UMH Buys First Property with Opportunity Zone Fund

umh opportunity zone investment manufactured housing

UMH Properties purchased its first manufactured home community from the newly created Qualified Opportunity Zone Fund.

The Freehold, N.J.-based real estate investment trust purchased a 186-homesite manufactured home community in Orangeburg, S.C. for $5.2 million. The community sits on 39 acres and is 42 percent occupied.

“This community is well-located and will benefit from our proven business plan,” UMH Properties President and CEO Sam Landy said. “The community has been acquired through the QOZF, in which UMH invested a portion of the capital gains realized earlier this year from the sale of Monmouth Real Estate Investment Corp. UMH will also earn fees for sourcing acquisitions and managing the QOZF.”

The purchase is UMH’s second in South Carolina.

In addition to seeking other opportunities to acquire existing communities requiring substantial capital investment that are located in qualified opportunity zones, Landy said the fund also will look to acquire development opportunities in qualified opportunity zones.

Economically distressed areas often have a great need for workforce housing, and the addition of such housing incentivizes corporations to invest in an area. This provides revenue for the area, attracting retail. Therefore, the value of the real estate within the opportunity zone increases.

What is a Qualified Opportunity Zone?

A qualified opportunity zone is an economically distressed community whereby new investments, under certain conditions, may be eligible for preferential tax treatment.

The fund was designed to allow for the deferral of taxes through 2026 on recently realized capital gains reinvested in the fund and to potentially obtain certain other tax benefits. Participating in the program allows UMH to stabilize short-term earnings, improve its position on capital gains, gain access to more deals, and continue to grow its relationship with federal and state governments.

“By providing quality affordable housing in opportunity zones, we will help make these areas even more attractive to employers who need housing for their employees,” Landy said.

UMH Properties is a public equity REIT organized in 1968. It owns and operates 132 manufactured home communities with approximately 25,000 developed homesites in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Maryland, Michigan, Alabama, and South Carolina. UMH also has an ownership interest in and operates one community in Florida, with 219 sites, through its joint venture with Nuveen Real Estate.

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