Umh Properties, Inc. (UMH) Q1 2026 Earnings Call Transcript

Good morning, and welcome to UMH Properties' first quarter 2026 Earnings Conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star and then two. Please note this event is being recorded. It is now my pleasure to introduce your host, Mr. Craig Koster, Executive Vice President and General Counsel. Thank you. Mr. Koster, 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 first quarter supplemental information presentation. This supplemental information presentation, along with our 10-Q, are available on the company's website at umh.reep. We would 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 make 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 risks and uncertainties that could cause actual results to differ materially from expectations are detailed in the company's first quarter 2026 earnings release and filings with the Securities and Exchange Commission. The company disclaims any obligation to update its forward-looking statements. 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, are included in our earnings release, our supplemental information, and our historical SEC filings. 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 Chu, Executive Vice President and Chief Financial Officer, Brett Taft, Executive Vice President and Chief Operating Officer, Jim Likens, Vice President of Capital Markets, and Daniel Landy, Executive Vice President. It is now my pleasure to turn the call over to UMH's President and Chief Executive Officer, Samuel Landy.

Thank you, Craig, and good morning, everyone. We are pleased to report solid operational results for the quarter, which we expect to continue to grow throughout the year. Normalized FFO for the first quarter of 2026 was 23 cents per share as compared to 23 cents per share last year. Our earnings per share were impacted by increased interest rates and increased investment in rental units and expansion lots which are not yet occupied. Additionally, we faced seasonal headwinds which impacted our sales volume and increased our community operating expenses. During the quarter, occupancy improved meaningfully, same property NOI grew by seven percent, and home sales revenue was stable. These gains were partially offset by higher interest costs associated with refinancing debt, bringing expansion lots online, adding rental homes, and the seasonal impact on home sales and operating expenses, which together moderated earnings per share growth. Normalized FFO per share came in essentially in line with last year's first quarter, reflecting the strength of our core rental business offset by those financing and seasonal pressures. As we continue to fill rental homes and generate increased sales profits, our earnings should increase in the quarters to come we have invested in rental homes expansions and acquisitions for which we currently incur interest expense but will later become accretive to earnings the fundamentals of our business remain strong with growing occupancy and improving community operating results we are tightening our nffo guidance range to 98 cents to a dollar four cents per share or $1.01 per share at the midpoint, compared to our previous guidance of $0.97 to $1.05 per share. UMH continues to experience strong demand throughout our portfolio of quality manufactured housing communities. This demand is being translated into increased occupancy rates and improved community operating results. During the quarter, overall occupancy improved by 184 units to approximately 88%. This increase was the result of the conversion of 166 homes from inventory to revenue-producing rental homes and an increase in occupancy of our existing rental homes. Additionally, sales of manufactured homes increased by 6% to $7.1 million for the quarter. This increase in sales includes the sales at Honeybridge, which is owned through our joint venture with Nuveen. We continue to execute our long-term strategy of driving organic growth across our high-quality manufactured home communities. This organic growth translates to increased property values and, over time, increased earnings. Rental and related income grew to $59.5 million for the quarter, representing a 9% increase over last year. Sales for the quarter were $7.1 million, including the sales at Honey Ridge, representing a 6% increase over the first quarter of last year. Our same property results continue to demonstrate the effectiveness of our long-term business plan. We generally acquire underperforming communities with vacancies and in need of capital improvements. Our team and our platform have proven time and time again that we can preserve and increase the supply of affordable housing while delivering solid and sustainable operating results. In the first quarter of 2026, we delivered same property revenue growth of 7.6%, or $4.1 million, and same property NOI growth of 7.1%, or $2.3 million. This growth in same property revenue and same property NOI was driven by site rent increases of 5% and the increase in occupancy of 412 units over last year. Our expenses were elevated as a result of the bad winter, as well as an increase in real estate taxes. This increase in community NOI substantially increases the value of our communities and our portfolio. We can realize this increase in value through our refinancing efforts, which generate additional capital to invest in our platform. Our occupancy gains continue to be driven by the successful implementation of our rental home program. During the quarter, we added and rented 166 new homes across our portfolio, including those in our joint venture communities, bringing our total rental home inventory to approximately 11,200 units with a 94.6% occupancy rate. Our home rental program continues to operate efficiently with a turnover rate of approximately 20%. Our expenses per unit per year are approximately $400. Our capitalized turnover costs vary, but we are generally able to increase rents to earn 10% on any additional investment in rental homes. We are well positioned to fill 800 or more new rental homes this year. We currently have 80 homes on site and ready for occupancy, 400 homes being set up, and 160 homes on order. The 480 homes that are on site have already been paid for, and once occupied, each home increases revenue and starts to earn our expected return on investment. Our home sales business also performed well despite the challenging winter, generating a 6% increase from $6.7 million in gross sales in the first quarter of 2025 to $7.1 million for the current quarter, including contributions from our new Honey Ridge community in our joint venture with Nuveen Real Estate. During the quarter, we financed 63% of our home sales, including sales at Honey Ridge. Our notes receivable portfolio continues to perform well. We have acquired and developed communities in strong locations, which should allow us to further increase our gross sales and sales profitability in the coming quarters. On the expansion and development front, we plan to develop 300 or more sites in 2026. Over the past four years, we have developed an average of approximately 200 sites per year. Expansions greatly increase the value of our existing communities. A larger asset generally operates with better margins as a result of economies of scale. We currently have $45 million invested in 600 vacant, well-located expansion sites that have been developed over the past few years. These sites will allow us to grow home sales revenue and community operating income. These sites have been paid for, so each site we occupy will increase revenue with limited additional investments. The interest is already being expensed. Additionally, these expansion sites are well-located and have the potential to greatly increase our sales and sales profits. As we fill our recently developed sites, our earnings can grow substantially. Expansions and development require patient capital, but lead to strong returns over time. We will continue to work on expanding our existing communities, in addition to exploring the highest and best uses of our vacant land. UMH is well positioned to capitalize on the progress we have made on our investments over the past few years. We have well-located communities that are experiencing strong demand, which should result in increased occupancy, revenue, and sales. Our communities in the Marcellus and Utica Shale areas continue to experience strong tailwinds as a result of the additional investment in these areas. Additionally, we are starting to see more interest in the leasing of our oil and gas rates, which can result in additional revenue. We have built a best-in-class operating platform that continues to produce results year after year. The fundamentals of our business remain strong. There is pent-up demand for affordable housing, and our product serves that need in each market that we operate in. Our quality income stream is derived from our 24,000 families that have chosen to make UMH communities their home. This income stream has proven resilient through all economic cycles. As we move through the stronger spring and summer selling seasons, we remain confident in our ability to deliver full year normalized FFO per share growth in the mid-single-digit range, which, if coupled with our current dividend yield, can easily drive a double-digit total return for our investors. Our communities are well positioned, our balance sheet is solid, and our team continues to perform at a high level. Overall, these accomplishments demonstrate the resilience and growth potential of our business model. I'll now turn the call over to Anna Chu, our CFO, to review our financial results in more detail.

Thank you, Sam. Normalized FFO, which excludes amortization and non-recurring items, was $19.4 million, or $0.23 per diluted share, for the first quarter of 2026, compared to $18.8 million, or $0.23 per diluted share, for 2025, resulting in a 3% increase on a dollar basis and remaining flat on a diluted per share basis. Rental and related income for the quarter was $59.5 million compared to $54.6 million a year ago, representing an increase of 9 percent. This increase was primarily due to acquisitions made in 2025, an increase in same property occupancy, the addition of rental homes, and an increase in rental rates. Community operating expenses increased 10 percent during the quarter. This increase was mainly due to the acquisitions made in 2025, an increase in payroll and related costs, real estate taxes, and water and sewer expenses. Our community net operating income, or NOI, which is our rental and related income, less our community operating expenses, increased 8%. Our same property results continue to meet our expectations. Same property income increased by 8% for the quarter, and despite the 8% increase in community operating expenses, community NOI increased by 7% for the quarter, from $32.6 million in 2025 to $34.9 million in 2026. As we turn to our capital structure, at quarter end, we had approximately $760 million in debt, of which $554 million was community-level mortgage debt, $28 million was loans payable, $102 million was our 4.72% Series A bonds, and $76 million was our 5.85% Series B bonds. Total debt was 99% fixed rate at quarter end with a weighted average interest rate of 4.92%. The weighted average interest rate on our mortgage debt was 4.75% at quarter end compared to 4.18% at quarter end last year. The weighted average maturity on our mortgage debt was 5.9 years at quarter end and 4.2 years at quarter end last year. In this volatile interest rate environment, the weighted average interest rate on our short-term borrowings was 15 basis points lower at 6.35% at the current quarter end as compared to 6.5% at quarter end last year. At quarter end, UMH had a total of $325 million in perpetual preferred equity. Our preferred stock, combined with an equity market capitalization of over $1.2 billion, and our $760 million in debt, results in a total market capitalization of approximately $2.3 billion at quarter end. During the quarter, we issued and sold 66,000 shares of our Series D preferred stock under the 2025 Preferred ATM program at a weighted average price of $22.51 per share, which generated gross and net proceeds after offering costs of $1.5 million. The company also received $2.4 million, including dividends reinvested, through our DRIP. During the quarter, we did not sell any shares of our common stock under the September 2024 Common ATM program. From a credit standpoint, we ended the quarter with net debt to total market capitalization of 31.2%, net debt less securities to total market capitalization of 30.1%, net debt to adjusted EBITDA of 5.5 times, and net debt less securities to adjusted EBITDA of 5.3 times. Interest coverage was 3.1 times, and six charge coverage was 2.1 times. From a liquidity standpoint, we ended the quarter with $37.4 million in cash-in-cash equivalents and $260 million available on our unsecured revolving credit facility with a potential total availability of up to $500 million pursuant to an accordion feature. Our unsecured revolving credit facility expires in November and we are currently working on a renewal of this facility. We also had $183 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 $26.4 million in our REIT Securities portfolio, all of which is unencumbered. This portfolio represents only approximately 1.2% of our undepreciated 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 tightening our NSSO guidance range to 98 cents to a dollar four cents per share or a dollar and one cents per share at the midpoint compared to our previous guidance of 97 cents to a dollar and five cents per share. 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.

Thank you, Anna. UMH continues on our mission to provide the nation with high-quality, affordable housing, and doing so while generating strong and growing returns for our shareholders. We have made immense progress over the years building a great portfolio of manufactured housing communities that our existing tenants and our new tenants are proud to call home. We improve our communities by upgrading the collected communities through infrastructure projects, the addition of amenities, security best practices, and further through the expansion of our communities. We are proud to say that each asset we own is in better condition today than the day we bought it. Over the company's history we've experienced several economic cycles across our portfolio and the manufactured housing industry has performed well throughout all of them. Our communities have strong demand in times of economic prosperity and in times of recession. While interest rates have fluctuated over the past few years, our communities still experience strong demand, have experienced growing occupancy, and sales and collections have remained strong. Our earnings have been impacted by rising interest rates, completion of expansions, and adding to the rental inventory which triggers added interest expense and seasonal fluctuations in sales and operating expenses. We believe that we are poised for meaningful earnings growth this year, and as such, we have tightened our guidance. Housing is a bipartisan issue with bipartisan support. There is pending legislation that will strengthen the manufactured housing industry. The pending legislation has the potential to improve the availability of financing for our tenants through changes to the Title I program, as well as remove the requirement that a manufactured home has to be on a permanent chassis. We've already made a substantial progress through the innovation of single-section and multi-section duplex homes. Additionally, we are hopeful that as we develop more communities, local municipalities will see the benefits of manufactured housing and ease burdensome regulatory requirements that have made getting entitlements nearly impossible. Your mates and the manufactured housing industry are in an exciting time with many possibilities. We have positioned the company to benefit from these changes and anticipate substantial growth of the company and our earnings in the near future. Thank you again for joining us today. Operator, we are now ready to take questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star and then two. At this time, we'll pause momentarily to assemble the roster. The first question will come from Gaurav Mehta with Alliance Global Partners. Please go ahead.

Thank you. Good morning. I wanted to ask you on your same property NOI and some of the comments around the impact of winters on the same property expenses. So on a normalized basis, do you still expect to deliver claims for NOI in high single digit and low double digit range, as you mentioned on the last earnings call?

Brett. Yeah, sure. Brett here. And yeah, as you mentioned, it was a tough winter uh pennsylvania ohio indiana new york even tennessee had deep freezes and extended periods of below freezing temperatures which obviously impacts our um you know water and sewer it impacts our maintenance over time dealing with freeze ups we had a lot of snow and a lot of snow removal related charges so you know overall community operating expenses were 8.2 percent i do want to point out that last year our community operating expenses in the first quarter were also elevated in about the seven and a half percent range. So this year was a little bit higher, but largely in line. We're very happy with the occupancy growth and the revenue growth we were able to produce in the first quarter. And as we go throughout the rest of the year, we expect that expense growth to moderate. We've always pointed out that we expect expenses to grow in the five to seven percent range. Nothing changes there. And we're absolutely confident in our ability to deliver high single digits, same property and a wide growth.

One of the things we think about, like, why is somebody short 3 million shares of UMH properties? And I don't know what they see or think they see that we, you know, see differently. Our 3,240 vacant sites represent incredible opportunity to increase sales and rental revenue, and that will come to the bottom line. And, you know, to me, it's reasonable to believe, you know, someday in the near future, will sell 320 homes in a year at $150,000 average price and gross $48 million in sales. So we remain incredibly optimistic, but obviously somebody else is pessimistic.

Thanks for those details. As a follow-up, I want to ask you on the home sales. Have you seen the earning press release? I think you talked about expectation of sales growth as we go into peak selling season. Just wondering if you would comment on the trends that you saw April for home sales?

Yeah, the trends in the portfolio look very good. You know, including Honey Ridge for the first quarter, sales were up year over year. Again, sales are absolutely impacted by the cold winter and everybody's ability to move. You know, our April sales were very strong. They're coming in at, you know, about three and a half million. So we're very happy with that. Our pipeline remains in good shape. We've got a lot of inventory that's now ready for sale or just about ready for sale at a lot of the expansions that we've recently opened um you know and as sam mentioned at the call we've got several hundred expansion sites built over the past few years that should all uh generate increased sales in the second and third quarter um i do also want to point out that our new jersey communities and some of our eastern pennsylvania communities were impacted uh by the winter but we're expecting and we're seeing a very strong sales pipeline at those locations um you know sales in the second quarter of last year we're about 10.5 million. We're on track, you know, through April. Obviously, there's a long way to go, but we remain confident in our ability to grow sales in the second quarter and year over year.

Thank you. That's all I had.

The next question will come from Craig Kuchera with Lucid. Please go ahead.

Yeah, good morning. There was a pretty significant swing in your marketable securities portfolio. Not much of an impact on a net basis, but can you give us some color on what was going on there?

Yes. Hi, Craig. It's Anna. We had written off one security. And if you think about it, it was already written down in our unrealized gain line, unrealized gain and loss line. So we just wrote it down, physically wrote it down. So we moved it from the unrealized to the realized. So that's all it was.

Okay. That's helpful. Changing gears, Are there any critical materials sourced from the Middle East that are a component for manufactured housing development or maybe aluminum or plastics or most of those materials sourced elsewhere?

At this moment, everything I've heard about supply has, you know, remained, you know, no issues and no material increases. What do you think, Brett?

Yeah, no, same point here. The main thing that I follow there is the backlogs we're seeing from our manufacturers. Well, while they've increased a little bit, I think generally we're still able to get homes in that six to eight week range. So with limited price increases, I mean, there are some price increases, but overall, it's pretty stable home ordering environment. We're comfortable with where we are. And if anything changes, we'll get back to you.

And we believe in the long-term efficiencies of factory-built houses that, you know, the factory-built homes will, in comparison to all other forms of housing, reduce the cost, you know, per house based on efficiencies of manufacturing.

Got it. And just one more for me. I mean, it was a quiet quarter from a capital-raising perspective. You worked down your cash balance. You know, last year you funded yourself primarily with debt. How are you thinking about funding the 2026 budget? I mean, is that mostly line of credit? I know you've got about $38 million in mortgages and are maturing, but just would be curious to get your thoughts on that.

Well, it all depends on our capital needs, right? As we always say, we always need about $120 million to $150 million on an annual basis to do our business plan. We do plan on refinancing, as you said, about $38 million in mortgages. When we refinanced last year, we were able to take out $100 million in additional capital. Now, that won't happen again this year because, again, there's less mortgages that are coming due. However, we do have approximately 60 communities that are free and clear. We have on hand about $40 million. We have unsecured line of credit of $260 million, which within accordion feature will go to $500 million. We have a rental home line. We have notes receivable line. So all in all, we believe that we will be able to obtain the capital necessary. And again, it all depends on our share price. It all depends on the market. What are the interest rates will be when we need that capital?

We have to understand that UMH is a unique company. We have a mission statement we really believe in. The nation needs housing. There's a shortage. The government's recent figures were 10 million units, and we used to figure they need 6 million units, so 4 million units. Whatever the number we have to reach to meet that shortage, we're not doing it. There'll be fewer homes built in 2026 than there were in 2025. But that's not the case with UMH. Our mission statement is to provide housing. We believe we have a definite advantage in the housing we have. We build houses in factories and ship them to communities. We have to create the communities. and we have to have the capital to do it and we're using every means we can to expand the company and we have units that we want to build in Tennessee, in Florida, in New York so we are constantly seeking ways to profitably grow this company And it's important to the company because in the long run, investing in housing is a good investment, and it's something the nation needs. Okay. Thank you.

The next question will come from John Masoka with D. Riley. Please go ahead.

Good morning. Maybe starting on the regulatory front, how does the removal of the chassis requirement rules impact UMH, if at all?

Yeah, it's not complete yet, but, you know, as we've gone to duplex homes, there never used to be such a thing as a one-bedroom manufactured home. In apartments, you did one-bedroom studio, two-bedroom, three-bedroom, four-bedroom. Manufactured housing was two-, three-, and four-bedroom. Now the duplexes give us one-bedrooms, which there's substantial demand for, and allows us to obtain two rents from one lot, which can increase revenue. The removal of the chassis will allow two-story homes, and those two-story homes will allow bigger families to occupy the same-sized lot, the 5,000 square foot lot. And there's additional potential that those two-story homes could be duplex. So two-story is a really big deal. You know, manufactured homes communities are built for HUD code houses, and the municipality has to allow whatever the HUD code allows. So this will allow two-story homes in the communities, which can be a really big deal, depending on location.

You build 2,000 square feet of homes instead of 1,000 square feet and the same piece of land. It's a very, very important development. When you buy communities that are older, it gives us a means of taking out these older homes and putting in twice as much space so the space is more valuable. This is a change that's going to help every manufactured home community owner in the country and it's going to help the residents because we can provide new and improved housing in the spaces where we had older and obsolete housing and put a better product in. So it's really a major change for the industry and I'd really like to thank you for that question.

Does it impact the cost, if somebody's not on the ground, does it impact the cost of installation of new homes and the pace at which you can kind of add new homes to existing communities or is that kind of just a net the the removal of the chassis doesn't really change that per se well so so removing the chassis can allow the house to be at ground level which is uh you know very appealing to 55 and older who don't like walking up steps so that that helps there uh you know removing the chassis reduces the cost of each unit by $3,000 or more, but then there's increased setup costs, which those will be worked out over time. Efficiencies will develop in setting up the houses. We've always found setting up 10 homes as opposed to one home at a time, you can save money because you have all the crews ready to do everything, and you could reduce the cost per house. So I assume it'll be the same thing when you get rid of the chassis, you know, in the beginning, there'll be inefficiencies, there'll be added costs of setting up homes without chassis, but eventually that will get worked out.

And then is there anything else you're seeing on the regulatory front that could change here in your term, especially in terms of maybe financing for manufactured homes?

Well, exactly. And, you know, we have more than $100 million in loans outstanding. We have more than 11,000 rental homes. And, you know, many developments are occurring that could make it more favorable for people already renting homes or others to purchase our rental units or purchase additional houses or for outside finance sources such as Fannie, Freddie. And then, you know, I'm learning about in Pennsylvania, there's government programs. You know, people may want to do these loans. And, you know, if they do the loans, homes we already sold where we have the loan, somebody could refinance and pay us off. That would be cash to us. We could be selling the rentals under a Title I program or other programs, which would be cash to us. So everything you read about in the Wall Street Journal pertaining to improving, you know, credit scores, is finding other ways to determine people's credit that will increase loan approvals. That's beneficial to us. Title one's beneficial, it's 3% down. They're gonna increase the loan limits. You know, Fanning and Freddie are trying to do more on the affordable housing front. So all of these things factor in to help increase our sales, sell off existing loans and sell rental homes.

Maybe switching gears a little bit, as I think about some of your assets in the Southeast tend to be a little bit more value-added purchase, and especially with some of those not being in the same store pool, how are you kind of thinking about the pace or the potential pace of lease-up at those assets as we come into kind of peak leasing slash selling season?

So, Daniel, Landy, why don't you tell them how we're doing on the Oz Fund properties and a little bit about the new video that's going to come out and how positive it is.

Yeah. So, for the Oz Fund properties, one in Georgia and one in South Carolina, both of them have really great demand. The one in Georgia right now, the leasing pace has been around, you know, four or five homes a month. So, I think we'll keep doing that. The 1 in South Carolina, we have an incredible waiting list and everything bring home. We've set up there is full. We're just right now there's a North section that we're trying to get expansions and approvals for looks like we'll be getting that. So we'll have a big info there and we're going to come out with a video. um you know showcasing what we're doing in the current oz fund um and in the south and it'll it'll really give you uh investors a really great feel of the the positive impact we've made there the the housing supply we've increased and the level of demand in the southeast um yes south carolina i think is the fastest growing state um in the u.s and you know we've we've done a really good job filling everything we can fill right now um and we're going to keep expanding there okay um that's it for me thank you very much the next question will come from rich anderson with

cantor fitzgerald please go ahead hey good morning this is jeffrey car on for rich um just wanted to ask about uh same property occupancy it looks like it looks like it uh kicked up about 110 bps from last year to 89%. In your view, what's the kind of realistic feeling or target that you might have for occupancy across the portfolios, and are there any markets that you feel like have the most room to run from this point?

Yeah, good question, first of all, and we're very happy with what we've been able to accomplish, I think, but I'm not positive this is a peak of same property NOI as long as i've been here so it's nice to get there and it's really a function of going out purchasing properties we know what the problem was when we purchased them we made the improvements to the communities we make them nicer and safer places to live and then we start to implement the rental home program um you know just to add some color there we currently have 430 homes on site some of them are ready for occupancy some of them are working on getting ready for occupancy that is all low-hanging fruit that should allow us to continue to grow occupancy into the second and third quarters i don't see any reason why in the near term call at the end of the year we can't get um you know above 90 occupancy i think that's a very realistic goal you've always got some move outs and some home removal that goes along with some of these home installations so it does offset the occupancy growth a little bit but by and large we've done the majority of that work and i do expect a lot of occupancy upside here going forward as far as regions that are doing very well. Ohio has really led the company over the past few years in occupancy growth and the good news is we still have quite a few vacant sites at some of our communities that are the best performers. We expect that to continue. Pennsylvania actually had a pretty slow first quarter but I think that was largely impacted by the winter and when we're out there working with our community managers and our regional managers we're expecting a nice uptick in occupancy there. Indiana has always been uh solid and we've got some nice expansion sites that we're filling at a pretty rapid clip and then i just can't leave tennessee out because tennessee albeit a smaller portion of the portfolio always has very strong demand and always fills quite a few sites um you know the issue in tennessee is we ran out of sites but the good news is we've been developing expansion sites we've got about 50 sites left at our holiday village expansion uh we're about to complete uh the next phase of our Duck River expansion, which in the short term will give us 40 new lots to fill. And then we just built 55 units at River Bluff, which is adjoining Allentown. And on top of that, we have another 100 units that were just completed at Memphis Blues. So, you know, really throughout the portfolio, demand is strong. I would just add that, you know, New York really does have a very seasonal impact because of the weather up there.

Our occupancy in new york right now has rebounded and we're in very good shape up there so you know i i hate to say we're doing well everywhere actually i love to say we're doing well everywhere but uh really across the board we're seeing strong demand and we're filling a lot of units just to give an example when the mayor of mantha says that they need 10 000 affordable homes and the the only people building there right now are umh and we're expanding there rapidly and we have a lot of extra land we plan to buy some more land and i don't know when the third section is we're going to the fourth section uh memphis is a sleeper we did the very well picking nashville now i think memphis is going to be an excellent area to develop affordable housing okay great Thank you.

And just as a follow-up, can you walk us through the puts and takes on interest expense for the rest of the year? I'm just wondering if Q1 is the peak or if we should expect this level to kind of persist throughout 2026?

I believe that it is pretty much the same that we will expect throughout the year. I don't believe that we will have any big increases in interest expense or big decreases at this point.

It's important to note, you know, if I remember the numbers right, which I think I do, $600 million of the increased interest expense is from refinancing at a higher rate. The rest of the interest expense is from adding rental units and building lots, which cannot possibly earn money until they're occupied. And they are now at this moment becoming occupied and will become occupied throughout the year. So to me, you have the maximum interest expense without revenue that you will have during the year.

Yeah, that's generally correct. I just want to point out that last year we had about 117 million in debt that was refinanced, it was at 4% at the time that it was being paid off. That increased to about $565,000 on average, which increased the interest cost on that batch by just about $2 million, just over $2 million, if I remember correctly. On top of that, we did increase the mortgage debt, so that was another $4 million in interest, and then we did the Israeli bond. So that's why interest is...

But we don't believe that there will be any large fluctuations throughout the rest of the year.

Okay, that's all for me. Thank you.

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 early August with our second quarter 2026 results. Thank you.

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