Activist investor Erez Asset Management is intensifying its campaign at manufactured-housing real estate investment trust UMH Properties, urging the company to undertake a strategic review that could result in a sale, according to a report by Bloomberg.
The report cites Erez Chairman and Chief Investment Officer Bruce Schanzer as saying in a letter to UMH’s Borda, that the firm believes there is significant interest in the REIT from both strategic buyers and private equity investors. According to Erez, potential buyers have attempted to engage with UMH but have either been rebuffed or received no response.
Erez argued that UMH should conduct a review of strategic alternatives, including a potential sale, to address what it views as a persistent disconnect between the value of the company’s real estate portfolio and its public-market valuation.
The activist owned approximately 4.7% of UMH when the letter was sent and planned to increase its holding to 5%, according to a person familiar with the matter. UMH had a market capitalisation of roughly $1.34 billion following a 1.4% decline in its shares to $15.68 on Monday.
UMH, headquartered in Freehold, New Jersey, owns and operates manufactured-home communities alongside rental self-storage facilities. The business was founded by Eugene Landy in 1968 and remains closely associated with the Landy family, with Eugene serving as chairman and his son Samuel as chief executive. Insiders own more than 5% of UMH’s shares, according to Bloomberg data.
Erez believes the company’s portfolio is worth considerably more than its current share price suggests. Following a property-level assessment, the activist estimated UMH’s net asset value at between $21.25 and $24.25 a share.
Schanzer argued that strong private-market demand for high-quality manufactured-housing assets contrasts with UMH’s relatively weak public-market valuation. He attributed the gap to what Erez considers shortcomings in strategic execution and capital allocation.
The latest letter follows an earlier effort by Erez to influence the composition of UMH’s board. In May, the investor launched a campaign urging shareholders to withhold support for independent director Matthew Hirsch at the REIT’s annual meeting. Institutional Shareholder Services backed the campaign, but Hirsch ultimately retained his seat.
Erez asked UMH to engage with the firm over its assessment of the company’s operating performance, capital allocation, valuation and strategic alternatives. While Schanzer said Erez would prefer to work constructively with the board and management, he warned that the investor could consider further action if UMH refuses to engage or undertake a strategic review.
