Sun Communities, Inc. · NYSE:SUI
Sun Communities — Investor Presentation (September 2013)
28 slides from Sun Communities's investor presentation, Sep 11, 2013
Slide 1: Blazing Star - San Antonio, TX
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Slide 2: Forward-looking statements disclaimer
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
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 SUI – Manufactured Homes Apartments • Average rent ≈ $788/month or $0.54/square foot • Av
Slide 6: Affordability Drives Manufactured Housing
6 64,700 63,100 62,800 60,600 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 2008 2009 2010 2011 Manufactured Housing 292,600 270,900 272,900 267,900 Single-Family Portion of purchase price attributable to land Median Household Income* AFFORDABILITY DRIVES MANUFACTURED HOUSING Manu
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 vs. Apartments
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. -9.00% -8.00% -7.00% -6.00% -5.00% -4.00% -3
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 43% 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, Rudgate, Palm Creek
KENTLAND Number of C ies: 18, Location: Re higan in NOL in 2.5 . increased ‘occupancy Sites: 5,323 ou fi Peaceeon csc Gane Lee Purchase Price: $139.3 Million RUDGATE Coe UO ities: 6 cation: E Mcliosn Gite ainei eral Be 594 = Increased occupanc) Acquisition d. vv 12 from 90% to 94% , Purchase Price:
Slide 13: Blazing Star - San Antonio, TX
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Slide 14: Grand Lake RV & Golf
Grand Lake RV & Golf - North Lake. Estates h en, FL
Slide 15: Growth Through Acquisition of RV Communities
15 GROWTH THROUGH ACQUISITION OF RV COMMUNITIES NOI Growth Income Growth Sun’s RV communities have exhibited stronger growth than its MH communities over a 10 year period on both the top and bottom lines. *Year-end 2013 is projected from actuals through 7/31/13. **10-Year CAGRs are calculated for pr
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 6,700 zoned and entitled sites available for expansion at 34 communities Expanding in communities with strong demand evidenced by occupancy of ~95% Expansion lease-up is driven by sales, rental and relocation programs Over 1,100 sites to
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 June 30, 2013
Slide 22: Experienced and Proven Leadership Team
22 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 23: Investment Highlights
23 Attractive manufactured housing and recreational vehicle fundamentals. Steady and predictable revenue streams. Growth through acquisitions. Proven management team. Conservative balance sheet. Access to diversified funding sources. INVESTMENT HIGHLIGHTS
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 6/30/2013
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 6/30/2013
Slide 28: Performance vs. Consumer Driven REITs
28 Even following its stock out-performance, Sun's current implied cap rate and dividend yield reflect a highly attractive valuation level (1) SNL (2) Green Street Advisors except SSS, sourced from SNL (3) Arithmetic, not on a market cap weighted basis 5 Year Total Return as of 6-30-20131 Self-Sto
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