Erez Asset Management is urging fellow shareholders to help remove the lead director of UMH Properties’ board in the interest of increasing the REIT's value.

Erez owns about 4% of shares in the manufactured housing owner and operator REIT, which it said has underperformed because Erez’s “entrenched and conflicted” board of directors refuses to hold management accountable.

While not recommending its own candidates or launching a full-blown proxy campaign, Erez recommends withholding votes from Presiding Independent Director Matthew Hirsch at the annual meeting set for Wednesday.

In 2023, the last time Hirsch stood for reelection, nearly 40% of votes withheld support for him, according to Erez Asset Management's letter to shareholders. Hirsch has been on the board since 2013.

“UMH owns valuable assets in one of the most attractive real estate sectors, but shareholders have endured persistent underperformance,” Erez Chief Investment Officer Bruce Schanzer said in a statement. “By withholding support from Matthew Hirsch, shareholders can send a clear message to the UMH Board that the status quo is no longer acceptable.”

UMH Properties’ stock price has dropped 10% in the past year, and it has a market valuation of $1.3B, Reuters reported. Sun Communities Inc. and Equity Lifestyle Properties, other REITs in the manufactured housing sector, have valuations of $15.2B and $12.2B, respectively.

Sun Communities’ stock price was flat, and Equity’s stock price dropped 3.6% over the past year.

UMH owns and operates 145 manufactured home communities with 10,800 rental homes and more than 1,000 self-storage units in 12 states throughout the Northeast, mid-Atlantic and Sun Belt.

Schanzer said in his letter that UMH’s manufactured housing communities should command a premium valuation because the asset class has a scarce land base, durable demand, recurring pad-rent revenue and growth potential.

Private equity has flooded into the manufactured housing market in recent years as lot rents have grown substantially.