Slide 1: Investor Presentation March 2016
INVESTOR PRESENTATION March 2016
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") and from third‐party sources indicated herein. Such third‐party information has not been independently verified. The Company makes no repr
Slide 3: Sun Communities, Inc. (NYSE: SUI)
Sun Communities, Inc. (NYSE: SUI) 3 185 manufactured housing only communities 10 manufactured housing and recreational vehicle communities 36 recreational vehicle only communities 1,521 406 141 1,370 24,126 2,630 1,277 916 1,187 2,913 3,401 549 1,652 685 237 581 419 1,150 404 413 976 226 2,335 473 6
Slide 4: Key Highlights
Key Highlights 4 Attractive value proposition of Manufactured Housing Stability through varying cycles Sustained industry‐leading earnings growth with low capital requirements Meaningful expansion site growth opportunity Realigned, high quality portfolio with diversified exposure Conserv
Slide 5: Manufactured Housing vs. Multi-Family
Manufactured Housing vs. Multi‐Family 5 Sun’s Manufactured Homes VS. Sun’s manufactured homes provide approximately 14% more space at approximately 45% less cost per square foot1,2 RENT ~$860 per month Multi‐Family Housing ~$1,100 per month SQUARE FOOTAGE PRICE ~1,250 sq. ft. ~1,100 sq. ft. $
Slide 6: Manufactured Housing vs. Single Family
6 Manufactured Housing vs. Single Family 1 SOURCE: US DEPARTMENT OF CENSUS. $54,900 REPRESENTS THE AVERAGE 2 BEDROOM HOUSEHOLD IN MAJOR METROPOLITAN AREAS SUN OPERATES IN AS OF FEBRUARY 2016. 2 SOURCE: MANUFACTURED HOUSING INSTITUTE, QUICK FACTS: “TRENDS AND INFORMATION ABOUT THE MANUFACTURED HOUSIN
Slide 7: Sustained Growth within Market Cycles
7 Sustained Growth within Market Cycles Sun’s same site occupancy reflects steady and continuous growth through various changes in the single family market Sun’s Occupancy1 Mortgage Rates2 Mortgages2 Sun’s occupancy percentage P e r c e n t a g e o f chang e i n m o r t g a g e r a t e s a n d a c
Slide 8: Consistent NOI Growth
Consistent NOI Growth 8 Manufactured housing is one of the most recession resistant sectors of the housing and commercial real estate sectors and has consistently outperformed multi‐family in same site NOI growth since 20001 1 SOURCE: SNL.COM. AS OF DECEMBER 31, 2015. ASSUMES $100.00 NOI STARTING
Slide 9: Consistent Organic Growth
9 Consistent Organic Growth Low annual resident turnover results in stability of income and occupancy Strong and consistent rental growth creating a stable revenue stream Occupancy gains are a function of Sun’s integrated platform, including leasing, sales, and financing SOURCE: COMPANY INFORM
Slide 10: Stable Revenue with Low Capex
10 Stable Revenue with Low Capex Move‐outs and Re‐sales Stable and growing financial results driven by: The cost to move a home ranges between $4,000 and $10,000. This facilitates a low turnover of owner occupied sites Tenure of our residents in our communities is ~13 years Tenure of homes in
Slide 11: Strong Internal Growth
Same Site NOI (change %) Strong Internal Growth 11 SUN’s average same site NOI growth has exceeded REIT industry average by 177 bps and apartment average by 161 bps over a 16 year period SOURCE: CITI INVESTMENT RESEARCH, MARCH, 2016. “REITS”‐ INCLUDES AN INDEX OF REITS ACROSS A VARIETY OF ASSET CL
Slide 12: Strong Growth and Returns From Expansions
Strong Growth and Returns From Expansions 12 SOURCE: COMPANY INFORMATION. REFER TO SUN COMMUNITIES, INC. FORM 10‐K AND SUPPLEMENTAL FOR THE YEAR ENDED DECEMBER 31, 2015 FOR ADDITIONAL INFORMATION. 1 ASSUMING A 6% CAP RATE AND EXITING IN FIVE YEARS. Inventory of over 7,100 zoned and entitled sites
Slide 13: Realigning the Portfolio
Realigning the Portfolio 13 Demographic Profile All ‐Age Age‐Restricted 26% 74% Sun is reshaping its portfolio through strategic acquisitions and dispositions SOURCE: COMPANY INFORMATION. REFER TO SUN COMMUNITIES, INC. FORM 10‐K AND SUPPLEMENTAL FOR THE YEAR ENDED DECEMBER 31, 2015 FOR ADDITIONAL
Slide 14: Strategic Acquisitions
14 136 communities 54,811 sites 173 communities 63,697 sites 188 communities 69,789 sites 217 communities 79,554 sites 231 communities 88,612 sites • 17 MH & 1 RV properties Kentland acquisition growing the portfolio. • Further strengthened the MH portfolio with the 6‐community Rudgate acquisition.
Slide 15: Extracting Value from Acquisitions
Extracting Value from Acquisitions 15 STRATEGIC ACQUISITIONS PROFESSIONAL OPERATIONAL MANAGEMENT CALL CENTER / DIGITAL MARKETING OUTREACH INCREASING MARKET RENT HOME SALES / RENTAL PROGRAM ADDING VALUE WITH EXPANSIONS REPOSITIONING WITH ADDITIONAL CAPEX SKILLED EXPENSE MANAGEMENT
Slide 16: Acquisition Performance
Acquisition Performance 16 83.4% 90.8% 92.5% 97.6%98.5% YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Occupancy $23.6MM $26.0MM $27.5MM $29.3MM $31.3MM YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Revenue NOI 2011Acquisitions (26 COMMUNITIES) 2012Acquisitions (11 COMMUNITIES) 91.4% 96.8% 97.1% 98.1% YEAR 1 YEAR 2 YEAR 3
Slide 17: Strong RV Portfolio Performance
Strong RV Portfolio Performance $48.4MM $59.2MM $70.1MM $84.9MM YEAR 1 YEAR 2 YEAR 3 YEAR 4 Revenue NOI 2013 Morgan Acquisition(10 PROPERTIES) 100% 89% 88% 82% 77% 81% 80% 8% 8% 12% 13% 10% 10% 2% 4% 6% 9% 9% 10% 2011 2012 2013 2014 2015 2016 MH Income Annual RV Income Transient RV Income GUIDANCE P
Slide 18: Rental Program
Rental Program 18 12.6% 13.5% 13.6% 14.0% 15.7% 15.6% 13.5% 70.8% 70.9% 71.7% 73.3% 74.0% 77.1% 81.6% 2009 2010 2011 2012 2013 2014 2015 Rental Occupancy Core Portfolio Occupancy 83.4% 84.3% 85.3% 87.3% 89.7% 92.6% 95.0% SOURCE: SUN’S DECEMBER 31, 2015 SUPPLEMENT 1 OPERATING EXPENSES INCLUDE REPAIRS
Slide 19: Historically Solid FFO Generation
19 61.5% 50.4% 45.8% 34.8% 34.0% 2011 2012 2013 2014 2015 Net Debt / Total Enterprise Value3 9.7x 8.4x 7.2x 7.3x 6.6x 2011 2012 2013 2014 2015 2.4x 2.4x 2.7x 3.0x 3.1x 2011 2012 2013 2014 2015 76.9% 84.7% 76.9% 90.8% 92.0% 2011 2012 2013 2014 2015 Historically Solid FFO Generation Strong balance s
Slide 20: Debt Maturity Profile
Debt Maturity Profile 20 Tallest ladder is 1/6th of the total long‐term debt due SOURCE: COMPANY INFORMATION. REFER TO SUN COMMUNITIES, INC. FORM 10‐K AND SUPPLEMENTAL FOR THE YEAR ENDED DECEMBER 31, 2015 FOR ADDITIONAL INFORMATION. 1 AMOUNTS EXCLUDING SECURED BORROWINGS, IN THOUSANDS, AS OF DECEMBE
Slide 21: Performance vs. Indices
Performance vs. Indices 21 275% 262% 181% 177% 175% 172% 155% 0% 50% 100% 150% 200% 250% 300% SUI SNL US REIT Manufactured Homes S&P 500 SNL US REIT Equity MSCI US REIT (RMS) S&P Small‐Cap Russell 2000 5‐year Total Returns by Index1 Sun has outperformed many major REIT and broader market indices o