Q3 2023 UMH Properties Inc Earnings Call
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Good morning, and welcome to UMH properties third quarter 2023 earnings Conference call.
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It is now my pleasure to introduce your host Mr. Craig Castor Executive Vice President and General Counsel. Thank you. Mr. Koester, you may begin.
Thank you very much operator in addition to the 10-Q that we filed with the SEC yesterday, we have filed an unaudited third quarter supplemental information presentation. This supplemental information presentation, along with our 10-Q are available on the company's website at UMH Dot REIT, we'd like to remind everyone that certain statements made during.
This conference call, which are not historical facts may be deemed forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
The forward looking statements that we made on this call are based on our 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 that its expectations will be achieved the.
The risks and uncertainties that could cause actual results to differ materially from expectations are detailed in the company's third quarter 2023 earnings release and filings with the Securities and Exchange Commission.
The company disclaims any obligation to update its forward looking statements and.
In addition, during today's call, we will be discussing non-GAAP financial metrics reconciliations of these non-GAAP financial metrics to the comparable GAAP financial metrics as well as the explanatory and cautioning language.
Quoted in our earnings release, our supplemental information and our historical SEC filings having.
Having said that I would like to introduce management with US today, Eugene Landy, founder and Chairman Samuel Landy, President and Chief Executive Officer, Anna Chew Executive Vice President and Chief Financial Officer, Brett Taft Executive Vice President and Chief Operating Officer, Jim Watkins, Vice President of capital markets and Daniel Andy Executive.
Rice President It is now my pleasure to turn the call over to <unk>, President and Chief Executive Officer Samuel Landy.
UMH is pleased to report another quarter of sequential <unk> growth sequentially normalized <unk> increased from 21 cents in the second quarter to 22 cents in the third quarter community net operating income increased by 16% for the quarter.
UMH provides quality housing for an average rent of $922 per month, and well located communities using three bedroom two bath room energy efficient factory built homes on lots that are generally 5000 square feet.
These competitively priced rental units are in strong demand, resulting in less than 30% turnover, 94% occupancy and 98% collection rates.
UMH has the ability to provide quality housing to households, with incomes of at least $37000 per year, most apartment and single family housing operators cannot provide housing for households, earning less than $55000 per year.
UMH reduces housing costs, thus improving the lives of our residents.
We now have 22300 occupied lots in our communities.
<unk> 9300 of these lots contain homes that we own and rent to residents. The remaining 13000 lot contained resident owned homes for which we collect lot rent.
UMH owns 25800, homesites, allowing us the opportunity to grow revenue by filling the 3500 vacant sites.
We buy communities for as little as $25000 per site and make improvements to the communities and add professional management and marketing to increase occupancy and revenue by selling and renting homes and financing home sales.
Our homes and communities are strongly desired as evidenced by our installation and occupancy of 900, new rental homes and sales of 122, new homes year to date.
Sequentially same property occupancy increased by 172 sites or 50 basis points.
And year over year, it increased by 546 sites or 210 basis points to 88, 4%.
The growth in occupancy combined with our 5% to 6% rent increases resulted in rental and related income growth of 10% and NOI growth of 12, 9% for the quarter.
Year to date same property rental and related income increased eight 4% and NOI increased 10, 4%. We are pleased to have achieved double digit same property NOI growth. We believe that through the continued implementation of our business plan, we will be able to generate similar same property operator.
Results in the future this growth in NOI directly correlates to an increase in property value.
Year to date gross home sales are $23 $4 million as compared to $23 million last year, representing an increase of 15%. We have sold 264 homes of which 122 were new home sales averaging $134000 per home sale.
At 142 were used home sales, averaging $50000 per home sale, we were able to achieve a 31% gross profit as compared to 30% last year.
We are on track to break our all time sales record of $28 $1 million and May reach our sales goal of $30 million. We anticipate further improvement in our sales division as the demand for affordable housing continues and the carrying cost of our inventory decrease.
Our rental home portfolio continues to perform exceptionally well for the first nine months, we have converted 900 units from inventory to income producing rental units. These homes were occupied throughout the year. So the full year's impact of this increase is not yet apparent in our financial results, we now own.
<unk> 9900 rental units, which 94, 2% are occupied.
We continued to experience, 30% or less turnover per year and our expenses are approximately $400 per unit. We anticipate another 800 to 900 homes next year.
Clogs from our manufacturers have returned to normal levels of two to four months, allowing us to no longer have to carry large amounts of inventory.
This should help to reduce our interest expense and carrying cost, while allowing us to generate similar overall occupancy and revenue gains next year.
Covid caused manufacturing backlogs that increase the cost of each home increase the amount of inventory. We carried increased many costs associated with carrying high inventory and that is all behind us now.
We are now on track to complete the construction of 216 expansion sites.
These expansions are located in good markets in Maryland, Pennsylvania, Tennessee, and Indiana and should generate profitable sales.
Spansion take time to become profitable, but they improve community appearance create operating efficiencies and increased community value, while generating sales profit.
Next year, we anticipate approvals to develop 800 sites and plan on developing approximately 400 sites.
One of our goals is to reduce the time it takes us to make turnaround properties expansions and new developments profitable.
On the acquisition front, we have two communities in Maryland under contract and anticipate closing in the first half of 2024.
Due to climbing mortgage rates to disparity across between buying and renting a home is at its most extreme since 1996.
Market conditions over the next several months are expected to continue widening the gap between buying and renting.
Which supports the robust rental home program, we have at UMH UMH is well positioned to serve the needs of the affordable housing market with either the option of buying or renting homes. The replacement cost for the rental homes. We added for $40000 per unit 12 years ago is now $70000 per unit.
During the quarter, our share count increased by approximately $3 1 million shares mainly from our issuances through the common ATM, which raised $44 $5 million in new equity. Additionally, we raised $12 $4 million of our series D preferred stock through our preferred ATM.
This capital is being rapidly invested in additional rental homes expansion lot community capital improvement and finance home sales. All these uses are accretive over the long term at any point in time, UMH is $100 million or more in capital that is invested in value add acquisitions.
Inventory for sale or for rent capital improvements expansions or Greenfield community development joint venture.
These investments are necessary and will add to the long term profitability of UMH. Our capital investments have made your major top performing provider of manufactured homes for sale Iraq.
Non income producing assets such as our vacant land do not currently add to <unk>, but to grow in value through inflation demographic and economic growth, Mike trout, and Tiger Woods or building a golf course in Vineland, New Jersey in very close proximity to 130 acres of vacant land to UMH owns.
UMH continues to execute on our long term value added business plan, we have successfully acquired communities improve their physical appearance and implemented our sales and rental programs. This business plan has allowed us to achieve higher returns through the infill of vacant sites and the correlated value creation.
We have been able to generate a stable income stream derived from our 22300 occupied homes sites and 9300 occupied rental homes. We have built a profitable sales and finance company that has the potential to grow volume and profits in the future. This year, we have installed over 1000 homes rented 900.
New homes and sold 122, new homes. This has resulted in improved community operating results and growing <unk> and now Anna will provide you with greater detail on our results for the quarter.
Thank you, Sam normalized <unk>, which excludes amortization and nonrecurring items was $14 $4 million or 22 cents per diluted share for the third quarter of 2023 compared to $13 $1 million or 24 cents per diluted share.
For 2022, resulting in an 8% per share decrease.
Sequentially normalized <unk> increased from 21 cents for the second quarter to 22 cents in the third quarter, representing a 5% per share increase we were able to obtain this increase in normalized <unk>. Despite our operating results being largely impacted by our investments to grow.
The company to value add acquisitions, and developments inflation and rising interest rates on our short term borrowings.
UMH is well positioned to grow U S. S felt in the last quarter of the year as we continue to increase occupancy and revenue.
Rental and related income for the quarter was $48 $1 million compared to $42 $9 million a year ago, representing an increase of 12%.
This increase was primarily due to recent community acquisitions. The addition of rental homes and an increase in rental rates commute.
Community operating expenses increased 8% during the quarter. This increase was mainly due to our recent acquisitions as well as an increase in payroll rental home expenses real estate taxes insurance waste removal water and sewer expenses.
Community NOI increased by 16% for the quarter from $23 $7 million in 2022 to $27 $5 million in 2023.
Our same property results are trending in the right direction. It is important to note that while total community operating expenses were up 8% same property operating expenses were only up 6%.
Property income increased by 10% generating same property double digit percentage NOI growth of 12, 9% for the quarter.
As we turn to our capital structure at quarter end, we had approximately $687 million in debt.
Of which $442 million with community level mortgage debt and $145 million was loans payable and $100 million with a $4 seven 2% series a bonds.
79% of our total debt is fixed rate.
The weighted average interest rate on our mortgage debt with 388% at quarter end compared to 387% at quarter end last year.
The weighted average maturity of our mortgage debt with five years at quarter end and five one years at quarter end last year.
The weighted average interest rate on our short term borrowings is 7.26% as compared to $4, 97% last year.
In total the weighted average interest rate on our total debt is $4 seven 1% compared to $4, one 8% last year.
We continue to explore opportunities to raise lower cost capital to pay down our short term borrowings, which would result in increased earnings per share.
During the quarter, we paid down our floor plan lines to approximately $1 $1 million. These lines have a weighted average interest rate of 9% subsequent to quarter end, we paid down $10 million on our revolving line of credit secured by our eligible notes receivable.
At quarter end UMH had a total of $279 million in perpetual preferred equity our preferred stock combined with an equity market capitalization of $928 million and our $687 million in debt results in a total market capitalization.
Approximately $1 $9 billion at quarter end.
During the quarter, we issued and sold approximately two 8 million shares of common stock through our common ATM program at a weighted average price of $15 93 per share generating gross proceeds of $44 $5 million and net proceeds of $43 5 million.
After offering expenses.
Subsequent to quarter end, we issued and sold approximately 190000 shares of common stock through our common ATM program at a weighted average price of $13 98 per share generating gross proceeds of $2 $7 million and net proceeds of $2 $6 million after.
Operating expenses.
Additionally, we issued and sold approximately 578000 shares of our series C preferred stock through our preferred ATM program at a weighted average price of $21 43 per share generating gross proceeds of $12 $4 million and net proceeds.
After offering expenses of $12 $2 million.
Subsequent to quarter end, we issued and sold approximately 44000 shares of our series D preferred stock through our preferred ATM program at a weighted average price of 21008 cents per share generating gross proceeds of $931000 and net proceeds of 916.
Thousands dollars after offering expenses.
On July 19th the company amended and expanded its revolving line of credit with Osha first bank from $20 million to $35 million interest is that prime with a floor of $4, 75%. This one is secured by the company's eligible notes receivable. The amendment also.
Extended the maturity date to June one 2025.
From a credit standpoint, we ended the quarter without net debt to total market capitalization of 34, 2%.
Our net debt less securities to total market capitalization of 32, 8%.
Our net debt to adjusted EBITDA of six five times.
Our net debt less securities to adjusted EBITDA of six two times, our interest coverage was two six times and our fixed charge coverage was one eight times.
From a liquidity standpoint, we ended the quarter with $38 $6 million in cash and cash equivalents and $80 million available on our unsecured revolving credit facility with an additional $400 million potentially available pursuant to an accordion feature we also had one <unk>.
Third and $77 $4 million available on our other lines of credit for the financing of home sales and the purchase of inventory and rental homes.
Additionally, we had $27 $6 million in our REIT securities portfolio, all of which is unencumbered. This portfolio represents only approximately one 5% of our unappreciated assets. We are committed to not increasing our investments in our REIT securities portfolio and have in fact.
Continued to sell certain positions.
We are well positioned to continue to grow the company internally and externally and now let me turn it over to gene before we open it up for questions.
There is a severe shortage of affordable housing in the United States estimates of this shortfall or as high as 4 million units, which does not even account for the mass migration now happening across the southern border.
Mortgage rates are now at approximately twice the levels, we have seen in recent years.
Home prices have remained elevated due to the lack of supply.
Additionally, higher mortgage rates and incentivize homeowners not to move further reducing supply.
The homes being sold are in high demand driving prices higher and once rates do begin to decline pent up demand could still supported overheated housing market for all these reasons the demand for much needed affordable housing should continue to increase.
UMH pioneered the rental model using new manufactured homes.
When I got home is more affordable than buying a home by a large margin.
UMH has built the foundation to provide the nation with much needed affordable housing.
Value add acquisition has positioned the company with 3500 vacant sites and 'twenty 100 acres of vacant land that can be developed into additional sites.
Bacon side, some landholdings have significant potential as we fill the existing vacant sites and build more sites on our vacant land. These values can be realized.
Additionally, 3800 acres of land in the Marcellus and Utica shale areas have growing potential.
Global events over the past year demonstrate the importance of the United States moving towards energy independence.
Ourselves and Utica shales holdings should increase in value as cracker plants panda plants and pipelines come online.
UMH is strategically positioned to benefit from the affordable housing and the energy crisis that basically United States.
Congratulations to all our staff, who have executed so well in our mission statement to provide quality affordable housing for the nation.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you were using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Okay.
Okay.
Our first question today is from Rob Stevenson with Janney. Please go ahead.
Hi, good morning, guys.
Any other seven communities that you acquired last year, where you are still forcing turnover as you improve the community.
The sequential occupancy boost remains solid for you guys throughout the.
The year here I just wanted to figure out if there was anything that would work to offset.
Gains as we head into 'twenty four drive occupancy lower in the near term or if that sort of 25 to 50 basis point quarter over quarter increase is sustainable from here.
Yeah, Brett here and good morning, So we've done a lot of home removal at the acquisition from last year and a few of them were very high in quality, where theres not too much home removal required. So we do anticipate being able to keep up with that 25 to 50 basis point improvement in occupancy quarter over quarter all of that is going.
<unk> dependent on.
The ability to get homes in a timely manner and the rental demand in the market all of that remains strong at the moment. So we're confident going forward Sam Landy here just want to tell you. It's important in our investor presentation to look at page 14.
From 2018 to 2019, we went from 6500 rentals to 7400 from 2019 to 2020, we went to 8300, which is the only other time other than now that we've added 900 rental units in a year 2020 to 21 went from eight.
300 to 8700, <unk> 402021, and 2022 8700 to 9100, just 400 and now 2022 to the third quarter of 2023 9100 to 9900 and I think if you look at what it did to our results the year we went forward.
900 units 2019, and 2020, how strong our results are in 2021, we expect the same to follow it during the course of this year 2023, we've had all of the expenses of adding the 900 homes. It's only in this quarter and the next that Youll.
Beginning to feel the benefit but for all of 2024, you will have the full benefit of the 5% to 6% rent increases during 2023, plus a full years of revenue from adding.
By the end of the year should be 1000 rental units and just to mention one other thing while I'm talking there were technical difficulties with the webcast. We will publish the transcript at our web site UMH REIT and if anybody has any questions and for some reason can't.
Ask them on this call due to technical difficulties, you can email and Madden at UMH Dot Com and we will set up a conference call with you. So thank you and we'll keep going with the questions. Okay, So bread or Sam what quality condition or the two Maryland acquisitions then are these.
Typical youre going to need to take them down.
Remove some homes or are these the better quality ones and how pervasive or rental units in those communities today.
Okay. So yeah, it's two properties there neighboring properties one of them is 49 units and very high quality multi section homes parallel to the street.
The other property of 142 units is lower in quality, which is where we will do our typical.
Home removal as we're able to.
Going to have to do some infrastructure work there and then we will start to bring in rental units.
The 49 unit property is 100% occupied so let's the stabilized portion of the deal the neighboring property at a 142 unit community is about 75% occupied actually 70% occupied so that represents the upside in the deal. The in place cap rate is expected to be about five 5%.
There isn't a mortgage that were assuming at lower rates with about seven years of term left so that should help us to be able to drive this to be an accretive acquisition in very short order.
Okay. That's very very helpful. Thank you and what is the current status of the Georgia asset and when do you expect to see meaningful occupancy taking place there.
So the Georgia asset we acquired in January we've been working through some permitting challenges with the municipality. We are just about through that we do have our first move ins scheduled here over the next few weeks and will quickly start, bringing additional homes and to boost occupancy and results.
Okay. That's a good time, it's a good time to mention how well our southern strategy has done and how much.
Rate percentage.
The increase in the rental revenue and all of our southern States. So we've seen significant increase in revenue in each state we went to in the south spread if you want to touch on there sure. So deer run in Dothan, Alabama, we acquired that property about a 30% occupied it's now approximately 80% off.
<unk> and growing.
We should have that property full by the end of next year revenue on a <unk> 12 based on 215%. The other property in South Carolina was slightly higher on occupancy when we acquired it about 47%. We did do a lot of home removal there in that property should be occupy 100% occupied throughout the first half of next year. So.
Revenue there was up 199% both of these properties had negative NOI last year and a.
Year to date they are both in the 300000 range. So we're on track with where we expect it to be and we look forward to continuing to improve them as we move forward.
Okay. Thanks, guys I appreciate the time.
Thank you.
The next question is from David Keller Channel a private Investor. Please go ahead.
Hey, good morning, I'm, calling from Fort Lauderdale.
Question I was wondering if it's UMH would be interested in getting like government contracts, especially like with FEMA and stuff do.
Due to the global warming, we seem to be getting a lot more natural disasters and people needing affordable housing really quickly and on their own properties would UMH be interested in something like that it's a whole different section but.
Unfortunately, with global warming things seem to be getting worse and worse and people.
Don't Wanna be waiting so so long to get back to their homes or you know the original properties, which then they purchased because of the environment, where they they love to live. Thank you.
UMH stays focused on building operating renovating communities with manufactured homes for sale or rent, we're going to stay focused we're aware that everywhere, including in Israel. There is a need for housing on an emergency basis, but the factories.
Are the ones, who have the ability to provide that housing and the government can and FEMA does store manufactured homes just for that purpose, but that's the whole separate business and we're very proud of how focused we stay on building and renovating communities with homes for sale and rent.
Okay. Thank you.
The next question is from John Masako with B Riley. Please go ahead.
Good morning.
Morning.
Apologies if I missed this earlier in the call, but any update maybe on.
Either renter or owner credit bad debt expense, so thats kind of trending and just kind of the outlook.
Maybe is.
You could potentially be seeing a softer macro environment, how how you are kind of.
Renters and are kind of working in that environment.
Yes, so we closely monitor this and we really haven't seen any material change in collections overall, our collections for the third quarter are above 98%, which is where they usually are.
And our monthly collections are right in line with where they typically are at this point in the month. So we don't see an issue at this point, but we are closely monitoring it.
Anywhere.
Where there could potentially be a problem, we're really staying on top of those.
But again overall 98 plus percent collections and again, we don't see anything at the moment that points us to believe that will change anytime soon.
An important time to note that.
The affordability gap continues to widen and the widening of that affordability cap makes our product that much more in demand for waiting lists for people, who can pay the rent for people doing everything in their power to pay their rent on time, when we began the turnaround property program, where we.
By and renovate communities and Ed rentals, we said that that took three years.
The pace, we're going on the southern communities indicates that pace may reduce to a year and a half because nobody else can do what we do which is create a rental dwelling unit for as little as $130000. So that gap between what it costs other.
People to provide the housing and what it cost us to provide the housing.
Results in us being able to charge lower rents strong demand.
Our drone videos will show you our newest drone video shows you how close our community as to the industrial warehouse, which is just a natural fit and the warehouse needs workers, we provide the housing for the workers and so we don't have receivables because.
People workforce housing is desperately needed.
Okay, and then maybe as you think about.
Some of the work that's done on the properties, where are you seeing how it's kind of cost trending there whether it would be kind of labor cost of materials.
Have there been any kind of went up and those operating costs due to changes in work kind of macro inflation is going.
Yeah on the on the payroll front, we saw the majority of our cost increases last year.
That's both through wages and making sure that we're fully staffed.
We're comfortable with where those numbers are and I really think that's evidenced by our expense growth of five 6% for the nine months.
Material costs are increasing about in line with inflation and we expect that to be the trend going forward as well, but that being said, we're very proud of our eight 4% revenue for the year on the same property from five 6% expense growth and 10, 4% NOI growth I think it's important to note that the.
900 rentals that we've set up an installed this year are not fully reflected in our first nine month numbers are.
Rent roll for November is significantly higher than overall, our revenue was on a going forward basis, what's in place right now about $7 million higher than what was reported for the nine months.
I think we're trying to like asking rents versus kind of.
The market rents out.
In particular.
I mean, how does that translate on a percentage basis some of those things that arent and maybe the same store pool.
We only raised the existing rents to residents of approximately 5%, we priced a new rents based on you know.
But what it cost to set up the house and what are what are market what market rents are so new rents are coming in closer to $1000 per month was absolutely.
It really depends on the market and.
The home that we're renting we've got multi section homes that are renting for 12 to $13500 in some cases, a little bit higher but your typical three bedroom two bath single wide unit isn't that thousand dollars range.
Okay. That's.
That's very helpful and Thats. It for me. Thank you very much.
Thank you.
The next question is from James Gordon with Gordon investments. Please go ahead.
And gentlemen, I wonder if someone would comment a little bit.
In depth on your sales of the preferred stock at the market.
There's a couple of questions that uncertainty.
Until recently when long rates started to drop.
You are getting less and less.
The market sales on your preferred stock.
Yeah.
Selling of the yield it looks like the company would be settled on these shares anyway.
Quasi permanent basis at about 75% interest.
First of all just several questions is there a.
The yield that you guys will not sell it that you'll close the ATM.
And not sell the preferred.
You just keep selling it to.
It seems to me that.
With respect to all of us.
Shares Youre selling the company is kind of on the treadmill on dilution here and there.
I'm kind of.
Puzzled by it.
I know you have a great need for capital I know you've been a very good stewards of capital.
But we're in a very funny environment with interest rates.
And I'm.
I'm wondering whether.
This is very expensive equity that you are selling the cost of this equity.
And so my another question is that you've done some computations as to what your.
Your returns are your spreads over your preferred stock.
Paying seven at the half let's say.
When the price was lower.
What is the spread that you're earning.
On this stock how can you tell us or can you explain to us what.
Is your thought process here with this continued selling particularly of the preferred.
Let me start.
And I have to start with.
Serious problem in the United States has for affordable housing the amount of the shortage.
It is the number two problem of the country and you will see us Congress <unk> session.
For the rest of the year. This is going to be the most talked about but this was the first thing is one piece.
Whatever we do that's number one but.
As far as problems that we can do something to solve housing is critical and.
This nation has been able to produce whatever we need whether it's food.
Everything in the World and then somehow we've gotten in a position where there is a 4 million homes shortage in the country and Thats shortage is growing.
Those are the fight against the inflation.
The other builders cutting back instead of building the building, 20% to 25% less homes.
The affordable part of the housing like it is simply close to people when it can't be.
People are entitled to shelter, they want to raise their families and they have to have a place to live and so we at the highest levels of the government.
Congress are working on a solution to the problem.
That solution.
With Rhopressa that is recognized and now appointed a special person.
To be in this sector.
Manufactured housing and the unique communities, we build and the price we come out whether it was just simply amazing.
We say the word.
<unk> dollars a month to three bedrooms and two baths.
17, hundreds a month to get two bedrooms, and one best wishes isn't sufficient housing and the conventional apartment.
Or as a solution and it is going to be a great business. So on the top side of the App. It is we've been in this business over 50 years I started with the original communities building them. It tends to out of the unit and those communities today, maybe with.
Substantially lower.
The amount of money, we've made over the years, which is really because we've had inflation in land values have gone up is tremendous so when people call Ed.
No.
The weather was 7% at 9% per foot.
It's too expensive I sort of smile about that because the communities we're building today.
We are building units for $150000 a unit.
Had land and homes as compared to three.
So we have two of them well 350000 feet of apartment building.
<unk>.
A better better better product at a lower cost on which this company is going to make a lot of money.
Over the years, if you will.
The basic projections is that of protection. It's a plan I wanted to be careful not to unequivocal.
Communities, we build today and 12 is going to double in value.
That's happened in the past so we're not.
Literally as soon as the preferred we would love to issue at a lower cost, but we want to.
We have I think Sam wants to do 800 rental homes a year.
And three is we'll do 2400 rental homes put it into sites that we already own or are they paid for it so I'm going to do.
2004 hundred homes, and it's going to cost $100 million, we wanted to do it because they don't make a lot of money on it whether or not we issued the preferred a 'twenty one 'twenty two.
Versus the 25 and of course, the preferred the preferred stock is a better investment because it.
As our capital stack.
Stack and our banks appreciate that the preferred stock is behind them.
As far as the common stock would be wonderful weather issues as we did most of the capital we've issued is at $20 a share.
We can if you can.
<unk>.
At a price higher than March.
So whatever the market is so what I'm, saying is that we are going to continue growing the company. We were a leader in the company and where we see great opportunities in Florida with 800000 people moving into the year, we see.
Need for workforce housing we need to.
You see a need for the immigration.
So we're going to allocate capital and do it for all of a sudden units cost $250 million. So I'm not so sure. If you expect the company to say well.
We're going to shut down because interest rates are the.
A little bit of a high level.
Going to shut down because the market doesn't appreciate the future value of the cycle, we're not going to do that and we have great government programs that we can get money.
It's about six 3% right now on 10 year fixed rate mortgages.
I believe the government sponsored entities.
We are raising money, so what I'm, saying, suggesting is you have to blend all of our sources of capital and we need equity to get the debt.
Uh huh.
Sure.
Highly profitable.
One of the best businesses to be in.
But you have to take a long term view of it and we certainly want to continue.
Leading this housing crisis and continue to be a leader in the industry. So we're going to build.
At least 400 expansion units were going to try to put it in 800 more new rentals, a year and right now we may be able to make some really attractive acquisitions one of the fundamental things. We look at is replacement cost and some other company that wants to sell 10000 units below replacement cost.
We're going to take a good look at that too.
And if we need to raise capital.
That.
Manufactured housing.
This is a wonderful industry, but it is capital intensive and were.
We're going to continue to be as a serious participant there.
Thank you.
Again, if you have a question. Please press Star then one please standby as we poll for questions.
Showing no further questions. This concludes our question and answer session I would like to turn the conference back over to Samuel Landy for any closing remarks.
Thank you operator, I would like to thank the participants on this call for their continued support and interest in our company as always gene Anna Brett and I are available for any follow up questions. We look forward to reporting back to you in February with our fourth quarter and year end 2023 results. Thank you.
The conference has now concluded thank you for attending today's presentation.
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Okay.
It's a new law.
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Right for me.
Ooh.
And then C.
Yes.
Okay.
Thank you.
Yes.
Thank you.
Okay.
We have a running through.
Operator.
Okay.
Understood.
[music].
Okay.
Okay.
Okay.
Yeah.
Yes.
See you in.
Okay.
Sure.
Yes.
Okay.
Dragon fly out.
Yeah.
No.
Butterflies.
Okay.
Yes.
Finally piece one day is done that's what I mean.
10 minutes.
Or is it new.
No.
[music].
When you ship.
Hi.
Right.
Yes.
Yeah.
Yes.
Sure.
No.
Thank you.
Yes.
It's a new day.
Excellent.
Yes.
Oh man.
Yes.
Okay.
[music].
Okay.
Yes.
Yes.
Yes.
Yeah.
Okay.
[music].
Thanks.
Yes.
No.
It's impossible.
However, much it is.
Round.
Right now Josh.
Just myself off we saw it all over again.
Don't lose you can finance it slips being grateful.
Pleasant strips classes to make yourself.
I'll start over again.
Work behind Us.
500.
The day was one.
You may be sick and tired, but julien.
Mark.
If you remember the famous men who have to follow the rise again, so take a deep breath pick yourself up start all over again.
Okay.
Yes.
Okay.
Thanks.
Yes.
Okay.
Okay.
Okay.