Sun Communities, Inc. · NYSE:SUI
Sun Communities — Investor Presentation (March 2022)
29 slides from Sun Communities's investor presentation, Mar 4, 2022
Slide 1: Investor Presentation March 4, 2022
INVESTOR PRESENTATION MARCH 4, 2022 SUN OUTDOORS PANAMA CITY BEACH – PANAMA CITY BEACH, FL
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
Slide 3: Company Highlights
Leading owner and operator of manufactured housing (“MH”) communities, recreational vehicle (“RV”) resorts and marinas Favorable demand drivers combined with supply constraints Consistent organic growth enhanced with embedded expansion opportunities Industry consolidator with proven value creation f
Slide 4: Sun Communities, Inc. Overview
602 properties across 39 states and Ontario, Canada 4 Current Portfolio as of December 31, 2021 Rental Revenue Breakdown as of December 31, 2021 SUN COMMUNITIES, INC. OVERVIEW (NYSE: SUI) Property Count as of December 31, 2021 Source: Company information. Refer to Sun Communities, Inc. Form 10-K and
Slide 5: 2021 Summary Performance Update
5 2021 SUMMARY PERFORMANCE UPDATE PORTFOLIO PERFORMANCE EXTERNAL GROWTH • 3.6% Weighted average monthly rental rate increase • 96.6% MH occupancy and 2,483 RPS Gains of which 67% were RV transient conversions to annual leases • Nearly 580 Expansion site deliveries in 11 properties • 42.6% increase i
Slide 6: 2022 Financial & Operating Guidance at a Glance
$3.79 $4.17 $4.58 $4.92 $5.09 $6.51 2016 2017 2018 2019 2020 2021 2022E 7.1% 6.9% 6.7% 7.3% 4.0% 11.2% 2016 2017 2018 2019 2020 2021 2022E MH/RV 2022E Marina 1,686 2,406 2,600 2,674 2,505 2,483 2016 2017 2018 2019 2020 2021 2022E 2,500 2022 FINANCIAL & OPERATING GUIDANCE AT A GLANCE 6 Earnings: Sour
Slide 7: Powering Sun's Internal Growth Engine
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 INTERNAL GROWTH ENGINE INTERNAL LEVERS Contractual Rent Increases MH Occupancy Gains Expansions Transient RV
Slide 8: Powering Sun's External Growth Engine
EXTERNAL LEVERS Development 8 POWERING SUN’S EXTERNAL GROWTH ENGINE Acquisitions ~$4.4bn investment in 184 properties since start of 2020 4.4x increase in properties since year end 2010 Targeting 3 – 5 new development project starts / year Over 2,000 2020 – 2021 ground-up site deliveries in 10 prope
Slide 9: 2021 Acquisition & Development Activity
2021 ACQUISITION & DEVELOPMENT ACTIVITY 9 ~$1.4bn purchase price Acquisitions Ground-up & Redevelopments Expansions Investment Activity Summary ~15,800 sites added in 54 properties & marinas Robust pipeline of small portfolios and single assets in underwriting $299mm invested Opened 2 new MH propert
Slide 10: Sticky Customer Base with Limited CapEx
RV Guest Trends (% of Total Residents, 3-Year Average) STICKY CUSTOMER BASE WITH LIMITED CAPEX 10 Annual home move-outs in Sun’s MH communities are less than 1% ꟷ Low turnover driven by a $6k - $10k average cost for a resident to move a home ꟷ Average tenure of residents in our MH communities is ~
Slide 11: Consistent and Cycle Tested Cash Flow Growth
Multi-Family REITsSun Communities CONSISTENT AND CYCLE TESTED CASH FLOW GROWTH 11 Favorable demand drivers, high barriers to entry and Sun’s investment and operational prowess have resulted in consistent and cycle tested organic cash flow growth Over at least the past 20 years, every individual
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 ~50% less cost per square foot Manufactured Homes in Sun’s Communities RENT $1,110 per month Other Rental Options(1) $1,855 per month SQUARE FOOTAGE PRICE 1,250 sq. ft. 1,000 sq. ft. $0.
Slide 13: Homeownership – MH vs. Single Family
HOMEOWNERSHIP – MH VS. SINGLE FAMILY 13 Single Family HomesManufactured Homes Average cost of Single Family is $308,597 or roughly 7 years median income Average cost of a new Manufactured Home is $87,000 or roughly 2 years median income Average Household Income ~$46k(1) Sources: U.S. Department
Slide 14: Expansions Provide Attractive Returns
14 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 Over 6,500 vacant expansion site deliveries since 2015 12 - 24 months average lease-up for 100-
Slide 15: Maximizing Value from Strategic Acquisitions
Professional Operational Management Home Sales & Rental Program Skilled Expense Management Call Center & Digital Marketing Outreach Repositioning with Additional Capex Adding Value with Expansions MAXIMIZING VALUE FROM STRATEGIC ACQUISITIONS 15 Source: Company information. Refer to Sun Communities,
Slide 16: Acquisition of Park Holidays UK
ACQUISITION 16 Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2021, as well as Press Releases and SEC Filings after December 31, 2021, for additional information. Refer to information regarding non-GAAP financial measures in the
Slide 17: Park Holidays Portfolio
PORTFOLIO 17 Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2021, as well as Press Releases and SEC Filings after December 31, 2021, for additional information. Refer to information regarding non-GAAP financial measures in the a
Slide 18: UK Park Market
67 42 40 16 14 14 12 11 11 50 7% 200 250 12% 3,000 80% 3,727 Others w/ 10+ 5-10 communities 2-5 communities Single community operators Total (5) UK PARK MARKET 18 Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2021, as well as P
Slide 19: We Are the Premier Marina Operator
90% 86% 79% Southeast South Southwest WE ARE THE PREMIER MARINA OPERATOR Unrivaled Among Competitors 125 Owned Marinas 36,700 Approximate Wet Slips 24 States & Puerto Rico 80% of Marinas Located in Coastal Markets(3) 45,000 Approximate Members 7.6 Years Average Member Tenure 75% of Marinas Owned Fee
Slide 20: Marina Sector Pioneer and Consolidator
$2,106 $466 $40 $423 $214 $132 99 7 4 4 6 5 Original Transaction 4Q20 1Q21 2Q21 3Q21 4Q21 Dollar Amount ($ mm) Number of Marinas MARINA SECTOR PIONEER AND CONSOLIDATOR 20 Key Transactions(1) 1 2 3 4 Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year e
Slide 21: Strategic Balance Sheet
2022 2023 2024 2025 2026 $255.4 $70.7 $50.5 $315.3 6.3x 5.6x 5.5x 6.9x 5.7x 2017 2018 2019 2020 2021 STRATEGIC BALANCE SHEET 21 Net Debt / TEV(5) As of December 31, 2021 Principal Outstanding(2) Weighted Average Interest Rates Total Secured Debt $3,380.7 3.78% Total Unsecured Debt $2,291.1 1.95% Tot
Slide 22: Sun Communities' ESG Initiatives
Environmental SUN COMMUNITIES’ ESG INITIATIVES 22 ESG Highlights(1) 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 will continue to enhance Sun’s sustainability progr
Slide 23: Strategy-Driven Outperformance
STRATEGY-DRIVEN OUTPERFORMANCE 23 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 2021 Total Return 5-year Total Return 10-year Total Return 3-year Total Return Source: S&P Global as of December
Slide 24: Best Performance Among Real Estate Sectors
$143 Shopping Centers BEST PERFORMANCE AMONG REAL ESTATE SECTORS 24 Sun has proven its strategy through recession resilience and consistent outperformance of multi-family in terms of same community NOI growth since 2000 Indexed Same Community NOI Growth Source: Citi Research, September 2021. (1) M
Slide 25: Appendix
APPENDIX SUN OUTDOORS LAKE TRAVIS – AUSTIN, TX
Slide 26: Non-GAAP Terms Defined
NON-GAAP TERMS DEFINED 26 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,
Slide 27: Net Income to FFO Reconciliation
NET INCOME TO FFO RECONCILIATION 27 (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, 2021, as well as Press Releases and SEC Filings after December 31, 2021, for additional information.
Slide 28: Net Income to NOI Reconciliation
NET INCOME TO NOI RECONCILIATION 28 (amounts in thousands) Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2021, as well as Press Releases and SEC Filings after December 31, 2021, for additional information. 2021 2020 2021 2020 2
Slide 29: Net Income to Recurring EBITDA Reconciliation
NET INCOME TO RECURRING EBITDA RECONCILIATION 29 (amounts in thousands) Source: Company information. Refer to Sun Communities, Inc. Form 10-K and Supplemental for the year ended December 31, 2021, as well as Press Releases and SEC Filings after December 31, 2021, for additional information. 2021 202