Sun Communities, Inc. · NYSE:SUI
Sun Communities — Investor Presentation (November 2013)
28 slides from Sun Communities's investor presentation, Nov 13, 2013
Slide 1: 1
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Slide 2: Disclaimer and forward-looking statements
2 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 representation or warranty, e
Slide 3: Sun Communities, Inc. (NYSE:SUI)
3 SUN COMMUNITIES, INC. (NYSE:SUI) Owns, develops and manages manufactured housing (“MH”) and recreational vehicle (“RV”) sites Sells and leases new and used manufactured homes Sun Communities’ portfolio includes 185 communities across 25 states 160 MH communities: 53,000 sites 12 blende
Slide 4: Diversified Portfolio
DIVERSIFIED PORTFOLIO ND sD wy Ge of | | Existing States. — © Existing Portfolio Newly Acquired $$ ——SaoEee
Slide 5: Affordability Drives Manufactured Housing (vs. Multifamily)
5 Comparing all manufactured homes to the multifamily average, a manufactured home provides approximately 50% more space at approximately 40% less cost per square foot. AFFORDABILITY DRIVES MANUFACTURED HOUSING Sun – Manufactured Homes Apartments • Average rent ≈ $795/month or $0.54/square foot • Av
Slide 6: Affordability Drives Manufactured Housing (vs. Single Family)
6 AFFORDABILITY DRIVES MANUFACTURED HOUSING Manufactured Housing vs. Single Family: • Average cost of Manufactured Housing ≈ $61,900 or roughly 1 years income • Average cost of Single Family ≈ $292,200 or roughly 4 years 6 months income The median income in the 25 states Sun operates in is $64.5K. E
Slide 7: Stability of Revenue
7 STABILITY OF REVENUE Stable and growing revenue due to: Low turnover of owner occupied sites due to high cost to move a home ($4,000-$10,000) Average tenure of our residents in our communities is 13 years Average term of home in our communities is approximately 40 years Move Outs and Re-Sale
Slide 8: Capital Expenditures
8 CAPITAL EXPENDITURES Manufactured housing is a low capex business relative to its peers as it is largely a land ownership business. Source: Company filings Data as of 12/31/2012 Capex as a % of Revenues
Slide 9: Recession Resistant
9 RECESSION RESISTANT 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 $ in M ill io n s Same Site
Slide 10: Same Site NOI and Indexed NOI Growth
10 Source: Citi Investment research, August 2013. “REITs”- includes an index of REITs across a variety of asset classes including self storage, mixed office, regional malls, shopping centers, multifamily, student housing, manufactured homes and specialty. Source: Green Street Advisors, company filin
Slide 11: Growth Through Acquisitions
11 GROWTH THROUGH ACQUISITIONS Since June 2011, Sun has completed over $620 million of acquisitions, increasing the number of sites and communities by 42% and 36%, respectively, diversifying from both a business segment and geographic perspective. - 100,000,000 200,000,000 300,000,000 400,000,000 50
Slide 12: Recent Acquisitions
KENTLAND Number of C ral Location: Michigan | _ NNOlin25 Sites: 5,430 |" increased Saar fr Acquisition date: June 11 | Siaceacquisition Purchase Price: $139.3 Million RUDGATE Coe UO ities: 6 | * Estimated NOI cation: E Mcliosn growth of 15-20% within 2 years Be 594 | « increased occupancy 10 95% Acq
Slide 13: RV Community Photos
sual wn Blazing Star - San Antonio, TX Big Timber Lake - Cape May G court House, NJ Rainbow RV - Frostproof, FL ay SF im Jellystone Park - North Java, NY
Slide 14: Grand Lake RV & Golf
Grand Lake RV & Golf - North Lake. Estates h en, FL
Slide 15: Growth Through Acquisition of RV Communities
0% 10% 20% 30% 40% 50% 60% 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 * MH Income RV Income 0% 10% 20% 30% 40% 50% 60% 70% 80% 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 * MH Communities RV Communities 15 GROWT
Slide 16: Diversified RV Portfolio
16 DIVERSIFIED RV PORTFOLIO Through recent acquisitions of northern RV resorts, Sun has achieved a more consistent stream of transient RV revenue over the calendar year. In less than two years, Sun has increased its RV communities from 18 to 37 and also increased its presence from 4 states to 14 s
Slide 17: RV Industry
17 RV INDUSTRY RV travel is 23% to 59% less expensive than other vacation types. At current fuel prices the cost of fuel would have to more than quadruple for a family of four, and more than double for an adult couple for an RV vacation to lose economic advantage over other forms of travel. The av
Slide 18: RV Industry: Growth Contributors
18 RV INDUSTRY: GROWTH CONTRIBUTORS High Demand Shipments are expected to reach a 6 year high in 2013 13,000 RV parks in the U.S for 8.9 million RV’s Growth in disposable income positively affects the industry Through 2018 domestic travel is forecast to increase at an average rate of 3.2% pe
Slide 19: Growth Through Expansion Opportunities
19 GROWTH THROUGH EXPANSION OPPORTUNITIES Inventory of over 6,700 zoned and entitled sites available for expansion at 35 communities Expanding in communities with strong demand evidenced by occupancy of ~95% Expansion lease-up is driven by sales, rental and relocation programs Over 1,200 sit
Slide 20: Strategic Balance Sheet Management
20 STRATEGIC BALANCE SHEET MANAGEMENT Financial flexibility has positioned Sun to de-lever substantially while expanding via acquisitions. DEBT-Since 2011: Refinanced $122.7 million of debt to 2021 Extended FNMA secured debt of $365.6 million from 2014 to 2023 EQUITY Raised over $550.0 million
Slide 21: Conservative Balance Sheet
21 CONSERVATIVE BALANCE SHEET Net Debt1 / Enterprise Value EBITDA / Interest Debt + Preferred Equity / EBITDA* (1) Including preferred OP units *Calculated based on trailing 12 months ended September 30, 2013
Slide 22: Debt Maturity Schedule and Interest Rate Exposure
$15 $43 $26 $302 $74 $772 $176 4Q13 2014 2015 2016 2017 2018+ (1) Debt maturity schedule includes principal amortization, and is pro forma for the refinancing of $176 million of mortgage loans due in 2014. Interest rates have risen recently, but remain low relative to historical levels Sun’s deb
Slide 23: Experienced and Proven Leadership Team
23 EXPERIENCED AND PROVEN LEADERSHIP TEAM Key executives have a combined 80 years experience in the industry and over 65 years at the company. Senior Management team has a combined 72 years at the company. Provided the vision and leadership to generate consistent profitability through all cycles. •
Slide 24: Appendices
24 APPENDICES
Slide 25: Performance vs. Consumer REIT Peers
25 PERFORMANCE VS. CONSUMER REIT PEERS The manufactured housing REITs have largely been ignored by investors in the past decade and are all at relatively large spreads to similar consumer-sensitive REITs Source: Green Street Advisors Implied Cap Rates
Slide 26: Performance vs. Indices
PERFORMANCE VS. INDICES SUI has significantly outperformed many major market indices over a five year period Source: SNL 26 5-year Total Returns by Index as of 9/30/2013 257% 85% 79% 70% 61% 38% 30% 0% 50% 100% 150% 200% 250% 300% SUI SNL US REIT Manufactured Housing Index S&P Small Cap Index Russ
Slide 27: Performance vs. REIT Sectors
PERFORMANCE VS. REIT SECTORS Source: SNL Manufactured homes outperformed many REIT sectors since 2008 Manufactured housing REITs have offered one of the most attractive historical returns among all REIT sectors 27 5-year Total Returns by REIT Sector as of 9/30/2013 257% 109% 79% 58% 57% 51% 47%
Slide 28: Performance vs. Consumer Driven REITs
Implied Cap Rate2 5.2% 7.2% 6.7% 5.1% 6.3% 6.3% 5.8% 5.3% 7.0% 6.7% 7.9% 5.1% 5.3% 6.9% 6.8% 6.7% 5.5% 6.2% 5.9% 6.6% 7.1% Dividend Yield 3.5% 5.8% 2.8% 3.1% 2.8% 4.0% 2.5% 3.3% 4.4% 3.7% 5.2% 3.2% 3.4% 2.9% 3.4% 4.7% 3.1% 4.1% 3.9% 4.8% 6.1% 262% 257% 118% 92% 89% 69% 67% 63% 62% 58% 54% 52% 46% 46
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