Sun Communities, Inc. · NYSE:SUI
Sun Communities — Investor Presentation (February 2019)
23 slides from Sun Communities's investor presentation, Feb 26, 2019
Slide 1: Investor Presentation February 2019
CAVA ROBLES RV RESORT – PASO ROBLES, CA GROUND UP DEVELOPMENT OPENED JUNE 2018 INVESTOR PRESENTATION FEBRUARY 2019
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation has been prepared for informational purposes only from information supplied by Sun Communities, Inc. (the “Company” or “Sun”) and from third- party sources indicated herein. Such third-party information has not been independently verified. The Company mak
Slide 3: Sun Communities, Inc. (NYSE: SUI) Overview
SUN COMMUNITIES, INC. (NYSE: SUI) OVERVIEW Current Portfolio as of December 31, 2018 4,891 371 communities 226 1,595 consisting of over 561 475 128,000 sites across 588 2,118 682 27,080 679 149 413 1,519 31 states and Ontario, 324 2,920 2,916 2,150 562 3,608 916 2,472 7,706 Canada 1,031 1,382 976 67
Slide 4: Operating and Financial Highlights
OPERATING AND FINANCIAL HIGHLIGHTS Financial Performance Quarter Ended December 31, Year Ended December 31, Total Revenue $274.0mm $242.0mm 13.2% $1,126.8mm $982.6mm 14.7% Total NOI $150.5mm $134.6mm 11.8% $623.1mm $550.5mm 13.2% Same Community Revenue $181.1mm $170.6mm 6.2% $746.4mm $703.3mm 6.1% S
Slide 5: 2019 Operating and Financial Guidance
2019 OPERATING AND FINANCIAL GUIDANCE Guidance 2019 Additional Information Net Income Core FFO 2019E First quarter 2019, per fully diluted share $0.31 - $0.34 $1.10 - $1.13 Increase in revenue producing sites 2,500 - 2,700 Full year 2019, per fully diluted share $1.59 - $1.71 $4.76 - $4.86 Vacant ex
Slide 6: 2018 and 2019 YTD Community and Land Acquisitions
2018 AND 2019 YTD COMMUNITY AND LAND ACQUISITIONS . Acquired 27 communities and 7 land parcels in 17 states with ~8,400 developed sites and ~3,500 additional sites for expansion or development as of February 20, 2019 2 333 1 Acquisition Community / Total Value 321 Date Portfolio Name (mm) 2 1 2 5//2
Slide 7: Powering Sun's Growth Engine
POWERING SUN’S GROWTH ENGINE . Sun is the premier owner and operator of manufactured home (“MH”) and recreational vehicle (“RV”) communities . Strong cycle-tested record of operating, expanding and acquiring MH and RV communities dating back to 1975 INTERNAL EXTERNAL Contractual Rent Increases MH Oc
Slide 8: Sun's Favorable Revenue Drivers
SUN’S FAVORABLE REVENUE DRIVERS . The average cost to move a home ranges from $5K- MH Resident Move-out Trends1 $10K, resulting in low move-out of homes . Yearly home move-outs in our MH communities is less 6.2% than 1% 0.9% . Tenure of residents in our MH communities is Resident Re-sales Resident M
Slide 9: Consistent and Cycle Tested Internal Growth
CONSISTENT AND CYCLE TESTED INTERNAL GROWTH . Sun’s average same community NOI growth has exceeded REIT industry average by ~180 bps and the apartment sector’s average by ~170 bps since 1998 . Every individual year or rolling 4-quarter period has positive same community NOI growth Same Community NOI
Slide 10: Manufactured Housing vs. Other Rental Options
MANUFACTURED HOUSING VS. OTHER RENTAL OPTIONS . Sun’s manufactured homes provide nearly 25% more space at ~48% less cost per square foot PRICE $0.76 per sq. ft. $1.46 per sq. ft SQUARE FOOTAGE 1,250 sq. ft. 1,000 sq. ft. RENT $950 per month $1,460 per month 1 Source: Company information. 2 Sou
Slide 11: Manufactured Housing vs. Single Family
MANUFACTURED HOUSING VS. SINGLE FAMILY . Sun’s communities offer affordable options in attractive locations Manufactured Homes Single Family Homes Average cost of a new Manufactured Home is Average cost of Single Family is $293,727 or $71,900 or roughly 2 years median income roughly 7 years medi
Slide 12: Manufactured Housing and RV Manufacturing Businesses Increasing Shipments
MANUFACTURED HOUSING AND RV MANUFACTURING BUSINESSES INCREASING SHIPMENTS . The demand for affordable homeownership and vacationing is reflected in the increased output from manufactured housing and RV manufacturers . Current yearly manufactured housing shipments as a percentage of single family sta
Slide 13: Expansions Provide Strong Growth and Attractive Returns
EXPANSIONS PROVIDE STRONG GROWTH AND ATTRACTIVE RETURNS . At the start of 2019, inventory of ~8,100 zoned and entitled sites available for expansion at 75 properties in 19 states and Ontario, Canada . 549 sites were delivered at 6 communities during the fourth quarter of 2018, bringing YTD expansion
Slide 14: Expansion Opportunities Supported by Rental Program
EXPANSION OPPORTUNITIES SUPPORTED BY RENTAL PROGRAM . Sun’s rental program is a key onboarding and conversion tool for our communities Rental Program All-in 5-Year Unlevered IRR . $48,000 initial investment in new home . Weighted average monthly rental rate ~$950 x 12 = $11,400 (3% annual increases)
Slide 15: Extracting Value from Strategic Acquisitions
EXTRACTING VALUE FROM STRATEGIC ACQUISITIONS REPOSITIONING PROFESSIONAL WITH ADDIT’L SKILLED OPERATIONAL CAPEX MANAGEMENT EXPENSE MANAGEMENT HOME SALES ENTAL & R ADDING ROGRAM P VALUE WITH EXPANSIONS INCREASING MARKET CALL RENT CENTER & DIGITAL MARKETING OUTREACH Year-end Communities and Sites . Sin
Slide 16: Strategic Balance Sheet
STRATEGIC BALANCE SHEET . Balance sheet supports growth strategy . Sun’s annual mortgage maturities average 5.1% from 2019 - 2023 1 2 Net Debt / EBITDA Reduced Net Debt / TEV ~36% reduction leverage by 4.1x since 2011 since 2011 9.7x 61.5% 8.4x 7.2x 7.3x 7.5x 50.4% 6.6x 6.3x 5.6x 45.8% 34.8% 34.0% 3
Slide 17: Appendix
APPENDIX Carolina Pines – Conway, South Carolina Ground up development expected to open first phase in late-2019
Slide 18: Strategy-Driven Outperformance
STRATEGY-DRIVEN OUTPERFORMANCE . Sun has significantly outperformed major REIT and broader market indices over the last ten years 2018 Total Return 3-year Total Return 30.0% 80.0% 25.0% 70.0% 67% 20.0% 60.0% 50.0% 15.0% 14% 40.0% 10.0% 30.0% 32% 5.0% 20.0% 0.0% 4 10.0% 10% (5%) (5.0%) 0.0% (10.0%) (
Slide 19: Consistent NOI Growth
CONSISTENT NOI GROWTH . Manufactured housing is one of the most recession-resistant sectors of the housing and commercial real estate sectors and has consistently outperformed multifamily in same community NOI growth since 2000 NOI Growth $230 $225 Self-storage $224 Sun Communities $219 Manufactured
Slide 20: Non-GAAP Terms Defined
NON-GAAP TERMS DEFINED Investors in and analysts following the real estate industry utilize funds from operations (“FFO”), net operating income (“NOI”), and earnings before interest, tax, depreciation and amortization (“EBITDA”) as supplemental performance measures. The Company believes that FFO, NO
Slide 21: Net Income to FFO Reconciliation
NET INCOME TO FFO RECONCILIATION Three Months Ended December 31, Year Ended December 31, (amounts in thousands except per share data) 2018 2017 2018 2017 2016 Net income attributable to Sun Communities, Inc. common stockholders $ 9,039 $ 7,438 $ 105,493 $ 65,021 $ 17,369 Adjustments: Depreciation an
Slide 22: Net Income to NOI Reconciliation
NET INCOME TO NOI RECONCILIATION (amounts in thousands) Three Months Ended December 31, Year Ended December 31, 2018 2017 2018 2017 2016 Net income attributable to Sun Communities, Inc., common stockholders $ 9,039 $ 7,438 $ 105,493 $ 65,021 $ 17,369 Other revenues (8,136) (6,287) (27,057) (24,874)
Slide 23: Net Income to Recurring EBITDA Reconciliation
NET INCOME TO RECURRING EBITDA RECONCILIATION (amounts in thousands) Three Months Ended December 31, Year Ended December 31, 2018 2017 2018 2017 2016 Net income attributable to Sun Communities, Inc., common stockholders $ 9,039 $ 7,438 $ 105,493 $ 65,021 $ 17,369 Adjustments: Interest expense 33,313
Sun Communities — Investor Presentation (February 2019) on 6ix