Good morning and welcome to UMH Properties Second Quarter 2016 Earnings Conference Call. All participants will be in a listen-only-mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. It is now my pleasure to introduce your host, Ms. Nelli Madden, Director of Investor Relations. Thank you. Ms. Madden, you may now begin.

Thank you very much, operator. In addition to the 10-Q that we filed with the SEC yesterday, we have filed an unaudited second quarter supplemental information presentation. This supplemental information presentation along with the 10-Q are available on the company's website at umh.reit. I would like to remind everyone that certain statements made during this conference call, which are not historical facts, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements that we make on this call are based on our current expectations and involve various risks and uncertainties. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company provides no assurance that its expectations will be achieved. The risks and uncertainties that could cause actual results to differ materially from expectations are detailed in the company's second quarter 2016 earnings release and filings with the Securities and Exchange Commission. The company disclaims any obligation to update its forward-looking statements. Having said that, I would like to introduce management with us today, Eugene Landy, Chairman; Samuel Landy, President and Chief Executive Officer; and Anna Chew, Vice President and Chief Financial Officer. It is now my pleasure to turn the call over to UMH's President and Chief Executive Officer, Samuel Landy.

Thank you very much, Nelli. Good morning, everyone, and thank you for joining us. We are pleased to report our results for the second quarter ended June 30, 2016. UMH is having a strong year due to the performance of our communities, our rental home program and our securities portfolio. The positive momentum created by our strong first quarter performance has continued into the second quarter. Core FFO for the second quarter Core FFO for the second quarter was $0.18 per diluted share representing an increase of 50% year-over-year following two consecutive years of double-digit normalized FFO per share growth and a 23% year-over-year increase in the first quarter, normalized FFO for the second quarter of 2016 was $0.16 per diluted share representing an increase of 33% year-over-year. Community NOI also increased 33% year-over-year, rental revenue was up 25% over the second quarter of 2015 and our expense ratio improved from 51% in the prior year period to 47.8% in the current quarter. It was an excellent quarter for the company marked by continued value creation through solid same property metrics. Same property NOI increased by 21.4% over the prior year period driven by a 180 basis point increase in same property occupancy and a 14.1% increase in same property revenue. These results demonstrate the strength of our business plan. We've been acquiring communities in strong geographic locations below replacement cost making necessary improvement and growing occupancy and revenue by utilizing our rental home and sales programs. Rental homes is the primary driver of our occupancy growth and performance. We continue to see strong demand for rentals in all of our markets. We've expanded our rental program with the addition of 228 rental homes during the quarter and 410 rental homes year-to-date bringing the total to approximately 4100 homes Occupancy…

Thank you, Sam. Core funds from operations or core FFO was $5 million or $0.18 per diluted share for the second quarter of 2016 compared to $3.1 million or $0.12 per diluted share for the prior year period representing an increase of 50% on a per-share basis. Normalized FFO which excludes realized gains on the sale of securities and other nonrecurring items was $4.3 million or $0.16 per diluted share for the second quarter of 2016 compared to $3.1 million or $0.12 per diluted share in the prior year period representing an increase of 33% on a per-share basis Rental and related income for the quarter increased by 25% from $17.9 million in 2015 to $22.4 million in 2016. This increase was primarily due to the acquisition of ten communities in 2015, the addition of rental units and the growth in occupancy. Community NOI increased by 33% from $8.8 million in 2015 to $11.7 million in 2016. Community operating expenses for the quarter were 47.8% of rental and related income representing a 320 basis point improvement over the 51% expense ratio of the prior year period. As we noted in the past, most of the community expenses consist of fixed cost and therefore as occupancy rates continue to increase and as we upgrade and integrate our acquisitions, these expense ratios will continue to improve. Our loss from the sales operation including interest expense decreased from approximately $456,000 in the second quarter of 2015 to $276,000 for the second quarter of 2016. Although sales of manufactured homes increased 72% over the prior year period, they have not yet returned to pre-recession levels. As we turn to our balance sheet, as of the end of the quarter, our capital structure consisted of approximately $332 million in debt of which $287 million was…

Thank you, Anna. As Founder and Chairman of the Board of Directors, I am proud of the substantial progress UMH has made in its long term strategic business plan. UMH’s second quarter results are strong. We have delivered solid performance metrics with double-digit growth in core and normalized FFO, rental revenue, home sales and NOI. Same property metrics continue to improve with same property NOI increasing by 21.4%. As allocators of capital, we have taken advantage of opportunities afforded by the weak securities market. As we have commented on in the past there were times when real estate is substantially cheaper on Wall Street than it is on Main Street. The performance of our securities portfolio has been excellent. We are very pleased with our current holdings which had $16.4 million in net unrealized gains at quarter end. This represents an $18.5 million improvement over the six month period. In addition our portfolio generated realized gain of $1 million thus for this year and $3.1 million in dividend income year-to-date. The portfolio continues to deliver outstanding performance subsequent to quarter end as securities portfolio provides us with additional liquidity to pursue opportunistic acquisitions, it also reduces our reliance on a capital markets with growth capital. We are very pleased with how 2016 is progressing and believe we are well positioned for an excellent year. With the anticipated continued growth of our per-share earnings, management will recommend to the Board of Directors the continuation of our current $0.18 a quarter or $0.72 annual per-share cash distribution. I would like to take a moment to thank our shareholders, our Board of Directors and our team members for their continued support. Next year, I will have the honor of having served as chairman of the board for 50 years. I am proud of the substantial contribution UMH has made to providing housing for all. In order to continue our mission of providing affordable housing for the growing population of the United States, we must redouble our efforts to remove regulatory and legal barriers to new construction and we must continue to build new manufactured home communities. We would now be happy to take questions.

[Operator Instructions] And our first question will come from Craig Kucera of Wunderlich.

Hi, good morning, guys. Appreciated the color on some of the long term viewpoint on expense ratios. But I was interested as to whether or not there were any one time reductions this quarter or was this really just sort of the natural seasoning of the portfolio where you know how to expense as many improvements upfront as you get in the past given you acquisition pace?

Well there is still expenses related to improving communities. There is still expenses relate to home removal and tree removal. And you know some day there will be less of those expenses. But what you will see is that the new revenue is coming in at 36% expense ratio, so 64% of every new dollar of revenue is operating income, and that's about what we always expected. The rental unit, brand-new rental units generate revenue with very few expenses and we always told you the expense ratios regarding managing communities 50% and 30%. So 36% is right where we had expected and that's where the new revenue is coming in.

Got it.

Yes, we anticipate by the continuing decline in the expense ratio, we at one point we will all the way up to 55% and we are now under 50% and we are going to continue to reduce the expense ratio and increase the operating income.

Okay, I know you mentioned you were going to complete a few acquisitions maybe in the third and the fourth quarter. But can you, do you have sort of a rough dollar amount of what you think you might do in the back half of the year?

Sam, how much? We have five products.

Five communities, 821 sites for a total of approximately $17 million.

Yes five communities, 821 sites, $17 million in like all acquisitions. They have always taken a little longer than you expect. We were hoping, we close a few today but certainly we expect this quarter to close on those five communities and we are actively seeking additional acquisitions.

This quarter and next quarter.

And next quarter total, okay.

Right, you mentioned the interest in the space, the cap rate compression. What would you say cap rates have compressed over the last 6 to maybe 12 months?

I prefer that we refer to the bigger competitors, they give you lot of color on that. Cap rates continue to go down. Cap rates with the type of product we buy, little difficult to pinpoint, so it’s, you know if you buy a full product, and used to buy full products with 7%, 8% and cap rates go down 6.5% or 5% and you are talking about a full community in effect that’s easy to analyze, when you buy the kind of products we buy which is a 200 space product with only a 110, 115 units occupied, we do buy them on a cap rate but we have additional benefits that we are anticipating and that is that we will buy value units and put them into the vacant site that increase operating income from those products. But it’s evident in all areas of real estate trust cap rates are going down and I see that the Presidents and Chairman of the board or Rito [ph] was taking a close look at that because cap rates are at historic lows which means the value of your properties are at an historic highs. I hope, I answered your question.

No, I guess what I am going for, it seems like what you generally have been buying in the last couple of years have been right around the seven cap but that’s been with you know maybe 30% occupants or vacancy, so significant upside as you mentioned by putting in rental units and I guess just given that your capacity to extract more value from the rental programs, does it make sense if cap rates were dropping given your drop in your cost of capital, does it make sense to even dip down in six, or you guys pretty much wanting to buy it, at sevens because you think that’s a better return long-term with upsides in rentals?

No we have in our model we have a good margin even if cap rates go down 6%, if you look at the 30%, 40% of the plot being empty and figure that you can put $10 million worth of rentals in there and 15% on the new annals, we can still average out a very good return plus Anna does a wonderful job as I say on every call, the mortgages we get are excellent mortgages. They are sub 4%, maybe they are four, three and three quarters, they are really good mortgages so that we do have a good spread between not only the cap rate we buy at but the cap rate we hope to return and so we hope to continue to improve our margins and increase value for our shareholders.

Okay, one last one for me. You know when I look at the same-store pool, you have added maybe 770 rental units over the last year, they seemed to be occupied as soon as you put them in the ground which you spoken to at length. And I think there are about 28% of your overall occupied units. Is there any – I know some lenders can covenant a maximum amount of rentals in the community but from a percentage perspective, is there a ceiling to the amount of rentals you could have or could you potentially continue adding as many rental units as you would like until your occupancy is sort of where you would like it to be?

Freddie Mac has studied our communities, studied the turnaround we've done and they are willing to give us waivers against prior standard so we can continue to add rental units. We are in discussions about doing the first rental only community of Memphis Mobile City. I think as time goes by people are going to recognize that UMH properties is in the housing business and our housing is either communities or the residents own their home and rents the site or it can just as well be communities where they rent the house and the land. The tenant retention, the quality of the tenant, it's all very high quality, it's a very high-quality income stream, I can't find the difference between renters and owners especially if you're talking about used and older home. Renters, you know have equal income, same jobs, it’s just very high-quality revenue stream and I think more and more people are going to accept rental units and accept 100% rental communities.

Okay, great thank you.

Our next question will come from Jonathan Feldman of Clear Vista Asset Management.

Good morning. I just had a question on the petrochemical project that you mentioned earlier in the call. When do you expect that to come online and see it back in their communities?

That’s a Shell project. It’s been in the works for years. They have committed to the project, there have been various testaments out to the total amount invested, the employment but the project itself is just the beginning of petrochemical development in the Western Pennsylvania area. First, you drill and get the natural gas and now they are going to convert it to ethylene and then they make plastics and then there is going to be industries that come into use the plastics and new products. And so, we think the growth of the Western Pennsylvania, Eastern Ohio is going to be above average and that's going to help all our communities here. To answer your question precisely, I think it’s going take three years to build this project. And then after that though there will be other manufacturing facilities coming into the area to use the product from the refinery.

Got it, thank you. Another question is to what extent do you see an opportunity to raise rents in your existing communities? Have you discerned any change in terms of what you think that opportunity might be on a going forward basis given the housing, lack of affordable housing that you talked about earlier in the call?

Well our plan is to just continue to raise rents 4% or CPI whichever is greater and currently 4% is greater. You know when you have a 98% occupied community, you've opportunities to make additional money brokering home sales, selling brand-new home. So i don't believe in raising rents more than that because you know, you need the industry to have a good image, you need the people who bought houses from your to be happy with it over the long period of time. And I think we should try to avoid excessive rent increases as much as possible.

The reduction in gasoline prices, the reduction in the cost of heating at tenants going ahead even after the 4% rent increase. So the economics of the people who live in our products is improving not tremendously but they certainly can sustain a $20 or $30 a month increase in rents.

Then just my last question is just around the home sales increase that you mentioned earlier in the call. Can you just speak to a little bit what’s driving that and I think you had mentioned a NAREIT change in who you are working with to [indiscernible], can you just speak to those?

Okay, let me back up a second, first, and tell you when you are made with less than half the size that currently is 2005, 2006, 2007 each year we did over $10 million in sales. It was the change in the finance laws and the recession that stopped sales and brought them down to $5,000,005 in 2009. They were slowly building up again but the new regulations pertaining to financing at times the new regulations confuse everything and stop everything dead. We went to a new lender and we fund the loan but they approved the loan. And this is through Triad out of Florida. That helps dramatically but not only has that helped, we are seeing more cash buyers, we are seeing more buyers in all ranges whether they are getting outside financing from another source besides through us using Triad or paying cash. Just the residents, you know the homebuyers have stronger income, stronger down payment. The economy for them is getting better and we are reaping the benefits. As good as our sales are we still don’t think they are good. We did 15,800,000 in 2006 and I see no reason we can't double that and I won't say our sales are good until we do.

I will add to that. In 1955 which is a long time ago the industry sold 250,000 homes. So prior to this recession we were selling 350,000 homes. Today we are only selling 70,000 80,000 homes. Cost sales dropped off with the recession, they have come back and doubled. Recreational vehicles dropped off during the recession, they were up 140%. We are not even back to where we were and the various reasons for that including the point that Sam made that the financing regulations make no sense. Read today's Wall Street Journal they have the statistics on what people really pay for rent and they really pay 40% of the people pay more than 35% of their income for rent, yet we have to live with regulations that say if our cost of financing is more than 35%, we can't make the loan. So that’s the reason the industry is switched over from a sales mode to a rental mode. Hopefully at some point there will be a change and that the sales will come back. Sales will also come back because people are building up their net worth. Home values dropped off dramatically with the recession, they have been coming back every year with 4%, 5% and you're talking about hundreds of billions of dollars building up and when the value of their existing home goes up and up they sell their home and they use the proceeds to buy a manufactured home free and clear. So we see a lot of reasons why it's going to come back. In the meantime Sam followed sun into this rental program and the rental program was working very well.

The program seems to be working well and yet there seems to be some stigma in the marketplace around rentals and in particular that residents kind of just don't take care of the home in the same way that they would as homeowner. What’s been your experience thus far?

So good, I really like that question. In all housing right whether it’s standard, you own the home, you own the land, there is million dollar houses and then you could be in a neighborhood where nobody is taking care of the houses and they are junk. In manufactured home communities, it’s the same thing. If we are a good operator and we are enforcing the rules and regulations then the people have to take care of the rental units or we are not going to let them stated there. And by doing this, the quality of our rental units if you're driving through the community, you can't tell the difference between a resident owned home or a rental. If you physically inspect the home you can't tell the difference. We expect each home every year. So by being good operators, our rental units are high quality rental housing. These are brand-new home, thousand square foot, three bedrooms, two bath houses. The price is only $700, $750 per month but the resident recognizes their $200-$300 per month saving, that’s sort of their equity in the house. They know if they can't live here, they got to go somewhere else it’s not as good for more money. So if we say, here’s our rules and regulations, you have to comply most people are going to comply and that’s our experience both on payment of rent and maintenance of the facilities. Some these people landscape the exteriors with their own money, they may have masonry skills and do fantastic beautiful work outside their house. They do amazing things with these rental unit. So I am extremely happy with the way the rentals are going, we inspect them, they are doing fine.

I would add one thing, [indiscernible] Vice President brought a drone, who have been going around to a 98 park, it’s quite an undertaking. We are creating movies off the each of the parks. If you are are worried about the quality of the parks and we worry about it too but we watch it. Go on our website and take a look at the parks and see what the park looks like and I am sure that it will alleviate some of your fears and believe me management will continue to look at the oints and we worry about it too but we want it and goes go on our website and take a look at the updated views of the park each year and we have followed it closely and make sure that the quality of the park not only stay the same but each year we are going to improving the quality of the park. So I do suggest you go out. How many people have looked at the videos already, Bret. 130 people have some on our website already and looked at the –taken the time to look at our communities. About how long does it take to go look at 98 parks?

More than, it’s probably.

No, I mean that they go on.

10 minutes.

Good, make it half an hour. But you are welcome to come on our website and see what our parks look like.

Thank you for your time this morning.

The next question will come from Rick Murray of Midwest Advisors.

Yes, hi, can you tell us what the depreciation related to the rental homes was in the quarter and also what was the maintenance CapEx number for the quarter?

I don’t have the numbers right in front of me but I can get back to you on that. But again if we talk about depreciation, a lot of it depends on really the quality of the home. We have brand-new homes, they are really no depreciating even though we depreciated over 30 years. They are really no depreciating because if you have a $40,000 home and people are taking care of it, it really does not go down.

The important point is, we install the home at our cost for $40,000. If you are putting in in somebody else's community or selling it, it would be in the high 70,000. And this high $70,000 house is going to last for 40 years and during the time that this house was worth $70,000, it's going to stay in that ballpark for 15 years and then it’s going to start to depreciate depending on the market. Sometimes homes go up in value, sometimes homes go down in value. So the homes that my father sold in Southwind Village for $10,000 in 1973 are still selling for $10,000 today. So the houses have repair and maintenance but again it's very minor because they are factory built. We can replace the wallboards, anything in the kitchen, you know it’s a vinyl sided shingle roof house. Shingle roof is 25 year roof. The vinyl siding is going to last a very long time. So there really are not, the home is not going down in value for any reason related to aging.

That up a $40,000 home on a $40,000 lot, 1,000 square feet of new house running for 800 a month has a value considerably higher than $80,000 a year but we will watch carefully over the years to see that the value of these homes, they do maintain their values and I'm sure we will look at that issue continually. But the value of our parks have been going up very substantially over the last two, three years.

I will add to that. During the half year we have sold 36 rental units and we are selling the rental units for more than they are on. There is no loss on any rental unit.

Okay thank you and so just I think the number you gave a couple of quarters ago was around $19 million or $20 million for 2015, so should we expected it call it $5 million a for CapEx is about…

We never gave a number like that. The highest number that I remember ever giving for CapEx was $16 million and that's a very special CapEx for this year 2016 related to very special expenditures bringing new communities that were acquired up to our standards, some require full replacement of water line some require full repaving, rebuilding clubhouse. Our normal CapEx and I am doing it off of memory but I am going to be pretty close, when we were half our size was

About $3 million.

$3 million, so we assume our normal CapEx is in the range of $6 million to $7 million, $6 to $8 million. But this is a very special year because we are taking communities we acquired making them new and improved, the drone videos prove this out, you know so I am going to backup a second. What UMH has done is phenomenal in every way. The capital structure just 27 million shares for approximately 800 million in assets. The addition of rental units and the choice to take existing communities that had age that had deferred maintenance and deferred capital improvement and upgrading them into brand-new status and making them better than they were originally built and that's where that $16 million in special capital expenditures comes in this year

With some damages you fix the water lines for $1 million and we do a sewage cross by $120,000 that’s not the type of CapEx that you are just spending money to keep where you are, you are actually going to improve your earnings.

Yes, okay well I thought Anna had given a figure of $19 million for 2015 on one of the prior calls but I can followup.

Okay never has. The highest number we are made with $16 million and we don't even – we are not even sure we are going to be that high.

They are not as close with a lot of special project. You buy a 1,000 units for $28 million, you can anticipate you may spend $3 million, $4 million, $5 million, $6 million getting those products up to our standards and you can call that CapEx or you can call whatever you want to call it. As far as we are concerned, it’s the cost of getting in place of 1,000 units that are worth $60 million. Any other questions.

Yes we do have a question from Brian Holland of Sidoti.

Good morning and thanks for taking my call.

Good morning, Brian.

The lack of acquisitions year-to-date has highlighted the underlying profitability of the business. Do you expect less community acquisitions moving forward as you focus on your rental program?

We just don’t know. We have excellent relations with some large holder of products who are repositioning and they are still making, trying to make a decision whether they are going to sell off some of the products that are in our area and not the type of products that they generally own. But they haven't made a decision and that would be a very substantial amount of acquisitions. The other way we do acquisitions on a one-off basis dealing with individual park owners who have owned the parks for 10, 20, 30 years and it’s like pulling teeth to buy the parks, in fact with more and more people don't want to sell at any price. So it is much harder to get parks than it was but we do have an active acquisition program and we will be announcing acquisitions over the next two quarters.

And I will point out that we have 1,000 sites in the approval phase and we are doing faith construction of various sites right now. We are at the point again where it’s less expensive to build them, to buy them because you are going to earn the sale profit when you build them. So we are building sites again and we are actively working on the approval process every day.

Thanks and then I have a follow up to earlier questions. With the strong pickup in the sale of manufactured homes, do you see that momentum continuing in the third quarter and then seasonally falling in the fourth quarter, and is better excess financing driving the pick up or has there been a increase in overall demand?

Increase in overall demand caused by I believe rising incomes and people having the down payment, it’s hard to say that there's a fourth-quarter slowdown because it varies so much. But we don't see any slowdown coming, we see sales growing, we see plenty of room for increased sales going through the whole year. Interestingly I know that December and January can be our best sales month, January because of the tax refund. So you know, you would think winter slows things down on sale but it varies year to year.

Okay thank you and then just one final question if I can. There is a, you touched on it earlier but there is a bit improvement in operating expense ratio, how much more room is there to push that number lower let’s say over the next 12 months?

Well I think 36% is a really great number for the new revenue and that’s what the new revenue was coming in at 36% expense ratio and so you know my estimate we are going to add 800 rental units over 12 months bringing in $6.4 million of new rental income. We are going to have the rent increases generating $3 million in new rental income. So you are going to have $9.4 million with 36% expenses against it on the operating side. So that that brings an awful lot of new revenue to net income. You know it’s always a question, will we actually get the 800 rental units in? Will we actually get them rented? But we are doing it and I have to thank every member of the UMH staff, I have to thank the factories, the set up crew, adding 800 new rental homes a year is an incredible achievement and we continue to do it.

I have to make a comment that I laugh about. I hope people see the humor in it. Some of our critics note that at least one maybe two of our peers have outperformed us. You should realize that manufactured housing REITs are best performing REITs in the country. So that if you say that one of our competitor has outperformed us, you are really saying that UMH is not the number one REIT in the country. So when I tell you that one of our REITs is operating at 40% factor and we are operating at a higher factor it troubles us greatly. We really want to match what the other REIT is doing. But we also realized that if we could perform as well as the REIT, we will be the number one REIT in the United States.

Thanks for taking my question.

Next we have a question from Michael Boulgaris of Boulgaris Investments.

Good morning. And thank you for taking my questions and congratulations on the organic growth that you are demonstrating. Sam, might you just share – update us as to the progress in Tennessee and the growth pathway there at Memphis Blues and some of the other developments that you have referred to in the past?

Sure. Memphis Blues, we are hoping for the grand opening in September and that will be an all rental community. Everybody down there is incredibly excited about it because they see the demand we are going to start out with 50 lots and 50 brand new rental units, that’s about 10 minute drive from Downtown Memphis. The whole Nashville area has been phenomenal for UMH. We have taken communities with 56% occupancy and got them to 100% occupancy. We have done this in Lebanon, Tennessee. The job we have done in North Nashville when people – that people come from New York, people looked and it’s amazing the way we have turned around these properties took old communities, removed homes, put new water lines and repaved streets, add new houses. In our investor presentation which is online we have documented the income we have added to these communities and the value we have added to these communities. And we have vacant land, one of the communities country side of states, South of Nashville is 380 sites and we have land to expand another 380 sites. So 760 sites next to what was the Springhill auto factory that’s reopening as an auto factory. Again, we have room to expand in North Nashville where we are working on the approvals now and again at places we have achieved high-90% occupancy and now it can expand. So Tennessee and always it’s been fantastic to us. Allentown in the Memphis area remains high occupancy with sales. So we are very optimistic about that area.

I don’t know if you could tell us is the – you mentioned Freddie Mac like for example with Memphis Blues are they being helpful to UMH?

Freddie Mac’s incredibly helpful to UMH in everything we do. I will let Anna tell you more about that.

We have been talking to Freddie Mac, they do not have a program yet for the rental homes combined with the community itself. However, they have indicated to us that they will consider it and they are looking into it as we speak.

Thanks Anna.

So we are very happy with Freddie Mac and the execution that we have been able to do with them. We have done 22, 23 loans, individual loans with them for probably about $150 million, so – over the last year and this year.

We are able in the Memphis area to produce housing 1,000 square feet, three bedrooms, two bath for approximately 100,000, 110,000 units. And there is no body in the country can do that well. And Freddie Mac is well aware of their mission to provide affordable housing, workforce housing and they see that we can do it and so we are hopeful they will come along with a program that we can get financing on both the park and on the homes. In the meantime the existing Freddie Mac programs are working wonderfully for the company. And so if we can’t put a mortgage on the Memphis Blues for the money, we will put a mortgage on another park and raise the money for that venture.

Thank you for that color Eugene and Anna. Sam, with same-property occupancy has increased year-over-year I guess to 84.2 and the rental home property occupancy now at 94.4, do you think by fiscal year end we can see maybe same-property occupancy north of 86% and rental home in the 96% range as well.

The rental homes, what affects the vacancy factor on the rental homes is we count them as a unit from the time they are setup. So, they actually – whatever number we show it’s the occupancy, it’s actually in my opinion higher. The problem is the new homes that are setup – you have to wait for the new resident, and that’s what creates the vacancy. So, it’s hard for me to get that number. But we are going to add 800 rental units and historically what’s happened in the last 5 or 6 years as we are upgrading the communities is you are losing about 400 homes out of the communities, because we are removing them. That is going to slowdown. The removal of houses is going to slowdown, because we have completed that. And a number of communities we have already removed everything that needs to be removed and there is nothing left to remove. So, the obsolescence number I always gave was 2% is going to start to decline. And as we add 800 rental units instead of only going 400 units total I think we are going to get closer to 600 units total. So, that’s going in the right direction. And everything we see out there, it’s been a number of years more than 7 since people pull out homes from dealers and move them into our communities. We are not seeing a lot of it, but we are seeing a handful of it. That’s happening again. The rental units are doing well for us and we have home sales. So, on the occupancy front, everything is going in the right direction. There is going to be less obsolescence, more outside dealers bringing houses and us doing more sales and us doing more rentals. So, it will continue to grow.

So, same property occupancy 86% no guarantees, but that’s not too much of a stretch, is it?

It appears and Anna is checking the numbers and it appears likely, yes.

Okay. And lastly, Sam for you or for Gene, I mean, you have had such a longstanding presence particularly in well obviously in the MH industry and in Western PA. Shell’s $6 billion commitment in Beaver County is – would you say that, that is truly transformative and perhaps the most significant commitment in that region that you have seen in quite some time?

Absolutely. We are commenting on another state that runs all these ads about all the business they bring in, that is 10% of $6 billion. $6 billion is a lot of money. It’s I believe they are estimating 6,000 people working on this for three years. But as I pointed out even as big as the $6 billion project that Sam has been pointing out, there is another $6 billion in pipeline to being built. But even as big as that is and as important as that is, the petrochemical industry is expanding in Western Pennsylvania and I forget whether it’s you call it upstream or downstream when you have these other plans that use the products in manufacturing, but that’s going to come into play still and my prediction for Western Pennsylvania and for Eastern Ohio is excellent. And again, what we are talking about, we have a company here with 18,000 sites and 3,000 vacancies. That’s just the drop in the bucket. We should be running 96% occupancy, the way our competitors are. And we are looking forward to that increased occupancy, because we bought the products where the growth is coming even if we had a average national growth we would do well over the next 5, 6 years, but we are going to do above average, because we expect sites like Memphis and Western Pennsylvania and the Marcellus and Utica shale that are going to have above average growth. So, I am very optimistic about that. And in addition, I want to point out, no one asked the question about the securities portfolio. The securities portfolio was doing as projected. And even with all the gains we have, we still have an excellent portfolio that we expect further gains in, but the size of the gains is so large that I didn’t get a question about covering the dividend this time, but I understand why, because the dividend is covered. It’s covered by our unrealized gains and the cash we have in the bank and the $0.18 dividend, $0.72 a year is a solid dividend. On previous calls, people were concerned that the FFO didn’t cover the dividends, but the dividend is now covered.

I just wanted to add this quarter the core FFO did cover the dividend. It was $0.18 and our dividend is $0.18 for the quarter.

Well, congratulations. That’s been a tough haul in the last couple of years, but you have persevered and congratulations and thank you for taking my questions.

Thank you, Mike.

This concludes our question-and-answer session. I would like to turn the conference back over to Samuel Landy for any closing remarks.

Thank you, operator. I would like to thank the participants on this call for their continued support and interest in our company. As always, Gene and I are available for any follow-up questions. We look forward to reporting back to you after our third quarter. Thank you.

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