Sun Communities, Inc. · NYSE:SUI
Sun Communities — Investor Presentation (June 2021)
29 slides from Sun Communities's investor presentation, Jun 7, 2021
Slide 1: Investor Presentation June 2021
INVESTOR PRESENTATION JUNE 2021 SUN OUTDOORS SAN DIEGO BAY – CHULA VISTA, CA OPENED IN MARCH 2021
Slide 2: Forward-looking statements disclaimer
2 This presentation has been prepared for informational purposes only from information supplied by Sun Communities, Inc., referred to herein as “we,” “our,” “Sun,” and “the Company,” and from third-party sources indicated herein. Such third-party information has not been independently verified. Sun
Slide 3: Company Highlights
COMPANY HIGHLIGHTS 3Source: Company information. Refer to Sun Communities, Inc. Form 10-Q and Supplemental for the quarter ended March 31, 2021, as well as Press Releases and SEC Filings after March 31, 2021, for additional information. Leading owner and operator of manufactured housing (“MH”) commu
Slide 4: Sun Communities, Inc. Overview
4 562 properties across 39 states and Ontario, Canada Current Portfolio as of March 31, 2021 Annual Budgeted Rental Revenue Breakdown SUN COMMUNITIES, INC. OVERVIEW (NYSE: SUI) Property Count as of March 31, 2021 (1) Source: Company information. Refer to Sun Communities, Inc. Form 10-Q and Supplemen
Slide 5: YTD 2021 Business Update
5 YTD 2021 BUSINESS UPDATE PORTFOLIO PERFORMANCE EXTERNAL GROWTH • Full-year Same Community NOI growth guidance range increased by 190 bps to 7.5% - 8.5% • Gained 514 revenue producing sites in 1Q21 • Same Community Memorial Day transient RV revenue up 39% to same weekend in 2019 • Transient RV reve
Slide 6: Powering Sun's Growth Engine - Internal
Sun is the premier owner and operator of MH and RV communities Strong cycle-tested record of operating, expanding and acquiring MH and RV communities dating back to 1975 6 POWERING SUN’S GROWTH ENGINE - INTERNAL INTERNAL LEVERS Contractual Rent Increases MH Occupancy Gains Expansions Transient R
Slide 7: Powering Sun's Growth Engine - External
EXTERNAL LEVERS Development 7 POWERING SUN’S GROWTH ENGINE - EXTERNAL Acquisitions ~$3.6bn investment in 146 properties since start of 2020 4.1x increase in properties since year end 2010 Targeting 2 - 4 new development project starts / year Over 1,200 2020 – 2021 YTD ground-up site deliveries in 6
Slide 8: 2020-2021 Acquisition & Development Activity
2020-2021 ACQUISITION & DEVELOPMENT ACTIVITY 8 2 ~$3.6bn purchase price Acquisitions Ground-up & Redevelopments Expansions Investment Activity Summary(1) ~50,100 sites added in 146 properties & marinas Robust pipeline of small portfolios and single assets in underwriting $201mm spend Opened new grou
Slide 9: Sticky Customer Base with Limited Capex
STICKY CUSTOMER BASE WITH LIMITED CAPEX 9 HOMOSASSA RIVER – HOMOSASSA SPRINGS, FL Capex Reserve as a % of NOI Annual home move-outs in Sun’s MH communities are less than 1% ꟷ Low turnover driven by a $6k-$10k avg. cost of move out Average tenure of residents in our MH communities is over 14 year
Slide 10: Consistent and Cycle Tested Cash Flow Growth
Multi-Family REITsSun Communities CONSISTENT AND CYCLE TESTED CASH FLOW GROWTH 10 Favorable demand drivers, high barriers to entry and Sun’s investment and operational prowess have resulted in consistent and cycle tested organic cash flow growth Over at least the past 20 years, every individual
Slide 11: Renting - MH vs. Other Rental Options
11 RENTING – MH VS. OTHER RENTAL OPTIONS Manufactured homes in Sun’s communities provide 25% more space at ~51% less cost per square foot Manufactured Homes in Sun’s Communities RENT $1,055 per month Other Rental Options(1) $1,721 per month SQUARE FOOTAGE PRICE 1,250 sq. ft. 1,000 sq. ft. $0.
Slide 12: Homeownership - MH vs. Single Family
HOMEOWNERSHIP – MH VS. SINGLE FAMILY 12 Single Family HomesManufactured Homes Average cost of Single Family is $299,415 or roughly 7 years median income Average cost of a new Manufactured Home is $81,900 or roughly 2 years median income Average Household Income ~$44,000(1) Sources: U.S. Departme
Slide 13: Expansions Provide Attractive Returns
13 EXPANSIONS PROVIDE ATTRACTIVE RETURNS SHERKSTON SHORES – SHERKSTON, ON Investment in expansion sites boosts growth in highly accretive manner Sun expands in communities and resorts with high occupancies and continued strong demand Over 400 vacant site deliveries in January 2020 through 2021 Y
Slide 14: Maximizing Value from Strategic Acquisitions
Since 2010, Sun has acquired properties valued at over $8.5 billion, increasing its number of properties by 4.1x Professional Operational Management Home Sales & Rental Program Skilled Expense Management Call Center & Digital Marketing Outreach Repositioning with Additional Capex Adding Value with
Slide 15: Strategic Balance Sheet
2021 2022 2023 2024 2025 Fannie Mae CMBS Freddie Mac Life Companies $50.5 $0 $315.3 $185.6 $82.2 6.3x 5.6x 5.5x 6.9x 6.1x 2017 2018 2019 2020 1Q21 STRATEGIC BALANCE SHEET 15 Net Debt / TEV(4) Quarter Ended March 31, 2021 Principal Outstanding(1) WA Interest Rates CMBS $265.8 4.79% Fannie Mae $1,148.
Slide 16: Sun Communities' ESG Initiatives
Environmental SUN COMMUNITIES’ ESG INITIATIVES 16 ESG Highlights(1) We are committed to sustainable business practices to benefit all stakeholders: team members, residents and guests, shareholders and the broader communities where we operate We will continue to enhance Sun’s sustainability progr
Slide 17: Strategy-Driven Outperformance
STRATEGY-DRIVEN OUTPERFORMANCE 17 Sun has significantly outperformed major REIT and broader market indices over the last ten years Sun Communities, Inc. (SUI) MSCI US REIT (RMS)S&P 500 2021 YTD Total Return 5-year Total Return 10-year Total Return 3-year Total Return Source: S&P Global as of May 3
Slide 18: Best Performance Among Real Estate Sectors
$124 Shopping Centers BEST PERFORMANCE AMONG REAL ESTATE SECTORS 18 Sun has proven its strategy through recession resilience and consistent outperformance of multi-family in terms of same community NOI growth since 2000 Indexed Same Community NOI Growth Source: Citi Research, March 2021. (1) Multi
Slide 19: Marina & Safe Harbor Overview
MARINA & SAFE HARBOR OVERVIEW LAUDERDALE MARINE CENTER – FT. LAUDERDALE, FL ACQUIRED IN MAY 2021
Slide 20: Safe Harbor is the Best Marina Operator
SAFE HARBOR IS THE BEST MARINA OPERATOR Unrivaled Among CompetitorsDiversified National Geographic Footprint 110 Owned Marinas 30,000 Approximate Wet Slips 22 States 73% of Marinas Located in Coastal Markets(3) 40,000 Approximate Members 8.3 Years Average Member Tenure 77% of Marinas Owned Fee Simpl
Slide 21: Attractive Industry Fundamentals
ATTRACTIVE INDUSTRY FUNDAMENTALS 21 Fragmented Industry High Barriers to Entry SupportiveDemographic Trends Most marinas are owned by small mom-and-pop operators Significant upside from institutional management and value-add capex The top five operators collectively represent approximately 5%
Slide 22: Attractive Industry Fundamentals (Cont'd)
ATTRACTIVE INDUSTRY FUNDAMENTALS (CONT’D) 22 Marina Supply Slow & Steady DecreaseU.S. Marinas (in 000’s) Fundamentals are strong as a result of the limited supply of new marinas, stable stock of boats and increasing vessel size that may require a marina for storage Slip Demand Slow & Steady Increa
Slide 23: Marina Sector Pioneer and Consolidator
MARINA SECTOR PIONEER AND CONSOLIDATOR 23 Safe Harbor Portfolio Evolution Key Transactions(2) 1 3Q 2015 Date Acquired Flagship 2 3 4 5 6 7 7 Marinas 4,717 Slips / Dry Storage Spaces (1) Dry Storage Spaces include Indoor Storage. (2) Date acquired reflects period in which last marina acquisition clos
Slide 24: Appendix
APPENDIX EL CAPITAN CANYON – GOLETA, CA
Slide 25: Non-GAAP Terms Defined
NON-GAAP TERMS DEFINED 25 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,
Slide 26: Sun's Full Year 2021 Operational Guidance in Perspective
SUN’S FULL YEAR 2021 OPERATIONAL GUIDANCE IN PERSPECTIVE Total New and Pre-Owned Homes Sales Ground-Up and Expansion Site Deliveries 2,483 3,172 3,282 3,629 3,439 2,866 2015 2016 2017 2018 2019 2020 2021E 3,250 Historical Average: 3,145 2,950 650 304 2,133 1,632 2,326 1,346 2015 2016 2017 2018 2019
Slide 27: Net Income to FFO Reconciliation
NET INCOME TO FFO RECONCILIATION 27 (amounts in thousands except per share data) Source: Company information. Refer to Sun Communities, Inc. Form 10-Q and Supplemental for the quarter ended March 31, 2021, as well as Press Releases and SEC Filings after March 31, 2021, for additional information. 20
Slide 28: Net Income to NOI Reconciliation
NET INCOME TO NOI RECONCILIATION 28 (amounts in thousands) Source: Company information. Refer to Sun Communities, Inc. Form 10-Q and Supplemental for the quarter ended March 31, 2021, as well as Press Releases and SEC Filings after March 31, 2021, for additional information. 2021 2020 2020 2019 2018
Slide 29: Net Income to Recurring EBITDA Reconciliation
NET INCOME TO RECURRING EBITDA RECONCILIATION 29 (amounts in thousands) Source: Company information. Refer to Sun Communities, Inc. Form 10-Q and Supplemental for the quarter ended March 31, 2021, as well as Press Releases and SEC Filings after March 31, 2021, for additional information. 2021 2020 2