Manufactured Housing REIT Faces Sale Pressure as Private Equity Eyes Sector
Erez Asset Management is pressing UMH Properties to explore a sale, citing interested strategic and financial buyers that the company has ignored. The activist investor, which owns 4.7% of the manufactured housing REIT and plans to increase its stake to 5%, sent a letter in July arguing that a review of strategic alternatives is warranted. UMH shares fell 1.4% to $15.68 on Monday, valuing the company at $1.34 billion. Erez Chairman Bruce Schanzer said private buyers have sought to engage with the Freehold, New Jersey-based company but have been rebuffed.
Schanzer conducted a property-by-property analysis of UMH’s portfolio and estimates net asset value at $21.25 to $24.25 per share, well above the current trading price. He attributed the valuation gap to poor strategic execution, ineffective capital allocation, and decisions that failed to maximize shareholder value. UMH owns and operates manufactured home communities and rental self-storage units. The company was founded in 1968 by Eugene Landy, whose son Samuel now serves as CEO, and insiders hold more than 5% of shares.
Private equity interest in manufactured housing has grown, with Brookfield Asset Management taking a stake in Yes! Communities, one of the largest manufactured home community owners in the United States. Erez has successfully pushed REITs including Veris Residential and Whitestone REIT to explore sales, with both companies selling this year. The activist launched a vote-no campaign against UMH in May seeking to remove an independent director, which gained support from Institutional Shareholder Services but failed.
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