Key Points
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Strong quarterly growth: Rental revenue rose 21.4% year over year to $19.8 million in NOI, while adjusted FFO increased 10.2%. Same-community revenue grew 9%, supported by rent increases, higher occupancy and ancillary revenue.
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Occupancy improved despite margin pressure: Same-community occupancy reached 85.4%, up 2 percentage points from year-end 2025, while total lot occupancy stood at 84.7%. NOI margin declined because of lower-margin ancillary services and water-and-sewer recapture issues.
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Selective expansion and stable outlook: Flagship completed two acquisitions in 2026, including a fully occupied 28-lot Ohio community, but remains disciplined as cap rates stay tight. Management expects 4%–5% annual lot-rent growth and same-community occupancy gains near the high end of its 1%–2% target range.
Flagship Communities Real Estate Investment Trust (TSE:MHC.UN) reported higher revenue, net operating income and occupancy in the second quarter of 2026, citing continued demand for affordable manufactured housing, rent increases and contributions from acquisitions.
President and Chief Executive Officer Kurt Keeney said rental revenue increased 21.4% from the prior-year period, while net operating income, or NOI, rose 18.9%. Adjusted funds from operations increased 10.2%, and adjusted funds from operations after capital expenditures rose 8.3%, he said.
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The company’s same-community revenue increased 9% year over year and same-community NOI rose 6.3%. Same-community occupancy reached 85.4%, up 2% from the end of 2025. Keeney said the results reflect both resident demand and the company’s focus on operating improvements at the community level.
Financial Results and Occupancy
Chief Financial Officer Eddie Carlisle said quarterly revenue rose 21.4% from a year earlier, driven by acquisitions and lot-rent increases. Same-community revenue totaled $27.3 million, reflecting higher monthly lot rents, ancillary revenue and increased occupancy.
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NOI was $19.8 million, compared with $16.7 million in the same quarter last year. However, NOI margin declined to 65.1% from 66.6%, while same-community NOI margin fell 1.7 percentage points to 64.9%.
Carlisle attributed the lower margin partly to ancillary services, including amenity-related revenue, that carry lower margins than the company has historically achieved. He also cited seasonal weather effects, including water and sewer recapture issues and water leaks that began in the first quarter and continued into the second quarter.
