UMH Properties has entered into a joint venture with Nuveen Real Estate for greenfield development and acquisition of new manufactured housing communities.
Nuveen, a TIAA company, brings an initial capital commitment of up to $170 million for the projects. UMH will have a 40% stake in the venture and serve as the managing member and operating member of the joint venture.
UMH will earn customary fees associated with property and asset management, the New Jersey-based company said in a public release.
“We have long been advocates for the development of new communities and are pleased to have found a partner who understands and shares our vision,” UMH President Sam Landy said. “This joint venture gives us the financial capacity to develop and acquire new manufactured housing communities, creating long-term shareholder value while limiting the short-term impact on our FFO during construction and lease-up.”
Landy said Nuveen has an in-depth understanding of the company, the manufactured housing industry, and the real estate market.
“We are excited to work with them to continue our mission of providing the country with a much-needed supply of affordable housing,” he said. “Our country needs at least 5.5 million new homes to keep pace with demand, with that number increasing to 6.8 million when considering obsolescence.
“Through this joint venture, UMH and Nuveen Real Estate intend to make significant investments in developing and acquiring new communities to help to ease the affordable housing crisis.”
UMH Properties will have the right to purchase from the joint venture the communities they plan and develop after a pre-determined period of time.
Potential elements of the deal are three to-be-built communities UMH has entered into agreements on in Florida, the news release stated. The communities are planned for 804 sites and a total purchase price of approximately $90 million.
The first community contains 219 sites and has an approximate purchase price of $23 million, and is scheduled to close in early 2022.
UMH Properties was organized in 1968 and is a public equity real estate investment trust that owns and operates 127 manufactured home communities with 24,000 developed homesites in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan, Maryland, Alabama and South Carolina.