Thank you, operator. Good morning, everyone.

Thank you for joining us today. The momentum we generated from 2023 has carried into the early part of 2024.

Not only did we see improvements in rental revenue, net operating income and same community metrics, but we have achieved many major milestones to start the year, and we expect these accomplishments to help the REIT's future growth. High priority is to begin this year was to refinance our near-term debt to maintain our conservative low-cost debt profile, and we were able to do just that.

We refinanced our near-term debt at a lower fixed rate resetting our interest rates for another 10 years. The cash proceeds were also used to pay off existing debt, now we have no substantial debt maturities until 2030.

Completing these refinancings at significantly better terms helped improve our financial position and speaks to the confidence our lenders have in our business and the MHC industry. Most important, these refinancings help pave the way for the largest acquisition in our history.

We entered into an agreement to acquire seven MHCs, which expands our existing footprint in Tennessee and establishes a new presence in the West Virginia market, representing the eighth contiguous U.S. state where we operate.

Nathan will elaborate during his remarks, but these acquisitions are the largest in our history and it created an opportunity to become a market-leading owner by strategically expanding our footprint into adjacent and new markets, both of which enable us to maximize our existing synergies and leverage economies of scale. We first began operating in Tennessee in 2019 and have strengthened our presence in that state, while entering Nashville, one of the hottest, fastest-growing markets in the U.S.

We will also form a foothold in a new market, West Virginia by establishing a presence in three distinct locations with five communities in that state. These were off-market transactions that represent a generational opportunity that position us well for future acquisitions.

We remain confident in the underlying fundamentals of the MHC industry. Manufactured homes are a very appealing a low cost effective option for many Americans.

Our customers enjoy homes that are detached structures that do not share walls, utilities, air conditioning or heating with any other homes. These homes include two, three and four bedrooms typically with two bathrooms.

They also have a deck yard, driveway and in-home laundry facilities all for less than the cost of running an apartment. Providing affordable housing and an exceptional resident living experience is Flagship's corporate mission, and we recently published our fourth ESG report, which articulates our sustainability strategy and initiatives to help make that mission a reality for our residents.

The report also outlines our commitments to our unit holders, employees and communities through initiatives such as renewable energy, education and household amenities. You will also find details on our diversity programs and governance.

Please visit our website to read the report and learn more about our ESG commitments. I will now turn it over to Nathan to provide more details on our recent acquisitions.

Nathan?

Thanks, Kurt. Good morning, everyone.

Aside from expanding our presence in an existing area and entering a new U.S. state, what makes these acquisitions, especially significant is how they were sourced.

These acquisitions are another example of the opportunity that we were able to source off market through long-standing industry relationships. Sourcing acquisitions in this manner is an integral part of how we can add external opportunities to our portfolio.

Kurt outlined some of the benefits of the acquisitions during his remarks, but let me provide a bit more context. These acquisitions enhance our size and scale, which increases our portfolio number of communities to over 80 and the number of manufactured housing lots to over 15,000.

Expanding our presence in Tennessee. Now we are in Nashville, one of the fastest-growing cities in the United States and the state capital.

We also entered West Virginia for the first time in Flagship history in three distinct markets. In addition to being our eighth contiguous U.S.

state, where we operate, West Virginia is a market that understands Manufactured Housing and is very MHC-friendly. These acquisitions have organic growth potential through our home sale strategy, along with cost-saving initiative.

And finally, we continue to expand our portfolio and are well-positioned to realize the potential of a platform that continues to be scalable. We intend to continue our growth by sourcing acquisitions in existing and adjacent markets.

Let me now describe the acquisitions in a little more detail. Beginning first with Tennessee.

These acquisitions accomplish two Manufactured Housing Communities in our Nashville area. The first is international neighborhood and has 300 home sites and is a value-add community.

The community is 57% occupied and is well positioned with the ability to add amenities and implementing our growth strategy. The second community is in Murfreesboro Tennessee and is best-in-class.

It has 173 home sites and is located 35 miles south of downtown Nashville and is home to Middle Tennessee State University. The community is approximately 99% occupied and includes amenities such as basketball courts and a clubhouse.

The West Virginia acquisition includes five Manufactured Housing Community in the state's largest metropolitan areas and is a value-add opportunity as well. The Morgantown acquisition includes two communities.

The first has 187 lots and is 88% occupied. The other has 203 home sites and is 81% occupied.

The Milton acquisition includes 213 home sites and is located 15 miles east of Huntington, West Virginia, which is home to Marshall State University. The community is 66% occupied and includes 21 rental homes, features many amenity, including a new playground, a clubhouse equipped with full kitchen and billiards table.

And the Beckley acquisition has two communities: the first have 120 home sites and is 87% occupied. The second community has 57 home sites and is 67% occupied.

In our business, acquisition opportunities of these natures don't come along very often, and we look forward to implementing our home sales strategy in Nashville and West Virginia. Now I'll turn it over to Eddie, our CFO, to talk about our financial performance for the quarter.

Eddie?

Thanks, Nathan. Good morning, everyone.

We generated revenue of $19.9 million for the first quarter, which was up 18.9% over the same period last year, primarily due to lot rate increases and occupancy increases across the portfolio as well as acquisitions. Same community revenues of $18.6 million for the first quarter grew by approximately $1.8 million over the comparable period last year.

This increase was driven by higher monthly lot rents as well as growth in same-community occupancy and increased utility revenues. Net operating income and NOI margin were $13.3 million and 67%, respectively, compared to $11.1 million and 66.3% during the first quarter of 2023.

Same-community NOI margins for the first quarter were 67.8%, which was an increase over the same period last year. This increase demonstrates Flagship's ability to develop operational efficiencies the longer communities are owned by the REIT.

AFFO adjusted, which is not taken into account an infrequent mortgages settlement expense of $2.5 million we incurred this quarter was $6 million, an increase of 16.8% from the first quarter of 2023. AFFO adjusted per unit for the first quarter of 2024 was approximately $0.29, an increase of 9.6%.

FFO adjusted per unit for the first quarter of 2024 was approximately $0.33, an increase of 9.1% from the first quarter last year. Same community occupancy of 84.7% increase over the same period last year, which continues to reflect our commitment to resident satisfaction and ensuring our communities are desirable locations.

Rent collections for the quarter were 99.7%, which demonstrates the strength and predictability of the MHC sector and was within our expectations. As at March 31, our total lot occupancy was 83.9% and our average monthly lot rent was $447, both of these metrics were within our expectations.

We remain committed to preserving a conservative debt profile. Our weighted average mortgage term to maturity is 10.8 years and our weighted average mortgage interest rate is 4.04% as at March 31, 2024.

We had total cash and cash equivalents of approximately $18 million with an additional $10 million available on our line of credit. The REIT currently has 17 unencumbered investment properties with a total fair value of $33.2 million as at March 31, 2024.

With that, I'll now turn it back over to Kurt for some final remarks. Kurt?

Thank you, Eddie. Our pending acquisitions and our refinancing measures have helped us get off to a great start in 2024.

These initiatives, coupled by our solid operating and financial performance position us well for the rest of the year. We believe we continue to be poised for growth as housing prices, high monthly rental rates and mortgage rate increases have made the potential to lead more people towards manufactured housing because our homes remained at an affordable price point.

The majority of our residents have steady jobs or they are retired in receiving social security disability or pensions. The interest rates of our customers have not changed substantially and their credit underwriting remains available.

We ended up our quarter with rig collections also of 99.7%. We certainly thank you for your time today, and I will now open up the line for questions.

Thanks, and good morning, guys.

Good morning, Mark.

Hey. In regards to occupancy, since you've been public, you've had some good occupancy gains overall.

I'm just curious with the cost of actually owning an MHC home having gone up. And I realize that the interest rates maybe not have gone up for MHC home or is this for more traditional homes.

But I'm just curious how this impacts the demand and ability of your tenants to actually purchase homes. And if this maybe will impact future occupancy growth from the core portfolio that you own?

I don't think it will negatively impact us. We just recently did some analysis, the affordability differential between us and the comparable housing alternatives in most markets still is $300 to $500 beneficial to live in our communities you're going to save $300 to $500 more a month if you live in one of our communities.

It still seems like people being driven to us because mortgage rates are high credit tightening on the stick-built industry is also pushing people towards us. Frankly, when you get up and that's normally that $300 to $500 range is normally for two and three bedroom homes.

When you start talking about four and five bedroom homes, which we also sell, that affordability measure gets even stronger than $500 in savings a month for the customers. So I think right now, we're in good shape.

The customers may move from double wide, single wide, if you will, and multi section to single section. But I don't think there's any headwind there with that.

Okay. Great.

Thanks. And maybe just one more from me.

The new acquisition, it might be too early for you to give some more information on this. But if you could just set up some timeline for expectations for actually getting the new homes on the vacant sites in this property and when you think you can actually have occupancy up there and haven't really turned into be more accretive as far as our portfolio acquisition.

And I realize that you have barely started or you haven't even started yet, so it might not be fair to ask at this point in time.

Well, I think we're closing next week. So yes, we haven't started putting our inventory on it.

I mean, Nathan, do you want to tackle…

Mark, we have ordered our inventory. And I think our inventory will take may be four weeks to get there, but we may get it even quicker.

But we give the new market for us. We're already ahead of the game on getting our license to sell manufactured housing there.

And it's a lengthy process. And I believe by the end of this week, we will have our license to sell manufactured housing in West Virginia.

We already own a license in Tennessee, and we've already started that process, too, and I've already ordered houses for that. There are quite a few rental homes in some of those, and we will start dissecting those immediately.

But I would say that you'll see some serious progress by the start of the first part of the third quarter.

Okay. Thanks.

Yes. In addition to that, Mark was asking about the accretion piece of it.

The way we've modeled it currently, we expect sometime during late quarter year two to see accretion. What I'll tell you is I think that was – it's a pretty conservative look at it, and hopefully, the hope to be worst-case scenario.

There are some opportunities to home sales, the living homes and then some other cost-saving initiatives and regularly driving initiatives that we could pull that forward and actually pull that into the latter part of the year one or even another year two.

Okay. And maybe just a follow-up on this, and it might not be fair to ask at this point, but how many homes have you ordered?

And how many do you think you can add over the first year?

Well, four a month would be what we would probably try to add. We will try to get more houses in during that time.

And I don't find that getting houses is going to be a big issue. We will buy out of a separate plant than our normal plant, Mark, that you were at a plant, probably out of Ohio that we'll bring them to West Virginia.

And then we'll be or obviously, our partner there in Benton, Champion Home will provide us our homes for the Nashville location. And they have – and they're ready to gear they're gearing up, building a few more homes a week to provide us with what we need there.

We're probably at least 30% to 40% of every home that goes down the line there that factory comes to a Flagship community property.

Okay. Great.

Thanks so much.

Thanks, Mark.

Hey, guys. Good morning.

Good morning, Brad.

Just want to, I guess, follow on to Mark's question there, but go about it a little bit differently. Just thinking about CapEx or capital improvement spend, including, I guess, the acquisitions that are about to close.

CapEx was about $5 million, I think, in Q1. How would you expect that to trend over the next few quarters once you've got the new acquisitions completed?

Yes. So the biggest part of the CapEx that we have budgeted for the new acquisition, we grew out $2 million of CapEx in the budget.

The biggest majority of that, about $6 million we had originally scheduled for rental homes and we did that again, we go back to kind of budgeting in a conservative manner. But the thought process is that which would be the quickest way to drive occupancy there.

So to make this point, we've budgeted that we're going to get for those houses a month at a couple of other communities. So if you're getting eight houses a month, we're at 50,000, we're doing 400,000 a month kind of early on now.

There's a caveat there. And we believe that when we get there, we're not going to be at all these rental homes that we're really going to have a sales boom.

The previous owners had been selling houses. So we think we're really going to have some opportunities there.

And maybe we don't spend as much of that CapEx early on as we thought. But also, the remaining, call it $4 million to $5 million that’s usually spent within the first 18 months and is only really has been 24 months as we go in and we do our amenity package, fix the street kind of the work there.

So what I'd tell you is for the remainder of the year, this is our CapEx season. CapEx season starts in kind of the early spring, and that’s just where we'll be paving roads and doing many of amenity work.

So we'll be buying less rental homes outside of that acquisition than we did in Q1, but we will have a good amount the work being done in that community. So I would expect to see a considerable decline in CapEx spend in that second, third quarter.

Okay. That's quite helpful.

Just to go back to the occupancy and just look at it more on a same-store basis. I think you've always guided for, I guess, 100 to 300 basis points of improvement each year.

How do you think things are trending this year relative to last year? And what would your expectations be for 2024 at this stage?

I think our expectations are about the same. I think on average, we like to be just north or just shy of 2% occupancy growth.

It doesn't seem like there's anything standing in our way to do that other than making sure we serve the customers right now to get the houses in and get them sold. Just like Eddie was talking, the truth is we not only want the occupancy, but we want quality occupancy.

Quality occupancy is homeownership. And homeownership does happen at a lower increase on the annual basis.

But it's sticky occupancy, right? It sticks around.

We now have several locations that are in the 95% and 100% occupancy range over the last three years. So by buying this vacancy that Nathan just bought, that gives us essentially the room to do the true value-add work that we're really good at.

So we're pretty happy with the occupancy quality that we're getting right now. And if we don't have to put those rental homes into this new acquisition, trust me, we won't.

I mean this is not something that we will put them in there if it's the right decision, and we get in and start doing our normal home sales model. It could be a stronger performance.

Okay. Last question, just how has – again, not excluding the new acquisitions coming in, but just looking at the current portfolio, how has your – I think last year, you had a pretty good year in terms of converting rental homes into owner-occupied residents.

Just how is that trending this year? Do you expect that sort of similar trend to 2023?

We're right on plan. I think we've already converted 34.

Yes, we've converted 34.

So again, last year, I think we did about 150. And again, what happens is we do that a little stronger as we get into the second, third and fourth quarter because the people's tax refunds, the down payments, sometimes get a little smaller.

So that means they need a cheaper used or [indiscernible]. So yes, I think we're right there.

This market might lend it up to that exact [indiscernible].

Okay. Great.

Thanks a lot. Appreciate it.

Thank you and good morning.

Good morning.

So just on the loss rent growth of, I think, almost 7% in Q1. I mean, this is strong.

Are you seeing pushback from tenants on these kind of rent increases?

Well, I think the answer to that, the short answer is no. We're always really mindful at that moment.

The average rent increase was about $31, I think. And so you look at that, and we're crazy mindful of rent increases.

We actually do that review by location. We need to buy to provide the best-in-class services for our residents.

Unfortunately, inflation is real. And we had to raise the rents.

We have not – we have stayed right on budget with occupancy so I think at this point, the answer is the rent increases have been absorbed and our residents are stable and performing. But the interesting thing is housing affordability, again, that gap between $300 and $500, that's beyond real to my resident.

And they are – this is the most affordable housing alternative, as you know, other than [indiscernible].

Got it. Okay.

So if I look at the rent growth of, let's say, 7% and occupancy growth of, let's say, 1% to 2%. So we could easily do like 10% plus same-store NOI growth, I mean, similar to what you did in Q1, like for the full-year?

Yes. I mean that is the budget, we budget high single digits kind of right at low double digits for Same Community NOI growth.

Looking – considering that we do have to think about the inflationary pressures that we still at the [indiscernible] getting. So, yes, Q1 was good.

There was some pickup in utility revenue that helped that versus prior year. But yes, I would expect high single digits to continue.

Got it. Okay.

Thank you. And then just on the bridge loan, I mean, it looks obviously a bit expensive in the near term.

When do you plan to put permanent financing on this piece? And what are the expectations for the rate on debt financing?

Yes. So I mean the expectation at this point is that within Q4 or maybe early Q1 of 2025, we'll have this refinanced with permanent financing, don't know yet if that will be agency debt, maybe for any or it will be something with [LiCo] at this point, still going through how – what gets best for these properties.

What I will say is the expectation if we did the debt today, would probably will be closer to 6%. There's some thought that maybe in Q4, we see some relief from an interest rate standpoint, which we kind of work with timing for us as we reposition a couple of these assets.

And I just give you a feel of our things then getting our playgrounds, basketball courts, the amenity packages into the communities and getting it ready for the permanent financing. So like I said, I would say that by Q4, Q1 of next year, the latest, we’ll have permanent financing.

Got it. Thank you.

Last question is on the acquisition portfolio. Just wondering what kind of stabilized cap rate did you underwrite on this acquisition, say, in year three, I mean, based on your NOI growth expectation for the next couple of years?

So stabilized cap rate is going to be somewhere around 7.5% by year three, it's 7.5% to 8%. Again, it really depends on how the occupancy growth is obviously, if we sell homes that we hope to do, it could be better than that.

The way we modeled it today with working more homes as we talked with lower margin there that the 7.5% is kind of where we expect it to could be.

Awesome. Thank you so much.

And I will turn it back.

Thanks, Himanshu.

Thanks. Good morning, guys.

Good morning, Kyle.

Just two quick ones for me. But just on the acquisition.

Just curious to kind of get your thoughts on what attracted you to West Virginia? Do you see a more significant opportunity to consolidate communities in that state and in similar markets in the future?

Just curious on the thinking there?

Well, Kyle, we have always been interested with West Virginia but the thing about West Virginia is you need enough – when you go in there, you need an economy of scale to go there, interesting also, we could be in the first property in less the two hours from our office. So West Virginia is extremely close location for us.

And we were able to go into the three real largest markets there. And also, it is not a consolidated state at all.

Actually, I don't know that any of the large companies are even there. So it gives us an opportunity to go in and find new partners there, people who are families shop that want to exit or – and so we will continue the bolt-on strategy that we've used in other states.

So we're very happy with that. And then obviously, the Nashville location were only 45 minutes away.

So – and then to the West, we're about an hour and 10 minutes away in Jackson. So it makes all the sense in the world for us to be there and to continue down and consolidate and find properties in the Tennessee market.

Now, that makes sense to recreate the model that's worked well thus far. So that's good.

Just second one, I'm sure this is the case, but in growing your NOI on the acquisition portfolio, I assume you'll be implementing the same kind of sub-metering systems that you have across the portfolio, just confirming that's the case. And do you have a sense on where kind of the utility recapture would be today on the portfolio and where that can go?

Anything to suggest that number can't get towards kind of where your total portfolio is running here today?

Yes. The expectation, and we've actually already ordered the sub-meters.

They are en route and we will have those kind of ready to start the process very early on. So the first answer is yes, that we will continue there.

Today, they're using a few of these locations are using a third-party provider that's doing their utility recapture. And while that is good and close to our normal recapture, call it, the 80% to 85%, they're also paying a fee to do that.

So we'll actually be doing it, and we believe we'll drive the closer we budgeted it after the first year that we'll be up to 90% recapture for all of those communities. And so yes, I mean, there's some opportunity there, again, the opportunities to bring it in-house and for us to control ourselves.

Okay. That makes sense.

Thanks for that. I will turn it back.

Thanks, Kyle.

Thank you, operator, and thanks, everyone, for participating today. Please feel free to reach out to our Investor Relations team at [email protected] if you have any further questions.

Have a great day.