Slide 1: Investor Presentation
SUN OUTDOORS CAROLINA PINES RV RESORT – CONWAY, SC INVESTOR PRESENTATION SEPTEMBER 8, 2022
Slide 2: Forward-Looking Statements
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-party information has not been ind
Slide 3: Company Highlights
COMPANY HIGHLIGHTS Leading owner and operator of manufactured housing (“MH”) communities, recreational vehicle (“RV”) resorts and marinas Compelling supply-demand fundamentals underpin all three segments Industry leading platforms of best-in-class assets drive strong performance GROVE BEACH – WESTBR
Slide 4: Sun Communities, Inc. Overview
SUN COMMUNITIES, INC. OVERVIEW (NYSE: SUI) Current Portfolio As of September 8, 2022 20,679 5,239 780 3,430 209 240 75 1,330 2,399 / 221 475 3,141 3,016 927 / 2,517 591 3,421 33,124 3,740 1,536 2,005 / 3,325 324 4,040 / 411 413 9,313 2,925 1,716 4,133 927 2,235 4,176 1,027 3,440 1,857 / 2,608 3,539
Slide 5: Premier Owner and Operator of MH, RV and Marina Properties
PREMIER OWNER AND OPERATOR OF MH, RV AND MARINA PROPERTIES WITH TRACK RECORD OF EXCEPTIONAL PERFORMANCE Sun Communities at a Glance Rental Revenue Breakdown (4) 1975 1993 662 Year Founded Year Listed Properties(1) 4th BBB / Baa3 $19.5Bn Annual and GRI-Linked S&P / Moody’s Equity Market Value(3) ESG
Slide 6: Compelling Supply-Demand Fundamentals Across Three Segments
COMPELLING SUPPLY-DEMAND FUNDAMENTALS ACROSS THREE SEGMENTS Our MH, RV and Marina properties offer unrivaled locations and premier amenities Durable demand and supply-constrained fundamentals MH RV Marina 351 properties in North America 180 properties in North America 131 properties in Nor
Slide 7: YTD Performance Update
YTD PERFORMANCE UPDATE Strong Performance • Increased FY22 Core FFO per Share Guidance on constant currency basis to $7.22 - $7.32 • Midpoint of $7.27 implies 11.7% growth compared to 2021 • Completed ~$2.1bn of acquisitions in 63 properties totaling 21,860 sites, wet slips and dry storage spaces YT
Slide 8: Multiple Levers Drive Resilient Growth
MULTIPLE LEVERS DRIVE RESILIENT GROWTH Outstanding record of revenue growth supported by internal and external opportunities Growth Levers Potential Annual Revenue Growth / Contribution - 4.5% weighted average rate increase as of June 2022 Contractual Rent Increases - Over 90% MH sites “market ren
Slide 9: Sticky Customer Base with Limited CapEx
STICKY CUSTOMER BASE WITH LIMITED CAPEX Annual home move-outs in Sun’s MH communities are less than 1% ꟷ Low turnover driven by a $6k - $10k average cost for a resident to move a home ꟷ Uninterrupted rental income stream: average tenure of residents in our MH communities is ~14 years(1) before uni
Slide 10: Conversion of Transient RV to Annual Leases
CONVERSION OF TRANSIENT RV TO ANNUAL LEASES GENERATED 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 grow base of annual RV sites ~1,700 transient to annual RV conver
Slide 11: Robust Internal Growth Provides a Strong Base
ROBUST INTERNAL GROWTH PROVIDES A STRONG BASE Same Property Monthly Base Rents 3.4% 3.4% 3.3% 3.6% 4.0% 4.2% 3.4% 3.4% 4.1% 2.0% 2.9% 3.1% 4.2% 5.4% 6.1% 5.4% 4.8% 6.8% $650 3.2% 3.3% 3.2% 3.6% 4.1% 4.5% 3.8% 3.6% 4.5% $600 $550 $500 $450 $400 2014 2015 2016 2017 2018 2019 2020 2021 1H22 MH Monthly
Slide 12: Maximizing Value from Strategic Acquisitions
MAXIMIZING VALUE FROM STRATEGIC ACQUISITIONS Professional Operational Management Adding Value with Expansions Home Sales & Rental Program Call Center & Digital Marketing Outreach Skilled Expense Management Repositioning with Additional CapEx Properties and Sites • Since 2010, Sun has acquired proper
Slide 13: Acquisition
ACQUISITION ~12,300 owner-occupied sites under 20+ year licenses with annual increases in land lease communities Complementary to ~2,100 hire fleet sites, which operate similarly to the Vacation the Sun Platform Rental platform within Sun’s RV resorts Average customer tenure of 7+ years PEVENS
Slide 14: Premier Owner-Operator of Marinas
PREMIER OWNER-OPERATOR OF MARINAS Service Offerings Keep Members in Network Average marina member tenure (in years) 131 37,600 8,500 Marinas Approximate Wet Slips Approximate Dry 9.3 8.8 8.2 Storage Spaces(1) 6.5 6.9 6.7 5.9 6.3 5.6 5.0 24 80% 75% States & Puerto Rico Marinas Located in Marinas Owne
Slide 15: Superior and Consistent Cash Flow Growth
SUPERIOR AND CONSISTENT CASH FLOW GROWTH Favorable demand drivers, high barriers to entry and Sun’s investment and operational platform have resulted in consistent and cycle tested organic cash flow growth For more than 20 years, every individual year or rolling 4-quarter period, has recorded po
Slide 16: Peer-Leading Same Property NOI and FFO Growth Track Record
PEER-LEADING SAME PROPERTY NOI AND FFO GROWTH TRACK RECORD Sun has consistently generated same property NOI outperformance with limited volatility Sun has generated greater FFO per share growth than peers and adjacent sectors than peers and adjacent sectors Same Property NOI Growth(1)(3) Core /
Slide 17: Balance Sheet Supports Growth Strategy
BALANCE SHEET SUPPORTS GROWTH STRATEGY Current Debt Outstanding ($ in millions)(1) Limited near-term maturity profile As of June 30, 2022 Weighted Weighted 84% of outstanding debt based on fixed interest rate Principal Average Interest Average Years to Outstanding(2) Rates Maturity Credit Statis
Slide 18: Sun Has Used All of Its Growth Levers
SUN HAS USED ALL OF ITS GROWTH LEVERS IN COMBINATION TO PRODUCE OUTSTANDING HISTORICAL PERFORMANCE Outstanding record of driving growth with broad array MH / RV Same Property NOI Growth of growth levers Historical Average: 7.0% 11.2% Average ~7% same property NOI 9.1% 7.7% 6.9% 6.7% 7.3% 6.8% 7.
Slide 19: Sun Communities' ESG Initiatives
SUN COMMUNITIES’ ESG INITIATIVES We are committed to sustainable business practices to benefit all stakeholders: team members, residents and guests, shareholders and the broader communities where we operate We will continue to enhance Sun’s sustainability program through the formal adoption of a
Slide 20: Appendix
APPENDIX SUN OUTDOORS NEW ORLEANS NORTH SHORE – PONCHATOULA, LA
Slide 21: Renting – MH vs. Other Rental Options
RENTING – MH VS. OTHER RENTAL OPTIONS Manufactured homes in Sun’s communities provide 25% more space at ~54% less cost per square foot Manufactured Homes in Other Rental Sun’s Communities Options(1) PRICE $0.93 per sq. ft. $2.03 per sq. ft. SQUARE FOOTAGE 1,250 sq. ft. 1,000 sq. ft. RENT $1,16
Slide 22: Industry-Leading Social Media Engagement and Original Digital Content
INDUSTRY-LEADING SOCIAL MEDIA ENGAGEMENT AND ORIGINAL DIGITAL CONTENT Sun leads the outdoor vacation industry across social media channels with 2mm followers and 40mm total engagements Sun Outdoors original content and Sun Communities Virtual Home Tours allow prospective guests and residents to
Slide 23: Strategy-Driven Outperformance
STRATEGY-DRIVEN OUTPERFORMANCE Sun has significantly outperformed major REIT and broader market indices over the last ten years 2022 YTD Total Return 3-year Total Return 100.0% 5.0% 0.0% 75.0% (5.0%) 50.0% 39.7% (10.0%) 25.0% 23.2% (15.0%) (16.1)% 13.9% (18.4)% 0.0% (20.0%) (25.0%) (26.0)% (25.0%)
Slide 24: 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 25: Net Income to FFO Reconciliation
NET INCOME TO FFO RECONCILIATION (amounts in millions except per share data) Three Months Ended June 30, Six Months Ended June 30, Year Ended December 31, 2022 2021 2022 2021 2021 2020 2019 Net Income Attributable to SUI Common Shareholders $ 74.0 $ 110.8 $ 74.7 $ 135.6 $ 380.2 $ 131.6 $ 160.3 Adjus
Slide 26: Net Income to NOI Reconciliation
NET INCOME TO NOI RECONCILIATION (amounts in millions) Three Months Ended June 30, Six Months Ended June 30, Year Ended December 31, 2022 2021 2022 2021 2021 2020 2019 Net Income Attributable to SUI Common Shareholders $ 74.0 $ 110.8 $ 74.7 $ 135.6 $ 380.2 $ 131.6 $ 160.3 Interest income (7.3) (2.8)
Slide 27: Net Income to Recurring EBITDA Reconciliation
NET INCOME TO RECURRING EBITDA RECONCILIATION (amounts in millions) Three Months Ended June 30, Six Months Ended June 30, Year Ended December 31, 2022 2021 2022 2021 2021 2020 2019 Net Income Attributable to SUI Common Shareholders $ 74.0 $ 110.8 $ 74.7 $ 135.6 $ 380.2 $ 131.6 $ 160.3 Adjustments De