Sun Communities, Inc. · NYSE:SUI

Sun Communities — Investor Presentation (February 2021)

30 slides from Sun Communities's investor presentation, Feb 24, 2021

  1. Slide 1: Investor Presentation February 2021

    INVESTOR PRESENTATION FEBRUARY 2021 JELLYSTONE PARK™ AT LARKSPUR – LARKSPUR, CO

  2. Slide 2: Forward-looking statements disclaimer

    2 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 independently verified. Sun

  3. Slide 3: Company Highlights

    COMPANY HIGHLIGHTS 3Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2020 as well as Press Releases and SEC Filings after December 31, 2020 for additional information. Leading owner and operator of manufactured housing (“MH”) comm

  4. Slide 4: Sun Communities, Inc. Overview

    276 136 34 106 MH Communities RV Resorts Marinas(1) Hybrid MH & RV Manufactured Housing 57% RV 26% Marinas 17% 4 552 properties across 39 states and Ontario, Canada Current Portfolio as of December 31, 2020 Indicative Annual Rental Revenue(2) SUN COMMUNITIES, INC. OVERVIEW (NYSE: SUI) Property Count

  5. Slide 5: 2020 Business Update

    5 2020 BUSINESS UPDATE PORTFOLIO PERFORMANCE EXTERNAL GROWTH 3.8% Weighted average monthly rental rate increase 96.6% MH Occupancy and 2,505 RPS Gains Over 300 Expansion site deliveries in 8 properties MH & RV rent collections were over 96% and 97%, respectively(1) ~$3bn investments in 24 MH and RV

  6. Slide 6: 2021 Financial and Operating Guidance

    2021 FINANCIAL AND OPERATING GUIDANCE(1) 6 Earnings and Core FFO Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2020 as well as Press Releases and SEC Filings after December 31, 2020 for additional information. Refer to informat

  7. Slide 7: 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 7 POWERING SUN’S GROWTH ENGINE - INTERNAL INTERNAL LEVERS Contractual Rent Increases MH Occupancy Gains Expansions Transient R

  8. Slide 8: Powering Sun's Growth Engine - External

    EXTERNAL LEVERS Development 8 POWERING SUN’S GROWTH ENGINE - EXTERNAL Acquisitions ~$3bn investment in 24 MH and RV properties and 106 marinas in 2020 4.1x increase in properties since year end 2010 Targeting 2 - 4 new development project starts / year Over 1,000 2020 ground-up site deliveries in 5

  9. Slide 9: 2020 Acquisition & Development Activity

    2020 ACQUISITION & DEVELOPMENT ACTIVITY 9 2 ~$3bn purchase price Acquisitions Ground-up & Redevelopments Expansions Investment Activity Summary ~45,800 sites added in 130 properties & marinas Robust pipeline of small portfolios and single assets in underwriting $172mm spend Over 1,000 site deliverie

  10. Slide 10: Sun's Favorable Revenue Drivers

    SUN’S FAVORABLE REVENUE DRIVERS 10  Yearly home move-outs in Sun’s MH communities are less than 1%  Tenure of residents in Sun’s MH communities is over 14(1) years  RVs stay in our resorts for approximately 11(1) years MH Resident Move-out Trends (3 Year Average) (Home stays in community) (Home l

  11. Slide 11: Consistent and Cycle Tested Internal Growth

    5.1% 3.1% 3.0% CONSISTENT AND CYCLE TESTED INTERNAL GROWTH 11  Sun’s average same community NOI growth has exceeded REIT industry average by ~210 bps and the apartment sector’s average by ~200 bps since 1998  Since 1998, every individual year or rolling 4-quarter period has had positive same commu

  12. Slide 12: Renting - MH vs. Other Rental Options

    12 RENTING - MH VS. OTHER RENTAL OPTIONS  Manufactured homes in Sun’s communities provide 25% more space at ~52% less cost per square foot Manufactured Homes in Sun’s Communities(1) RENT   $1,042 per month Other Rental Options(2) $1,740 per month SQUARE FOOTAGE PRICE 1,250 sq. ft. 1,000 sq. ft.

  13. Slide 13: Homeownership - MH vs. Single Family

    $63,100 $62,800 $60,500 $62,200 $64,000 $65,300 $68,000 $70,600 $71,900 $78,500 $81,900 $81,900 $203,182 $206,560 $207,950 $223,085 $249,429 $263,256 $272,454 $278,409 $293,727 $297,747 $299,415 $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 2009 2010 2011 2012 20

  14. Slide 14: Expansions Provide Attractive Returns

    14 EXPANSIONS PROVIDE ATTRACTIVE RETURNS SHERKSTON SHORES – SHERKSTON, ON  Investment in expansion sites boosts growth in highly accretive manner  Sun expands in communities and resorts with high occupancies and continued strong demand Over 300 2020 vacant expansion site deliveries 12 – 24 months

  15. Slide 15: Maximizing Value from Strategic Acquisitions

    47,683 54,811 63,697 69,789 79,554 88,612 117,376 121,892 128,454 141,293 188,176 136 159 173 188 217 231 341 350 371 422 552 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Sites Properties  Since 2010, Sun has acquired communities valued at over $8.5 billion, increasing its number of commu

  16. Slide 16: Strategic Balance Sheet

    33.8% 28.2% 25.2% 19.0% 21.4% 2016 2017 2018 2019 2020 STRATEGIC BALANCE SHEET 16 Net Debt / TEV(4) Quarter Ended December 31, 2020 Principal Outstanding(1) WA Interest Rates CMBS $267.2 4.79% Fannie Mae $1,150.9 3.23% Life Companies $1,658.2 3.99% Freddie Mac $368.6 3.85% Total $3,444.9 3.78% Mortg

  17. Slide 17: Sun Communities' ESG Initiatives

    Environmental SUN COMMUNITIES’ ESG INITIATIVES 17 ESG Highlights(1)  Sun published its 2nd annual ESG report in 2020  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 w

  18. Slide 18: Strategy-Driven Outperformance

    STRATEGY-DRIVEN OUTPERFORMANCE 18  Sun has significantly outperformed major REIT and broader market indices over the last ten years Sun Communities, Inc. (SUI) MSCI US REIT (RMS)S&P 500 2020 Total Return 5-year Total Return 10-year Total Return 3-year Total Return Source: S&P Global as of December

  19. Slide 19: Consistent NOI Growth

    CONSISTENT NOI GROWTH 19  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 Source: Citi Investment research, September 2020. Refer to informati

  20. Slide 20: Marina & Safe Harbor Overview

    MARINA & SAFE HARBOR OVERVIEW RIVIERA BEACH – RIVIERA BEACH, FL

  21. Slide 21: Attractive Industry Fundamentals

    ATTRACTIVE INDUSTRY FUNDAMENTALS 21 Fragmented Industry High Barriers to Entry SupportiveDemographic Trends  Most marinas are owned by small mom-and-pop operators  Significant upside from institutional management and value-add capex  The top five operators collectively represent approximately 5%

  22. Slide 22: Attractive Industry Fundamentals (Cont'd)

    ATTRACTIVE INDUSTRY FUNDAMENTALS (CONT’D) 22 Marina Supply Slow & Steady DecreaseU.S. Marinas (in 000’s)  Fundamentals are strong as a result of the limited supply of new marinas, stable stock of boats and increasing vessel size that may require a marina for storage Slip Demand Slow & Steady Increa

  23. Slide 23: Safe Harbor Is the Best Marina Operator

    SAFE HARBOR IS THE BEST MARINA OPERATOR Unrivaled Among CompetitorsDiversified National Geographic Footprint 108 Owned Marinas 30,000 Approximate Wet Slips 22 States 72% of Marinas Located in Coastal Markets(3) 40,000 Approximate Members 8.3 Years Average Member Tenure 77% of Marinas Owned Fee Simpl

  24. Slide 24: Experienced Team with Proven Track Record

    EXPERIENCED TEAM WITH PROVEN TRACK RECORD 24 Baxter Underwood Chief Executive Officer Prior experience acquiring and managing lifestyle assets Former CIO of CNL Lifestyle Properties Former Partner at Clapham Capital Executive Leadership with Safe Harbor Platform from the Beginning Experienced Team o

  25. Slide 25: Marina Sector Pioneer and Consolidator

    MARINA SECTOR PIONEER AND CONSOLIDATOR 25 Safe Harbor Portfolio Evolution Key Transactions(2) 1 3Q 2015 Date Acquired Flagship 2 3 4 5 6 7 7 Marinas 4,717 Slips / Dry Storage Spaces (1) Dry Storage Spaces include Indoor Storage. (2) Date acquired reflects period in which last marina acquisition clos

  26. Slide 26: Appendix

    APPENDIX RIPTIDE RV RESORT & MARINA– KEY LARGO, FL

  27. Slide 27: Non-GAAP Terms Defined

    NON-GAAP TERMS DEFINED 27 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,

  28. Slide 28: Net Income to FFO Reconciliation

    NET INCOME TO FFO RECONCILIATION 28 (amounts in thousands except per share data) Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2020 as well as Press Releases and SEC Filings after December 31, 2020 for additional information. 2

  29. Slide 29: Net Income to NOI Reconciliation

    NET INCOME TO NOI RECONCILIATION 29 (amounts in thousands) Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2020 as well as Press Releases and SEC Filings after December 31, 2020 for additional information. 2020 2019 2020 2019 201

  30. Slide 30: Net Income to Recurring EBITDA Reconciliation

    NET INCOME TO RECURRING EBITDA RECONCILIATION 30 (amounts in thousands) Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2020 as well as Press Releases and SEC Filings after December 31, 2020 for additional information. 2020 2019

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