UMH PROPERTIES, INC. (UMH) FY 2024 MD&A

Item
7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

2024
Accomplishments

During
2024, UMH made substantial progress on multiple fronts – generating solid operating results, achieving strong growth and improving
our financial position. We have:

Refer
to the discussion below in this Item 7, Management’s Discussion and Analysis of Financial Condition, Results of Operations, and
Non-U.S. GAAP Measures, contained in this Form 10-K for information regarding the presentation of community NOI, and for the presentation
and reconciliation of funds from operations and normalized funds from operations to net income (loss) attributable to common shareholders.

Overview

The
following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with
the historical Consolidated Financial Statements and Notes thereto included elsewhere in this Form 10-K.

The
Company is incorporated in Maryland and operates as a self-administered, self-managed REIT with its headquarters in Freehold, New
Jersey. The Company’s primary business is the ownership and operation of manufactured home communities, which includes leasing
manufactured home spaces on an annual or month-to-month basis to residents. The Company also leases manufactured homes to residents
and, through its wholly-owned taxable REIT subsidiary, S&F, sells and finances the sale of manufactured homes to residents and
prospective residents of our communities and for placement on customers’ privately-owned land. During 2022, the Company also
formed an opportunity zone fund to acquire, develop and redevelop manufactured housing communities requiring substantial capital
investment and located in areas designated as Qualified Opportunity Zones by the Treasury Department pursuant to a program
authorized under the 2017 Tax Cuts and Jobs Act to encourage long-term investment in economically distressed areas. The Company holds a 77% interest in its OZ Fund.

-42-

As
of December 31, 2024, we operated 139 manufactured home communities, 137 of which are communities in which we own either a 100% or
majority interest, containing a total of approximately 26,300 developed homesites, on which approximately 10,300 Company-owned
rental homes are situated.  The 139 communities include (i) two communities in central Florida owned through a joint venture
with Nuveen Real Estate in which the Company has a 40% interest (Sebring Square and Rum Runner), (ii) two communities in Tennessee,
the Countryside Village expansion (Duck River Estates) and the Allentown expansion (River Bluff Estates), that were previously part
of other Company-owned communities but are now considered separate communities, and (iii) two communities acquired through the
Company’s OZ Fund. These 139 communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana,
Maryland, Michigan, Alabama, South Carolina, Florida and Georgia. UMH has continued to execute our growth strategy of purchasing
well-located communities in our target markets, including the energy-rich Marcellus and Utica Shale regions. On November 30, 2023,
the Company expanded its joint venture relationship with Nuveen Real Estate and formed a new joint venture entity focused on the
development of a new manufactured housing community located in Honey Brook, Pennsylvania. As with the original 2021 joint venture
entity, UMH has a 40% stake in the new joint venture entity and serves as the managing member, developer and operating member. The
Honey Brook community, once complete, is expected to contain 113 manufactured home sites situated on approximately 61 acres. This
community is expected to open at the end of the second quarter of 2025 with our first two homes on order currently.

The
Company earns income from the operation of its manufactured home communities which includes leasing of manufactured homesites, the
rental of manufactured homes, the sale and finance of manufactured homes, the brokering of third party home sales, self-storage
leases, oil and gas leases, cable service agreements and from appreciation in the values of the manufactured home communities and
vacant land owned by the Company. In addition, the Company receives property management and other fees from its joint venture
arrangements with Nuveen and from its opportunity zone fund. Management views the Company as a single segment based on its method of
internal reporting in addition to its allocation of capital and resources.

Occupancy
in our properties, as well as our ability to increase rental rates, directly affects revenues. In 2024, total income increased 9% from
the prior year due to our rental program, rent increases and the growth of our sales business. Community NOI (as defined
below) increased 10% from the prior year. Overall occupancy increased 60 basis points from 86.7% as of December 31, 2023 to 87.3% as
of December 31, 2024. Same property occupancy, which includes communities owned and operated as of January 1, 2023, increased 70 basis
points from 87.1% as of December 31, 2023 to 87.8% as of December 31, 2024. (Unless expressly indicated, information in this report with
respect to the Company’s properties, including financial and operating results for the year ended December 31, 2024, does not include
the properties owned by the Company’s joint venture with Nuveen.)

Demand
for quality affordable housing remains healthy while inventory is scarce. Our property type offers substantial comparative value that
should result in continued high demand.

The
macro-economic environment and current housing fundamentals continue to favor home rentals. Due to high mortgage rates and lack of inventory,
the higher cost of buying a home versus renting one is at its most extreme since 1996. According to the National Association of Realtors, reported sales of existing homes fell to 4.06 million in 2024,
the lowest level in nearly 30 years. We believe rental homes in a manufactured home community allow the resident to obtain the efficiencies
of factory-built housing and the amenities of community living for less than the cost of other forms of affordable housing. We continue
to see strong demand for rental homes. During 2024, our portfolio of rental homes increased by 364 homes, net of rental home sales. Occupied
rental homes represent approximately 43.0% of total occupied sites. Occupancy in rental homes continues to be strong and registered at
94.0% as of December 31, 2024. Our manufactured home communities compare favorably with other types of rental housing, including apartments,
and we will continue to allocate capital to rental home purchases, as demand dictates.

The
Company holds a portfolio of marketable equity securities of other REITs with a fair value of $31.9 million as of December 31, 2024,
representing 1.6% of our undepreciated assets (total assets excluding accumulated depreciation). The REIT securities portfolio provides
the Company with additional diversification, liquidity and income. As of December 31, 2024, 99% consisted of REIT common stocks and 1%
of the Company’s portfolio consisted of REIT preferred stocks. The Company does not intend to increase its investment in the REIT
securities portfolio.

-43-

The
Company invests in these REIT securities and, from time to time, may use margin debt when an adequate yield spread can be obtained. The
Company’s weighted average yield on the securities portfolio was approximately 4.5% at December 31, 2024. At December 31, 2024,
the Company had unrealized losses of $38.5 million in its REIT securities portfolio. During 2024, the Company sold positions in securities,
generating a net realized loss of $3.8 million.

The
Company continues to strengthen its balance sheet. During the year ended December 31, 2024, through an at-the-market sale program
for our Common Stock that was established in March 2024 (the “March 2024 Common ATM Program”), an at-the-market sale
program for our Common Stock that was established in September 2024 (the “September 2024 Common ATM Program”) and a
prior at-the-market sale program for our Common Stock established in 2023 (collectively, the “Common ATM Programs”), the
Company issued and sold a total of 12.5 million shares of our Common Stock, generating gross proceeds of $224.5 million and net
proceeds of $220.6 million, after offering expenses. Additionally, during 2024 the Company raised approximately $10.2 million in new
capital through the Dividend Reinvestment and Stock Purchase Plan (“DRIP”).

During
the year ended December 31, 2024, through an at-the-market sale program for our Preferred Stock that was established
in January 2023 (the “2023 Preferred ATM Program,” and together with the Common ATM Programs, the “At-the-Market Sale
Programs”), the Company issued and sold a total of approximately 1.2 million shares of our Series D Preferred Stock, generating
gross proceeds of $28.5 million and net proceeds of $28.0 million, after offering expenses.

The
Company believes that its capital structure, which allows for the ownership of assets using a balanced combination of equity obtained
through the issuance of common stock, preferred stock and debt, will enhance shareholder returns as the properties appreciate over time.

On
December 31, 2024, the Company had approximately $99.7 million in cash and cash equivalents and $260 million available on our credit
facility. We also had $138 million available on our revolving lines of credit for the financing of home sales and the purchase of inventory
and $55 million available on our lines of credit secured by rental homes and rental home leases.

The
Company intends to continue to increase its real estate investments. Our business plan includes acquiring communities that over time
are expected to yield in excess of our cost of funds and then investing in physical improvements, including adding rental homes onto
otherwise vacant sites. As part of this plan, we intend to seek opportunities, through our OZ Fund, to acquire communities that require substantial capital investment
and are located in qualified opportunity zones. In addition, on behalf of our joint venture arrangement with Nuveen Real Estate, we will
seek opportunities to acquire manufactured home communities that are under development and/or newly developed and meet certain other investment
guidelines.  There is no guarantee that any of these additional opportunities will continue to materialize or that the Company will
be able to take advantage of such opportunities. The growth of our real estate portfolio and success of the joint venture depends on the
availability of suitable properties which meet the Company’s investment criteria and appropriate financing. Competition in the market
areas in which the Company operates is significant. To the extent that funds or appropriate communities are not available, fewer acquisitions
will be made.

See
PART I, Item 1- Business and Item 1A – Risk Factors for a more complete discussion of the economic and industry-wide factors relevant
to the Company, the Company’s lines of business and principal products and services, and the opportunities, challenges and risks
on which the Company is focused.

Acquisitions
in 2024 and 2023

There
were no acquisitions made during 2024. On January 19, 2023, through our qualified opportunity zone fund, we acquired Mighty Oak, a
newly developed manufactured home community located in Albany, GA for approximately $3.65 million, This community contains a total
of 118 newly developed homesites that are situated on approximately 26 total acres and was unoccupied at the date of the
acquisition.

-44-

In
addition, in November 2023, 61 acres of land located in Honey Brook, Pennsylvania, previously owned by
the Company, with a carrying value cost basis of $3.8 million, was contributed to an entity formed under our joint venture with Nuveen
for the purpose of developing a new manufactured housing community, which, once complete, is expected to contain 113 sites. The Company
was reimbursed by Nuveen for 60% of the carrying value of this land. This community is expected to open at the end of the second quarter of 2025 with our first two homes currently on order.

Results
of Operations

2024
vs. 2023

Rental
and related income increased from $189.7 million for the year ended December 31, 2023 to $207.0 million for the year ended December 31,
2024, or 9%. This increase was due to increases in rental rates, same property occupancy and additional rental homes. During 2024, the Company raised
rental rates by 5% to 6% at most communities. Rent increases vary depending on overall market conditions and demand. Occupancy, as well
as the ability to increase rental rates, directly affects revenues. The Company has been acquiring communities with vacant sites that
can potentially be occupied and earn income in the future. Overall occupancy was 87.3% and 86.7% at December 31, 2024 and 2023, respectively.
Demand for rental homes continues to be strong. As of December 31, 2024, we had approximately 10,300 rental homes with an occupancy rate
of 94.0%. We continue to evaluate the demand for rental homes and will invest in additional homes as demand dictates.

Community
operating expenses increased from $81.3 million for the year ended December 31, 2023 to $87.4 million for the year ended December 31,
2024, or 7%. This increase was due to increases in payroll and payroll costs, real estate taxes, insurance, professional fees, waste
removal, water expenses and sewer expenses.

Community
NOI increased from $108.4 million for the year ended December 31, 2023 to $119.7 million for the year ended December 31, 2024, or 10%.
This increase was primarily due to the increases in rental rates, occupancy and rental homes. The operating expense ratio (defined as
community operating expenses divided by rental and related income) improved 70 basis points from 42.9% in 2023 to 42.2% for 2024. Many
recently acquired communities have deferred maintenance requiring higher than normal expenditures in the first few years of ownership.
Since most of the community expenses consist of fixed costs, as occupancy rates increase, these expense ratios are expected to continue
to improve. Due to the Company’s ability to increase its rental rates annually (subject to limitations on rent increases in certain
jurisdictions), increasing costs due to inflation and changing prices have generally not had a material effect on revenue and income
from continuing operations.

Sales
of manufactured homes increased from $31.2 million for the year ended December 31, 2023 to $33.5 million for the year ended December
31, 2024, or 8%. The total number of homes sold increased 16% from 341 homes in 2023 to 394 homes in 2024. Cost of sales of
manufactured homes increased from $21.1 million for the year ended December 31, 2023 to $21.9 million for the year ended December
31, 2024, or 4%. The gross profit percentage was 35% and 32% for the years ended December 31, 2024 and 2023, respectively. Selling
expenses remained relatively stable for the years ended December 31, 2023 and 2024. Gain from the sales operations, excluding
interest on the financing of inventory, increased 53% and amounted to a gain of $4.8 million and $3.1 million for the years ended
December 31, 2024 and 2023, respectively. Many of the costs associated with sales, such as salaries, and to an extent, advertising
and promotion, are fixed. Despite high mortgage rates, home prices have continued to rise as fewer sellers are listing homes and
inventories decline resulting in the inherent relative affordability of our property type becoming more and more apparent, which
should result in increased demand. The Company continues to be optimistic about future sales and rental prospects given the
fundamental need for affordable housing. The Company believes that sales of new homes produce new rental revenue and represent an
investment in the upgrading of our communities.

General
and administrative expenses increased from $19.7 million for the year ended December 31, 2023 to $21.8 million for the year ended December
31, 2024, or 11%. This increase was primarily due to an increase in payroll and related personnel cost and an increase in
meeting costs as a result of our biennial in-person employee training meeting (which was not held during 2023). General and administrative
expenses, excluding non-recurring expenses, as a percentage of gross revenue (total income plus interest, dividends and other income)
was approximately 8.7% and 8.1% for the years ended December 31, 2024 and 2023, respectively.

-45-

Depreciation
expense increased from $55.7 million for the year ended December 31, 2023 to $60.2 million for the year ended December 31, 2024, or 8%.
This increase was primarily due to the increases in rental homes during 2024 and 2023.

Interest
income increased from $5.0 million for the year ended December 31, 2023 to $7.1 million for the year ended December 31, 2024, or 43%.
This increase was primarily due to an increase in the average balance of notes receivable from $71.5 million for the year ended December
31, 2023 to $83.9 million for the year ended December 31, 2024 and interest earned on excess cash during 2024. The weighted average interest
rate earned on notes receivables increased 10 basis points and was 7.1% and 7.0% as of December 31, 2024 and 2023, respectively.

Dividend
income decreased from $2.3 million for the year ended December 31, 2023 to $1.5 million for the year ended December 31, 2024, or 37%.
This decrease was due to reduced dividends from a combination of our smaller securities portfolio and the weighted average yield on our
dividends received from our marketable securities investments. The weighted average yield decreased 220 basis points from 6.7% in 2023
to 4.5% in 2024.

The
Company recognized a realized loss on sales of marketable securities of $3.8 million for the year ended December 31, 2024. The Company
recognized a realized gain on sales of marketable securities of $183,000 for the year ended December 31, 2023. The increase (decrease)
in fair value of marketable securities amounted to an increase of $1.2 million and a decrease of $3.6 million for the years ended December
31, 2024 and 2023, respectively. As of December 31, 2024, the Company had total net unrealized losses of $38.5 million in its REIT securities
portfolio.

Interest
expense, including amortization of financing costs, decreased from $32.5 million for the year ended December 31, 2023 to $27.3 million
for the year ended December 31, 2024, or 16%. This decrease was due to a decrease in the average balance of mortgages and loans from
$626.2 million at December 31, 2023 to $551.9 million at December 31, 2024. The weighted average interest rate on our total debt decreased
from 4.6% at December 31, 2023 to 4.4% at December 31, 2024, respectively.

2023
vs. 2022

Rental
and related income increased from $170.4 million for the year ended December 31, 2022 to $189.7 million for the year ended December 31,
2023, or 11%. This increase was primarily due to the acquisitions made during 2022, as well as increases in rental rates, same property
occupancy and additional rental homes. During 2023, the Company raised rental rates by 5% to 6% at most communities. Overall
occupancy was 86.7% and 84.6% at December 31, 2023 and 2022, respectively. Overall occupancy includes communities acquired in 2023 and
2022 which had an average occupancy of 60%, at the time of acquisition. As of December
31, 2023, we had approximately 10,000 rental homes with an occupancy rate of 94.0%.

Community
operating expenses increased from $75.7 million for the year ended December 31, 2022 to $81.3 million for the year ended December 31,
2023, or 8%. This increase was primarily due to expenses pertaining to recently acquired communities during 2022, as well as increases
in payroll, rental home expenses, real estate taxes, waste removal, water expenses and sewer expenses.

Community
NOI increased from $94.8 million for the year ended December 31, 2022 to $108.4 million for the year ended December 31, 2023, or 14%.
This increase was primarily due to the acquisitions during 2022, and an increase in rental rates, occupancy and rental homes. The operating
expense ratio (defined as community operating expenses divided by rental and related income) improved 150 basis points from 44.4% in
2022 to 42.9% for 2023.

Sales
of manufactured homes increased from $25.3 million for the year ended December 31, 2022 to $31.2 million for the year ended December
31, 2023, or 23%. The total number of homes sold increased from 301 homes in 2022 to 341 homes in 2023. There was a 14% increase in new
homes sold from 144 new homes sold in 2022 to 164 new homes sold in 2023. The Company’s average sales price increased 8% in 2023
and was approximately $91,000 for the year ended December 31, 2023 and $84,000 for the year ended December 31, 2022. Cost of sales of
manufactured homes increased from $17.6 million for the year ended December 31, 2022 to $21.1 million for the year ended December 31,
2023, or 20%. The gross profit percentage was 32% and 31% for 2023 and 2022, respectively. Selling expenses increased from $5.3 million
for the year ended December 31, 2022 to $6.9 million for the year ended December 31, 2023, or 32%. Gain from the sales operations, excluding
interest on the financing of inventory, increased 24% and amounted to a gain of $3.1 million and $2.5 million for the years ended December
31, 2023 and 2022, respectively.

-46-

General
and administrative expenses increased from $19.0 million for the year ended December 31, 2022 to $19.7 million for the year ended December
31, 2023, or 4%. This increase was due to an increase in payroll, personnel costs and non-cash stock-based compensation. General and
administrative expenses, excluding non-recurring expenses, as a percentage of gross revenue (total income plus interest, dividends and
other income) was approximately 8.0% and 7.6% for the years ended December 31, 2023 and 2022, respectively.

Depreciation
expense increased from $48.8 million for the year ended December 31, 2022 to $55.7 million for the year ended December 31, 2023, or 14%.
This increase was primarily due to the acquisitions and the increases in rental homes during 2023 and 2022.

Interest
income increased from $4.1 million for the year ended December 31, 2022 to $5.0 million for the year ended December 31, 2023, or 22%.
This increase was primarily due to an increase in the average balance of notes receivable from $58.6 million for the year ended December
31, 2022 to $71.5 million for the year ended December 31, 2023. The weighted average interest rate earned on these notes receivables
increased 30 basis points and was 7.0% and 6.7% as of December 31, 2023 and 2022, respectively.

Dividend
income decreased from $2.9 million for the year ended December 31, 2022 to $2.3 million for the year ended December 31, 2023, or 20%.
This decrease was due to reduced dividends from a combination of our smaller securities portfolio and the weighted average yield on our
dividends received from our marketable securities investments decreasing 90 basis points from 7.6% in 2022 to 6.7% in 2023.

The
Company recognized a realized gain on sales of marketable securities of $183,000 for the year ended December 31, 2023. The Company recognized
a realized gain on sales of marketable securities of $6.4 million for the year ended December 31, 2022 primarily as a result of the cash
consideration received in the MREIC merger, partially offset by a loss on sale of other marketable securities. The decrease in fair value
of marketable securities amounted to $3.6 million and $21.8 million for the years ended December 31, 2023 and 2022, respectively. As
of December 31, 2023, the Company had total net unrealized losses of $39.7 million in its REIT securities portfolio.

Interest
expense, including amortization of financing costs, increased from $26.4 million for the year ended December 31, 2022 to $32.5 million
for the year ended December 31, 2023, or 23%. This increase was mainly due to the interest incurred on the $102.7 million of Series A
Bonds the Company issued in 2022 in an offering to investors in Israel, an increase in the average balance of total debt and an increase
in interest rates. The average balance of our total debt was approximately $734.5 million in 2023 and $637.1 million in 2022.

Non-U.S.
GAAP Measures

In
addition to the results reported in accordance with U.S. GAAP, management’s discussion and analysis of financial condition and
results of operations include certain non-U.S. GAAP financial measures that in management’s view of the business we believe are
meaningful as they allow the investor the ability to understand key operating details of our business both with and without regard to
certain accounting conventions or items that may not always be indicative of recurring annual cash flow of the portfolio. These non-U.S.
GAAP financial measures as determined and presented by us may not be comparable to related or similarly titled measures reported by other
companies, and include Community Net Operating Income (“Community NOI”), Funds from Operations Attributable to Common Shareholders
(“FFO”) and Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”).

We
define Community NOI as rental and related income less community operating expenses such as real estate taxes, repairs and maintenance,
community salaries, utilities, insurance and other expenses. We believe that Community NOI is helpful to investors and analysts as a
direct measure of the actual operating results of our manufactured home communities, rather than our Company overall. Community NOI should
not be considered a substitute for the reported results prepared in accordance with U.S. GAAP. Community NOI should not be considered
as an alternative to net income (loss) as an indicator of our financial performance, or to cash flows as a measure of liquidity; nor
is it indicative of funds available for our cash needs, including our ability to make cash distributions.

-47-

The
Company’s Community NOI for the years ended December 31, 2024, 2023 and 2022 is calculated as follows (in thousands):

We
assess and measure our overall operating results based upon FFO, an industry performance measure which management believes is a useful
indicator of our operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure
of a REIT. FFO, as defined by Nareit, represents net income (loss) attributable to common shareholders, as defined by accounting principles
generally accepted in the U.S. (“U.S. GAAP”), excluding gains or losses from sales of previously depreciated real estate
assets, impairment charges related to depreciable real estate assets, the change in the fair value of marketable securities, and the
gain or loss on the sale of marketable securities plus certain non-cash items such as real estate asset depreciation and amortization.
Included in the Nareit FFO White Paper - 2018 Restatement, is an option pertaining to assets incidental to our main business in the calculation
of Nareit FFO to make an election to include or exclude gains and losses on the sale of these assets, such as marketable equity securities,
and include or exclude mark-to-market changes in the value recognized on these marketable equity securities. In conjunction with the
adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude the change in the fair value
of marketable securities from our FFO calculation. Nareit created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance.
We define Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), as FFO, excluding certain
one-time charges. FFO and Normalized FFO should be considered as supplemental measures of operating performance used by REITs. FFO and
Normalized FFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost
basis. However, other REITs may use different methodologies to calculate FFO and Normalized FFO and, accordingly, our FFO and Normalized
FFO may not be comparable to all other REITs. The items excluded from FFO and Normalized FFO are significant components in understanding
the Company’s financial performance.

FFO
and Normalized FFO (i) do not represent Cash Flow from Operations as defined by U.S. GAAP; (ii) should not be considered as an alternative
to net income (loss) as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii)
are not alternatives to cash flow as a measure of liquidity. FFO and Normalized FFO, as calculated by the Company, may not be comparable
to similarly titled measures reported by other REITs.

-48-

The
Company’s FFO and Normalized FFO attributable to common shareholders for the years ended December 31, 2024, 2023 and 2022 are calculated
as follows (in thousands):

Liquidity
and Capital Resources

The
Company operates as a REIT deriving its income primarily from real estate rental operations. The Company’s principal liquidity
demands have historically been, and are expected to continue to be, distributions to the Company’s shareholders, acquisitions,
capital improvements, development and expansions of properties, debt service, purchases of manufactured home inventory and rental
homes, financing of manufactured home sales and payments of expenses relating to real estate operations. The Company’s ability
to generate cash adequate to meet these demands is dependent primarily on income from its real estate investments and marketable
securities portfolio, the sale of real estate investments and marketable securities, refinancing of mortgage debt, leveraging of
real estate investments, availability of bank borrowings, lines of credit, and other incurrence of indebtedness, proceeds from the
DRIP, and access to the capital markets, including sales of Common Stock and Series D Preferred Stock through its At-the-Market Sale
Programs. In addition to cash generated through operations, the Company uses a variety of sources to fund its cash needs, including
acquisitions. The Company may sell marketable securities from its investment portfolio, borrow on its unsecured credit facility or
lines of credit, incur other indebtedness, finance and refinance its properties, and/or raise capital through the DRIP and capital
markets, including through the Company’s At-the-Market Sale Programs. In order to provide continued financial flexibility to
opportunistically access the capital markets, on March 12, 2024, the Company implemented its March 2024 Common ATM Program which
allowed the Company to offer and sell shares of the Company’s Common Stock, having an aggregate sales price of up to $150
million, from time to time through the distribution agents. In addition, on September 16, 2024, the Company terminated the use of
its successful March 2024 Common ATM Program and implemented a new September 2024 Common ATM Program which allows the Company to
offer and sell shares of the Company’s Common Stock, having an aggregate sales price of up to $150 million, from time to time
through the distribution agents. Additionally, during 2024 the Company expanded the borrowing capacity on its unsecured revolving
credit facility from $180 million in available borrowings to $260 million in available borrowings.

-49-

The
Company intends to continue to increase its real estate investments. Our business plan includes acquiring communities that over time
are expected to yield in excess of our cost of funds and then investing in physical improvements, including adding rental homes onto
otherwise vacant sites. As part of this plan, we intend to continue to seek opportunities, through our opportunity zone fund, to acquire
communities that require substantial capital investment and are located in qualified opportunity zones. In addition, on behalf of our
joint venture with Nuveen Real Estate, we will continue to seek opportunities to acquire manufactured home communities that are under
development and/or newly developed and meet certain other investment guidelines. There is no guarantee that any of these additional opportunities
will materialize or that the Company will be able to take advantage of such opportunities. The growth of our real estate portfolio and
success of our joint venture depends on the availability of suitable properties which meet the Company’s investment criteria and
appropriate financing. Competition in the market areas in which the Company operates is significant. To the extent that funds or appropriate
communities are not available, fewer acquisitions will be made.

The
Company continues to strengthen its capital and liquidity positions. During the year ended December 31, 2024, the Company issued and
sold 12.5 million shares of Common Stock through our Common ATM Programs at a weighted average price of $17.92 per share, generating
gross proceeds of $224.5 million and net proceeds of $220.6 million, after offering expenses.

Through
our 2023 Preferred ATM Program, the Company issued and sold a total of 1.2 million shares of our Series D Preferred Stock generating
gross proceeds of $28.5 million and net proceeds after offering expenses of $28.0 million during the year ended December 31,
2024.

As
of December 31, 2024, $89.8 million of Common Stock remained available
for sale under the September 2024 Common ATM Program and $17.6 million in shares of Series D Preferred Stock remained available for sale
under the 2023 Preferred ATM Program. Subsequent to year end, the Company issued and sold 270,000 shares of Common Stock under the September
2024 Common ATM Program for gross proceeds of $4.9 million. Subsequent to year end, the Company issued and sold a total of 49,000 shares
of Preferred Stock under the 2023 Preferred ATM Program for gross proceeds of $1.1 million.

In
addition, the Company has a DRIP in which participants can purchase original issue shares of Common Stock from the Company at a price
of approximately 95% of market. During 2024, amounts received under the DRIP, including dividends reinvested of $3.2 million, totaled
$10.2 million. The Company issued a total of 623,000 shares under the DRIP during 2024.

The
Company also has the ability to finance home sales, inventory purchases and rental home purchases. The Company has a $35 million revolving
line of credit for the financing of homes that was not utilized at December 31, 2024, revolving credit facilities totaling $103.0 million
to finance inventory purchases, that were not utilized at December 31, 2024 and $55.0 million available on our lines of credit secured
by rental homes and rental homes leases.

As
of December 31, 2024, the Company had $99.7 million of cash and cash equivalents and marketable securities of $31.9 million. The Company operated 139 communities (including 137 communities in which the
Company owned either a 100% interest or a majority interest and two communities owned by the Company’s joint venture with Nuveen),
of which 52 are unencumbered. Except for communities in the borrowing base for our unsecured credit facility, these unencumbered communities
can be used to raise additional funds. Our marketable securities, unencumbered properties, and lines of credit provide the Company with
additional liquidity. The Company holds a 40% equity interest in the entities formed under its joint venture with Nuveen, which owns two
newly developed communities that are unencumbered and one community in the process of being developed that is also unencumbered.

The
Company’s focus is on real estate investments. The Company has historically financed purchases of real estate primarily through
mortgages. During 2024, total investment property, including rental homes, increased 8% or $130.1 million. We have also expanded three
communities for a total of 190 additional home sites.  See
Note 3 of the Notes to Consolidated Financial Statements for additional information on our acquisitions and Note 7 of the Notes to Consolidated
Financial Statements for related debt transactions. The Company continues to evaluate acquisition opportunities. The funds for these
acquisitions (including the Company’s 40% share of acquisition costs that may be incurred pursuant to its joint venture with Nuveen
Real Estate) may come from bank borrowings, proceeds from the DRIP, and private placements or public offerings of debt, Common Stock
or Preferred Stock, including under the September 2024 Common ATM Program or the 2023 Preferred ATM Program or any other at-the-market
sale programs that the Company may commence.  To the extent that funds or appropriate properties are not available, fewer acquisitions
will be made.

-50-

The
Company owned approximately 10,300 rental homes, or approximately 40% of our total homesites as of December 31, 2024. During 2024,
our rental home portfolio increased by 565 homes and we sold 201 rental homes, representing a net increase of $49.8 million. The Company markets these rental
homes for sale to existing residents. The Company estimates that in 2025 it will order approximately 700 to 800 manufactured homes to
use as rental units at its properties for a total invoice cost of approximately $55 million to $60 million. Rental home rates on new homes
range from approximately $850 to $2,000 per month, including lot rent, depending on size, location and market conditions. During 2024,
the Company also invested approximately $42 million in other improvements to its communities.

The
following table summarizes cash flow activity for the years ended December 31, 2024, 2023 and 2022 (in thousands):

Net
cash provided by (used in) operating activities decreased by $38.5 million in 2024 primarily due to an increase in Community NOI and
an increase in inventory. Net cash provided by (used in) operating activities increased by $127.3 million in 2023 primarily due to a
decrease in inventory.

Net
cash used in investing activities decreased by $25.7 million in 2024, primarily due to the decrease in purchase of investment
property and equipment. Net cash used in investing activities increased by $40.7 million in 2023, primarily due to the purchase of
investment property and equipment and additions to land development and the decrease in proceeds from sales of marketable
securities.

Net
cash provided by financing activities increased by $33.6 million in 2024 to $102.6 million. The Company issued and sold 12.5 million
shares of its Common Stock during 2024 through the Common ATM Programs, raising net proceeds of approximately $220.6 million. The Company
also received $10.2 million, including dividends reinvested, through the DRIP. In addition, the Company issued and sold 1.2 million shares
of its Series D Preferred Stock during 2024 through the 2023 Preferred ATM Program, raising net proceeds of approximately $28.0
million. During 2024, the Company distributed to our common shareholders a total of $62.3 million, including dividends reinvested. In
addition, the Company also paid $19.2 million in preferred dividends during 2024. The Company also made principal payments on its mortgages
and loans, net of new debt financing, totaling $77.7 million.

Net cash provided by financing activities increased by $21.1 million in
2023 to $69.1 million. The Company issued and sold 9.4 million shares of its Common Stock during 2023 through its then-current Common
Stock at-the-market sale programs, raising net proceeds of approximately $145.8 million. The Company also received $9.0 million, including
dividends reinvested, through the DRIP. In addition, the Company issued and sold 2.6 million shares of its Series D Preferred Stock during
2023 through the 2023 Preferred ATM Program, raising net proceeds of approximately $55.7 million. During 2023, the Company distributed
to our common shareholders a total of $51.7 million, including dividends reinvested. In addition, the Company also paid $16.7 million
in preferred dividends during 2023. The Company also made principal payments on its mortgages and loans, net of new debt financing, totaling
$73.8 million.

Cash
flows were primarily used for capital improvements, payment of dividends, purchase of inventory
and rental homes, loans to customers for the sales of manufactured homes, and expansion of existing communities. The Company meets maturing
mortgage obligations by using a combination of positive cash flows and refinancing. The dividend payments were primarily made from cash
flows from operations.

Excluding expansions and rental home purchases, the Company is budgeting approximately
$20 to $30 million in capital improvements for 2025.

-51-

The
Company’s significant commitments and contractual obligations relate to its mortgages, loans payable and other indebtedness, acquisitions
of manufactured home communities, retirement benefits, and the lease on its corporate offices as described in Note 10 to the Consolidated
Financial Statements.

The
Company recently entered into a preliminary agreement with a leading national homebuilder regarding the potential formation of a
joint venture to develop approximately 131 acres of undeveloped land adjacent to one of the Company’s existing manufactured
home communities in southern New Jersey. If necessary governmental approvals can be obtained, the purpose of the joint venture would
be to construct roads, infrastructure and other site improvements on the property and then sell the improved lots to an affiliate of
the Company’s joint venture partner, which would construct luxury single family residential homes to sell to purchasers. It is
envisioned that the joint venture partner would fully fund the costs of required site improvements, to the extent not financed by a
third-party construction lender, and would obtain all required approvals. The Company would contribute the real property to the
joint venture and receive a percentage of the sale price of each home. If the parties elect to proceed, it is anticipated that the
joint venture partner would seek preliminary subdivision and site plan approvals over the next two years and, if these approvals are
obtained, the joint venture would then be formally established. Pursuit of this project would be contingent upon execution of
definitive documentation setting forth the terms of certain agreements between the parties. There can be no assurance that the
Company and its potential joint venture partner will reach agreement or proceed with this arrangement or that required governmental
approvals can be obtained. The parties are currently
engaged in a 90-day due diligence period during which they intend to commence preliminary discussions with the municipality relating
to the necessary approvals.

As
of December 31, 2024, the Company had total assets of $1.6 billion and total liabilities of $647.8 million. Our net debt (net of cash
and cash equivalents) to total market capitalization decreased 32% and as of December 31, 2024 and 2023 was approximately 21% and 31%,
respectively. Our net debt, less securities (net of cash and cash equivalents and marketable securities) to total market capitalization
decreased 37% and as of December 31, 2024 and 2023 was approximately 19% and 30%, respectively. As of December 31, 2024, the Company has 23 mortgages
totaling $115.2 million due within the next 12 months, of which 10 mortgages totaling $45.9 million are due in the first and second
quarters of 2025.  We are in the process of refinancing these mortgages with Fannie Mae.  We believe that proceeds from these
refinancings will exceed their current balances.

The
Company believes that cash on hand, funds generated from operations, the DRIP and capital markets, the funds available on the lines of
credit, together with the ability to finance and refinance its properties will provide sufficient funds to adequately meet its obligations
and generate funds for new investments over the next several years.

Contractual
Obligations

The
Company has investments in entities formed under its joint venture relationship with Nuveen Real Estate which are accounted for under
the equity method of accounting as we have the ability to exercise significant influence, but not control, over the operating and financial
decisions for the joint venture entities. The terms of the joint venture arrangements require the Company to fund 40% and Nuveen to fund
60% of the total capital contributions made by the members. See Item 2 – “Properties” and Note 5, “Investment
in Joint Venture,” of the Notes to Consolidated Financial Statements for additional information.

Our
other primary contractual obligations relate to our loans and mortgages payable and other indebtedness, our operating lease obligations
and our obligations regarding the financing of our home sales. See Note 2 “Summary of Significant Accounting Policies”, Note
7 “Loans and Mortgages Payable”, Note 10 “Related Party Transactions and Other Matters” and Note 14 “Commitments,
Contingencies and Legal Matters” of the Notes to Consolidated Financial Statements for additional information.

Critical
Accounting Policies and Estimates

Our
consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosures. Actual results could differ
from these estimates.

For
additional information regarding our significant accounting policies, see Note 2 of the Notes to Consolidated Financial Statements.

-52-

Recent
Accounting Pronouncements

See
Note 2 of the Notes to Consolidated Financial Statements.