Sun Communities, Inc. · NYSE:SUI
Sun Communities — Investor Presentation (February 2020)
24 slides from Sun Communities's investor presentation, Feb 24, 2020
Slide 1: Investor Presentation February 2020
RIVER RUN – GRANBY, CO FIRST PHASE OPENED IN JULY 2019 INVESTOR PRESENTATION FEBRUARY 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 mak
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 PONY EXPRESS RV RESORT – NORTH SALT LAKE CITY, U
Slide 4: Sun Communities, Inc. Overview
SUN COMMUNITIES, INC. OVERVIEW (NYSE: SUI) Current Portfolio as of December 31, 2019 422 communities consisting of over 141,000 sites across 33 states and Ontario, Wine Country RV Resort – PasoCanada Robles, CA 7,931 Trailing Twelve Months Rental Revenue as of December 31, 2019 83% Annual Revenues R
Slide 5: 2020 Financial and Operating Guidance
2020 FINANCIAL AND OPERATING GUIDANCE Guidance 2020 Additional Information Net Income Core FFO 2020E First quarter 2020, per fully diluted share $0.34 - $0.37 $1.18 - $1.21 Increase in revenue producing sites 2,500 – 2,700 Full year 2020, per fully diluted share $1.79 - $1.91 $5.20 - $5.30 Vacant ex
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 95.5% Annual historical
Slide 7: Powering Sun's Growth Engine - External
POWERING SUN’S GROWTH ENGINE - EXTERNAL EXTERNAL LEVERS Acquisitions Development $815mm Targeting 3-4 investment in 46 communities in 2019 new development project starts / year 3.1x increase 7% – 9% in communities since year end 12/31/10 ground-up development IRRs1 High degree of visibility into MH
Slide 8: Financial Highlights
FINANCIAL HIGHLIGHTS Financial Performance Quarter Ended December 31, YTD Ended December 31, 2019 2018 % Change 2019 2018 % Change Total Revenue $301.8mm $274.0mm 10.2% $1,264.0mm $1,126.8mm 12.2% Total NOI $167.6mm $150.0mm 11.7% $700.0mm $622.4mm 12.5% Same Community Revenue $196.1mm $184.4mm 6.4%
Slide 9: 2019 Acquisition & Development Activity
2019 ACQUISITION & DEVELOPMENT ACTIVITY Investment Activity Summary Acquisitions Ground-up & Redevelopments Expansions 2 PANDION RIDGE – ORANGE BEACH, AL JELLYSTONE GOLDEN VALLEY – BOSTIC, NC PECAN PARK – JACKSONVILLE, FL ACQUIRED IN NOVEMBER 2019 FIRST PHASE OPENED IN JULY 2019 OPENED DECEMBER 2019
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 141 years MH Resident Move-out Trends (3 Year Average) 6.3% 0.8% Resident Re-sales Resident Move-outs (Home stays in community) (Home leaves
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 ~190 bps and the apartment sector’s average by ~180 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 VS. PRICE $0.80 per sq. ft. $1.60 per sq. ft. SQUARE FOOTAGE 1,250 sq. ft. 1,000 sq. ft. RENT $99
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 $297,747 or $78,500 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 Year-end Communities and Sites . Since 2010, Sun has acqui
Slide 16: Strategic Balance Sheet
STRATEGIC BALANCE SHEET . Balance sheet supports growth strategy . Sun’s annual mortgage maturities in the years 2020 - 2024 average 4.7% of total mortgage debt outstanding Mortgage Debt Outstanding Mortgage Debt 5-Year Maturity Ladder principal amounts in thousands amounts in thousands Quarter Ende
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 2019 Total Return 3-year Total Return 140.0% 70.0% 60.0% 115.0% 112.8% 50.0% 50.9% 90.0% 40.0% 65.0% 31.5% 30.0% 25.8% 53.2% 40.0% 20.0% 26.2% 10.0% 15.0% 0.0% (10.0%) 5-
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 Sun Communities $242 Sun Communities Manufactured Housing $240 Multifam
Slide 20: Appendix
APPENDIX CAROLINA PINES – CONWAY, SC
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) Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2019 as well as Press Releases and SEC Filings after December 31, 2019 for additional information. 22
Slide 23: Net Income to NOI Reconciliation
NET INCOME TO NOI RECONCILIATION (amounts in thousands) Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2019 as well as Press Releases and SEC Filings after December 31, 2019 for additional information. 23
Slide 24: Net Income to Recurring EBITDA Reconciliation
NET INCOME TO RECURRING EBITDA RECONCILIATION (amounts in thousands) Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2019 as well as Press Releases and SEC Filings after December 31, 2019 for additional information. 24
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