Slide 1: Sun Communities Investor Presentation
SOUTHERN PALMS – LADSON, SC SUN COMMUNITIES INVESTOR PRESENTATION (NYSE: SUI) MARCH 2023
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING 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-par
Slide 3: Sun Communities – Company Key Topics
SUN COMMUNITIES – COMPANY KEY TOPICS Key Topics Page Strong Results in 2022 Demonstrated Recession-Resistant Platform, 2023 FY Guidance Based on Continued Strong Same-Property NOI 4-6 Growth Leading Owner / Operator of Manufactured Housing (“MH”) & 7 Recreational Vehicle (“RV”) Communities, and Mari
Slide 4: Robust Fundamentals Continue to Drive Outperformance
ROBUST FUNDAMENTALS CONTINUE TO DRIVE OUTPERFORMANCE 53% of Real Property NOI Derived from MH Consolidated NOI for the year ended December 31, 2022 North America: 6.3% MH UK Operations: 7.3% 53% 2023 Average Rental 7.8% Rate Increases(1) Marina RV 7.5% 21% 26% Steady, Organic Growth 85% of NOI Deriv
Slide 5: FY22 Performance Review
FY22 PERFORMANCE REVIEW Resilient Platform and Operational Strength Drive Outperformance • Reported Core FFO per Share of $1.33 and $7.35 for the quarter and year ended December 31, 2022, respectively, representing a 1.5% and 12.9% increase over 2021 periods, respectively • Record volume of transien
Slide 6: 2023 Guidance
2023 GUIDANCE FY 2022 2023E Core FFO 2023E Same Property – Expected NOI (millions) Change % MH NOI (289 properties) $570.3 4.2% - 5.0% First quarter 2023, Core FFO per Share $1.15 - $1.20 RV NOI (163 properties) $281.0 5.1% - 6.4% Full year 2023, Core FFO per Share $7.22 - $7.42 Marina NOI (120 prop
Slide 7: Leading Owner / Operator of MH, RV and Marinas
LEADING OWNER / OPERATOR OF MH, RV AND MARINAS With ~179,700 MH and RV sites and ~48,000 wet slips and dry storage spaces, Sun is the largest publicly traded operator of MH, RV and Marinas MH RV Marina Largest publicly traded owner / 182 best-in-class RV communities Largest and most diversif
Slide 8: Compelling Supply-Demand Fundamentals: MH North America
COMPELLING SUPPLY-DEMAND FUNDAMENTALS Manufactured Housing (MH) – North America • Total MH portfolio at 95.9% occupancy • 55K+ applications in 2022 to live in a Sun community • Sun MH communities provide 25% more space than multi-family and single-family rentals at ~51% less cost per square foot • S
Slide 9: Compelling Supply-Demand Fundamentals: MH UK
COMPELLING SUPPLY-DEMAND FUNDAMENTALS Manufactured Housing (MH) - UK Complementary to North American Well Located, Solid performance with Strong Platform Highly Amenitized Properties Growth Prospects Numerous barriers to entry, including strict regulatory environment, scarcity of Leading presenc
Slide 10: Compelling Supply-Demand Fundamentals: RV and Marinas
COMPELLING SUPPLY-DEMAND FUNDAMENTALS RV Marinas • 11.2 million households own an RV versus 1.7 million RV • Existing base of ~12 million registered boats within the campsites U.S. and an estimated supply of ~900K to 1 million leasable wet slips and dry storage racks • 7-in-10 households identify th
Slide 11: Safe Harbor Wickford Cove Wet Slip Reconfiguration
COMPELLING SUPPLY – DEMAND FUNDAMENTALS As boats become longer and wider, many marinas cannot keep up with increasing vessel size Recent example of wet slip reconfiguration at Safe Harbor Wickford Cove in North Kingston, Rhode Island demonstrates higher rate achievement SAFE HARBOR WICKFORD COVE
Slide 12: Resilient Demand: MH Through Economic Cycles
COMPELLING SUPPLY – DEMAND FUNDAMENTALS Resilient demand through the Global Financial Crisis Manufactured Housing (MH) – U.S. Residents Moved into MH Communities in Record Numbers US unemployment rate and SUI same property occupancy 12% 88% 9.3% 9.6% 8.9% 8.1% 8% 84% 5.8% 4% 80% 0% 76% 2008 2009 2
Slide 13: Continued Demand for Affordable Vacationing (RV)
COMPELLING SUPPLY – DEMAND FUNDAMENTALS Resilient demand through the Global Financial Crisis RV Continued Demand for Affordable Vacationing Despite Declining RV Sales Growth in annual RV shipments and historical RV revenue growth 46.2% 13.2% 4.8% 0.8% 6.6% 4.2% 5.4% 4.9% -32.9% -30.1% 2008 2009 20
Slide 14: Sun's Track Record of Strong FFO Growth
SUN’S TRACK RECORD OF STRONG FFO GROWTH Sun has generated greater FFO per share growth than Multifamily peers 8.6% Core FFO per share growth (10-year CAGR) 4.9% Core FFO per share yield Core / Normalized FFO Per Share Growth(1)(2)(3) Indexed from 2018 180 170 +60 / 9.8% 160 150 140 +30 / 5.4%
Slide 15: Renting – MH vs. Other Rental Options
RENTING – MH VS. OTHER RENTAL OPTIONS Manufactured homes in Sun’s communities provide 25% more space at ~51% less cost per square foot Manufactured Homes in Other Rental Sun’s Communities Options(1) PRICE $0.98 per sq. ft. $1.98 per sq. ft. SQUARE FOOTAGE 1,250 sq. ft. 1,000 sq. ft. RENT $1,22
Slide 16: Multiple Levers Drive Resilient FFO and Cash Flow Growth
MULTIPLE LEVERS DRIVE RESILIENT FFO AND CASH FLOW GROWTH Outstanding record of revenue growth supported by internal and external opportunities Growth Levers Potential Annual Revenue Growth / Contribution - 5.0% weighted average rate increase for 2022 Contractual Rent Increases - Over 90% MH sites
Slide 17: Consistent, Cycle-Tested Internal Growth
CONSISTENT, CYCLE-TESTED INTERNAL GROWTH Resilient demand, 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, Sun has recorded posi
Slide 18: Drivers of Internal Growth
DRIVERS OF INTERNAL GROWTH Same Property NOI Growth Ground-Up and Expansion Site Deliveries 10-Year Actual Average Same Property NOI Growth: 7.2% 10-Year Actual Average: 1,338 11.2% 2,326 2,133 2,000 9.1% 7.7% 1,632 1,609 7.1% 7.3% 6.9% 6.7% 1,346 5.9% 1,300 5.8% 5.9% 4.0% 1,000 4.9% 1,000 650 375 3
Slide 19: Same Property Operating Expenses
SAME PROPERTY OPERATING EXPENSES Total same property operating expense growth is projected to be 9.1% - 10.0% in 2023 40% increase in Legal, insurance and other expenses driven by more than 80% increase in insurance expense for Sun’s MH / RV same property portfolio 2023E Same Property Operating
Slide 20: Conversion of RV Transient-to-Annual Leases Generates Uplift
CONVERSION OF RV TRANSIENT-TO-ANNUAL LEASES GENERATES 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 increases our annual RV sites 2,257 transient to annual RV conver
Slide 21: Strategic Acquisitions Support Future Growth
STRATEGIC ACQUISITIONS SUPPORT FUTURE GROWTH Professional Operational Management Adding Value with Expansions Transient Site Conversion to Annual Program Consolidating Fragmented Markets Skilled Expense Management Repositioning with Additional CapEx Properties and Sites • Since 2010, Sun has acquire
Slide 22: Balance Sheet Supports Growth Strategy
BALANCE SHEET SUPPORTS GROWTH STRATEGY Upcoming Mortgage Maturities ($ in millions)(1) Credit Statistics % of Total Rate Type(1) 2.3% 2.5% 1.0% 12.9% Baa3 16% $658 variable rate $118 $128 $51 84% fixed 2023 2024 2025 2026 rate BBB Net Debt / ‘Fully Loaded’ TTM EBITDA(2) 5.8x Total Debt Outstanding (
Slide 23: Sun Communities' ESG Initiatives
SUN COMMUNITIES’ ESG INITIATIVES Our board and executive leadership are committed to sustainable business practices that benefit all stakeholders including the broader communities in which we operate Current initiatives to advance our ESG platform include policy enhancement, establishing environ
Slide 24: Appendix
APPENDIX JELLYSTONE PARK™ PETOSKEY – PETOSKEY, MI
Slide 25: Strategy-Driven Outperformance
STRATEGY-DRIVEN OUTPERFORMANCE Sun has significantly outperformed major REIT and broader market indices over the last ten years 2022 Total Return 3-year Total Return 0.0% 50.0% (10.0%) 25.0% 24.8% (20.0%) (18.1)% (24.5)% (30.0%) 0.0% 1.7% (30.3)% (0.2)% (40.0%) (25.0%) (50.0%) (50.0%) 5-year Total
Slide 26: Premier Owner / Operator of Marinas
PREMIER OWNER / OPERATOR OF MARINAS Service Offerings Keep Members in Network Average Marina member tenure (in years) 134 ~38,900 ~8,900 9.4 8.8 Marinas in 24 States Wet Slips Dry Storage Spaces(1) 8.2 8.1 7.0 6.7 6.5 6.4 6.0 6.0 5.6 5.0 ~91% 81% 75% Marinas Marinas Located in Marinas Owned 2017 201
Slide 27: Industry-Leading Social Media Engagement and Original Digital Content
INDUSTRY-LEADING SOCIAL MEDIA ENGAGEMENT AND ORIGINAL DIGITAL CONTENT Virtual Home Tours Sun leads the outdoor vacation industry across social media channels with ~2.3mm followers and 95mm total engagements Creating Original Content Sun Outdoors original content and Sun Communities Virtual Home
Slide 28: 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 29: Net Income to FFO Reconciliation
NET INCOME TO FFO RECONCILIATION Three Months Ended Year Ended December 31, December 31, December 31, December 31, December 31, (amounts in millions except per share data) 2022 2021 2022 2021 2020 Net Income Attributable to SUI Common Shareholders $ 4.7 $ 12.9 $ 242.0 $ 380.2 $ 131.6 Adjustments Dep
Slide 30: Net Income to NOI Reconciliation
NET INCOME TO NOI RECONCILIATION Three Months Ended Year Ended December 31, December 31, December 31, December 31, December 31, (amounts in millions) 2022 2021 2022 2021 2020 Net Income Attributable to SUI Common Shareholders $ 4.7 $ 12.9 $ 242.0 $ 380.2 $ 131.6 Interest income (9.9) (4.2) (35.2) (1
Slide 31: Net Income to Recurring EBITDA Reconciliation
NET INCOME TO RECURRING EBITDA RECONCILIATION Three Months Ended Year Ended December 31, December 31, December 31, December 31, December 31, (amounts in millions) 2022 2021 2022 2021 2020 Net Income Attributable to SUI Common Shareholders $ 4.7 $ 12.9 $ 242.0 $ 380.2 $ 131.6 Adjustments Depreciation