Sun Communities, Inc. · NYSE:SUI
Sun Communities — Investor Presentation (March 2013)
26 slides from Sun Communities's investor presentation, Mar 5, 2013
Slide 1: Sun Communities, Inc.
UN 4 SUN COMMUNITIES, INC.
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements This presentation contains various presentation contains various “forward-looking statements” within the meaning of the United States Securities Act of 1933, as amended, and the United States Securities Exchange Act of 1934, as amended, and we intend that such forward-lo
Slide 3: Sun Communities, Inc. (NYSE: SUI)
Sun Communities, Inc. (NYSE: SUI) 3 Owns, develops, and manages manufactured housing (“MH”) and recreational vehicle (“RV”) sites. Sells, leases, and finances new and used manufactured homes. 183 communities across 24 states. Comprised of over 52,800 MH and 14,500 RV sites.
Slide 4: Experienced And Proven Leadership Team
4 Gary A. Shiffman-Chairman and Chief Executive Officer Karen J. Dearing – Chief Financial Officer John B. McLaren – Chief Operating Officer Jonathan M. Colman– Executive Vice President of Acquisitions Experienced And Proven Leadership Team Provided the vision and leadership to generate consistent
Slide 5: Property Locations
Property Locations SUN coMMONTaIES. ING.
Slide 6: Property/Site Composition: Steady, Predictable Revenue Streams
6 MH Annual Income 88.0% RV Annual Income 7.9% RV Transient Income 4.1% 160 manufactured/resort home communities: 52,800 sites 23 RV resorts: 14,500 sites Annuals 6,550 Transient 7,950 Based on announced acquisitions, RV income is estimated to grow to between 18%-20% of income from prop
Slide 7: Affordability Drives Our Industry: MH vs. Multi Family
Affordability Drives Our Industry 7 ApartmentsSUI - Manufactured Homes Average Rent is approximately $805 per month or $0.55 per square foot. Average square footage approximately 1,470 square feet. Average Rent is approximately $867 per month or $0.92 per square foot. Average square footage
Slide 8: Affordability Drives Our Industry: MH vs. Single Family
64,300 65,400 64,700 63,100 62,800 60,600 305,900 313,600 292,600 270,900 272,900 267,900 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 2006 2007 2008 2009 2010 2011 Manufactured Housing Single-Family Affordability Drives Our Industry 8 Manufactured home prices are significantly l
Slide 9: Resilient Operating Model
9 Resilient Operating Model Move Outs and Re-Sales Low turnover for owner occupied sites results in minimal turn costs and stable and growing NOI. On average, tenants reside in our communities approximately 13 years. Average term of home in our communities is approximately 40 years. No loss in
Slide 10: Recession Resistant
10 Recession Resistant Recession Resistant – lost only 47 sites in the Great 2008 recession. SUI’s rent growth is among the highest and most consistent rental growth rates of all property types. SUI’s low annual resident turnover results in stability of income and occupancy. Occupancy gains
Slide 11: Same Site NOI comparison vs. industry
11 Industry Average‐2.4% Apartment Average‐2.6% SUI Average‐3.8% Same Site NOI Source: Citi Investment research, February 2013. “REITs”- includes an index of REITs across a variety of asset classes including self storage, mixed office, regional malls, shopping centers, multifamily, student housing,
Slide 12: Consistent and Stable Growth
Consistent and Stable Growth 12 Indexed Same Store NOI Growth: MH is the most recession resistant sector of the housing and REIT industry. MH has consistently outperformed other asset classes in same store NOI growth since 2000. Source: Green Street Advisors, company filings
Slide 13: Low Capital Expenditures
13 Capex as a % of Revenues Source: Company Filings Low Capital Expenditures Minimal capex requirements as MH is largely a land ownership business: tenants typically own their own MH units. Manufactured housing is a low capex business relative to its peers in consumer-sensitive real estate sectors
Slide 14: Acquisitions
Acquisitions 14 Robust and attractive pipeline, which SUI expects to capitalize on due to its access to capital, strong balance sheet, and size. Approximately $600 million of acquisitions since June 2011. Established and tested legacy systems and processes allow SUI to integrate and grow these
Slide 15: MH Acquisitions: Kentland
MH Acquisitions Strategic Acquisition Opportunities Purchase for in-place NOI. Significant vacancy at $0 cost. Implementation of rental program. Acquisition Date June 2011 Overview Located in Western Michigan. 17 MH Communities and 1 RV Community. 5,044 MH sites and 393 RV sites. Acquisi
Slide 16: MH Acquisitions: Rudgate
MH Acquisitions Strategic Acquisition Opportunities 10%-15% below market rents. Implementation of rental program. Undermanaged. Acquisition Date November 2012 Overview Located in Southeast Michigan. 6 MH Communities, 3,586 sites. Acquisition Price $132.5 million Occupancy 12/31/2012 occu
Slide 17: RV Acquisitions: Palm Creek
RV Acquisitions Strategic Acquisition Opportunities Geographic diversity / entry into new market. Expansion capability. Lifestyle property rent increases. Rental units underutilized. Acquisition Date December 2012 Overview Located near Phoenix, Arizona. 1,745 RV sites (838 annual, 907 tr
Slide 18: RV Acquisitions: Morgan
RV Acquisitions Strategic Acquisition Opportunities Geographic & seasonal balance / entry into new northern market. Undermanaged. Invest capital to correct deferred maintenance and reposition properties. Acquisition Date February 2013 Overview Located in Maine, Virginia, Connecticut, Massach
Slide 19: Accretive Expansion Opportunities
Accretive Expansion Opportunities Expansion Strategy At 12/31/2012, have inventory of nearly 7,000 zoned and entitled sites available for expansion at 33 communities. Expanding in communities with strong demand and occupancy of approximately 95%. Expansion lease-up is driven by sales, rental a
Slide 20: Capital Management
Capital Management Active and thoughtful balance sheet management. Since mid-2011: Refinanced line of credit facility and upsized to $150.0 million. Extended FNMA secured debt of $365.6 million. Accessed the preferred market via an inaugural $85.0 million offering in November 2012 at attra
Slide 21: Improved Balance Sheet
21 Improved Balance Sheet Debt / Total Capitalization Debt + Preferred Equity / EBITDA EBITDA / Interest 75.2% 63.2% 61.6% 53.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 2009 2010 2011 2012 2.00x 2.20x 2.40x 2.61x 0.00x 0.50x 1.00x 1.50x 2.00x 2.50x 3.00x 2009 2010 2011 2012
Slide 22: Appendices
Appendices SUN SUN COMMUNITIES, INC.
Slide 23: Performance vs. Consumer REIT Peers
Performance vs. Consumer REIT Peers 23 The manufactured housing REITs have largely been ignored by investors in the past decade and are all at relatively large spreads to similar consumer- sensitive REITs. Implied Cap Rates Source: Green Street Advisors 6.7% 5.5% 5.0% 5.3% 4.0% 5.0% 6.0% 7.0% 8.0% 9
Slide 24: Historical Returns by Sector
Historical Returns by Sector 24 Manufactured housing REITs have offered one of the most attractive historical returns among REIT sectors.. 1-year Total Returns: 3-year Total Returns: 5-year Total Returns: Source: SNL
Slide 25: Historical Returns
Implied Cap Rate2 6.9% 5.2% 4.8% 5.1% 8.2% 7.3% 5.8% 5.8% 6.4% 6.5% 5.2% 4.8% 6.3% 5.1% 5.6% 6.6% 5.5% 5.6% 6.8% 6.7% 5.8% Dividend Yield 5.3% 2.6% 3.3% 2.9% 3.1% 4.3% 3.6% 3.1% 4.0% 2.3% 5.4% 3.2% 4.4% 3.3% 3.5% 3.2% 3.2% 2.0% 3.9% 5.1% 3.6% 288% 217% 139% 124% 124% 123% 91% 83% 83% 83% 79% 74% 74%
Slide 26: Sun Communities, Inc.
UN 4 SUN COMMUNITIES, INC.