Slide 1: Sun Communities Investor Presentation (NYSE: SUI)
CHERRYWOOD – CLINTON, NY SUN COMMUNITIES INVESTOR PRESENTATION (NYSE: SUI) SEPTEMBER 2023
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 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-par
Slide 3: Sun Communities – Company Key Topics
SUN COMMUNITIES – COMPANY KEY TOPICS Key Topics Leading Owner / Operator of Manufactured Housing (“MH”) & Recreational Vehicle (“RV”) Communities, and Marinas Resilient Real Property Operations Drive Earnings SUN OUTDOORS SARASOTA – SARASOTA, FL Compelling Supply-Demand Fundamentals & Best-in-Class
Slide 4: Leading Owner / Operator of MH, RV and Marinas
LEADING OWNER / OPERATOR OF MH, RV AND MARINAS With ~180,100 MH and RV operational sites and ~48,200 wet slips and dry storage spaces, Sun is the largest publicly traded operator of MH, RV and Marinas MH RV Marina Largest publicly traded owner / 182 best-in-class RV communities Largest and m
Slide 5: Resilient Real Property Operations Drive Earnings
RESILIENT REAL PROPERTY OPERATIONS DRIVE EARNINGS NOI from real property operations is largest contributor to results Detail on Earnings Drivers (in mms) $1,400 87% $1,200 $1,000 $800 2020 $600 2021 $400 2022 $200 2023⁽¹⁾ 4% 5% 4% $0 MH, RV and Marina real North America home sales UK home sales NO
Slide 6: Robust Fundamentals Continue to Drive Outperformance
ROBUST FUNDAMENTALS CONTINUE TO DRIVE OUTPERFORMANCE Steady, Organic Growth 5.8% same property NOI growth in 2022 and expecting 5.3% - 6.1% in 2023 driven by: Consistent annual rental rate increases that exceed expected inflationary cost pressures • Midpoint of 2023 average rental rate increases
Slide 7: YTD23 Performance Review
RESILIENT REAL PROPERTY OPERATIONS DRIVE EARNINGS YTD23 Performance Review Reported Core FFO per Share of $1.96 for the quarter ended June 30, 2023, in line with our guidance range • Total same property NOI growth of 6.3% exceeded guidance • Updated 2023 Guidance to reflect higher expected total sam
Slide 8: 2023 Guidance Update
RESILIENT REAL PROPERTY OPERATIONS DRIVE EARNINGS 2023 Guidance Update Expected % Change Seasonality 1Q23 2Q23 3Q23 4Q23 FY 2022 in 2023 Actual Results Prior FY July 26, 2023 Same Property NOI Same Property – Expected NOI (millions) Guidance Update MH 25% 25% 25% 25% MH NOI (289 properties) $569.7
Slide 9: UK NOI Building Blocks
UK NOI BUILDING BLOCKS Same property 10-year average rental rate increase 4.6%; expecting 7.2 - 7.4% increase for total UK portfolio in 2023 Average resident tenure: 7 - 8 years Occupancy: 90.1% as of June 30, 2023 Expect to increase real property NOI contribution relative to home sales NOI
Slide 10: Compelling Supply-Demand Fundamentals: MH
COMPELLING SUPPLY-DEMAND FUNDAMENTALS Manufactured Housing (MH) North America UK Supply Supply • Virtually no new supply has been added for years • Irreplaceable coastal ‘destination’ locations that are short drives from London and other urban locations US Inventory Growth by Property Type 6% • Nume
Slide 11: Compelling Supply-Demand Fundamentals: Resilient Demand
COMPELLING SUPPLY – DEMAND FUNDAMENTALS Resilient demand through the Global Financial Crisis Manufactured Housing (MH) – North America Residents Moved into MH Communities in Record Numbers US unemployment rate and SUI same property occupancy 12% 88% 9.6% SUI Same Property Occupancy 9.3% US Unemplo
Slide 12: Compelling Supply-Demand Fundamentals: RV
COMPELLING SUPPLY – DEMAND FUNDAMENTALS RV Continued Demand for Affordable Vacationing Annual Active Camping Households (in mms) Despite Declining RV Sales Growth in annual RV shipments and historical RV revenue growth 8% CAGR 57 58 46.2% 48 42 13.2% 37 39 39 4.8% 0.8% 6.6% 4.2% 5.4% 4.9% 35 32 -32.
Slide 13: Compelling Supply-Demand Fundamentals: Marinas
COMPELLING SUPPLY - DEMAND FUNDAMENTALS Marinas • Existing base of ~12 million registered boats within the • As boats become longer and wider, many marinas cannot keep U.S. and an estimated supply of 900K - 1 million leasable up with increasing vessel size wet slips and dry storage racks • Recent ex
Slide 14: Sun's Track Record of Growth: Same Property NOI
SUN’S TRACK RECORD OF GROWTH Consistent, cycle-tested internal growth Resilient demand, high barriers to entry, and Sun’s investment and operational platform have resulted in consistent, and cycle tested organic cash flow growth For more than 20 years, every individual year or rolling 4-quarte
Slide 15: Sun's Track Record of Growth: FFO Growth
SUN’S TRACK RECORD OF GROWTH Strong FFO Growth Sun has generated greater FFO per share growth than Multifamily peers 8.3% Core FFO per share growth (10-year CAGR) 6.0% Core FFO per share yield Core / Normalized FFO Per Share Growth(1)(2)(3) Indexed from 2018 180 170 160 +56 / 9.3% 150 140 13
Slide 16: Sun's Strong Track Record of Internal Growth
SUN’S STRONG TRACK RECORD OF INTERNAL GROWTH Multiple Levers Drive Resilient FFO and Cash Flow Growth Growth Levers Potential Annual Revenue Growth / Contribution - 5.0% weighted average rate increase for 2022 Contractual Rent Increases - Over 90% MH sites “market rent” or tied to CPI - ~95% MH Oc
Slide 17: Operating Efficiencies Support Same Property NOI
SUN’S TRACK RECORD OF GROWTH Operating efficiencies support strong same property NOI results Same property operating expense growth is projected to be 7.2 – 7.9% in 2023, despite 80% increase in insurance expense for Sun’s MH/RV same property portfolio 2023E Same Property Operating Expenses MH,
Slide 18: Investment Grade Balance Sheet
INVESTMENT GRADE BALANCE SHEET Upcoming Mortgage Maturities ($ in millions)(1) Credit Statistics % of Total Rate Type(1) 2.1% 2.3% 0.9% 11.7% BBB 18% $658 variable rate $118 $128 $51 82% fixed 2023 2024 2025 2026 rate Baa3 Total Debt Outstanding ($ in millions)(2) Encumbrance(1) As of June 30, 2023
Slide 19: Robust ESG Initiatives
ROBUST ESG INITIATIVES Our board and executive leadership are committed to sustainable business practices that benefit all stakeholders including the broader communities in which we operate Current initiatives to advance our ESG platform include policy enhancement, establishing environmental tar
Slide 20: Appendix
APPENDIX SUN RETREATS REHOBOTH BAY – MILLSBORO, DE
Slide 21: Renting – MH vs. Other Rental Options
COMPELLING SUPPLY – DEMAND FUNDAMENTALS 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 Other Rental Sun’s Communities Options(1) PRICE $1.00 per sq. ft. $2.06 per sq. ft. SQUARE FOOTAGE
Slide 22: Conversion of RV Transient-to-Annual Leases Generates Significant Uplift
CONVERSION OF RV TRANSIENT-TO-ANNUAL LEASES GENERATES SIGNIFICANT UPLIFT IN REVENUE Transient RV site conversions to annual leases have historically increased revenue per site by 40-60% for the first full year after conversion and increases our annual RV sites 2,257 transient to annual RV conver
Slide 23: Premier Owner / Operator of Marinas
PREMIER OWNER / OPERATOR OF MARINAS Service Offerings Keep Members in Network Average Marina member tenure (in years) 135 ~39,100 ~9,100 9.4 8.8 Marinas in 24 States Wet Slips Dry Storage Spaces(1) 8.2 8.1 7.0 6.7 6.5 6.4 6.0 6.0 5.6 5.0 ~84% 81% 76% Marinas Marinas Located in Marinas Owned 2017 201
Slide 24: Defined Non-GAAP Terms
DEFINED NON-GAAP TERMS Investors and analysts following the real estate industry use non-GAAP supplemental performance measures, including net operating income ("NOI"), earnings before interest, tax, depreciation and amortization ("EBITDA") and funds from operations ("FFO") to assess REITs. The Comp
Slide 25: Net Income to FFO Reconciliation
NET INCOME TO FFO RECONCILIATION Three Months Ended Six Months Ended Year Ended (amounts in millions except per share data) December 31, December 31, December 31, June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 2022 2021 2020 Net Income Attributable to SUI Common Shareholders $ 89.8 $ 74.0 $
Slide 26: Net Income to NOI Reconciliation
NET INCOME TO NOI RECONCILIATION Three Months Ended Six Months Ended Year Ended (amounts in millions) December 31, December 31, December 31, June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 2022 2021 2020 Net Income Attributable to SUI Common Shareholders $ 89.8 $ 74.0 $ 59.7 $ 74.7 $ 242.0 $
Slide 27: Consolidated NOI by Segment
CONSOLIDATED NOI BY SEGMENT Consolidated Real Property NOI (amounts in millions) (1) (1) 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 MH North America $151.3 $150.6 $143.1 $141.6 $142.8 $143.5 UK 17.4 6.3 10.4 25.2 15.4 NA Total MH $168.7 $156.9 $153.5 $166.8 $158.2 $143.5 RV 76.5 45.8 46.0 127.0 78.8 50.1 Marina
Slide 28: Net Income to Recurring EBITDA Reconciliation
NET INCOME TO RECURRING EBITDA RECONCILIATION Three Months Ended Six Months Ended Year Ended December 31, December 31, December 31, (amounts in millions) June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 2022 2021 2020 Net Income Attributable to SUI Common Shareholders $ 89.8 $ 74.0 $ 59.7 $ 7