v3.26.1
ORGANIZATION AND ACCOUNTING POLICIES (Policies)
 6 Months Ended
Jun. 30, 2026
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Use of Estimates

Use of Estimates

 

In preparing the consolidated financial statements in accordance with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as contingent assets and liabilities as of the dates of the consolidated balance sheets and revenue and expenses for the years then ended. These estimates and assumptions include the allowance for doubtful accounts, valuation of inventory, depreciation, valuation of securities, accounting for land development, reserves and accruals, and stock compensation expense. Actual results could differ from these estimates and assumptions.

 
Segment Reporting

Segment Reporting

 

The Company reports segment information in accordance with ASC Topic 280, Segment Information (“ASC 280”). ASC 280 requires companies to report financial and descriptive information for each identified operating segment based on management’s internal organizational decision-making structure. Management has determined that the Company has one single reportable segment based on its method of internal reporting in addition to its allocation of capital and resources. The primary focus of our business is the ownership and operation of our manufactured home communities, leasing of manufactured homesites and manufactured homes in our communities to residents. The sales of homes are integrated with the leasing of these manufactured homes and homesites. Sales of homes are necessary to maintain and increase occupancy at our communities. These leasing activities generate rental revenues and incur operating expenses. As each of the Company’s assets has similar economic characteristics, the assets have been aggregated into one reportable segment. The accounting policies for the reportable segment are the same as those described in Note 2 – Summary of Significant Accounting Policies included in our in our annual report on Form 10-K for the year ended December 31, 2025. Our Chief Executive Officer, with the assistance of our Chief Operating Officer, is the Company’s Chief Operating Decision Maker (“CODM”). The CODM is provided with consolidated financial statements to assess segment performance and decide how to allocate resources based on consolidated net income, which is reported on the Consolidated Statements of Income (Loss). The measure of segment assets is reported on the Consolidated Balance Sheets as Total Assets. Total expenditures for additions to segment long-lived assets are consistent with the amounts presented in the accompanying Consolidated Statements of Cash Flows. The CODM reviews net income on an individual asset level and on a consolidated level and uses this information to monitor actual results, evaluate returns on assets and determine how to reinvest profits. The revenue, costs and expenses, and net income for the reportable segment are the same as those presented on the Consolidated Statements of Income (Loss). We report our results of operations consistent with the manner in which the CODM reviews the business to assess performance and allocate resources.

 
Reclassifications

Reclassifications

 

Certain amounts in the financial statements for the prior periods have been reclassified to conform to the statement presentation for the current periods.

 
Investment in Joint Ventures

Investment in Joint Ventures

 

The Company accounts for its investment in entities formed under its joint ventures with Nuveen Real Estate under the equity method of accounting in accordance with ASC 323, Investments – Equity Method and Joint Ventures. The Company has the ability to exercise significant influence, but not control, over the operating and financial decisions of the joint venture entities. Under the equity method of accounting, the cost of an investment is adjusted for the Company’s share of the equity in net income or loss from the date of acquisition, reduced by distributions received and increased by contributions made. The income or loss is allocated in accordance with the provisions of the operating agreement. The carrying values of the investment in the joint ventures is reviewed for other than temporary impairment whenever events or changes in circumstances indicate a possible impairment. Financial condition, operational performance, and other economic trends are among the factors that are considered in evaluation of the existence of impairment indicators (See Note 4).

 

 
Leases

Leases

 

The Company accounts for its leases under ASC 842, “Leases.” Our primary source of revenue is generated from lease agreements for our sites and homes, where we are the lessor. These leases are generally for one-year or month-to-month terms and renewable by mutual agreement from us and the resident, or in some cases, as provided by jurisdictional statute.

 

The Company is the lessee in other arrangements, primarily for our corporate office and a ground lease at one community expiring in April 2099, with an option to extend for another 99-year term. As of June 30, 2026 and December 31, 2025, the right-of-use assets and corresponding lease liabilities of $2.4 million and $2.7 million, respectively, are included in prepaid expenses and other assets and accrued liabilities and deposits on the consolidated balance sheets.

 

Future minimum lease payments under these leases over the remaining lease terms are as follows (in thousands):

 

Year  Amount 
2026  $210 
2027   204 
2028   111 
2029   111 
2030   111 
Thereafter   18,558 
      
Total Lease Payments  $19,305 

 

The weighted average remaining lease term for these leases, including renewal options, is 170 years. The right of use assets and lease liabilities was calculated using an interest rate of 5%.

 
Restricted Cash

Restricted Cash

 

The Company’s restricted cash consists of amounts primarily held in deposit for tax, insurance and repair escrows held by lenders in accordance with certain debt agreements. Restricted cash is included in prepaid expenses and other assets on the consolidated balance sheets.

 

 

The following table presents beginning of period and end of period balances of cash, cash equivalents and restricted cash for the periods shown (in thousands):

 

   6/30/26   12/31/25   6/30/25   12/31/24 
                 
Cash and Cash Equivalents  $28,622   $72,100   $79,235   $99,720 
Restricted Cash   9,922    8,826    8,248    9,091 
Cash, Cash Equivalents And Restricted Cash  $38,544   $80,926   $87,483   $108,811 

 
Revenue Recognition

Revenue Recognition

 

The Company accounts for its Sales of Manufactured Homes in accordance with Accounting Standards Update (“ASU”) 2014-09 “Revenue from Contracts with Customers (Topic 606)” (ASC 606). For transactions in the scope of ASC 606, we recognize revenue when control of goods or services transfers to the customer, in the amount that we expect to receive for the transfer of goods or provision of services.

 

Rental and related income is generated from lease agreements for our sites and homes. The lease component of these agreements is accounted for under ASC 842 “Leases.” The non-lease components of our lease agreements consist primarily of utility reimbursements, which are accounted for with the site lease as a single lease under ASC 842.

 

Revenue from sales of manufactured homes is recognized in accordance with the core principle of ASC 606, at the time of closing when control of the home transfers to the customer. After closing of the sale transaction, we generally do not have any remaining performance obligations.

 

Interest income is primarily from notes receivables for the previous sales of manufactured homes. Interest income on these receivables is accrued based on the unpaid principal balances of the underlying loans on a level yield basis over the life of the loans.

 

Dividend income and gain (loss) on sales of marketable securities are from our investments in marketable securities and are presented separately but are not in the scope of ASC 606.

 

Other income primarily consists of brokerage commissions for arranging for the sale of a home by a third party and other miscellaneous income. This income is recognized when the transactions are completed and our performance obligations have been fulfilled.

 

 
Notes Receivables

Notes Receivables

 

The Company accounts for its receivables in accordance with ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires that entities use a forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. As of June 30, 2026 and December 31, 2025, the Company had notes receivable of $106.3 million and $100.0 million, net of the fair value adjustment of $1.6 million and $1.5 million, respectively. Notes receivables are presented as a component of notes and other receivables, net on our consolidated balance sheets. These receivables represent balances owed to us for previously completed performance obligations for sales of manufactured homes.

 
Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2024-03 - Income Statement – Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities (PBEs). The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 and should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to any or all prior periods presented in the financial statements. Early adoption is permitted. The Company anticipates making the required disclosures beginning with its Form 10-K for the year ending December 31, 2027.

 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.