Sun Communities, Inc. · NYSE:SUI
Sun Communities — Investor Presentation (November 2019)
21 slides from Sun Communities's investor presentation, Nov 12, 2019
Slide 1: Investor Presentation November 2019
RIVER RUN RANCH – GRANBY, CO OPENED IN JULY 2019 INVESTOR PRESENTATION NOVEMBER 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: Company Highlights
COMPANY HIGHLIGHTS Leading owner and operator of manufactured housing (“MH”) and recreational vehicle (“RV”) communities Favorable demand drivers combined with supply constraints Consistent organic growth enhanced with embedded expansion opportunities CAROLINA PINES RV RESORT – MYRTLE BEACH, SC Indu
Slide 4: Sun Communities, Inc. Overview
SUN COMMUNITIES, INC. (NYSE: SUI) OVERVIEW Current Portfolio as of October 31, 2019 420 communities consisting of over 140,000 sites across 32 states and Ontario, Wine Country RV Resort – PasoCanada Robles, CA 7,931 Trailing Twelve Months Rental Revenue as of September 30, 2019 83% Annual Revenues 2
Slide 5: Powering Sun's Growth Engine
POWERING SUN’S GROWTH ENGINE . 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 INTERNAL EXTERNAL Contractual Rent Increases MH Occupancy Gains Acquisitions 95.7% $788mm YTD Ann
Slide 6: Operating and Financial Highlights
OPERATING AND FINANCIAL HIGHLIGHTS Financial Performance Quarter Ended September 30, YTD Ended September 30, 2019 2018 % Change 2019 2018 % Change Total Revenue $362.4mm $323.4mm 12.1% $962.2mm $852.8mm 12.8% Total NOI $197.1mm $175.5mm 12.4% $533.0mm $472.5mm 12.8% Same Community Revenue $214.5mm $
Slide 7: 2019 YTD Acquisition & Development Activity
2019 YTD ACQUISITION & DEVELOPMENT ACTIVITY Investment Activity Summary Acquisitions Ground-up Developments Expansions 2 LAKESIDE CROSSING – CONWAY, SC OCEAN PINES & MAGNOLIA GROVE – GARDEN CITY, SC RIVER RUN RANCH – GRANBY, CO $788mm purchase price, $107mm YTD spend $72mm YTD spend 44 communities 8
Slide 8: Sun's Favorable Revenue Drivers
SUN’S FAVORABLE REVENUE DRIVERS . Yearly home move-outs in Sun’s MH communities are less than 1% . Tenure of residents in Sun’s MH communities is approximately 141 years MH Resident Move-out Trends1 6.5% 0.8% Resident Re-sales Resident Move-outs (Home stays in community) (Home leaves community) PHEA
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 ~200 bps and the apartment sector’s average by ~190 bps since 1998 . Since 1998, every individual year or rolling 4-quarter period has had positive same community NOI growth Sa
Slide 10: Renting - MH vs. Other Rental Options
RENTING - MH VS. OTHER RENTAL OPTIONS . Manufactured homes in Sun’s communities provide nearly 25% more space at 50% less cost per square foot Manufactured Homes in Other Rental Sun’s Communities1 Options2 VS. PRICE $0.79 per sq. ft. $1.60 per sq. ft. SQUARE FOOTAGE 1,250 sq. ft. 1,000 sq. ft. R
Slide 11: Homeownership - MH vs Single Family
HOMEOWNERSHIP – MH 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 $297,747 or $78,500 or roughly 2 years median income roughly 7 years median
Slide 12: Expansions Provide Attractive Returns
EXPANSIONS PROVIDE ATTRACTIVE RETURNS . Investment in expansion sites boosts growth in highly accretive manner . Sun expands in communities and resorts with high occupancies and continued strong demand HILL COUNTRY – NEW BRAUNFELS, TX 12 – 24 months average lease-up for 100-site expansion $35k - $40
Slide 13: Maximizing Value from Strategic Acquisitions
MAXIMIZING VALUE FROM STRATEGIC ACQUISITIONS Professional Operational Management Adding Value with Expansions Home Sales & Rental Program Call Center & Digital Marketing Outreach Skilled Expense Management Repositioning with Additional Capex Year-end Communities and Sites . Since 2010, Sun has acqui
Slide 14: Strategic Balance Sheet
STRATEGIC BALANCE SHEET . Balance sheet supports growth strategy . Sun’s annual mortgage maturities in the years 2020 - 2023 average 5.0% of total mortgage debt outstanding Mortgage Debt Outstanding Mortgage Debt 5-Year Maturity Ladder principal amounts in thousands amounts in thousands Quarter Ende
Slide 15: Strategy-Driven Outperformance
STRATEGY-DRIVEN OUTPERFORMANCE . Sun has significantly outperformed major REIT and broader market indices over the last ten years YTD Total Return 3-year Total Return 110.0% 106.2% 60.0% 100.0% 54.5% 90.0% 50.0% 80.0% 40.0% 70.0% 60.0% 30.0% 30.0% 50.0% 45.8% 40.0% 20.0% 20.4% 30.0% 23.4% 10.0% 20.0
Slide 16: Consistent NOI Growth
CONSISTENT NOI GROWTH . Manufactured housing is one of the most recession-resistant sectors in real estate and has consistently outperformed multifamily and most sectors in same community NOI growth since 2000 NOI Growth Sun Communities $242 Sun Communities Manufactured Housing $240 Multifamily $233
Slide 17: Appendix
APPENDIX LAKE SAN MARINO – NAPLES, FL
Slide 18: 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 19: Net Income to FFO Reconciliation
NET INCOME TO FFO RECONCILIATION (amounts in thousands except per share data) Three Months Ended September 30, Nine Months Ended September 30, Year Ended December 31, 2019 2018 2019 2018 2018 2017 2016 Net income attributable to Sun Communities, Inc. common stockholders $ 57,002 $ 46,060 $ 131,718 $
Slide 20: Net Income to NOI Reconciliation
NET INCOME TO NOI RECONCILIATION (amounts in thousands) Three Months Ended September 30, Nine Months Ended September 30, Year Ended December 31, 2019 2018 2019 2018 2018 2017 2016 Net income attributable to Sun Communities, Inc., common stockholders $ 57,002 $ 46,060 $ 131,718 $ 96,454 $ 105,493 $ 6
Slide 21: Net Income to Recurring EBITDA Reconciliation
NET INCOME TO RECURRING EBITDA RECONCILIATION (amounts in thousands) Three Months Ended September 30, Nine Months Ended September 30, Year Ended December 31, 2019 2018 2019 2018 2018 2017 2016 Net income attributable to Sun Communities, Inc., common stockholders $ 57,002 $ 46,060 $ 131,718 $ 96,454
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