UMH Properties (UMH) risk factors, FY2025 10-K

Real Estate Industry Risks

1. 01General economic conditions and the concentration of our properties in certain states may affect our ability to generate sufficient revenue to maintain our profitability
2. 02We may be unable to compete with our larger competitors for acquisitions, which may increase prices for communities
3. 03We may not be able to integrate or finance our acquisitions and our acquisitions may not perform as expected
4. 04We may be unable to finance or accurately estimate or anticipate costs and timing associated with expansion activities
5. 05We may be unable to sell properties when appropriate because real estate investments are illiquid
6. 06Our ability to sell manufactured homes may be affected by various factors, which may in turn adversely affect our profitability
7. 07Licensing laws and compliance could affect our profitability
8. 08The termination of our third-party lending program could adversely affect us67% rewritten
9. 09Many of our costs may be adversely impacted by continued heightened inflation
10. 10Costs associated with taxes and regulatory compliance may reduce our revenue
11. 11Rent control legislation may harm our ability to increase rents27% rewritten
12. 12Environmental liabilities could affect our profitability
13. 13Some of our properties are subject to potential natural or other disasters
14. 14Climate change may adversely affect our business
15. 15Actions by our competitors may decrease or prevent increases in the occupancy and rental rates of our properties which could adversely affect our business
16. 16Losses in excess of our insurance coverage or uninsured losses could adversely affect our cash flow
17. 17Our investments are concentrated in the manufactured housing/residential sector and our business would be adversely affected by an economic downturn in that sector
18. 18Our joint venture relationship 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 us23% rewritten

Financing Risks

1. 19We face risks generally associated with our debt
2. 20We mortgage our properties, which subjects us to the risk of foreclosure in the event of non-payment
3. 21We face risks associated with our dependence on external sources of capital
4. 22We 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
5. 23We are subject to risks associated with the current interest rate environment, and changes in interest rates may affect our cost of capital and, consequently, our financial results
6. 24Covenants in our credit agreements and other debt instruments could limit our flexibility and adversely affect our financial condition
7. 25A change in the U.S. government policy with regard to Fannie Mae and Freddie Mac could impact our financial condition
8. 26We face risks associated with the financing of home sales to customers in our manufactured home communities26% rewritten

Risks Related to our Status as a REIT

1. 27If our leases are not respected as true leases for federal income tax purposes, we would fail to qualify as a REIT
2. 28Failure to make required distributions would subject us to additional tax
3. 29We may not have sufficient cash available from operations to pay distributions to our shareholders, and, therefore, distributions may be made from borrowings
4. 30We may be required to pay a penalty tax upon the sale of property that is determined to be held for sale to customers
5. 31We may be adversely affected if we fail to qualify as a REIT
6. 32To qualify as a REIT, we must comply with certain highly technical and complex requirements
7. 33There is a risk of changes in the tax law applicable to REITs45% rewritten
8. 34We may be unable to comply with the strict income distribution requirements applicable to REITs
9. 35Our taxable REIT subsidiary (“TRS”) is subject to special rules that may result in increased taxes
10. 36Notwithstanding our status as a REIT, we are subject to various federal, state and local taxes on our income and property

General Risk Factors

1. 37Global and regional economic conditions could materially adversely affect our business, results of operations, financial condition and growth
2. 38We may not be able to obtain adequate cash to fund our business
3. 39We are dependent on key personnel
4. 40If we fail to maintain an effective system of internal controls, we may not be able to accurately report financial results, which could result in a loss of investor confidence and adversely affect the market price of our Common Stock
5. 41Some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests
6. 42We may amend our business policies without shareholder approval
7. 43Third-party expectations relating to sustainability initiatives may impose additional costs and expose us to new risks
8. 44The market value of our Series D Preferred Stock and Common Stock could decrease based on our performance and market perception and conditions
9. 45The market price and trading volume of our Common Stock may fluctuate significantly
10. 46The market price and trading volume of our Series D Preferred Stock may fluctuate significantly
11. 47Future issuance or sale of additional shares of Preferred Stock or Common Stock or other securities could adversely affect the trading prices of our outstanding Series D Preferred Stock and Common Stock
12. 48Future issuances of our debt securities, which would be senior to our Series D Preferred Stock upon liquidation, or preferred equity securities which may be senior to our Series D Preferred Stock for purposes of dividend distributions or upon liquidation, may adversely affect the per-share trading prices of our Series D Preferred Stock
13. 49There are restrictions on the transfer of our capital stock
14. 50The dual listing of our Common Stock on the NYSE and the TASE may result in price variations that could adversely affect liquidity of the market for our Common Stock
15. 51The 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
16. 52We are subject to restrictions that may impede our ability to effect a change in control
17. 53We cannot assure you that we will be able to pay distributions regularly
18. 54Dividends on our capital stock do not qualify for the reduced federal tax rates available for some dividends (i.e., they are not qualified dividends)
19. 55We are subject to risks arising from litigation
20. 56Future terrorist attacks and military conflicts could have a material adverse effect on general economic conditions, consumer confidence and market liquidity
21. 57Disruptions 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
22. 58We face risks relating to cybersecurity attacks which could adversely affect our business, cause loss of confidential information and disrupt operations38% rewritten
23. 59We operate in an intensely competitive business environment. We may not be as successful as our competitors in keeping pace with developments in technology, including incorporating generative artificial intelligence and machine learning into our business, or adapting to a rapidly changing marketplace38% rewritten
24. 60We are dependent on continuous access to the Internet to use our cloud-based applications
25. 61We face risks relating to expanding use of social media mediums
26. 62The use of AI presents risks and challenges that may adversely impact usNew
27. 63Our OZ Fund may fail to qualify for the tax benefits available for investments in qualified opportunity zones under the detailed rules adopted by the Internal Revenue Service
28. 64We face various risks and uncertainties related to public health crises, pandemics or other highly infectious or contagious diseases