Sun Communities, Inc. · NYSE:SUI

Sun Communities — Investor Presentation (November 2021)

27 slides from Sun Communities's investor presentation, Nov 8, 2021

  1. Slide 1: Investor Presentation November 2021

    INVESTOR PRESENTATION NOVEMBER 2021 SUN OUTDOORS SAN DIEGO BAY – CHULA VISTA, CA

  2. 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

  3. Slide 3: Company Highlights

    COMPANY HIGHLIGHTS 3Source: Company information. Refer to Sun Communities, Inc. Form 10-Q and Supplemental for the quarter ended September 30, 2021, as well as Press Releases and SEC Filings after September 30, 2021, for additional information. Leading owner and operator of manufactured housing (“MH

  4. Slide 4: Sun Communities, Inc. Overview

    584 properties across 38 states and Ontario, Canada 4 Current Portfolio as of September 30, 2021 Proforma Rental Revenue Breakdown SUN COMMUNITIES, INC. OVERVIEW (NYSE: SUI) Property Count as of September 30, 2021 Source: Company information. Refer to Sun Communities, Inc. Form 10-Q and Supplemental

  5. Slide 5: YTD 2021 Business Update

    5 YTD 2021 BUSINESS UPDATE PORTFOLIO PERFORMANCE EXTERNAL GROWTH • 2021 full year Same Community NOI growth guidance range increased to 10.9% - 11.1% • Increased 2021 full year Core FFO Guidance to $6.44 - $6.50, representing 27% YoY growth at the midpoint • 4Q21 Transient RV revenue is 21.3% ahead

  6. 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

  7. Slide 7: Powering Sun's Growth Engine - External

    EXTERNAL LEVERS Development 7 POWERING SUN’S GROWTH ENGINE - EXTERNAL Acquisitions ~$4.2bn investment in 170 properties since start of 2020 4.3x increase in properties since year end 2010 Targeting 2 - 4 new development project starts / year Over 1,600 2020 – 2021 YTD ground-up site deliveries in 9

  8. Slide 8: 2020-2021 Acquisition & Development Activity

    2020-2021 ACQUISITION & DEVELOPMENT ACTIVITY 8 2 ~$4.2bn purchase price Acquisitions Ground-up & Redevelopments(1) Expansions(1) Investment Activity Summary ~58,300 sites added in 170 properties & marinas Robust pipeline of small portfolios and single assets in underwriting $261mm invested Opened 2

  9. Slide 9: Sticky Customer Base with Limited Capex

    STICKY CUSTOMER BASE WITH LIMITED CAPEX 9 HOMOSASSA RIVER – HOMOSASSA SPRINGS, FL  Annual home move-outs in Sun’s MH communities are less than 1% ꟷ Low turnover driven by a $6k - $10k average cost to resident to move a home ꟷ Average tenure of residents in our MH communities is ~14 years(1)  RVs s

  10. 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

  11. 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 ~50% less cost per square foot Manufactured Homes in Sun’s Communities RENT   $1,114 per month Other Rental Options(1) $1,888 per month SQUARE FOOTAGE PRICE 1,250 sq. ft. 1,000 sq. ft. $0.

  12. Slide 12: Homeownership - MH vs. Single Family

    HOMEOWNERSHIP – MH VS. SINGLE FAMILY 12 Single Family HomesManufactured Homes  Average cost of Single Family is $308,597 or roughly 7 years median income  Average cost of a new Manufactured Home is $87,000 or roughly 2 years median income Average Household Income ~$44k(1) Sources: U.S. Department

  13. 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 6,250 vacant expansion site deliveries since 2015 12 - 24

  14. Slide 14: Maximizing Value from Strategic Acquisitions

    Professional Operational Management Home Sales & Rental Program Skilled Expense Management Call Center & Digital Marketing Outreach Repositioning with Additional Capex Adding Value with Expansions MAXIMIZING VALUE FROM STRATEGIC ACQUISITIONS 14 Source: Company information. Refer to Sun Communities,

  15. Slide 15: Strategic Balance Sheet

    6.3x 5.6x 5.5x 6.9x 4.9x 2017 2018 2019 2020 3Q21 STRATEGIC BALANCE SHEET 15 Net Debt / TEV(5) Quarter Ended September 30, 2021 Principal Outstanding(2) WA Interest Rates Total Secured Debt $3,403.4 3.78% Total Unsecured Debt $1,286.0 2.04% Total $4,689.4 3.30% Current Debt Outstanding(1) principal

  16. 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

  17. 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 Septe

  18. Slide 18: Best Performance Among Real Estate Sectors

    $140 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, June 2021. (1) Multi-

  19. Slide 19: Appendix

    APPENDIX RIVERSIDE CLUB GOLF & MARINA COMMUNITY – RUSKIN, FL

  20. Slide 20: Non-GAAP Terms Defined

    NON-GAAP TERMS DEFINED 20 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,

  21. Slide 21: Sun's Internal and External Operational Growth

    5.5% 5.9% 7.7% 9.1% 7.1% 6.9% 6.7% 7.3% 4.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E $314 $182 $744 $1,143 $1,769 $145 $364 $815 $2,979 $1,102 2012 2013 2014 2015 2016 2017 2018 2019 2020 3Q21 SUN’S INTERNAL AND EXTERNAL OPERATIONAL GROWTH Total New and Pre-Owned Homes Sales Ground-Up and

  22. Slide 22: Healthy Balance Sheet and High Returns

    $39.89 $42.64 $60.46 $68.53 $76.61 $92.78 $101.71 $150.10 $151.95 $195.98 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 $3.05 $3.22 $3.37 $3.63 $3.79 $4.17 $4.58 $4.92 $5.09 $6.47 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 50.4% 45.8% 34.8% 34.0% 33.8% 28.2% 25.2% 19.0% 21.4% 17.1% 2012

  23. Slide 23: Safe Harbor is the Premier Marina Operator

    87% 87% 86% 84% 80% South Southeast Northeast Midwest Southwest SAFE HARBOR IS THE PREMIER MARINA OPERATOR Unrivaled Among Competitors 120 Owned Marinas 34,100 Approximate Wet Slips 23 States & Puerto Rico 79% of Marinas Located in Coastal Markets(3) 44,000 Approximate Members 7.6 Years Average Memb

  24. Slide 24: Marina Sector Pioneer and Consolidator

    MARINA SECTOR PIONEER AND CONSOLIDATOR 24 Key Transactions(1) 1 3Q 2015 Date Acquired Flagship(2) 2 3 4 5 6 7 7 Marinas 4,717 Slips / Dry Storage Spaces (1) Date acquired reflects period in which last marina acquisition closed. (2) Properties acquired prior to Sun Communities’ acquisition of Safe Ha

  25. Slide 25: Net Income to FFO Reconciliation

    NET INCOME TO FFO RECONCILIATION 25 (amounts in thousands except per share data) Source: Company information. Refer to Sun Communities, Inc. Form 10-Q and Supplemental for the quarter ended September 30, 2021, as well as Press Releases and SEC Filings after September 30, 2021, for additional informa

  26. Slide 26: Net Income to NOI Reconciliation

    NET INCOME TO NOI RECONCILIATION 26 (amounts in thousands) Source: Company information. Refer to Sun Communities, Inc. Form 10-Q and Supplemental for the quarter ended September 30, 2021, as well as Press Releases and SEC Filings after September 30, 2021, for additional information. 2021 2020 2021 2

  27. Slide 27: Net Income to Recurring EBITDA Reconciliation

    NET INCOME TO RECURRING EBITDA RECONCILIATION 27 (amounts in thousands) Source: Company information. Refer to Sun Communities, Inc. Form 10-Q and Supplemental for the quarter ended September 30, 2021, as well as Press Releases and SEC Filings after September 30, 2021, for additional information. 202

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