UMH PROPERTIES, INC. EXPANDS ITS EXISTING UNSECURED REVOLVING CREDIT AGREEMENT
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The expansion of UMH Properties' unsecured revolving credit facility represents a strategic move to bolster liquidity and support ongoing growth initiatives. This increase from $180 million to $260 million in available borrowings suggests a robust confidence from the syndicate of banks in UMH's financial health and business model. The involvement of reputable financial institutions such as BMO, JPMorgan and Wells Fargo, especially with the latter joining the facility, implies a positive credit outlook for the company.
From a financial perspective, the enhanced credit line may lead to an improved debt-to-equity ratio, assuming the funds are utilized effectively for accretive projects or acquisitions. Such financial leverage can be beneficial if it translates into higher returns on equity for shareholders. However, stakeholders should monitor the company's interest coverage ratio to ensure that the increased debt level does not lead to excessive financial risk.
For investors, liquidity is a key indicator of a company's ability to meet short-term obligations and invest in growth opportunities. This move could signal to the market that UMH is positioning itself for strategic expansions or acquisitions, potentially driving future revenue growth. On the flip side, investors should be aware of the potential for dilution if the credit is used to fund operations rather than growth, which could impact shareholder value negatively.
The expansion of UMH Properties' credit facility comes at a time when the manufactured home community sector is experiencing a shift in demand dynamics. The increase in borrowing capacity may provide UMH with the agility to capitalize on market opportunities such as purchasing new properties or upgrading existing ones to meet the evolving needs of consumers.
As a Market Research Analyst, observing the geographic distribution of UMH's assets across multiple states, the company is well-positioned to leverage regional market trends. The housing affordability crisis has led to increased interest in manufactured homes as an alternative to traditional housing and UMH's expansion of its credit line may be a strategic response to this trend.
Additionally, the involvement of a new banking partner in Wells Fargo could indicate a broadening of UMH's financial relationships, potentially leading to more favorable terms and access to a larger network of financial services. It's essential for stakeholders to consider how UMH plans to use the increased financial flexibility to stay competitive and whether they can maintain a balance between growth and financial stability in the long term.
UMH Properties' decision to expand its credit facility is a move that is closely watched by REIT analysts. This expansion reflects the company's proactive approach to capital management, which is critical for a REIT given its requirement to distribute at least 90% of taxable income to shareholders in the form of dividends.
Access to a larger credit facility could enhance UMH's ability to maintain and potentially increase its dividend payouts, a key metric for REIT investors. Moreover, the credit expansion could be indicative of upcoming acquisitions or developments, which could drive long-term asset value growth for the company. It is important, however, to assess the terms of the credit facility, such as interest rates and covenants, as they can have significant implications for UMH's cost of capital and operational flexibility.
Furthermore, the diversification of UMH's portfolio across various states and the joint venture in Florida with Nuveen Real Estate suggest a strategic approach to risk management and growth. Investors should evaluate how the increased borrowing capacity might affect UMH's market position within the REIT sector and its ability to generate sustainable income streams from its property portfolio.
FREEHOLD, NJ, April 03, 2024 (GLOBE NEWSWIRE) -- UMH Properties, Inc. (NYSE: UMH) (TASE:UMH), announced today that it has expanded its existing unsecured revolving credit facility (the “Facility”) from
Samuel A. Landy, President and Chief Executive Officer commented, "The expansion of our Facility will further enhance our liquidity and strengthen the financial flexibility and balance sheet of our Company as we continue to execute our growth strategy. We are pleased to continue our long-term relationship with BMO and JPMorgan and appreciate their continued support. We would also like to welcome Wells Fargo into this Facility. We look forward to continued success with our partners.”
UMH Properties, Inc., which was organized in 1968, is a public equity REIT that owns and operates 135 manufactured home communities containing approximately 25,800 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Maryland, Michigan, Alabama, South Carolina and Georgia. UMH also has an ownership interest in and operates two communities in Florida, containing 363 sites, through its joint venture with Nuveen Real Estate.
Certain statements included in this press release which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are based on the Company’s current expectations and involve various risks and uncertainties. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can provide no assurance those expectations will be achieved. The risks and uncertainties that could cause actual results or events to differ materially from expectations are contained in the Company’s annual report on Form 10-K and described from time to time in the Company’s other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.
Contact: Nelli Madden
732-577-9997
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