Sun Communities, Inc. · NYSE:SUI
Sun Communities — Investor Presentation (September 2015)
21 slides from Sun Communities's investor presentation, Sep 15, 2015
Slide 1: Sun Communities, Inc.
UN 4 SUN COMMUNITIES, INC. Photo from community: Palm Creek Golf & RV Resort = Casa Grande, AZ
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") and from third-party sources indicated herein. Such third-party information has not been independently verified. The Company makes no repr
Slide 3: Sun Communities, Inc. (NYSE:SUI)
SUN COMMUNITIES, INC. (NYSE:SUI) Leading owner, operator and developer of manufactured housing (“MH”) and recreational vehicle (“RV”) communities Sun Communities’ current portfolio includes 251 communities consisting of 93,373 sites across 30 states □ 200 MH communities, 37 RV resorts, and 14 co
Slide 4: Affordability Drives Manufactured Housing
AFFORDABILITY Affordability Drives Manufactured Housing Manufactured Housing vs. Multi Family: Sun – Manufactured Homes • Average rent ≈ $845/month or $0.65/square foot • Average square footage ≈ 1,300 square feet Apartments • Average rent ≈ $1,050/month or $1.00/square foot* • Average square footag
Slide 5: Affordability Drives Manufactured Housing: Income and Home Costs
The median income in the 30 states in which Sun operates is $59,000 and the average income in a MH community is roughly half the median income. The average single family home costs over 5x the price of a MH unit. * 2013 Average 2 person household income - 30 states in which SUI operates per US Censu
Slide 6: Affordability Drives Manufactured Housing: Occupancy and Mortgage Rates
76.0% 78.0% 80.0% 82.0% 84.0% 86.0% 88.0% 90.0% 92.0% 94.0% 96.0% ‐20.00% ‐15.00% ‐10.00% ‐5.00% 0.00% 5.00% 10.00% 15.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* Mortgage Rates (% Change)** Mortgages (% change)** Sun Occupancy ***Data from IBISWorld is based on 30-year conventional mortg
Slide 7: Stability of Revenue
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 12 years Average term of home in our communities is approximately 45 years No loss in revenue as
Slide 8: Capital Expenditures
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 12/31/2014 8 12.2% 8.8% 8.1% 4.7% 3.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Multi-family Student Housing Overall Average Self-S
Slide 9: Recession Resistant
RECESSION RESISTANT Same Site NOI Growth Same Site OccupancySame Site Rent Growth 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, includin
Slide 10: Same Site NOI
SAME SITE NOI Source: Citi Investment research, August 2015. “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 Sun’s average same site NOI growth
Slide 11: Same Site Indexed NOI Growth
SAME SITE INDEXED NOI GROWTH MH is the most recession resistant sector of the housing and commercial real estate sectors and has consistently outperformed multifamily in same site NOI growth since 2000. Source: SNL 11
Slide 12: Realigning the Portfolio
REALIGNING THE PORTFOLIO 12 *Information from 2011 to September 2015 **Population growth information taken from usa.com and the US census Sun is reshaping its portfolio through strategic acquisitions, dispositions and expansions. Average population growth in all acquisitions and development states
Slide 13: Timeline: Strategic Acquisitions
TIMELINE : STRATEGIC ACQUISITIONS • 17 MH & 1 RV properties Kentland Acquisition growing the portfolio. 136 communities 54,811 sites Since May 2011, Sun has acquired over $2.5 billion of communities, increasing its number of sites and communities by 85% and 96%, respectively. 13 2011 173 communities
Slide 14: Growth Through Accretive Acquisitions
GROWTH THROUGH ACCRETIVE ACQUISITIONS A Look at Acquisition Performance 2011 Acquisitions (26 Communities) 2012 Acquisitions (11 Communities)* 14 $13 $16 $19 $22 $25 $28 $31 $34 $37 $40 Year 1 Year 2 Year 3 Year 4 ( i n m i l l i o n s ) Revenues NOI 90.8% 92.5% 97.6% 98.5% 90% 92% 94% 96% 98% 100%
Slide 15: RV Industry: Growth Contributors
RV INDUSTRY : GROWTH CONTRIBUTORS Contributors In the 5 years to 2020, industry revenue is expected to increase at approximately 1.6% to $6 billion Shipments reached a 7 year high in 2014 and a 6.5% year-over-year increase is projected for 2015 Adults aged 50 and over accounted for more than 4
Slide 16: Sun RV Portfolio Performance
SUN RV PORTFOLIO PERFORMANCE Strong RV Portfolio Performance **Based on 2015 guidance. Percentage of revenues from RV resorts increased from 10% in 2011 to an estimated 17% in 2015 NOI and Income Growth – 2013 Morgan acquisition (10 properties) 16 *Year 3 represents actuals through July 2015 plus pr
Slide 17: Growth Through Expansion Opportunities
GROWTH THROUGH EXPANSION OPPORTUNITIES Inventory of over 8,100 zoned and entitled sites available for expansion at 48 communities in 15 states Expanding in communities with strong demand evidenced by occupancy of ~95% Expansion lease-up is driven by sales, rental and relocation programs Appr
Slide 18: Conservative Balance Sheet
CONSERVATIVE BALANCE SHEET Net Debt / Enterprise Value EBITDA / Interest 18 *Calculated based on trailing 12 months ended June 30, 2015 which only includes a partial year of EBITDA for 2015 acquisitions. Net Debt / EBITDA Fixed Debt (%)
Slide 19: Staggered Debt Maturities
STAGGERED DEBT MATURITIES 19 *Data as of 6/30/2015, adjusted for line of credit refinance on 8/19/2015 Unsecured Line of Credit Refinanced Increased total potential capacity, inclusive of the accordion, from $600M to $750M Reduced spread to LIBOR by 10bps Added a Term loan component for $58M
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Slide 21: Performance vs. Indices
PERFORMANCE VS. INDICES 21 Sun has outperformed all major REIT sector indices and many major market indices over the last five years. 5-year Total Returns by Index as of 6-30-2015 5-year Total Returns by REIT Sector as 6-30-2015 Source: SNL 326% 260% 233% 222% 220% 199% 195% 0% 50% 100% 150% 200% 25
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