941		12,805
Shady Hills	Nashville, TN		4,563				337		3,379		4,458
Somerset/Whispering	Somerset, PA			(1	)		1,485		2,050		9,437
Southern Terrace	Columbiana, OH			(2	)		63		3,387		685
Southwind	Jackson, NJ		21,907	(8	)		100		603		3,245
Spreading Oaks	Athens, OH		-0-				67		1,327		4,415
Springfield Meadows	Springfield, OH		2,914				1,230		3,093		2,340
Suburban Estates	Greensburg, PA		5,126				299		5,837		5,147
Summit Estates	Ravenna, OH			(1	)		198		2,779		4,327
Summit Village	Marion, IN		-0-				522		2,821		2,374
Sunny Acres	Somerset, PA		5,706				287		6,114		3,383
Sunnyside	Eagleville, PA			(2	)		450		2,674		945
Trailmont	Goodlettsville, TN		3,042				411		1,867		3,694
Twin Oaks	Olmsted Township, OH		5,809				823		3,527		2,308
Twin Pines	Goshen, IN			(2	)		650		6,307		5,529

-99-

UMH PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2021 (in thousands)

Column A		Column B				Column C					Column D
Description						Initial Cost
								Site, Land
								& Building			Capitalization
								Improvements			Subsequent
Name	Location	Encumbrances				Land		and Rental Homes			to Acquisition
Valley High	Ruffs Dale, PA	$		(5)		$	284	$	2,267		$2,447
Valley Hills	Ravenna, OH		3,152				996		6,542		9,613
Valley Stream	Mountaintop, PA		-0-				323		3,191		1,242
Valley View HB	Honeybrook, PA			(2	)		1,380		5,348		4,518
Valley View I	Ephrata, PA			(3	)		191		4,359		1,220
Valley View II	Ephrata, PA			(3	)		72		1,746		76
Voyager Estates	West Newton, PA			(1	)		742		3,143		5,044
Waterfalls	Hamburg, NY		4,293				424		3,812		5,646
Wayside	Bellefontaine, OH			(1	)		196		1,080		2,669
Weatherly Estates	Lebanon, TN		7,422				1,184		4,034		4,142
Wellington Estates	Export, PA		2,205				896		6,179		5,762
Wood Valley	Caledonia, OH		-0-				260		1,753		6,369
Woodland Manor	West Monroe, NY			(1	)		77		841		4,825
Woodlawn	Eatontown, NJ			(8	)		157		281		2,050
Woods Edge	West Lafayette, IN		5,628				1,808		13,321		9,423
Worthington Arms	Lewis Center, OH		8,580				437		12,706		6,208
Youngstown Estates	Youngstown, NY			(4	)		269		1,606		1,837
		$	456,702			$	66,905	$	504,964	$	626,234

-100-

UMH PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2021 (in thousands)

Column A		Column E (9) (10)						Column F
Description		Gross Amount at Which Carried at 12/31/21
				Site, Land
				& Building
				Improvements and				Accumulated
Name	Location	Land		Rental Homes		Total		Depreciation
Allentown	Memphis, TN	$	703	$	16,119	$	16,822	$	7,547
Arbor Estates	Doylestown, PA		2,650		10,847		13,497		3,117
Auburn Estates	Orrville, OH		114		2,070		2,184		509
Bayshore Estates	Sandusky, OH		560		11,621		12,181		224
Birchwood Farms	Birch Run, MI		70		7,016		7,086		1,895
Boardwalk	Elkhart, IN		1,796		4,984		6,780		863
Broadmore Estates	Goshen, IN		1,120		23,142		24,262		6,648
Brookside	Berwick, PA		372		8,668		9,040		2,524
Brookview	Greenfield Ctr, NY		123		11,677		11,800		3,625
Camelot Village	Anderson, IN		828		2,994		3,822		363
Camelot Woods	Altoona, PA		766		4,141		4,907		201
Candlewick Court	Owosso, MI		159		12,997		13,156		3,189
Carsons	Chambersburg, PA		176		5,066		5,242		1,217
Catalina	Middletown, OH		1,008		24,302		25,310		4,991
Cedarcrest Village	Vineland, NJ		408		5,392		5,800		3,178
Chambersburg	Chambersburg, PA		118		3,205		3,323		1,003
Chelsea	Sayre, PA		124		4,269		4,393		1,097
Cinnamon Woods	Conowingo, MD		1,884		3,233		5,117		437
City View	Lewistown, PA		137		2,143		2,280		616
Clinton	Tiffin, OH		142		3,786		3,928		1,324
Collingwood	Horseheads, NY		196		5,744		5,940		1,389
Colonial Heights	Wintersville, OH		67		10,459		10,526		2,328
Countryside Estates	Muncie, IN		174		7,983		8,157		1,843
Countryside Estates	Ravenna, OH		205		8,830		9,035		2,014
Countryside Village	Columbia, TN		609		18,239		18,848		5,601
Cranberry	Cranberry Twp, PA		182		6,412		6,594		3,543
Crestview	Athens, PA		362		5,170		5,532		1,238
Cross Keys	Duncansville, PA		61		5,109		5,170		1,863
Crossroads Village	Mount Pleasant, PA		183		1,623		1,806		266
D&R Village	Clifton Park, NY		392		4,432		4,824		2,415
Dallas Mobile Home	Toronto, OH		276		6,229		6,505		1,252
Deer Meadows	New Springfield, OH		226		6,160		6,386		1,333
Deer Run	Dothan, AL		301		5,850		6,151		192
Evergreen Estates	Lodi, OH		119		1,687		1,806		439
Evergreen Manor	Bedford, OH		49		3,894		3,943		951
Evergreen Village	Mantua, OH		105		2,479		2,584		617
Fairview Manor	Millville, NJ		2,535		9,877		12,412		6,203
Fifty One Estates	Elizabeth, PA		1,330		8,522		9,852		648
Forest Creek	Elkhart, IN		440		9,483		9,923		3,202
Forest Park	Cranberry Twp, PA		75		10,600		10,675		4,468
Fox Chapel Village	Cheswick, PA		372		7,656		8,028		888
Frieden Manor	Schuylkill Haven, PA		643		9,964		10,607		2,662
Friendly Village	Perrysburg, OH		1,266		27,600		28,866		2,216
Green Acres	Chambersburg, PA		63		731		794		226
Gregory Courts	Honey Brook, PA		370		2,486		2,856		669
Hayden Heights	Dublin, OH		248		3,096		3,344		803
Heather Highlands	Inkerman, PA		573		16,558		17,131		6,929
High View Acres	Apollo, PA		825		4,856		5,681		707
Highland	Elkhart, IN		510		13,064		13,574		4,049
Highland Estates	Kutztown, PA		404		14,160		14,564		8,355
Hillcrest Crossing	Lower Burrell, PA		961		10,200		11,161		1,280
Hillcrest Estates	Marysville, OH		1,277		8,664		9,941		1,137

-101-

UMH PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2021 (in thousands)

Column A		Column E (9) (10)						Column F
Description		Gross Amount at Which Carried at 12/31/21
					Site, Land
					&Building
					Improvements and Rental				Accumulated
Name	Location		Land		Homes		Total		Depreciation
Hillside Estates	Greensburg, PA	$	484	$	6,327	$	6,811	$	1,382
Holiday Village	Nashville, TN		1,632		18,918		20,550		3,720
Holiday Village	Elkhart, IN		491		22,401		22,892		4,849
Holly Acres	Erie, PA		194		4,879		5,073		1,103
Hudson Estates	Peninsula, OH		141		9,416		9,557		2,259
Huntingdon Pointe	Tarrs, PA		399		3,038		3,437		484
Independence Park	Clinton, PA		686		7,780		8,466		1,513
Iris Winds	Sumter, SC		122		4,021		4,143		157
Kinnebrook	Monticello, NY		353		16,017		16,370		6,961
Lake Erie Estates	Fredonia, NY		140		6,955		7,095		309
Lake Sherman	Navarre, OH		290		16,040		16,330		5,900
Lakeview Meadows	Lakeview, OH		726		2,951		3,677		500
Laurel Woods	Cresson, PA		433		7,791		8,224		3,101
Little Chippewa	Orrville, OH		113		3,874		3,987		800
Maple Manor	Taylor, PA		674		17,278		17,952		5,465
Marysville Estates	Marysville, OH		818		12,510		13,328		1,635
Meadowood	New Middletown, OH		152		8,331		8,483		2,111
Meadows	Nappanee, IN		549		17,625		18,174		3,237
Meadows of Perrysburg	Perrysburg, OH		2,182		6,509		8,691		671
Melrose Village	Wooster, OH		767		12,955		13,722		3,041
Melrose West	Wooster, OH		94		1,158		1,252		326
Memphis Blues	Memphis, TN		336		12,575		12,911		2,849
Monroe Valley	Jonestown, PA		114		1,709		1,823		491
Moosic Heights	Avoca, PA		330		7,696		8,026		2,243
Mount Pleasant Village	Mount Pleasant, PA		280		5,030		5,310		827
Mountaintop	Narvon, PA		249		3,143		3,392		760
New Colony	West Mifflin, PA		448		5,822		6,270		460
Northtowne Meadows	Erie, PA		1,313		26,550		27,863		2,505
Oak Ridge	Elkhart, IN		500		11,077		11,577		3,366
Oakwood Lake	Tunkhannock, PA		379		3,991		4,370		1,013
Olmsted Falls	Olmsted Township, OH		569		5,393		5,962		1,477
Oxford	West Grove, PA		155		3,896		4,051		2,340
Parke Place	Elkhart, IN		4,317		16,608		20,925		3,290
Perrysburg Estates	Perrysburg, OH		407		9,873		10,280		816
Pikewood Manor	Elyria, OH		1,071		38,150		39,221		3,691
Pine Ridge/Pine Manor	Carlisle, PA		145		10,848		10,993		4,655
Pine Valley	Apollo, PA		732		10,254		10,986		3,917
Pleasant View	Bloomsburg, PA		282		5,099		5,381		1,360
Port Royal	Belle Vernon, PA		505		18,148		18,653		8,575
Redbud Estates	Anderson, IN		1,753		21,328		23,081		2,404
River Valley	Marion, OH		236		9,728		9,964		4,453
Rolling Hills Estates	Carlisle, PA		301		3,834		4,135		1,068
Rostraver Estates	Belle Vernon, PA		814		4,769		5,583		1,147
Sandy Valley	Magnolia, OH		270		14,746		15,016		6,082
Shady Hills	Nashville, TN		337		7,837		8,174		2,517
Somerset/Whispering	Somerset, PA		1,489		11,483		12,972		4,751
Southern Terrace	Columbiana, OH		63		4,072		4,135		1,307
Southwind	Jackson, NJ		100		3,848		3,948		2,282
Spreading Oaks	Athens, OH		67		5,742		5,809		2,447
Springfield Meadows	Springfield, OH		1,230		5,433		6,663		788
Suburban Estates	Greensburg, PA		299		10,984		11,283		3,373
Summit Estates	Ravenna, OH		198		7,106		7,304		1,700
Summit Village	Marion, IN		522		5,195		5,717		1,079

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UMH PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2021 (in thousands)

Column A		Column E (9) (10)						Column F
Description		Gross Amount at Which Carried at 12/31/21
				Site, Land
				& Building
				Improvements and Rental				Accumulated
Name	Location	Land		Homes		Total		Depreciation
Sunny Acres	Somerset, PA	$	287	$	9,497	$	9,784	$	3,162
Sunnyside	Eagleville, PA		662		3,407		4,069		990
Trailmont	Goodlettsville, TN		411		5,561		5,972		1,658
Twin Oaks	Olmsted Township, OH		998		5,660		6,658		1,756
Twin Pines	Goshen, IN		650		11,836		12,486		3,482
Valley High	Ruffs Dale, PA		284		4,714		4,998		1,033
Valley Hills	Ravenna, OH		996		16,155		17,151		3,888
Valley Stream	Mountaintop, PA		323		4,433		4,756		952
Valley View HB	Honeybrook, PA		1,380		9,866		11,246		2,607
Valley View I	Ephrata, PA		280		5,490		5,770		1,806
Valley View II	Ephrata, PA		72		1,822		1,894		604
Voyager Estates	West Newton, PA		742		8,187		8,929		1,498
Waterfalls	Hamburg, NY		424		9,458		9,882		4,937
Wayside	Bellefontaine, OH		261		3,684		3,945		439
Weatherly Estates	Lebanon, TN		1,184		8,176		9,360		4,002
Wellington Estates	Export, PA		896		11,941		12,837		1,447
Wood Valley	Caledonia, OH		260		8,122		8,382		3,721
Woodland Manor	West Monroe, NY		77		5,666		5,743		1,779
Woodlawn	Eatontown, NJ		135		2,353		2,488		1,024
Woods Edge	West Lafayette, IN		1,808		22,744		24,552		4,528
Worthington Arms	Lewis Center, OH		437		18,914		19,351		3,795
Youngstown Estates	Youngstown, NY		269		3,443		3,712		781
		$	72,744	$	1,125,359	$	1,198,103	$	295,740

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UMH PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2021

Column A		Column G	Column H		Column I
Description
		Date of	Date		Depreciable
Name	Location	Construction	Acquired		Life
Allentown	Memphis, TN	prior to 1980		1986		5 to 27.5
Arbor Estates	Doylestown, PA	1959		2013		5 to 27.5
Auburn Estates	Orrville, OH	1971/1985/1995		2013		5 to 27.5
Bayshore Estates	Sandusky, OH	1969		2021		5 to 27.5
Birchwood Farms	Birch Run, MI	1976-1977		2013		5 to 27.5
Boardwalk	Elkhart, IN	1995-1996		2017		5 to 27.5
Broadmore Estates	Goshen, IN	1950/1990		2013		5 to 27.5
Brookside	Berwick, PA	1973-1976		2010		5 to 27.5
Brookview	Greenfield Ctr, NY	prior to 1970		1977		5 to 27.5
Camelot Village	Anderson, IN	1998		2018		5 to 27.5
Camelot Woods	Altoona, PA	1999		2020		5 to 27.5
Candlewick Court	Owosso, MI	1975		2015		5 to 27.5
Carsons	Chambersburg, PA	1963		2012		5 to 27.5
Catalina	Middletown, OH	1968-1976		2015		5 to 27.5
Cedarcrest Village	Vineland, NJ	1973		1986		5 to 27.5
Chambersburg	Chambersburg, PA	1955		2012		5 to 27.5
Chelsea	Sayre, PA	1972		2012		5 to 27.5
Cinnamon Woods	Conowingo, MD	2005		2017		5 to 27.5
City View	Lewistown, PA	prior to 1980		2011		5 to 27.5
Clinton	Tiffin, OH	1968/1987		2011		5 to 27.5
Collingwood	Horseheads, NY	1970		2012		5 to 27.5
Colonial Heights	Wintersville, OH	1972		2012		5 to 27.5
Countryside Estates	Muncie, IN	1996		2012		5 to 27.5
Countryside Estates	Ravenna, OH	1972		2014		5 to 27.5
Countryside Village	Columbia, TN	1988/1992		2011		5 to 27.5
Cranberry	Cranberry Twp, PA	1974		1986		5 to 27.5
Crestview	Athens, PA	1964		2012		5 to 27.5
Cross Keys	Duncansville, PA	1961		1979		5 to 27.5
Crossroads Village	Mount Pleasant, PA	1955/2004		2017		5 to 27.5
D&R Village	Clifton Park, NY	1972		1978		5 to 27.5
Dallas Mobile Home	Toronto, OH	1950-1957		2014		5 to 27.5
Deer Meadows	New Springfield, OH	1973		2014		5 to 27.5
Deer Run	Dothan, AL	1960		2021		5 to 27.5
Evergreen Estates	Lodi, OH	1965		2014		5 to 27.5
Evergreen Manor	Bedford, OH	1960		2014		5 to 27.5
Evergreen Village	Mantua, OH	1960		2014		5 to 27.5
Fairview Manor	Millville, NJ	prior to 1980		1985		5 to 27.5
Fifty One Estates	Elizabeth, PA	1970		2019		5 to 27.5
Forest Creek	Elkhart, IN	1996-1997		2013		5 to 27.5
Forest Park	Cranberry Twp, PA	prior to 1980		1982		5 to 27.5
Fox Chapel Village	Cheswick, PA	1975		2017		5 to 27.5
Frieden Manor	Schuylkill Haven, PA	1969		2012		5 to 27.5
Friendly Village	Perrysburg, OH	1970		2019		5 to 27.5
Green Acres	Chambersburg, PA	1978		2012		5 to 27.5
Gregory Courts	Honey Brook, PA	1970		2013		5 to 27.5
Hayden Heights	Dublin, OH	1973		2014		5 to 27.5
Heather Highlands	Inkerman, PA	1970		1992		5 to 27.5
High View Acres	Apollo, PA	1984		2017		5 to 27.5
Highland	Elkhart, IN	1969		2013		5 to 27.5
Highland Estates	Kutztown, PA	1971		1979		5 to 27.5
Hillcrest Crossing	Lower Burrell, PA	1971		2017		5 to 27.5
Hillcrest Estates	Marysville, OH	1995		2017		5 to 27.5

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UMH PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2021

Column A		Column G	Column H		Column I
Description
		Date of	Date		Depreciable
Name	Location	Construction	Acquired		Life
Hillside Estates	Greensburg, PA	1980		2014		5 to 27.5
Holiday Village	Nashville, TN	1967		2013		5 to 27.5
Holiday Village	Elkhart, IN	1966		2015		5 to 27.5
Holly Acres	Erie, PA	1977/2007		2015		5 to 27.5
Hudson Estates	Peninsula, OH	1956		2014		5 to 27.5
Huntingdon Pointe	Tarrs, PA	2000		2015		5 to 27.5
Independence Park	Clinton, PA	1987		2014		5 to 27.5
Iris Winds	Sumter, SC	1972		2021		5 to 27.5
Kinnebrook	Monticello, NY	1972		1988		5 to 27.5
Lake Erie Estates	Fredonia, NY	1965		2020		5 to 27.5
Lake Sherman	Navarre, OH	prior to 1980		1987		5 to 27.5
Lakeview Meadows	Lakeview, OH	1995		2016		5 to 27.5
Laurel Woods	Cresson, PA	prior to 1980		2001		5 to 27.5
Little Chippewa	Orrville, OH	1968		2013		5 to 27.5
Maple Manor	Taylor, PA	1972		2010		5 to 27.5
Marysville Estates	Marysville, OH	1960s to 2015		2017		5 to 27.5
Meadowood	New Middletown, OH	1957		2012		5 to 27.5
Meadows	Nappanee, IN	1965-1973		2015		5 to 27.5
Meadows of Perrysburg	Perrysburg, OH	1998		2018		5 to 27.5
Melrose Village	Wooster, OH	1970-1978		2013		5 to 27.5
Melrose West	Wooster, OH	1995		2013		5 to 27.5
Memphis Blues	Memphis, TN	1955		1985		5 to 27.5
Monroe Valley	Jonestown, PA	1969		2012		5 to 27.5
Moosic Heights	Avoca, PA	1972		2010		5 to 27.5
Mount Pleasant Village	Mount Pleasant, PA	1977-1986		2017		5 to 27.5
Mountaintop	Narvon, PA	1972		2012		5 to 27.5
New Colony	West Mifflin, PA	1930/1973		2019		5 to 27.5
Northtowne Meadows	Erie, MI	1988		2019		5 to 27.5
Oak Ridge	Elkhart, IN	1990		2013		5 to 27.5
Oakwood Lake	Tunkhannock, PA	1972		2010		5 to 27.5
Olmsted Falls	Olmsted Township, OH	1953/1970		2012		5 to 27.5
Oxford	West Grove, PA	1971		1974		5 to 27.5
Parke Place	Elkhart, IN	1995-1996		2017		5 to 27.5
Perrysburg Estates	Perrysburg, OH	1972		2018		5 to 27.5
Pikewood Manor	Elyria, OH	1962		2018		5 to 27.5
Pine Ridge/Pine Manor	Carlisle, PA	1961		1969		5 to 27.5
Pine Valley	Apollo, PA	prior to 1980		1995		5 to 27.5
Pleasant View	Bloomsburg, PA	1960’s		2010		5 to 27.5
Port Royal	Belle Vernon, PA	1973		1983		5 to 27.5
Redbud Estates	Anderson, IN	1966/1998/2003		2018		5 to 27.5
River Valley	Marion, OH	1950		1986		5 to 27.5
Rolling Hills Estates	Carlisle, PA	1972-1975		2013		5 to 27.5
Rostraver Estates	Belle Vernon, PA	1970		2014		5 to 27.5
Sandy Valley	Magnolia, OH	prior to 1980		1985		5 to 27.5
Shady Hills	Nashville, TN	1954		2011		5 to 27.5
Somerset/Whispering	Somerset, PA	prior to 1980		2004		5 to 27.5
Southern Terrace	Columbiana, OH	1983		2012		5 to 27.5
Southwind	Jackson, NJ	1969		1969		5 to 27.5
Spreading Oaks	Athens, OH	prior to 1980		1996		5 to 27.5
Springfield Meadows	Springfield, OH	1970		2016		5 to 27.5
Suburban Estates	Greensburg, PA	1968/1980		2010		5 to 27.5
Summit Estates	Ravenna, OH	1969		2014		5 to 27.5
Summit Village	Marion, IN	2000		2018		5 to 27.5
Sunny Acres	Somerset, PA	1970		2010		5 to 27.5
Sunnyside	Eagleville, PA	1960		2013		5 to 27.5
Trailmont	Goodlettsville, TN	1964		2011		5 to 27.5

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UMH PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2021

Column A		Column G	Column H		Column I
Description
		Date of	Date		Depreciable
Name	Location	Construction	Acquired		Life
Twin Oaks	Olmsted Township, OH	1952/1997		2012		5 to 27.5
Twin Pines	Goshen, IN	1956/1990		2013		5 to 27.5
Valley High	Ruffs Dale, PA	1974		2014		5 to 27.5
Valley Hills	Ravenna, OH	1960-1970		2014		5 to 27.5
Valley Stream	Mountaintop, PA	1970		2015		5 to 27.5
Valley View HB	Honeybrook, PA	1970		2013		5 to 27.5
Valley View I	Ephrata, PA	1961		2012		5 to 27.5
Valley View II	Ephrata, PA	1999		2012		5 to 27.5
Voyager Estates	West Newton, PA	1968		2015		5 to 27.5
Waterfalls	Hamburg, NY	prior to 1980		1997		5 to 27.5
Wayside	Bellefontaine, OH	1960’s		2016		5 to 27.5
Weatherly Estates	Lebanon, TN	1997		2006		5 to 27.5
Wellington Estates	Export, PA	1970/1996		2017		5 to 27.5
Wood Valley	Caledonia, OH	prior to 1980		1996		5 to 27.5
Woodland Manor	West Monroe, NY	prior to 1980		2003		5 to 27.5
Woodlawn	Eatontown, NJ	1964		1978		5 to 27.5
Woods Edge	West Lafayette, IN	1974		2015		5 to 27.5
Worthington Arms	Lewis Center, OH	1968		2015		5 to 27.5
Youngstown Estates	Youngstown, NY	1963		2013		5 to 27.5

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UMH PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2021

(1)	Represents one mortgage note payable secured by twenty-eight properties.
(2)	Represents one mortgage note payable secured by thirteen properties.
(3)	Represents one mortgage note payable secured by six properties.
(4)	Represents one mortgage note payable secured by five properties.
(5)	Represents one mortgage note payable secured by four properties.
(6)	Represents one mortgage note payable secured by two properties.
(7)	Represents one mortgage note payable secured by two properties.
(8)	Represents one mortgage note payable secured by two properties.
(9)	Reconciliation

	/————FIXED ASSETS————/ (in thousands)
	12/31/21			12/31/20			12/31/19
Balance – Beginning of Year	$	1,100,256		$	1,008,104		$	874,601
Additions:
Acquisitions		8,546			7,835			56,015
Improvements		94,213			88,684			81,399
Total Additions		102,759			96,519			137,414
Deletions		(4,911	)		(4,367	)		(3,911	)
Balance – End of Year	$	1,198,104		$	1,100,256		$	1,008,104

	/——ACCUMULATED DEPRECIATION——/ (in thousands)
	12/31/21			12/31/20			12/31/19
Balance – Beginning of Year	$	254,369		$	216,332		$	182,599
Additions:
Depreciation		43,064			39,525			34,816
Total Additions		43,064			39,525			34,816
Deletions		(1,693	)		(1,488	)		(1,083	)
Balance – End of Year	$	295,740		$	254,369		$	216,332

(10) The aggregate cost for Federal tax purposes approximates historical cost.

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