Sun Communities, Inc. Reports 2023 Third Quarter and Year-to-Date Results

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Net Earnings per Diluted Share of $1.31 for the Quarter

Core FFO per Share of $2.57 for the Quarter Exceeded the High-End of Guidance Range

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Total Same Property NOI Grew by 6.7% for the Quarter over the 2022 Period, Exceeding the High-End of Guidance Range by 220 Basis Points

Strong Demand and Effective Expense Management Continue to Drive Outperformance

Same Property Adjusted Occupancy for MH and RV Increased by 170 Basis Points, Year-over-Year

Transient-to-Annual RV Site Conversions of nearly 537 Sites for the Quarter and 1,815 for the Year-to-Date

         

Revising Full-Year Core FFO per Share Guidance for 2023 to $7.05 – $7.13

Increasing Guidance Range for Full-Year Total Same Property NOI Growth to 6.0% – 6.4%

Establishing Preliminary Guidance for 2024 Rental Rate Increases of 5.4% for MH, 6.5% for Annual RV, and 5.6% for Marina in North America, and 7.1% for UK

         

Southfield, MI, Oct. 25, 2023 (GLOBE NEWSWIRE) — Sun Communities, Inc. (NYSE: SUI) (the “Company” or “SUI”), a real estate investment trust (“REIT”) that owns and operates, or has an interest in, manufactured housing (“MH”) and recreational vehicle (“RV”) communities and marinas (collectively, the “properties”), today reported its third quarter results for 2023.

Financial Results for the Quarter and Nine Months Ended September 30, 2023

  • For the quarter ended September 30, 2023, net income attributable to common shareholders was $163.1 million, or $1.31 per diluted share, compared to net income attributable to common shareholders of $162.6 million, or $1.32 per diluted share for the same period in 2022.
  • For the nine months ended September 30, 2023, net income attributable to common shareholders was $222.8 million, or $1.79 per diluted share, compared to net income attributable to common shareholders of $237.3 million, or $1.97 per diluted share, for the same period in 2022.

Non-GAAP Financial Measures

  • Core Funds from Operations (“Core FFO”) for the quarter and nine months ended September 30, 2023, were $2.57 per common share and dilutive convertible securities (“Share”) and $5.76 per Share, respectively.
  • Same Property Net Operating Income (“NOI”) increased by 6.7% and 6.6% for the quarter and nine months ended September 30, 2023, respectively, as compared to the corresponding periods in 2022.

“In the third quarter, we again delivered strong performance in our core real property portfolio, with Same Property NOI growth and Core FFO exceeding our expectations,” said Gary A. Shiffman, Chairman, President and CEO. “This strength was exhibited across Manufactured Housing, RV and Marinas, all of which demonstrate the continued favorable backdrop of high demand and limited supply. Furthermore, we are positioned for ongoing organic growth with 2024 expected rental rate increases of approximately 5.4% for MH, 6.5% for RV, and 5.6% for Marina in North America and 7.1% for UK.” He continued, “Our current objectives include implementing select changes to help our best-in-class portfolio deliver the FFO per share growth Sun shareholders historically have enjoyed. These changes include selective capital recycling opportunities and using the proceeds to de-lever. With the strength of our core business, which has a positive track record throughout economic cycles, and our focus on our durable cash flow business, we remain confident in our ability to create shareholder value.”

OPERATING HIGHLIGHTS

North America Portfolio Occupancy

  • Total MH and annual RV occupancy was 97.2% at September 30, 2023, as compared to 97.1% at September 30, 2022.
  • During the quarter ended September 30, 2023, the number of MH and annual RV revenue producing sites increased by 744 sites, as compared to an increase of 689 sites during the corresponding period in 2022, an 8.0% increase.
  • Transient-to-annual RV site conversions totaled 537 sites during the third quarter of 2023 and account for 72.2% of the revenue producing site gains. Total transient-to-annual RV site conversions totaled 1,815 for the nine months ended September 30, 2023.

Same Property Results

For the properties owned and operated by the Company since at least January 1, 2022, the following table reflects the percentage changes for the quarter and nine months ended September 30, 2023:

  Quarter Ended September 30, 2023
  MH   RV   Marina   Total
Revenue         7.4         %           2.2         %           8.4         %           5.5         %
Expense         5.7         %           (0.8)        %           7.4         %           3.0         %
NOI         8.0         %           4.1         %           8.9         %           6.7         %
               
  Nine Months Ended September 30, 2023
  MH   RV   Marina   Total
Revenue         6.8         %           3.6         %           9.4         %           6.2         %
Expense         8.5         %           3.1         %           5.1         %           5.5         %
NOI         6.2         %           3.9         %           11.5         %           6.6         %
               
Number of Properties 288     161     119     568  

Same Property adjusted blended occupancy for MH and RV increased by 170 basis points to 98.8% at September 30, 2023, from 97.1% at September 30, 2022.

INVESTMENT ACTIVITY

During the quarter ended September 30, 2023, the Company:

  • Expanded its existing communities by nearly 170 sites.
  • Delivered over 70 sites at one ground-up development property.

BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

As of September 30, 2023, the Company had $7.7 billion in debt outstanding with a weighted average interest rate of 4.1% and a weighted average maturity of 6.8 years. At September 30, 2023, the Company’s net debt to trailing twelve-month Recurring EBITDA ratio was 6.1 times.

During the quarter, the Company entered into interest rate swap contracts to hedge variable rate borrowings of $125.0 million in aggregate under its senior credit facility. The interest rate swaps lock in a weighted average SOFR rate of 4.771%, and inclusive of spread, an all-in rate of 5.681% through the maturity date of April 7, 2026.

Subsequent to the quarter, the Company:

  • Entered into an interest rate swap contract to hedge variable rate borrowings of $25.0 million under its senior credit facility. The interest rate swap lock in a weighted average SOFR rate of 4.684%, and inclusive of spread, an all-in rate of 5.594% through the term loan maturity date of April 7, 2026.
  • Terminated one SOFR interest rate swap hedging variable rate borrowings of $50.0 million under its senior credit facility and received a cash settlement payment of $6.0 million. The net accumulated gain is included in Accumulated other comprehensive income on the Company’s Consolidated Balance Sheets, and will be amortized as a reduction to Interest expense over the term of the hedged transaction.
  • Entered into a new mortgage term loan for $252.8 million that matures in November 2030 and bears interest at a fixed rate of 6.49%. The proceeds were used to repay $117.8 million of mortgage term loans that mature in 2023 and pay down amounts drawn under the Company’s senior credit facility.
  • Sold its 41.8 million share position in Ingenia Communities Group (ASX: INA), generating $102.5 million of proceeds, net of underwriting and other estimated fees, with an estimated realized loss of $9.0 million. The proceeds were used to pay down amounts drawn under the Company’s senior credit facility.

UK Notes Receivable from Real Estate Operators

From time to time, the Company extends loans to third party real estate developers and operators to facilitate the Company’s potential acquisition and development pipeline. At September 30, 2023, the Company had a $361.1 million note receivable due from Royale Holdings Group HoldCo Limited, a real estate development owner / operator in the UK, and certain other parties (the “Note”). As of the same date, the borrowings under the Note bear interest at a weighted average rate of 12.4%. The Note is not related to the Company’s manufactured housing portfolio in the UK that operates under the Park Holidays brand.

Since inception, the Company has elected to measure the Note at fair value, using pricing models with the assistance of third-party valuation specialists, in accordance with Accounting Standards Codification Topic 820, “Fair Value Measurements and Disclosures.” The Company has also periodically engaged third party valuation specialists to appraise the collateral in order to assess the fair value of the Note.

The Note is collateralized by a first-priority security interest in three real estate properties and three MH manufacturers in the UK. The real estate collateral consists of MH development properties that comprised a significant majority of the total appraised value of all collateral securing the Note at September 30, 2023.
The Note matured on July 31, 2023, and remained due at September 30, 2023. On September 29, 2023, the Company appointed receivers over the real estate collateral and is assessing courses of action with respect to the other collateral.

The Company expects the receivers to start to market the real estate collateral for sale during the fourth quarter of 2023. Upon completion of the marketing process, the Company may elect to credit bid certain amounts due under the Note for the real estate collateral. If that were to occur and no third-party bid is received that exceeds the Company’s credit bid, the Company may elect to receive the real estate collateral in satisfaction of related amounts due under the Note. If a third-party bid is received that exceeds the Company’s bid, the Company will receive the cash proceeds of that bid up to the outstanding loan amount including interest, fees, and penalties, as applicable.

UK Contemplated Asset Sale

As previously disclosed, the Company had agreed to sell an operating MH community in the UK, Sandy Bay, in February 2023, which was expected to close in the third quarter. While the sale contract is no longer in effect, the asset remained classified as held for sale at September 30, 2023.

2023 GUIDANCE UPDATE

The Company is updating full-year 2023 and establishing fourth quarter 2023 guidance for diluted EPS and Core FFO per Share as follows:

Reconciliation of Diluted EPS to Core FFO per Share

  Full-Year Ending December 31, 2023   Fourth Quarter
Ending
December 31, 2023
  Prior FY Guidance   Revised FY Range  
Diluted EPS   $         2.11             $         2.25             $         1.92             $         2.00             $         0.12             $         0.20          
Depreciation and amortization             5.07                       5.07                       5.06                       5.06                       1.26                       1.26          
Distributions on preferred OP units             0.09                       0.09                       0.09                       0.09                       0.02                       0.02          
Noncontrolling interest             0.11                       0.11                       0.09                       0.09                       (0.01 )             (0.01 )
Gain on sale of assets             (0.28 )             (0.28 )             (0.25 )             (0.25 )             (0.07 )             (0.07 )
Business combination expense and other acquisition related costs             0.09                       0.09                       0.12                       0.12                       0.01                       0.01          
Other adjustments(a)             (0.10 )             (0.10 )             0.02                       0.02                       (0.05 )             (0.05 )
Core FFO(b) per Share   $         7.09             $         7.23             $         7.05             $         7.13             $         1.28             $         1.36          

(a) Other adjustments consist primarily of deferred taxes, changes in remeasurement (gains) / losses, contingent legal and insurance gains and other items presented in the table that reconciles Net income attributable to SUI common shareholders to Core FFO on page 6.

(b) The Company’s updated guidance translates forecasted results from operations in the UK using the relevant exchange rate in effect provided in the 2023 Guidance Assumptions table presented below. The impact of fluctuations in Canadian and Australian foreign currency rates on revised and initial guidance are not material.

The $7.09 per Share midpoint of the revised full-year guidance range is 1.0% lower than the prior range provided in July, primarily reflecting higher interest expense related to the UK Note remaining outstanding and lower expected transient RV revenues.

For the fourth quarter ending December 31, 2023, the Company’s guidance ranges assume Total Same Property NOI growth of 4.4% – 5.9%. The midpoints of Same Property NOI growth for the fourth quarter ending December 31, 2023 are 5.1% for Manufactured Housing, 3.6% for RV and 6.2% for Marina.

The assumptions underlying the Company’s revised 2023 full-year guidance are as follows:

    FY 2022   Expected Change in 2023
2023 Guidance Assumptions (dollars in millions)   Results   Prior FY Guidance   Revised FY Range
Consolidated Portfolio:            
Total real property NOI       6.1% – 6.9%   6.9% – 7.1%
Service, retail, dining and entertainment NOI       $50.4 – $52.9   $51.2 – $52.2
North America home sales contribution to Core FFO(a)       $18.9 – $21.7   $19.4 – $20.5
Interest income(b)       N/A   $44.8 – $45.1
Brokerage commissions and other, net(c)       N/A   $50.9 – $51.4
General and administrative expenses       ($255.4) – ($249.9)   ($253.6) – ($252.1)
             
UK            
UK real property NOI(d)       $63.6 – $65.6   $64.1 – $65.1
UK home sales NOI       $65.7 – $75.4   $68.2 – $72.2
UK NOI       $129.3 – $141.0   $132.3 – $137.3
             
Same Property Portfolio(e)            
MH NOI (288 properties)   $ 569.2   5.2% – 5.8%   5.8% – 6.1%
RV NOI (161 properties)   $ 281.8   3.4% – 4.6%   3.5% – 4.2%
Marina NOI (119 properties)   $ 210.8   8.0% – 9.0%   10.0% – 10.3%
             
Total Same Property Pool (568 Properties):            
Revenue from real property   $ 1,600.4   6.2% – 6.5%   5.8% – 6.0%
Property operating expenses(f)(g)   $ 538.6   7.2% – 7.9%   5.2% – 5.4%
Same Property NOI   $ 1,061.8   5.3% – 6.1%   6.0% – 6.4%
             
Exchange rates in effect at:   December 31, 2022   June 30, 2023   September 30, 2023
U.S. Dollar (“USD”) / Pound Sterling (“GBP”)     1.21   1.27   1.22
USD / Canadian Dollar (“CAD”)     0.74   0.75   0.74
USD / Australian Dollar (“AUS”)     0.68   0.66   0.64

Footnotes to 2023 Guidance Assumptions            
(a) FFO from home sales in North America is net of home selling expenses and includes the gross profit from new and certain pre-owned home sales. Gross profit from pre-owned home sales of depreciated homes is excluded.
(b) Interest income recognized from the UK Note during the first nine months ended September 30, 2023, totaled $27.9 million, or $0.22 per Share. No interest income from the UK Note is included in the Company’s fourth quarter guidance. The following table summarizes the interest income contribution inclusive of fourth quarter guidance:
  Interest Income – 2023 Guidance   Nine Months
Ended
September 30, 2023
  4Q23
Guidance
  FY 2023
Guidance
  UK Note   $ 27.9   $ 0.0   $ 27.9
  Other     12.7   4.2 – 4.5   16.9 – 17.2
  Total   $ 40.6   $4.2 – $4.5   $44.8 – $45.1
(c) For the third quarter and nine months ended September 30, 2023, Brokerage commissions and other, net includes recognition of $12.9 million of business interruption proceeds, which nets against accrued ‘Loss of earnings – catastrophic event-related charges, net’ in the Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO table.
(d) UK Real Property NOI is included in the Total Real Property NOI forecast and the properties are excluded from the 2023 Same Property pool.
(e) The amounts in the table reflect constant currency, as currency figures included within the 2022 actual amounts have been translated at the assumed exchange rate used for 2023 guidance.
(f) Total Same Property results net $101.1 million of utility revenue for 2022 actual results and $109.7 million for 2023 guidance against the related utility expense in property operating expenses.
(g) 2022 actual results exclude $1.3 million of expenses incurred at recently acquired properties to bring them up to the Company’s standards. The improvements included items such as tree trimming and painting costs that do not meet the Company’s capitalization policy.

Seasonality (Updated as of October 25, 2023)   1Q23   2Q23   3Q23   4Q23
Same Property NOI:                
MH   25 %   25 %   25 %   25 %
RV   16 %   25 %   42 %   17 %
Marina   20 %   27 %   30 %   23 %
Total Same Property   21 %   26 %   30 %   23 %
                 
UK NOI:                
Real property   10 %   27 %   44 %   19 %
Home sales   18 %   35 %   33 %   14 %
Total NOI from UK Operations   14 %   31 %   38 %   17 %
                 
Consolidated Service, Retail, Dining and Entertainment NOI   5 %   36 %   49 %   10 %
                 
Consolidated EBITDA   19 %   27 %   34 %   20 %
                 
Core FFO per Share   17 %   28 %   36 %   19 %

Preliminary 2024 Rental Rate Increases
The Company expects to realize the following rental rate increases, on average, during 2024:

Average 2024 Rental Rate Increases Expected  
Manufactured Housing:  
North America 5.4 %
UK 7.1 %
Annual RV 6.5 %
Marina 5.6 %

The estimates and assumptions presented above represent a range of possible outcomes and may differ materially from actual results. These estimates include contributions from all acquisitions, dispositions and capital markets activity completed through October 25, 2023. These estimates exclude all other prospective acquisitions, dispositions and capital markets activity. The estimates and assumptions are forward-looking based on the Company’s current assessment of economic and market conditions and are subject to the other risks outlined below under the caption Cautionary Statement Regarding Forward-Looking Statements.

EARNINGS CONFERENCE CALL

A conference call to discuss third quarter results will be held on Thursday, October 26, 2023 at 2:00 P.M. (ET). To participate, call toll-free at (877) 407-9039. Callers outside the U.S. or Canada can access the call at (201) 689-8470. A replay will be available following the call through November 9, 2023 and can be accessed toll-free by calling (844) 512-2921 or (412) 317-6671. The Conference ID number for the call and the replay is 13739128. The conference call will be available live on the Company’s website located at www.suncommunities.com. The replay will also be available on the website.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains various “forward-looking statements” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this document that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as “forecasts,” “intends,” “intend,” “intended,” “goal,” “estimate,” “estimates,” “expects,” “expect,” “expected,” “project,” “projected,” “projections,” “plans,” “predicts,” “potential,” “seeks,” “anticipates,” “anticipated,” “should,” “could,” “may,” “will,” “designed to,” “foreseeable future,” “believe,” “believes,” “scheduled,” “guidance,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements reflect the Company’s current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this document, some of which are beyond the Company’s control. These risks and uncertainties and other factors may cause the Company’s actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks described under “Risk Factors” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and in the Company’s other filings with the Securities and Exchange Commission, from time to time, such risks, uncertainties and other factors include, but are not limited to:

Outbreaks of disease and related restrictions on business operations;
Changes in general economic conditions, including inflation, deflation and energy costs, the real estate industry and the markets within which the Company operates;
Difficulties in the Company’s ability to evaluate, finance, complete and integrate acquisitions, developments and expansions successfully;
The Company’s liquidity and refinancing demands;
The Company’s ability to obtain or refinance maturing debt;
The Company’s ability to maintain compliance with covenants contained in its debt facilities and its unsecured notes;
Availability of capital;
Changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, Australian dollar and Pound sterling;
The Company’s ability to maintain rental rates and occupancy levels;
The Company’s ability to maintain effective internal control over financial reporting and disclosure controls and procedures;
Increases in interest rates and operating costs, including insurance premiums and real estate taxes;
Risks related to natural disasters such as hurricanes, earthquakes, floods, droughts and wildfires;
General volatility of the capital markets and the market price of shares of the Company’s capital stock;
The Company’s ability to maintain its status as a REIT;
Changes in real estate and zoning laws and regulations;
Legislative or regulatory changes, including changes to laws governing the taxation of REITs;
Litigation, judgments or settlements, including costs associated with prosecuting or defending claims and any adverse outcomes;
Competitive market forces;
The ability of purchasers of manufactured homes and boats to obtain financing; and
The level of repossessions by manufactured home and boat lenders;

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements included or incorporated by reference into this document, whether as a result of new information, future events, changes in the Company’s expectations or otherwise, except as required by law.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. All written and oral forward-looking statements attributable to the Company or persons acting on the Company’s behalf are qualified in their entirety by these cautionary statements.

Company Overview and Investor Information

 

The Company

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of September 30, 2023, the Company owned, operated, or had an interest in a portfolio of 670 developed MH, RV and Marina properties comprising approximately 180,170 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.

For more information about the Company, please visit www.suncommunities.com.

Company Contacts  
   
Management Investor Relations
  • Gary A. Shiffman, Chairman, President and CEO
Sara Ismail, Vice President
  • Fernando Castro-Caratini, EVP and CFO
(248) 208-2500
  • Bruce D. Thelen, EVP and COO
[email protected]
   

Corporate Debt Ratings  
Moody’s S&P
Baa3 | Stable BBB | Stable
   

Equity Research Coverage        
Bank of America Merrill Lynch   Joshua Dennerlein   [email protected]
Barclays   Anthony Powell   [email protected]
BMO Capital Markets   John Kim   [email protected]
Citi Research   Eric Wolfe   [email protected]
    Nicholas Joseph   [email protected]
Evercore ISI   Samir Khanal   [email protected]
    Steve Sakwa   [email protected]
Green Street Advisors   John Pawlowski   [email protected]
JMP Securities   Aaron Hecht   [email protected]
RBC Capital Markets   Brad Heffern   [email protected]
Robert W. Baird & Co.   Wesley Golladay   [email protected]
Truist Securities   Anthony Hau   [email protected]
UBS   Michael Goldsmith   [email protected]
Wells Fargo   James Feldman   [email protected]
Wolfe Research   Andrew Rosivach   [email protected]
    Keegan Carl   [email protected]

Financial and Operating Highlights
(amounts in millions, except for *)

 

  Quarters Ended
  9/30/2023   6/30/2023   3/31/2023   12/31/2022   9/30/2022
Financial Information                  
Basic earnings / (loss) per share* $         1.31             $         0.72             $         (0.24         )   $         0.04             $         1.32          
Diluted earnings / (loss) per share* $         1.31             $         0.72             $         (0.24         )   $         0.04             $         1.32          
                   
Cash distributions declared per common share* $         0.93             $         0.93             $         0.93             $         0.88             $         0.88          
                   
FFO per Share(a)* $         2.55             $         1.95             $         1.14             $         1.02             $         2.54          
Core FFO per Share(a)* $         2.57             $         1.96             $         1.23             $         1.33             $         2.65          
                   
Real Property NOI                  
MH $         182.5             $         168.7             $         156.9             $         153.5             $         166.8          
RV           128.4                       76.5                       45.8                       46.1                       127.0          
Marinas           83.1                       72.4                       52.0                       58.3                       77.8          
Total $         394.0             $         317.6             $         254.7             $         257.9             $         371.6          
                   
Recurring EBITDA $         433.0             $         339.7             $         237.4             $         236.3             $         408.1          
TTM Recurring EBITDA / Interest* 4.0 x   4.3 x   4.6 x   5.2 x   5.7 x
Net Debt / TTM Recurring EBITDA 6.1 x   6.2 x   6.1 x   6.0 x   5.7 x
                   
Balance Sheet                  
Total assets $         17,605.3             $         17,561.4             $         17,363.8             $         17,084.2             $         16,484.6          
Total debt $         7,665.0             $         7,614.0             $         7,462.0             $         7,197.2             $         6,711.0          
Total liabilities $         9,465.0             $         9,474.8             $         9,294.8             $         8,992.8             $         8,354.6          
                   
Operating Information*                  
Properties                  
MH           353                       354                       354                       353                       350          
RV           182                       182                       182                       182                       181          
Marina           135                       135                       135                       134                       131          
Total           670                       671                       671                       669                       662          
                   
Sites, Wet Slips and Dry Storage Spaces*                  
Manufactured homes           118,250                       118,170                       117,970                       118,020                       116,910          
Annual RV           32,150                       31,620                       30,860                       30,330                       32,030          
Transient site           29,770                       30,270                       30,870                       31,180                       31,150          
Total sites           180,170                       180,060                       179,700                       179,530                       180,090          
Marina wet slips and dry storage spaces(b)           48,030                       48,180                       47,990                       47,820                       46,190          
                   
Occupancy*                  
MH occupancy (including UK)           95.4         %             95.3         %             95.1         %             95.0         %             95.5         %
Annual RV occupancy           100.0         %             100.0         %             100.0         %             100.0         %             100.0         %
Blended MH and annual RV occupancy           96.4         %             96.3         %             96.1         %             96.0         %             96.5         %
                   
MH and RV Revenue Producing Site Net Gains(c) (excluding UK Operations)*
MH leased sites, net           207                       285                       278                       346                       122          
RV leased sites, net           537                       754                       524                       267                       567          
Total leased sites, net           744                       1,039                       802                       613                       689          

(a)  Excludes the effects of certain anti-dilutive convertible securities.

(b)  Total wet slips and dry storage spaces are adjusted each quarter based on site configuration and usability.

(c)  Revenue producing site net gains do not include occupied sites acquired during the year.
(d)  
Portfolio Overview as of September 30, 2023

 

    MH & RV Properties
    Properties

  MH & Annual RV   RV Transient Sites

  Total MH and RV Sites

  Sites for Development

Location     Sites   Occupancy %      
North America                        
Florida           129                   40,460                   97.5         %           3,950                   44,410                   3,400        
Michigan           85                   32,850                   96.7         %           630                   33,480                   1,300        
California           37                   6,920                   98.8         %           1,880                   8,800                   850        
Texas           31                   8,950                   95.2         %           2,580                   11,530                   4,000        
Ontario, Canada           16                   4,680                   100.0         %           500                   5,180                   1,450        
Connecticut           16                   1,930                   94.8         %           80                   2,010                   —        
Maine           15                   2,470                   95.6         %           1,070                   3,540                   200        
Arizona           13                   4,570                   94.4         %           940                   5,510                   —        
Indiana           12                   3,160                   97.2         %           1,020                   4,180                   180        
New Jersey           11                   3,000                   100.0         %           1,050                   4,050                   260        
Colorado           11                   2,810                   89.1         %           990                   3,800                   1,490        
Virginia           10                   1,480                   99.9         %           1,970                   3,450                   750        
New York           10                   1,520                   99.1         %           1,420                   2,940                   780        
New Hampshire           10                   1,740                   99.9         %           680                   2,420                   80        
Other           74                   15,810                   98.5         %           7,730                   23,540                   940        
North America Total           480                   132,350                   97.2         %           26,490                   158,840                   15,680        
United Kingdom           55                   18,050                   90.6         %           3,280                   21,330                   2,290        
Total           535                   150,400                   96.4         %           29,770                   180,170                   17,970        

    Marina    
    Properties

      Wet Slips and Dry Storage Spaces

   
Location            
Florida           21                       5,200            
Rhode Island           12                       3,460            
California           11                       5,710            
Connecticut           11                       3,330            
New York           9                       3,020            
Maryland           9                       2,480            
Massachusetts           9                       2,520            
Other           53                       22,310            
Total           135                       48,030            

    Properties

      Sites, Wet Slips and Dry Storage Spaces

   
             
Total Portfolio           670                       228,200            

Consolidated Balance Sheets
(amounts in millions)

 

  September 30, 2023   December 31, 2022
Assets      
Land $         3,996.4             $         4,322.3          
Land improvements and buildings           11,418.4                       10,903.4          
Rental homes and improvements           725.6                       645.2          
Furniture, fixtures and equipment           995.1                       839.0          
Investment property           17,135.5                       16,709.9          
Accumulated depreciation           (3,144.8 )             (2,738.9 )
Investment property, net           13,990.7                       13,971.0          
Cash, cash equivalents and restricted cash           62.0                       90.4          
Marketable securities           112.8                       127.3          
Inventory of manufactured homes           219.8                       202.7          
Notes and other receivables, net           832.2                       617.3          
Goodwill           1,084.1                       1,018.4          
Other intangible assets, net           374.7                       402.0          
Other assets, net           929.0                       655.1          
Total Assets $         17,605.3             $         17,084.2          
Liabilities      
Secured debt $         3,359.5             $         3,217.8          
Unsecured debt           4,305.5                       3,979.4          
Distributions payable           118.2                       111.3          
Advanced reservation deposits and rent           372.7                       352.1          
Accrued expenses and accounts payable           380.2                       396.3          
Other liabilities           928.9                       935.9          
Total Liabilities           9,465.0                       8,992.8          
Commitments and contingencies      
Temporary equity           304.5                       202.9          
Shareholders’ Equity      
Common stock           1.2                       1.2          
Additional paid-in capital           9,581.6                       9,549.7          
Accumulated other comprehensive income / (loss)           5.2                       (9.9 )
Distributions in excess of accumulated earnings           (1,848.2 )             (1,731.2 )
Total SUI shareholders’ equity           7,739.8                       7,809.8          
Noncontrolling interests      
Common and preferred OP units           96.0                       78.7          
Total noncontrolling interests           96.0                       78.7          
Total Shareholders’ Equity           7,835.8                       7,888.5          
Total Liabilities, Temporary Equity and Shareholders’ Equity $         17,605.3             $         17,084.2          

Consolidated Statements of Operations
(amounts in millions, except for per share amounts)

 

  Quarter Ended   Nine Months Ended
  September 30, 2023   September 30, 2022   % Change   September 30, 2023   September 30, 2022   % Change
Revenues                      
Real property (excluding transient) $         457.2             $         425.3                     7.5         %   $         1,285.5             $         1,158.1                     11.0         %
Real property – transient           161.6                       160.4                     0.7         %             300.9                       303.5                     (0.9)        %
Home sales           117.8                       150.7                     (21.8)        %             326.7                       358.1                     (8.8)        %
Service, retail, dining and entertainment           205.4                       174.2                     17.9         %             498.9                       423.0                     17.9         %
Interest           15.2                       11.2                     35.7         %             40.6                       25.3                     60.5         %
Brokerage commissions and other, net           26.0                       10.8                     140.7         %             45.3                       27.4                     65.3         %
Total Revenues           983.2                       932.6                     5.4         %             2,497.9                       2,295.4                     8.8         %
Expenses                      
Property operating and maintenance           195.5                       184.7                     5.8         %             530.7                       469.2                     13.1         %
Real estate tax           29.3                       29.4                     (0.3)        %             89.4                       83.2                     7.5         %
Home costs and selling           80.5                       96.4                     (16.5)        %             224.9                       235.2                     (4.4)        %
Service, retail, dining and entertainment           178.7                       144.9                     23.3         %             450.4                       363.3                     24.0         %
General and administrative           66.2                       69.1                     (4.2)        %             192.4                       187.0                     2.9         %
Catastrophic event-related charges, net           (3.1 )             12.2                     (125.4)        %             (2.2 )             12.3                     (117.9)        %
Business combinations           —                       8.4                     (100.0)        %             3.0                       23.9                     (87.4)        %
Depreciation and amortization           162.6                       149.7                     8.6         %             482.3                       447.7                     7.7         %
Asset impairments           1.2                       1.6                     (25.0)        %             10.1                       2.3             N/M
Loss on extinguishment of debt           —                       4.0                     (100.0)        %             —                       4.4                     (100.0)        %
Interest           84.1                       61.7                     36.3         %             239.9                       162.2                     47.9         %
Interest on mandatorily redeemable preferred OP units / equity           0.8                       1.0                     (20.0)        %             2.7                       3.1                     (12.9)        %
Total Expenses           795.8                       763.1                     4.3         %             2,223.6                       1,993.8                     11.5         %
Income Before Other Items           187.4                       169.5                     10.6         %             274.3                       301.6                     (9.1)        %
Gain / (loss) on remeasurement of marketable securities           6.1                       (7.2 )   N/M             (8.0 )             (74.0 )           (89.2)        %
Gain / (loss) on foreign currency exchanges           (6.5 )             14.9             N/M             (6.5 )             21.7             N/M
Gain / (loss) on dispositions of properties           (0.7 )             (0.8 )           (12.5)        %             (2.9 )             12.5             N/M
Other income / (expense), net(a)           (3.7 )             2.8             N/M             (5.5 )             2.6             N/M
Gain / (loss) on remeasurement of notes receivable           (1.3 )             (0.1 )   N/M             (3.1 )             0.1             N/M
Income from nonconsolidated affiliates           1.4                       2.0                     (30.0)        %             0.5                       3.8                     (86.8)        %
Gain / (loss) on remeasurement of investment in nonconsolidated affiliates           —                       (0.4 )           (100.0)        %             (4.5 )             0.1             N/M
Current tax expense           (4.6 )             (7.3 )           (37.0)        %             (13.9 )             (12.5 )           11.2         %
Deferred tax benefit           2.3                       3.6                     (36.1)        %             14.6                       3.9                     274.4         %
Net Income           180.4                       177.0                     1.9         %             245.0                       259.8                     (5.7)        %
Less: Preferred return to preferred OP units / equity interests           3.3                       2.5                     32.0         %             9.0                       8.6                     4.7         %
Less: Income attributable to noncontrolling interests           14.0                       11.9                     17.6         %             13.2                       13.9                     (5.0)        %
Net Income Attributable to SUI Common Shareholders $         163.1             $         162.6                     0.3         %   $         222.8             $         237.3                     (6.1)        %
                       
Weighted average common shares outstanding – basic(a)           123.5                       122.4                     0.9         %             123.4                       119.2                     3.5         %
Weighted average common shares outstanding – diluted(a)           123.5                       122.8                     0.6         %             123.4                       121.9                     1.2         %
                       
Basic earnings per share $         1.31             $         1.32                     (0.8)        %   $         1.79             $         1.98                     (9.6)        %
Diluted earnings per share(b) $         1.31             $         1.32                     (0.8)        %   $         1.79             $         1.97                     (9.1)        %

(a) Refer to Definitions and Notes for additional information.

(b) Excludes the effect of certain anti-dilutive convertible securities.

N/M = Percentage change is not meaningful.

Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO
(amounts in millions, except for per share data)

 

  Quarter Ended   Nine Months Ended
  September 30, 2023   September 30, 2022   September 30, 2023   September 30, 2022
Net Income Attributable to SUI Common Shareholders $         163.1             $         162.6             $         222.8             $         237.3          
Adjustments              
Depreciation and amortization           162.2                       149.2                       480.5                       446.3          
Depreciation on nonconsolidated affiliates           0.1                       —                       0.2                       0.1          
Asset impairments           1.2                       1.6                       10.1                       2.3          
(Gain) / loss on remeasurement of marketable securities           (6.1 )             7.2                       8.0                       74.0          
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates           —                       0.4                       4.5                       (0.1 )
(Gain) / loss on remeasurement of notes receivable           1.3                       0.1                       3.1                       (0.1 )
(Gain) / loss on dispositions of properties, including tax effect           0.7                       0.8                       5.0                       (12.5 )
Add: Returns on preferred OP units           1.8                       1.3                       6.2                       9.5          
Add: Income attributable to noncontrolling interests           12.6                       10.5                       11.9                       14.1          
Gain on dispositions of assets, net           (10.5 )             (11.9 )             (29.0 )             (44.2 )
FFO(a) $         326.4             $         321.8             $         723.3             $         726.7          
               
Adjustments              
Business combination expense and other acquisition related costs(a)           4.2                       19.2                       15.6                       40.1          
Loss on extinguishment of debt           —                       4.0                       —                       4.4          
Catastrophic event-related charges, net           (3.1 )             12.2                       (2.2 )             12.3          
Loss of earnings – catastrophic event-related charges, net(b)           (6.1 )             0.2                       4.9                       0.2          
(Gain) / loss on foreign currency exchanges           6.5                       (14.9 )             6.5                       (21.7 )
Other adjustments, net(a)           1.1                       (6.5 )             (9.6 )             (5.1 )
Core FFO(a)(c) $         329.0             $         336.0             $         738.5             $         756.9          
               
Weighted Average Common Shares Outstanding – Diluted           128.0                       126.7                       128.3                       125.4          
               
FFO per Share(c) $         2.55             $         2.54             $         5.64             $         5.80          
               
Core FFO per Share(c) $         2.57             $         2.65             $         5.76             $         6.04          

(a) Refer to Definitions and Notes for additional information.

(b) Loss of earnings – catastrophic event-related charges, net include the following:

  Quarter Ended   Nine Months Ended
  September 30, 2023   September 30, 2023
Hurricane Ian – Three Fort Myers, Florida RV communities impaired      
Estimated loss of earnings in excess of the applicable business interruption deductible $         6.3             $         16.8          
Insurance recoveries received for previously estimated loss of earnings through April 30, 2023           (11.8 )             (11.8 )
Hurricane Irma – Three Florida Keys communities impaired      
Estimated loss of earnings in excess of the applicable business interruption deductible           —                       0.5          
Reversal of unpaid previously estimated loss of earnings that the Company does not expect to recover           (0.6 )             (0.6 )
Loss of earnings – catastrophic event-related charges, net $         (6.1 )   $         4.9          

(c) Excludes the effect of certain anti-dilutive convertible securities.

Refer to Definitions and Notes for additional information for Home sales contribution to FFO.

       

Reconciliation of Net Income Attributable to SUI Common Shareholders to NOI
(amounts in millions)

 

  Quarter Ended   Nine Months Ended
  September 30, 2023   September 30, 2022   September 30, 2023   September 30, 2022
Net Income Attributable to SUI Common Shareholders $         163.1             $         162.6             $         222.8             $         237.3          
Interest income           (15.2 )             (11.2 )             (40.6 )             (25.3 )
Brokerage commissions and other revenues, net           (26.0 )             (10.8 )             (45.3 )             (27.4 )
General and administrative           66.2                       69.1                       192.4                       187.0          
Catastrophic event-related charges, net           (3.1 )             12.2                       (2.2 )             12.3          
Business combination expense           —                       8.4                       3.0                       23.9          
Depreciation and amortization           162.6                       149.7                       482.3                       447.7          
Asset impairments           1.2                       1.6                       10.1                       2.3          
Loss on extinguishment of debt           —                       4.0                       —                       4.4          
Interest expense           84.1                       61.7                       239.9                       162.2          
Interest on mandatorily redeemable preferred OP units / equity           0.8                       1.0                       2.7                       3.1          
(Gain) / loss on remeasurement of marketable securities           (6.1 )             7.2                       8.0                       74.0          
(Gain) / loss on foreign currency exchanges           6.5                       (14.9 )             6.5                       (21.7 )
(Gain) / loss on disposition of properties           0.7                       0.8                       2.9                       (12.5 )
Other (income) / expense, net(a)           3.7                       (2.8 )             5.5                       (2.6 )
(Gain) / loss on remeasurement of notes receivable           1.3                       0.1                       3.1                       (0.1 )
Income from nonconsolidated affiliates           (1.4 )             (2.0 )             (0.5 )             (3.8 )
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates           —                       0.4                       4.5                       (0.1 )
Current tax expense           4.6                       7.3                       13.9                       12.5          
Deferred tax benefit           (2.3 )             (3.6 )             (14.6 )             (3.9 )
Add: Preferred return to preferred OP units / equity interests           3.3                       2.5                       9.0                       8.6          
Add: Income attributable to noncontrolling interests           14.0                       11.9                       13.2                       13.9          
NOI $         458.0             $         455.2             $         1,116.6             $         1,091.8          

  Quarter Ended   Nine Months Ended
  September 30, 2023   September 30, 2022   September 30, 2023   September 30, 2022
Real Property NOI(a) $         394.0           $         371.6           $         966.3           $         909.2        
Home Sales NOI(a)           37.3                     54.3                     101.8                     122.9        
Service, retail, dining and entertainment NOI(a)           26.7                     29.3                     48.5                     59.7        
NOI $         458.0           $         455.2           $         1,116.6           $         1,091.8        

(a) Refer to Definitions and Notes for additional information.

Reconciliation of Net Income Attributable to SUI Common Shareholders to Recurring EBITDA
(amounts in millions)

 

  Quarter Ended   Nine Months Ended
  September 30, 2023   September 30, 2022   September 30, 2023   September 30, 2022
Net Income Attributable to SUI Common Shareholders $         163.1             $         162.6             $         222.8             $         237.3          
Adjustments              
Depreciation and amortization           162.6                       149.7                       482.3                       447.7          
Asset impairments           1.2                       1.6                       10.1                       2.3          
Loss on extinguishment of debt           —                       4.0                       —                       4.4          
Interest expense           84.1                       61.7                       239.9                       162.2          
Interest on mandatorily redeemable preferred OP units / equity           0.8                       1.0                       2.7                       3.1          
Current tax expense           4.6                       7.3                       13.9                       12.5          
Deferred tax benefit           (2.3 )             (3.6 )             (14.6 )             (3.9 )
Income from nonconsolidated affiliates           (1.4 )             (2.0 )             (0.5 )             (3.8 )
Less: (Gain) / loss on dispositions of properties           0.7                       0.8                       2.9                       (12.5 )
Less: Gain on dispositions of assets, net           (10.5 )             (11.9 )             (29.0 )             (44.2 )
EBITDAre $         402.9             $         371.2             $         930.5             $         805.1          
Adjustments              
Catastrophic event-related charges, net           (3.1 )             12.2                       (2.2 )             12.3          
Business combination expense           —                       8.4                       3.0                       23.9          
(Gain) / loss on remeasurement of marketable securities           (6.1 )             7.2                       8.0                       74.0          
(Gain) / loss on foreign currency exchanges           6.5                       (14.9 )             6.5                       (21.7 )
Other (income) / expense, net(a)           3.7                       (2.8 )             5.5                       (2.6 )
(Gain) / loss on remeasurement of notes receivable           1.3                       0.1                       3.1                       (0.1 )
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates           —                       0.4                       4.5                       (0.1 )
Add: Preferred return to preferred OP units / equity interests           3.3                       2.5                       9.0                       8.6          
Add: Income attributable to noncontrolling interests           14.0                       11.9                       13.2                       13.9          
Add: Gain on dispositions of assets, net           10.5                       11.9                       29.0                       44.2          
Recurring EBITDA $         433.0             $         408.1             $         1,010.1             $         957.5          

(a) Refer to Definitions and Notes for additional information.

Real Property Operations – Total Portfolio
(amounts in millions, except statistical information)

 

  Quarter Ended September 30, 2023   Quarter Ended September 30, 2022
  MH               MH            
Financial Information North America   UK   Total   RV   Marinas   Total   North America   UK   Total   RV   Marinas   Total
Revenues                                              
Real property (excluding transient) $         229.4     $         29.3     $         258.7     $         82.5     $         116.0   $         457.2     $         213.5     $         24.7     $         238.2             $         78.4             $         108.7   $         425.3  
Real property – transient           0.8               23.0               23.8               128.0               9.8             161.6               0.3               21.8               22.1                       131.2                       7.1             160.4  
Total operating revenues           230.2               52.3               282.5               210.5               125.8             618.8               213.8               46.5               260.3                       209.6                       115.8             585.7  
Expenses                                              
Property operating expenses           76.7               23.3               100.0               82.1               42.7             224.8               72.2               21.3               93.5                       82.6                       38.0             214.1  
Real Property NOI $         153.5     $         29.0     $         182.5     $         128.4     $         83.1   $         394.0     $         141.6     $         25.2     $         166.8             $         127.0             $         77.8   $         371.6  
                                               
  Nine Months Ended September 30, 2023   Nine Months Ended September 30, 2022
  MH               MH            
Financial Information North America   UK   Total   RV   Marinas   Total   North America   UK(a)   Total   RV   Marinas   Total
Revenues                                              
Real property (excluding transient) $         676.9     $         85.1     $         762.0     $         217.1     $         306.4   $         1,285.5     $         630.8     $         44.7     $         675.5             $         208.2             $         274.4   $         1,158.1  
Real property – transient           1.5               37.9               39.4               241.3               20.2             300.9               1.2               34.7               35.9                       253.0                       14.6             303.5  
Total operating revenues           678.4               123.0               801.4               458.4               326.6             1,586.4               632.0               79.4               711.4                       461.2                       289.0             1,461.6  
Expenses                                              
Property operating expenses           223.1               70.3               293.4               207.6               119.1             620.1               204.1               38.8               242.9                       205.3                       104.2             552.4  
Real Property NOI $         455.3     $         52.7     $         508.0     $         250.8     $         207.5   $         966.3     $         427.9     $         40.6     $         468.5             $         255.9             $         184.8   $         909.2  
                                               
  As of September 30, 2023   As of September 30, 2022
  MH               MH            
Other information North America   UK   Total   RV   Marinas   Total   North America   UK(a)   Total   RV   Marinas   Total
Number of properties           298               55               353               182               135             670               296               54               350               181               131             662  
Sites, wet slips and dry storage spaces                                              
Sites, wet slips and dry storage spaces(b)           100,200               18,050               118,250               32,150               48,030             198,430               99,430               17,480               116,910               32,030               46,190             195,130  
Transient sites N/M             3,280               3,280               26,490     N/A             29,770     N/M             3,200               3,200               27,950     N/A             31,150  
Total           100,200               21,330               121,530               58,640               48,030             228,200               99,430               20,680               120,110               59,980               46,190             226,280  
                                               
MH and Annual RV Occupancy           96.3         %             90.6         %             95.4         %             100.0         %   N/A             96.4         %             96.2         %             91.7         %             95.5         %             100.0         %   N/A             96.5         %

N/M = Not meaningful. N/A = Not applicable.

(a) UK amounts for the nine months ended September 30, 2022 cover April 8, 2022 (date of acquisition) to September 30, 2022.

(b) MH annual sites included 9,834 and 9,126 rental homes in the Company’s Rental Program during the quarter ended September 30, 2023 and 2022, respectively. The Company’s investment in occupied rental homes at September 30, 2023 was $655.8 million, an increase of 20.6% from $543.8 million at September 30, 2022.

Real Property Operations – Same Property Portfolio(a)
(amounts in millions, except for statistical information)

 

  Quarter Ended September 30, 2023   Quarter Ended September 30, 2022   Total Change

  % Change(c)
  MH(b)   RV(b)   Marina   Total   MH(b)   RV(b)   Marina   Total     MH   RV   Marina   Total
Financial Information                                                  
Same Property Revenues                                                  
Real property (excluding transient) $         209.2           $         74.4           $         91.0           $         374.6           $         195.0           $         64.7           $         85.8           $         345.5           $         29.1                     7.3         %           15.0         %           6.0         %           8.4         %
Real property – transient           0.4                     118.4                     7.9                     126.7                     0.2                     123.9                     5.4                     129.5                     (2.8 )           72.6         %           (4.4)        %           47.1         %           (2.1)        %
Total Same Property operating revenues           209.6                     192.8                     98.9                     501.3                     195.2                     188.6                     91.2                     475.0             26.3             7.4         %           2.2         %           8.4         %           5.5         %
Same Property Expenses                                                  
Same Property operating expenses(d)(e)           57.1                     69.3                     29.7                     156.1                     54.1                     69.8                     27.7                     151.6             4.5             5.7         %           (0.8)        %           7.4         %           3.0         %
Real Property NOI(e) $         152.5           $         123.5           $         69.2           $         345.2           $         141.1           $         118.8           $         63.5           $         323.4           $         21.8                     8.0         %           4.1         %           8.9         %           6.7         %
                                                   

               

                                                   
  Nine Months Ended September 30, 2023   Nine Months Ended September 30, 2022   Total Change

  % Change(c)
  MH(b)   RV(b)   Marina   Total   MH(b)   RV(b)   Marina   Total     MH   RV   Marina   Total
Financial Information                                                  
Same Property Revenues                                                  
Real property (excluding transient) $         619.5           $         198.7           $         244.5           $         1,062.7           $         579.9           $         171.9           $         227.1           $         978.9           $         83.8                     6.8         %           15.6         %           7.7         %           8.6         %
Real property – transient           1.0                     224.4                     17.5                     242.9                     0.9                     236.7                     12.5                     250.1                     (7.2 )           11.8         %           (5.2)        %           39.5         %           (2.9)        %
Total Same Property operating revenues           620.5                     423.1                     262.0                     1,305.6                     580.8                     408.6                     239.6                     1,229.0                     76.6                     6.8         %           3.6         %           9.4         %           6.2         %
Same Property Expenses                                                  
Same Property operating expenses(d)(e)           167.0                     178.4                     84.1                     429.5                     154.0                     172.9                     80.1                     407.0                     22.5                     8.5         %           3.1         %           5.1         %           5.5         %
Real Property NOI(e) $         453.5           $         244.7           $         177.9           $         876.1           $         426.8           $         235.7           $         159.5           $         822.0           $         54.1                     6.2         %           3.9         %           11.5         %           6.6         %
                                                   
Other Information                                                  
Number of properties           288                     161                     119                     568                     288                     161                     119                     568                            
Sites, wet slips and dry storage spaces           98,590                     54,630                     40,890                     194,110                     97,830                     54,340                     40,690                     192,860                            

(a) Refer to the Definitions and Notes for additional information.

(b) Same Property results for the Company’s MH and RV properties reflect constant currency for comparative purposes. Canadian currency figures in the prior comparative period have been translated at the average exchange rate of $0.7453 USD and $0.7431 USD per Canadian dollar during the quarter and nine months ended September 30, 2023, respectively.

(c) Percentages are calculated based on unrounded numbers.

Real Property Operations – Same Property Portfolio(a) (Continued)

(amounts in millions, except for statistical information)

         

(d) The Company nets certain utility revenues (which include utility reimbursement revenues from residents) against related utility expenses in property operating expenses as follows (in millions):

  Quarter Ended September 30, 2023   Quarter Ended September 30, 2022
  MH   RV   Marina   Total   MH   RV   Marina   Total
Utility revenue netted against related utility expense $         18.2           $         6.3           $         5.9           $         30.4           $         17.2           $         5.8           $         5.2           $         28.2        

  Nine Months Ended September 30, 2023   Nine Months Ended September 30, 2022
  MH   RV   Marina   Total   MH   RV   Marina   Total
Utility revenue netted against related utility expense $         52.1           $         15.3           $         16.7           $         84.1           $         48.2           $         14.3           $         14.1           $         76.6        

(e) Total Same Property operating expenses consist of the following components for the periods shown (in millions) and exclude amounts invested into recently acquired properties to bring them up to the Company’s standards:

  Quarter Ended   Nine Months Ended
  September 30, 2023   September 30, 2022   Change   % Change   September 30, 2023   September 30, 2022   Change   % Change
Payroll and benefits $         54.8           $         51.6           $         3.2                     6.2         %   $         146.2           $         139.5           $         6.7                     4.8         %
Real estate taxes           26.4                     25.9                     0.5                     2.1         %             81.2                     77.7                     3.5                     4.6         %
Supplies and repairs           22.9                     24.4                     (1.5 )           (6.2)        %             58.0                     58.4                     (0.4 )           (0.7)        %
Utilities           18.9                     19.8                     (0.9 )           (4.2)        %             49.5                     50.3                     (0.8 )           (1.6)        %
Legal, state / local taxes, and insurance           14.0                     9.5                     4.5                     47.7         %             42.0                     28.3                     13.7                     48.2         %
Other           19.1                     20.4                     (1.3 )           (6.7)        %             52.6                     52.8                     (0.2 )           (0.4)        %
Total Same Property Operating Expenses $         156.1           $         151.6           $         4.5                     3.0         %   $         429.5           $         407.0           $         22.5                     5.5         %

Real Property Operations – Same Property Portfolio(a) (Continued)

    As of
    September 30, 2023   September 30, 2022
    MH   RV   MH   RV
Other Information                
Number of properties             288                       161                       288                       161          
                 
Sites                
MH and Annual RV sites             98,590                       31,850                       97,830                       29,790          
Transient RV sites   N/M             22,780             N/M             24,550          
Total             98,590                       54,630                       97,830                       54,340          
                 
MH and Annual RV Occupancy                
Occupancy(b)             97.0         %             100.0         %             96.8         %             100.0         %
Monthly base rent per site   $         661             $         580             $         623             $         533          
% Change of monthly base rent(c)             6.1         %             8.8         %   N/A   N/A
                 
Rental Program Statistics included in MH:                
Number of occupied sites, end of period(d)             9,680             N/A             9,110             N/A
Monthly rent per site – MH Rental Program   $         1,282             N/A   $         1,193             N/A
% Change(d)             7.5         %   N/A   N/A   N/A

N/M = Not meaningful. N/A = Not applicable.

(a) Refer to Definitions and Notes for additional information.

(b) Same Property adjusted blended occupancy for MH and RV combined increased to 98.8% at September 30, 2023, from 97.1% at September 30, 2022. The 170 basis point increase was driven by MH expansion fills and the conversion of transient RV sites to annual sites.

(c) Calculated using actual results without rounding.

(d) Occupied rental program sites in Same Property are included in total sites.

Home Sales Summary
(amounts in millions, except for *)

 

  Quarter Ended   Nine Months Ended
Financial Information September 30, 2023   September 30, 2022   % Change   September 30, 2023   September 30, 2022   % Change
North America                      
Home sales $         62.4             $         66.6                     (6.3)        %   $         171.9             $         213.4                     (19.4)        %
Home cost and selling expenses           48.0                       51.5                     (6.8)        %             130.2                       155.9                     (16.5)        %
NOI $         14.4             $         15.1                     (4.6)        %   $         41.7             $         57.5                     (27.5)        %
NOI margin %*           23.1         %             22.7         %                 24.3         %             26.9         %    
                       
UK(a)                      
Home sales $         55.4             $         84.1                     (34.1)        %   $         154.8             $         144.7             7.0         %
Home cost and selling expenses           32.5                       44.9                     (27.6)        %             94.7                       79.3             19.4         %
NOI $         22.9             $         39.2                     (41.6)        %   $         60.1             $         65.4             (8.1)        %
NOI margin %*           41.3         %             46.6         %                 38.8         %             45.2         %    
                       
Total(a)                      
Home sales $         117.8             $         150.7                     (21.8)        %   $         326.7             $         358.1                     (8.8)        %
Home cost and selling expenses           80.5                       96.4                     (16.5)        %             224.9                       235.2                     (4.4)        %
NOI $         37.3             $         54.3                     (31.3)        %   $         101.8             $         122.9                     (17.2)        %
NOI margin %*           31.7         %             36.0         %                 31.2         %             34.3         %    
                       
Other information                      
Units Sold:*                      
North America           636                       724                     (12.2)        %             1,909                       2,538             (24.8)        %
UK(a)           884                       1,016                     (13.0)        %             2,310                       1,778             29.9         %
Total home sales(a)           1,520                       1,740                     (12.6)        %             4,219                       4,316             (2.2)        %
                       
Average Selling Price:*                      
North America $         98,113             $         91,989                     6.7         %   $         90,047             $         84,082             7.1         %
UK(a) $         62,670             $         82,776                     (24.3)        %   $         67,013             $         81,384             (17.7)        %

(a) UK amounts for the nine months ended September 30, 2022 cover the period from April 8, 2022 (date of acquisition) through September 30, 2022.

Operating Statistics for MH and Annual RVs (excluding UK Operations)

 

    Resident Move-outs                
    % of Total Sites   Number of Move-outs   Leased Sites, Net(b)   New Home Sales   Pre-owned Home Sales   Brokered
Re-sales
2023 – YTD as of September 30           3.7         % (a)         5,651                   2,585                   421                   1,488                   1,818        
2022           3.0         %           5,170                   2,922                   703                   2,509                   2,864        
2021           2.7         %           5,276                   2,483                   732                   3,356                   3,528        

(a) Percentage calculated on a trailing 12-month basis.

(b) Net increase in revenue producing sites.

Acquisitions and Dispositions
(amounts in millions, except for *)

 

Property Name   Property Type   Number of Properties*   Sites, Wet Slips and Dry Storage Spaces*   Expansion or Development Sites*   State, Province or Country   Total Purchase / Sale Price   Month Acquired
ACQUISITIONS                            
Fox Run(a)   MH           1                   68                   72           MI   $         7.0           January
Savannah Yacht Center(b)   Marina           1                   24                   —           GA             100.0           March
First Quarter 2023               2                   92                   72               $         107.0            
                             
Acquisitions in 2023               2                   92                   72               $         107.0            
                             
DISPOSITIONS                            
Cedar Haven   MH           1                   155                   —           ME   $         6.8           August
Third Quarter 2023               1                   155                                  $         6.8            
                             
Dispositions in 2023               1                   155                                  $         6.8            

(a) In conjunction with the acquisition of this ground-up development project, the Company issued 31,289 Common OP units valued at $4.4 million. The Company also delivered 68 of the 140 sites during the first quarter.

(b) In conjunction with this acquisition, the Company issued one million Series K preferred OP units to cover the total purchase price of $100.0 million.

Capital Expenditures and Investments
(amounts in millions, except for *)

 

  Nine Months Ended   Year Ended
  September 30, 2023   December 31, 2022   December 31, 2021
  MH / RV   Marina   MH / RV   Marina   MH / RV   Marina
Recurring Capital Expenditures(a) $         36.1           $         24.9           $         51.0           $         22.8           $         45.3           $         19.3        
                       
Non-Recurring Capital Expenditures(a)                      
Lot Modifications $         41.3           N/A   $         39.1           N/A   $         28.8           N/A
Growth Projects           20.5                     61.0                     28.4                     71.1                     25.6                     51.4        
Rebranding           3.9           N/A             15.0           N/A     6.1   N/A
Acquisitions           147.2                     172.1                     2,788.1                     522.5                     944.3                     852.9        
Expansion and Development           207.1                     24.9                     247.9                     13.9                     191.8                     9.9        
Total Non-Recurring Capital Expenditures           420.0                     258.0                     3,118.5                     607.5                     1,196.6                     914.2        
Total $         456.1           $         282.9           $         3,169.5           $         630.3           $         1,241.9           $         933.5        
Other Information                      
Recurring Capex per Site, Slip and Dry Storage Spaces(b)* $         270           $         608           $         397           $         582           $         371           $         491        

(a) Refer to Definitions and Notes for additional information.

(b) Average based on actual number of MH and RV sites and Marina wet slips and dry storage spaces associated with the recurring capital expenditures in each period.

Capitalization Overview
(Shares and units in thousands, dollar amounts in millions, except for *)

 

    As of
    September 30, 2023
Equity and enterprise value   Common Equivalent Shares   Share Price*   Capitalization
Common shares           124,447           $         118.34           $         14,727.1          
Convertible securities            
Common OP units           2,632           $         118.34                     311.5          
Preferred OP units           2,633           $         118.34                     311.6          
Diluted shares outstanding and market capitalization(a)           129,712                         15,350.2          
Plus: Debt, per the balance sheet                     7,665.0          
Total capitalization                     23,015.2          
Less: Cash and cash equivalents (excluding restricted cash)                     (46.0 )
Enterprise value(b)           $         22,969.2          
             
             
Debt       Weighted Average Maturity
(in years)*
  Debt Outstanding
Secured debt         9.3   $         3,359.5          
Unsecured debt         4.9             4,305.5          
Total debt, per consolidated balance sheet         6.8             7,665.0          
Plus: Unamortized deferred financing costs and discounts / premiums on debt                     40.1          
Total debt(b)           $         7,705.1          
             
             
Corporate debt rating and outlook            
Moody’s           Baa3 | Stable
S&P           BBB | Stable

(a) Refer to “Securities” within Definitions and Notes for additional information related to our securities outstanding.

(b) Refer to “Enterprise Value” and “Net Debt” within Definitions and Notes for additional information.

Summary of Outstanding Debt

(amounts in millions, except for *)

 

    Quarter Ended
    September 30, 2023
    Debt Outstanding   Weighted Average Interest Rate(a)*   Maturity Date*
Secured Debt   $         3,359.5                   3.81         %   Various
             
Unsecured Debt:            
Senior Credit Facility:            
Revolving credit facilities (in USD)(b)             1,009.3                   5.98         %   April 2026
GBP term loan (in USD)(c)             1,066.4                   4.83         %   April 2025
Total senior credit facility             2,075.7                
Other unsecured term loan             9.2                   6.36         %   October 2025
Senior credit facility and other term loan             2,084.9                   5.39         %    
             
Senior Unsecured Notes:            
2028 senior unsecured notes             446.7                   2.30         %   November 2028
2031 senior unsecured notes             742.2                   2.70         %   July 2031
2032 senior unsecured notes             592.4                   3.62         %   April 2032
2033 senior unsecured notes             395.6                   5.51         %   January 2033
Total Senior Unsecured Notes             2,176.9                   3.38         %    
             
Mandatorily redeemable preferred equity and OP units(d)             43.7                   6.10         %   Various
Total Unsecured Debt             4,305.5                   4.38         %    
Total debt, per consolidated balance sheets             7,665.0                   4.13         %    
Plus: Unamortized deferred financing costs and discounts / premiums on debt(a)             40.1                
Total debt   $         7,705.1                

(a)  Includes the effect of amortizing deferred financing costs, loan premiums / discounts and derivatives.

(b)  As of September 30, 2023, the Company’s revolving credit facilities consisted of:

  • $464.0 million borrowed on its U.S. line of credit at the Secured Overnight Financing Rate (“SOFR”) plus 85 basis points, of which $125.0 million was swapped to a weighted average fixed SOFR rate of 4.771% for an all-in fixed rate of 5.681%.
  • $473.8 million USD equivalent borrowed on its GBP line of credit at the Daily Sterling Overnight Index Average (“SONIA”) plus 85 basis points.
  • $71.5 million USD equivalent borrowed on its Australian line of credit at the Bank Bill Swap Bid Rate (“BBSY”) plus 85 basis points.

(c)  As of September 30, 2023, £500.0 million ($610.1 million) was swapped to a weighted average fixed SONIA rate of 2.924% for an all-in fixed rate, inclusive of spread, of 3.866%.

(d)  Mandatorily redeemable preferred equity and OP unit distributions are included within the line item ‘Interest on mandatorily redeemable preferred OP units / equity’ on the Company’s Consolidated Statements of Operations.

Debt Maturities(e)

Year   Secured Debt(f)   Principal Amortization   Senior
Credit Facility
  Senior
Unsecured Notes
  Other Unsecured Debt   Total
2023   $         117.8         (g) $         13.8           $         —           $         —           $         —           $         131.6        
2024             128.8                     56.5                     —                     —                     51.1                     236.4        
2025             50.5                     54.2                     1,068.4                     —                     1.8                     1,174.9        
2026             658.4                     46.2                     1,009.3                     —                     —                     1,713.9        
2027             4.0                     40.7                     —                     —                     —                     44.7        
Thereafter             1,576.2                     627.4                     —                     2,200.0                     —                     4,403.6        
Total   $         2,535.7           $         838.8           $         2,077.7           $         2,200.0           $         52.9           $         7,705.1        

(e) Debt maturities include the unamortized deferred financing costs and discount / premiums associated with outstanding debt.

(f) For the secured debt maturing between 2023 – 2027:

  2023     2024     2025     2026     2027  
Weighted average interest rate         3.54         %           4.03         %           4.04         %           3.97         %           4.34         %

(g) This debt was paid off with proceeds from the new secured loan that the Company entered into subsequent to the quarter ended September 30, 2023. The new $252.8 million loan matures in November 2030 and bears interest at a fixed rate of 6.49%.

Debt Analysis

 

        As of
        September 30, 2023
Select Credit Ratios        
Net debt / TTM recurring EBITDA(a)       6.1 x
Net debt / enterprise value               33.2         %
Net debt / gross assets               36.7         %
Unencumbered assets / total assets               77.0         %
Floating rate debt / total debt(b)               17.5         %
         
Coverage Ratios        
TTM Recurring EBITDA(a) / interest       4.0 x
TTM Recurring EBITDA(a) / interest + preferred distributions + preferred stock distribution       4.0 x
         
Senior Credit Facility Covenants   Requirement    
Maximum leverage ratio   <65.0 %           33.9         %
Minimum fixed charge coverage ratio   >1.40 x   3.23 x
Maximum secured leverage ratio   <40.0 %           12.5         %
         
Senior Unsecured Note Covenants   Requirement    
Total debt / total assets   ≤60.0 %           41.0         %
Secured debt / total assets   ≤40.0 %           17.9         %
Consolidated income available for debt service / debt service   ≥1.50 x   3.99 x
Unencumbered total asset value / total unsecured debt   ≥150.0 %           334.0         %

(a) Refer to page 8 for additional detail on the Company’s TTM Recurring EBITDA.

(b) Percentage includes the impact of hedge activities.

^ Excludes the Company’s borrowings under its senior credit facility.

Definitions and Notes

 

Capital Expenditures and Investment Activity – The Company classifies its investments in properties into the following categories:

  • Recurring Capital Expenditures – Property recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing items used to operate the communities and marinas. Recurring capital expenditures at the Company’s MH and RV properties include major road, driveway and pool improvements; clubhouse renovations; adding or replacing streetlights; playground equipment; signage; maintenance facilities; manager housing and property vehicles. Recurring capital expenditures at the Company’s marinas include dredging, dock repairs and improvements, and equipment maintenance and upgrades. The minimum capitalized amount is five hundred dollars.
  • Non-Recurring Capital Expenditures – The following investment and reinvestment activities are non-recurring in nature:
    • Lot Modifications – Lot modification capital expenditures are incurred to modify the foundational structures required to set a new home after a previous home has been removed. These expenditures are necessary to create a revenue stream from a new site renter and often improve the quality of the community. Other lot modification expenditures include land improvements added to annual RV sites to aid in the conversion of transient RV guests to annual contracts. See page 13 for move-out rates.
    • Growth Projects – Growth projects consist of revenue-generating or expense-reducing activities at the properties. These include, but are not limited to, utility efficiency and renewable energy projects, site, slip or amenity upgrades, such as the addition of a garage, shed or boat lift, and other special capital projects that substantiate an incremental rental increase.
    • Rebranding – Rebranding includes new signage at the Company’s RV communities and costs of building an RV mobile application and updated website.
    • Acquisitions – Total acquisition investments represent the purchase price paid for operating properties and land parcels for future ground-up development and expansions activities (detailed for the current calendar year on page 14), plus any capital improvements identified during due diligence needed to bring acquired properties up to the Company’s operating standards.

Capital improvements subsequent to acquisition often require 24 to 36 months to complete after closing and include upgrading clubhouses; landscaping; new street light systems; new mail delivery systems; pool renovations including larger decks, heaters and furniture; new maintenance facilities; lot modifications; and new signage including main signs and internal road signs.

For the nine months ended September 30, 2023, the components of total acquisition investment are as follows (in millions):

    Nine Months Ended September 30, 2023
    MH and RV   Marina   Total
Purchase price of property acquisitions   $         7.2           $         100.6           $         107.8        
Capitalized transaction costs for property acquisitions             5.0                     1.6                     6.6        
Purchase price of land acquisitions (including capitalized transaction costs)(a)             36.7                     —                     36.7        
Capital improvements to recent property acquisitions             98.3                     69.9                     168.2        
Total Acquisition Investments   $         147.2           $         172.1           $         319.3        

(a) Includes the value allocated to infrastructure improvements associated with acquired land, when applicable.

  • Expansions and Developments – Expansion and development expenditures consist primarily of construction costs such as roads, activities, and amenities, and costs necessary to complete site improvements, such as driveways, sidewalks and landscaping at the Company’s MH and RV communities. Expenditures also include costs to rebuild after damage has been incurred at MH, RV or marina properties, and research and development.

Enterprise Value – Equals total equity market capitalization, plus total indebtedness reported on the Company’s balance sheet and less cash and cash equivalents (excluding restricted cash).

GAAP – U.S. Generally Accepted Accounting Principles.

Home Sales Contribution to FFO – The reconciliation of NOI from home sales to FFO from home sales for the quarter and nine months ended September 30, 2023 is as follows (in millions):

  Quarter Ended September 30, 2023   Nine Months Ended September 30, 2023
  North America   UK   Total   North America   UK   Total
Home Sales NOI $         14.4             $         22.9             $         37.3             $         41.7             $         60.1     $         101.8  
Gain on dispositions of assets, net           (9.6         )             (0.9         )             (10.5         )             (28.2         )             (0.8 )             (29.0 )
FFO Contribution from home sales $         4.8             $         22.0             $         26.8             $         13.5             $         59.3     $         72.8  

Interest Expense – The following is a summary of the components of the Company’s interest expense (in millions):

  Quarter Ended   Nine Months Ended
  September 30, 2023   September 30, 2022   September 30, 2023   September 30, 2022
Interest on Secured debt, Senior unsecured notes, Senior Credit Facility, Unsecured Term Loan and interest rate swaps $         81.0             $         57.2             $         228.5             $         151.5          
Lease related interest expense           3.6                       2.9                       10.7                       5.6          
Amortization of deferred financing costs, debt (premium) or discounts and losses on hedges           1.5                       1.3                       4.5                       3.7          
Senior credit facility commitment fees and other finance related charges           1.8                       1.6                       5.1                       5.5          
Capitalized interest           (3.8 )             (1.3 )             (8.9 )             (4.1 )
Interest Expense, per Consolidated Statements of Operations $         84.1             $         61.7             $         239.9             $         162.2          

NAREIT – The National Association of Real Estate Investment Trusts is the worldwide representative voice for REITs and real estate companies with an interest in U.S. real estate and capital markets. More information is available at www.reit.com.

Net Debt – The carrying value of debt, which includes unamortized premiums, discounts and deferred financing costs, less, unrestricted cash (i.e., cash and cash equivalents, excluding restricted cash).

Other Acquisition Related Costs – In the Company’s Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO on page 6, ‘Other acquisition related costs’ represent (a) nonrecurring integration expenses associated with acquisitions during the quarter and nine months ended September 30, 2023 and 2022, (b) costs associated with potential acquisitions that will not close, (c) costs associated with the termination of the bridge loan commitment during the quarter ended March 31, 2022 related to the acquisition of Park Holidays and (d) expenses incurred to bring recently acquired properties up to the Company’s operating standards, including items such as tree trimming and painting costs that do not meet the Company’s capitalization policy.

Other adjustments, net – In the Company’s Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO on page 6, ‘Other adjustments, net’ consists of the following (in millions):

  Quarter Ended   Nine Months Ended
  September 30, 2023   September 30, 2022   September 30, 2023   September 30, 2022
Litigation settlement $         —             $         (3.4 )   $         —             $         (3.4 )
Long term lease termination (benefit) / expense           3.3                       0.2                       4.0                       (0.1 )
Severance costs           0.1                       —                       0.5                       —          
Deferred tax benefit           (2.3 )             (3.6 )             (14.6 )             (3.9 )
RV rebranding non-recurring cost           —                       —                       —                       2.2          
Accelerated deferred compensation amortization           —                       0.3                       0.4                       0.4          
Other           —                       —                       0.1                       (0.3 )
Other adjustments, net $         1.1             $         (6.5 )   $         (9.6 )   $         (5.1 )

Other income / (expense), net – In the Company’s Consolidated Statements of Operations on page 5, ‘Other income / (expense), net’ consists of the following (in millions):

  Quarter Ended   Nine Months Ended
  September 30, 2023   September 30, 2022   September 30, 2023   September 30, 2022
Litigation settlement $         —             $         3.4             $         —             $         3.4          
Long term lease termination benefit / (expense)           (3.3 )             (0.2 )             (4.0 )             0.1          
Repair reserve on repossessed homes           (1.0 )             (0.4 )             (2.2 )             (0.9 )
Other           0.6                       —                       0.7                       —          
Other income / (expense), net $         (3.7 )   $         2.8             $         (5.5 )   $         2.6          

Same Property – The Company defines Same Properties as those the Company has owned and operated continuously since at least January 1, 2022. Same properties exclude ground-up development properties, acquired properties and properties sold after December 31, 2021. The Same Property data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions or unique situations.

Securities – The Company had the following securities outstanding as of September 30, 2023:

  Number of Units / Shares Outstanding (in thousands)   Conversion Rate(a)   If Converted to
Common shares (in thousands)(b)
  Issuance Price
Per Unit
  Annual Distribution Rate
Non Convertible Securities                  
Common shares         124,447