Barry Oxford

Barry Oxford with Colliers Securities questioned the conservative nature of UMH Properties' 2026 FFO per share guidance, particularly the low end of $0.97, given the strong same-store NOI and internal growth trends observed in 2025. He sought clarification on factors that might be holding back the per-share FFO growth.

Answer

Jim Lykins, Vice President of Capital Markets, stated that the guidance range accounts for potential variables like home sales performance and capital raising, aiming for a "straight down the fairway" estimate rather than overly conservative or optimistic. Samuel Landy, President and CEO, added that while sales are difficult to predict, the company has more available expansion sites and turnaround communities, which could lead to sales exceeding $40 million, suggesting potential for upside beyond the guidance.

Barry Oxford inquired about the apparent discrepancy between UMH Properties' strong same-store NOI and internal growth numbers and the relatively low end of the 2026 FFO guidance ($0.97), which represents only a $0.02 increase from the prior year, asking what factors might be holding back FFO per share growth.

Answer

Brett Taft, EVP and COO, and Samuel Landy, President and CEO, explained that the guidance range accounts for potential variables such as home sales performing worse than anticipated or unexpected capital raises. They expect to land in the middle of the guidance range. Samuel Landy added that home sales are difficult to predict, but with available lots in communities that were full in 2025 and other expansions maturing, there's potential for sales to exceed $40 million if conditions are favorable.

Barry Oxford inquired about Alpine Income Property Trust's dividend policy, specifically regarding capital retention versus dividend increases, and asked for clarification on the reported drop in the percentage of credit-rated tenants in the portfolio.

Answer

CEO John Albright confirmed the company's intent to retain as much capital as possible, acknowledging that earnings growth will create pressure to raise the dividend to comply with REIT payout rules. CFO Philip Mays attributed the decrease in the percentage of credit-rated tenants to specific tenants, such as Walgreens and At Home, losing their credit ratings.

Barry Oxford inquired about Alpine Income Property Trust's dividend strategy, specifically if increases would be minimal to retain capital, and the reason for a significant drop in the percentage of credit-rated tenants in the portfolio.

Answer

CEO John Albright confirmed that dividend increases would likely be minimal to retain capital, despite pressure to raise it to meet REIT payout requirements. CFO Philip Mays explained that the drop in credit-rated tenants was primarily due to a few tenants, such as At Home and Walgreens, whose credit ratings had either dropped or were no longer carrying a rating.

Barry Oxford asked about recent trends in acquisition pricing and cap rates since the start of the year. He also questioned whether certain markets are offering more favorable risk-adjusted returns or if the company's approach is purely asset-by-asset.

Answer

CEO Dave Holeman responded that cap rates have stabilized, with recent acquisitions closing in the 6.4% to 6.7% range, and that the company targets adding at least 200 basis points of yield post-acquisition. President & COO Christine Mastandrea added that their strategy focuses on markets with strong infrastructure development and densification, allowing them to execute remerchandising or redevelopment plans, typically within 18 months of purchase, to capture value.

Barry Oxford of Colliers inquired about current acquisition cap rate trends, the impact of external economic factors on seller motivations, and whether the company's underwriting has intensified its focus on acquiring 'mission-critical' assets.

Answer

Executive Jordan Cooperstein stated that cap rates are holding steady, with the company targeting acquisitions at or above a 7.5% rate. CEO Andrew Spodek confirmed that seller motivations are driven by life events or the benefits of PSTL's platform, not economic factors like tariffs. Spodek also emphasized that their underwriting has always rigorously focused on acquiring properties critical to the USPS network, a strategy validated by their high retention rate.

Barry Oxford asked if a potential change in the Postmaster General would alter the type of lease agreements Postal Realty Trust signs with the U.S. Postal Service going forward.

Answer

Andrew Spodek, Chief Executive Officer, stated that he does not anticipate any changes to the lease documents. He explained that this area is not a major focus for USPS leadership because lease expenses constitute only 1.5% of the Postal Service's total operating budget.

Barry Oxford questioned the company's level of patience with the geriatric tenant before taking definitive action on the lease default. He also asked about the financial health of other smaller tenants and the overall macroeconomic impact on their ability to pay rent.

Answer

Executive David Dupuy responded that the company's patience is not unlimited and they expect to make decisions by early Q3 based on the level of buyer interest in the tenant's assets. He assured that if interest is insufficient, they will pursue all available alternatives. Dupuy also noted that the broader tenant portfolio is stable, with no new significant issues arising, and that the current macro environment does not present any immediate threats to tenants' ability to pay rent.

Barry Oxford asked whether the tenants on the company's watch list were concentrated in a specific property type or if the issues were more idiosyncratic and specific to individual tenants.

Answer

CEO David Dupuy stated that the issues with watch list tenants are 'definitely the latter,' clarifying that they are idiosyncratic, tenant-by-tenant situations rather than a broader problem within any specific healthcare property sector.

Barry Oxford questioned whether apartment landlords, especially larger ones, had paused converting units during the CEO transition and if the company is now seeing positive re-engagement from these major landlords.

Answer

CEO Shane Paladin attributed any slowdown to the ongoing restructuring of the internal sales motion rather than a lack of customer demand. He stated that while he has only been with the company for a week, his initial conversations indicate that customers have an appetite to do more, provided there is a clear return on investment (ROI).

Barry Oxford asked if the company is seeing any distressed acquisition opportunities and how it balances acquisition cap rates with its cost of capital. He also inquired about the company's plans for developing more spec suite space.

Answer

CEO James Farrar responded that while he expects distressed sales to increase over the next two years, the company's current focus is on internal value creation by investing capital in its existing portfolio to drive NOI growth. He stated that external growth will be considered later if it makes sense. Regarding spec suites, Farrar confirmed they have about 50,000 square feet currently and are planning the next phase for 2025, focusing on markets with the highest demand, like Phoenix, to capture strong rental rates.

Barry Oxford asked for an update on leasing concessions, such as free rent and tenant improvements, compared to a year ago, and questioned the outlook for refinancing debt that matures in late 2025.

Answer

CEO James Farrar stated that while construction costs remain high, their inflation has stabilized. He noted that face rents for quality properties continue to grow and free rent concessions have held steady at approximately one month per year of term. Regarding debt, CFO Anthony Maretic indicated that substantive discussions for the Q4 2025 maturities have not yet begun but are expected to start in early 2025, giving the company ample time to evaluate its options.

Barry Oxford inquired about distressed property opportunities, specifically asking if acquisition cap rates are rising compared to six months prior.

Answer

Executive Scott Schaeffer responded that cap rates have remained stable in the mid-5% range. He noted that while the 10-year Treasury rate influences cap rates with a lag, the primary market change has been an increase in the number of opportunities, not a rise in cap rates themselves.

Barry Oxford from Colliers asked when GNL might pivot back to an acquisition strategy, considering the significant progress made on deleveraging and the disposition of noncore assets.

Answer

CEO Michael Weil stated that while he is eager to return to acquisitions, the company's current priority is to continue lowering leverage and improving the net debt-to-EBITDA multiple. He clarified that a return to acquisitions will only be considered when the company's stock trades at a multiple where using equity for growth is accretive.

Barry Oxford asked about Modiv's cost of capital, specifically at what stock price management would consider a significant equity issuance to fund growth, as an alternative to recycling capital through dispositions.

Answer

CEO Aaron Halfacre provided a detailed response on his capital allocation philosophy, stating a strong preference for avoiding traditional, dilutive institutional equity raises at a discount to NAV. He favors patient, incremental growth by raising capital through the ATM program directly to the company's retail investor base. He outlined two primary long-term paths for shareholder value creation: either gradually growing the company to a size that attracts index inclusion, or an eventual acquisition of the portfolio by a larger entity. Both strategies, he argued, protect the interests of existing long-term investors over short-term growth for its own sake.

Barry Oxford questioned the potential cap rate spread between the company's industrial acquisitions and office dispositions, and asked if the elevated use of the At-The-Market (ATM) equity program would continue in coming quarters.

Answer

President Arthur Cooper acknowledged potential cap rate compression due to market competition but highlighted that the company is improving its competitiveness by lowering its cost of capital through recycling proceeds from office sales. CFO Gary Gerson confirmed the company will continue to utilize its ATM program to fund acquisitions and manage leverage, noting that the recent quarter's activity was unusually high to bring leverage down following numerous dispositions.

Inquired about the cap rate level required for the company to re-enter the acquisition market, whether any unconsolidated partners are looking to sell their positions, and the outlook for supply absorption and demand through 2024 and into 2025.

Answer

The company would re-enter the acquisition market when leverage is neutral, such as when both interest rates and cap rates are around 5.5%. Discussions with unconsolidated partners are not expected until loan maturities occur between 2027 and 2029. The absorption of new supply is expected to be a longer process that could extend into 2025, though the company is comfortable with long-term demand in its markets.