Sun Communities, Inc. · NYSE:SUI
Sun Communities — Investor Presentation (September 2020)
24 slides from Sun Communities's investor presentation, Sep 1, 2020
Slide 1: Investor Presentation September 2020
VIZCAYA LAKES – PORT CHARLOTTE, FL INVESTOR PRESENTATION SEPTEMBER 2020
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 make
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 HERITAGESUNSET RIDGE- TEMECULA, – PORTLAND, CA M
Slide 4: Sun Communities, Inc. Overview
SUN COMMUNITIES, INC. OVERVIEW (NYSE: SUI) Current Portfolio as of July 31, 2020 426 communities consisting of over 143,000 sites across 32 states and Ontario, Canada Trailing Twelve Months Rental Revenue as of June 30, 2020 85% Annual Revenues 266 MH Communities 44% 126 RV Communities MH Age Restri
Slide 5: Resilient Business with Long-Term Tailwinds
RESILIENT BUSINESS WITH LONG-TERM TAILWINDS ▪ Continued strong rent collection with ~97% average collections in the second quarter and 96.7% for August as of 8/25 ▪ Approximately 14% of residents prepaid their deferred rent under the Financial Hardship Program in full ▪ Gained 851 revenue producing
Slide 6: Powering Sun's Growth Engine - Internal
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 INTERNAL LEVERS Contractual Rent Increases MH Occupancy Gains 96.5% Annual historical
Slide 7: Powering Sun's Growth Engine - External
POWERING SUN’S GROWTH ENGINE - EXTERNAL EXTERNAL LEVERS Acquisitions Development ~$133mm Targeting 2-4 investment in 5 communities 2020 YTD new development project starts / year 3.1x increase Target 7% – 9% in communities since year end 2010 ground-up development IRRs1 High degree of visibility into
Slide 8: Financial Highlights
FINANCIAL HIGHLIGHTS Financial Performance Quarter Ended June 30, YTD Ended June 30, 2020 2019 % Change 2020 2019 % Change Total Revenue $303.3mm $312.4mm (2.9)% $613.6mm $599.8mm 2.3% Total NOI $172.3mm $171.3mm 0.6% $352.1mm $335.7mm 4.9% Same Community Revenue $204.5mm $208.2mm (1.8)% $419.2mm $4
Slide 9: 2020 Acquisition & Development Activity
2020 ACQUISITION & DEVELOPMENT ACTIVITY Investment Activity Summary Acquisitions Ground-up & Redevelopments Expansions FORESTJELLYSTONE SPRINGS NATURAL – GRASS BRIDGE VALLEY, – NATURAL CA BRIDGE, VA JELLYSTONERIVER RUN RV PARK RESORT AT LARKSPUR – GRANBY, –COLARKSPUR, CO SHADOWINDIAN WELLS WOOD RV V
Slide 10: 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 151 years ▪ RVs stay in our resorts for approximately 111 years MH Resident Move-out Trends MAJESTIC OAKS – ZEPHYRHILLS, FL (3 Year Average)
Slide 11: 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 12: Renting - MH vs. Other Rental Options
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 Other Rental Sun’s Communities1 Options2 PRICE $0.81 per sq. ft. ✓ $1.72 per sq. ft. SQUARE FOOTAGE 1,250 sq. ft. ✓ 1,000 sq. ft. RENT $1,018
Slide 13: 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 $299,415 or $81,900 or roughly 2 years median income roughly 7 years median
Slide 14: 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 12 – 24 months average lease-up for 100-site expansion $40k - $45k typical per site construction c
Slide 15: 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 YTD Communities and Sites ▪ Since 2010, Sun has acquired c
Slide 16: Strategic Balance Sheet
STRATEGIC BALANCE SHEET ▪ Balance sheet supports growth strategy ▪ No near-term debt maturities with 3.7% of total debt maturing per year through 2024 Mortgage Debt Outstanding Mortgage Debt 5-Year Maturity Ladder principal amounts in thousands amounts in thousands Quarter Ended June 30, 2020 Fannie
Slide 17: Sun Communities' ESG Initiatives
SUN COMMUNITIES’ ESG INITIATIVES ▪ Sun published its inaugural ESG report in late 2019 ▪ We are committed to sustainable business practices to benefit all stakeholders: team members, residents and guests, shareholders and the broader communities where we operate ▪ In 2020, we will continue to enhanc
Slide 18: Strategy-Driven Outperformance
STRATEGY-DRIVEN OUTPERFORMANCE ▪ Sun has significantly outperformed major REIT and broader market indices over the last ten years 2020 YTD Total Return 3-year Total Return 20.0% 120.0% 10.0% 2.4% 95.0% 0.0% 1.1% 82.2% (10.0%) 70.0% (15.1)% (20.0%) 45.0% 40.5% (30.0%) 20.0% (40.0%) 3.0% (5.0%) (50.0%
Slide 19: 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 Indexed NOI Growth $260 Sun Communities Manufactured Housing $252 Sun Communities Multifam
Slide 20: Appendix
APPENDIX PELICAN BAY – MICCO, FL
Slide 21: 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 22: Net Income to FFO Reconciliation
NET INCOME TO FFO RECONCILIATION (amounts in thousands except per share data) Three Months Ended June 30, Six Months Ended June 30, Year Ended December 31, 2020 2019 2020 2019 2019 2018 2017 Net Income attributable to Sun Communities, Inc. common stockholders $ 58,910 $ 40,385 $ 42,824 $ 74,716 $ 16
Slide 23: Net Income to NOI Reconciliation
NET INCOME TO NOI RECONCILIATION Three Months Ended June 30, Six Months Ended June 30, Year Ended December 31, (amounts in thousands) 2020 2019 2020 2019 2019 2018 2017 Net Income Attributable to Sun Communities, Inc., Common Stockholders $ 58,910 $ 40,385 $ 42,824 $ 74,716 $ 160,265 $ 105,493 $ 65,
Slide 24: Net Income to Recurring EBITDA Reconciliation
NET INCOME TO RECURRING EBITDA RECONCILIATION Three Months Ended June 30, Six Months Ended June 30, Year Ended December 31, (amounts in thousands) 2020 2019 2020 2019 2019 2018 2017 Net Income Attributable to Sun Communities, Inc., Common Stockholders $ 58,910 $ 40,385 $ 42,824 $ 74,716 $ 160,265 $
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