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Net Income / (Loss) per Diluted Share of $(1.77) and $0.71 for the Quarter and Full Year
Core FFO per Share of $1.41 and $6.81 for the Quarter and Full Year
North America Same Property NOI increased by 5.7% for the Quarter and
4.1% for the Full Year of 2024 versus corresponding 2023 Periods
North America Same Property Adjusted Blended Occupancy for MH and RV of 99.0%
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represents a 160 basis point year-over-year increase
Expecting North American Same Property NOI Growth of 4.3% - 5.6%
Expecting UK Same Property NOI Growth of 0.9% - 2.9%
Southfield, Michigan, Feb. 26, 2025 (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 fourth quarter and full year results for 2024.
Financial Results for the Quarter and Year Ended December 31, 2024
- For the quarter ended December 31, 2024, net loss attributable to common shareholders was $224.4 million, or $1.77 per diluted share, compared to net loss attributable to common shareholders of $80.9 million, or $0.65 per diluted share for the same period in 2023.
- For the year ended December 31, 2024, net income attributable to common shareholders was $89.0 million, or $0.71 per diluted share, compared to a net loss attributable to common shareholders of $213.3 million, or $1.72 per diluted share for the same period in 2023.
Non-GAAP Financial Measures
- Core Funds from Operations ("Core FFO") for the quarter and year ended December 31, 2024, was $1.41 per common share and dilutive convertible securities ("Share") and $6.81 per Share, respectively, as compared to $1.34 and $7.10 for the same periods in 2023.
- Same Property Net Operating Income ("NOI")
- North American Same Property NOI increased by $14.8 million and $45.5 million, or 5.7% and 4.1%, respectively, for the quarter and year ended December 31, 2024, as compared to the corresponding periods in 2023.
- UK Same Property NOI increased by $1.8 million and $6.2 million, or 12.9% and 9.0%, respectively, for the quarter and year ended December 31, 2024, as compared to the corresponding periods in 2023.
"In the fourth quarter we continued to advance our strategic priorities focused on further simplifying our business," said Gary A. Shiffman, Chairman and CEO. "We achieved solid results in our Manufactured Housing segment, demonstrating the ongoing demand for attainable housing, while on the RV side we further increased the contribution from annual income streams. We are starting to see positive momentum with our operating initiatives and repositioning efforts aimed at maximizing revenue, diligent expense management, and more effective asset management to drive efficiencies. We have also been executing on our deleveraging initiative, disposing of approximately $570 million of non-strategic assets in 2024 and this year to date while remaining disciplined with capital investments. We took another meaningful step with the announcement of the sale of Safe Harbor Marinas, which will allow us to focus on our core businesses and further reduce our leverage. We are encouraged by our outlook for 2025 and our progress towards delivering sustained earnings growth."
OPERATING HIGHLIGHTS
North America Portfolio Occupancy
- MH and annual RV sites were 98.0% occupied at December 31, 2024, as compared to 97.4% at December 31, 2023.
- During the quarter ended December 31, 2024, the number of MH and annual RV revenue producing sites increased by approximately 710 sites, as compared to an increase of approximately 680 sites during the corresponding period in 2023. MH occupancy gains during the quarter ended December 31, 2024, accounted for approximately 57% of the total gains.
- During the year ended December 31, 2024, MH and annual RV revenue producing sites increased by approximately 3,210 sites, as compared to an increase of approximately 3,270 sites during the corresponding period in 2023. MH occupancy gains during the year ended December 31, 2024, accounted for approximately 29% of the total gains.
Same Property Results
For the properties owned and operated by the Company since at least January 1, 2023, the following table reflects the percentage changes for the quarter and year ended December 31, 2024, as compared to the same periods in 2023:
| Quarter Ended December 31, 2024 | ||||||||||||||
| North America | ||||||||||||||
| MH | RV | Marina | Total | UK | ||||||||||
| Revenue | 6.6 | % | 3.3 | % | 6.6 | % | 5.8 | % | 8.5 | % | ||||
| Expense | 5.3 | % | 6.2 | % | 6.7 | % | 6.0 | % | 4.3 | % | ||||
| NOI | 7.1 | % | 0.4 | % | 6.6 | % | 5.7 | % | 12.9 | % | ||||
| Year Ended December 31, 2024 | ||||||||||||||
| North America | ||||||||||||||
| MH | RV | Marina | Total | UK | ||||||||||
| Revenue | 6.8 | % | 0.1 | % | 5.9 | % | 4.6 | % | 6.5 | % | ||||
| Expense | 6.8 | % | 3.8 | % | 6.9 | % | 5.7 | % | 3.9 | % | ||||
| NOI | 6.7 | % | (2.8) % | 5.4 | % | 4.1 | % | 9.0 | % | |||||
| Number of Properties | 283 | 150 | 127 | 560 | 51 | |||||||||
North America Same Property adjusted blended occupancy for MH and RV increased by 160 basis points to 99.0% at December 31, 2024, from 97.4% at December 31, 2023.
INVESTMENT ACTIVITY
During the quarter ended December 31, 2024, the Company completed the following dispositions:
- In November 2024, one UK property for total cash consideration of $7.6 million, with a loss on sale of $1.1 million.
- In December 2024, a portfolio of 13 RV properties in Canada for total consideration of $64.0 million. The consideration consisted of $42.4 million in the form of an operator note receivable with a weighted average interest rate of 5.0% due in December 2026, and cash consideration of $20.1 million. The Company recorded a gain on sale of $9.1 million in conjunction with the disposition.
- In December 2024, one MH land parcel under development in Texas for total cash consideration of $13.0 million, with a gain on sale of $10.9 million.
Net proceeds from the dispositions were used to pay off an aggregate of $44.3 million of borrowings under the Company's senior credit facility.
Subsequent to the quarter ended December 31, 2024, the Company completed the following dispositions:
- In January 2025, a portfolio of RV properties for total cash consideration of $92.9 million. The total consideration included proceeds from the disposition of four RV properties that were owned by the Company along with proceeds from the settlement of a developer note receivable of $33.9 million pertaining to three additional developer-owned properties in which the Company had provided financing. Prior to the sale, in December 2024, the Company recorded asset impairment charges of $12.1 million related to the four owned properties and a fair value adjustment loss of $32.0 million related to the developer note receivable.
Refer to page 14 for additional details related to the Company's acquisition and disposition activity.
Impacts of Hurricane Helene and Milton
During the quarter ended December 31, 2024, the Company recognized charges of $13.9 million for debris removal and clean-up at several of its MH and RV properties and $4.4 million for impaired assets at several of its marinas due to the impact of Hurricane Helene and Milton. The Company maintains property, casualty, flood and business interruption insurance for its properties, subject to customary deductibles and limits.
The foregoing impairment is based on current information available, and the Company continues to assess these estimates. The actual final impairment could vary significantly from these estimates. Any changes to these estimates will be recognized in the period(s) in which they are determined.
BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS
As of December 31, 2024, the Company had $7.4 billion in debt outstanding with a weighted average interest rate of 4.1% and a weighted average maturity of 6.2 years. At December 31, 2024, the Company's Net Debt to trailing twelve-month Recurring EBITDA ratio was 6.0 times.
UK Goodwill Impairment
During the quarter ended December 31, 2024, the Company recorded a non-cash goodwill impairment charge of $180.8 million in the Park Holidays reporting unit within the UK segment as part of its annual quantitative testing of goodwill. The decline in the fair value of the reporting unit was driven by recent uncertainty in the macroeconomic environment in the region, including higher borrowing costs and changing market dynamics, resulting in a decline in projected future cash flows.
Safe Harbor Sale
Subsequent to the quarter ended December 31, 2024, the Company announced that it had entered into an agreement to sell 100% of the Company's interest in the Safe Harbor Marinas business for an all-cash purchase price of $5.65 billion, subject to certain post-closing adjustments (the "Safe Harbor Sale"). While the Safe Harbor Sale is anticipated to close in the second quarter of 2025, the Safe Harbor Sale is subject to certain closing conditions and rights of termination, and it may not be completed on the anticipated timeline or at all. The Safe Harbor Sale is expected to generate approximately $5.5 billion of pre-tax proceeds after transaction costs, which the Company expects to use to support a combination of debt reduction, distributions to shareholders, and reinvestment in the Company's core businesses.
The Safe Harbor Sale represents the disposition of the Company's Marina reporting segment and a strategic shift in operations. Accordingly, the historical results of the Marina reporting segment and assets and liabilities included in the disposition will be presented in the Company's consolidated financial statements as held for sale and as discontinued operations beginning in the first quarter of 2025. The initial closing of the Safe Harbor Sale is expected to take place during the second quarter of 2025. Upon closing, the Company expects to realize an estimated gain on sale of approximately $1.3 billion within Income from discontinued operations, net on the Company's Consolidated Statement of Operations. Certain marina properties representing approximately 10% of the total consideration may be transferred and paid for in one or more subsequent closings, subject to receipt of certain third-party approvals.
2025 GUIDANCE
The Company is establishing first quarter and full year 2025 guidance for Diluted EPS attributable to the Consolidated Portfolio (excluding marinas) and Core FFO per Share attributable to the Consolidated Portfolio (excluding marinas). The Company's guidance presented in this earnings release does not give pro forma effect to the completion of the Safe Harbor Sale, nor does it reflect any impacts therefrom, including timing and potential uses of proceeds. While the Safe Harbor Sale is anticipated to close in the second quarter of 2025, the Safe Harbor Sale is subject to certain closing conditions and rights of termination, and it may not be completed on the anticipated timeline or at all. Pursuant to the terms of the transaction agreement governing the Safe Harbor Sale, certain properties are also subject to the receipt of certain third-party consents and other closing conditions that may cause those properties to be sold in one or more subsequent closings, or may not be sold at all. In addition, while the Company currently anticipates that the proceeds from the Safe Harbor Sale will be used to support a combination of debt paydown, distributions to shareholders and reinvestment in the Company's core businesses, the anticipated proceeds are subject to adjustment, and no final decisions have been made with respect to use thereof. For these reasons, as well as other factors described elsewhere in this earnings release and in the Company's public reports, the actual results from the Company's business and operations in such period may differ materially from the Company's guidance for that period.
Given uncertainties related to the operations and financial impact to the Company of its marina portfolio during the pendency of the Safe Harbor Sale, including with respect to its operations prior to closing, the timing of closing and the impacts to the Company thereof, and the potential of subsequent closings and the timing thereof, the Company is not providing guidance with respect to the marina portfolio at this time.
The Company expects to provide updated guidance following the closing of the Safe Harbor Sale.
| First Quarter Ending March 31, 2025 | Full Year Ending December 31, 2025 | |||||||||||||
| Low | High | Low | High | |||||||||||
| Diluted EPS attributable to the Consolidated Portfolio (excluding marinas) (a)(b) | $ | (0.28 | ) | $ | (0.20 | ) | $ | 1.11 | $ | 1.35 | ||||
| Core FFO per Share attributable to the Consolidated Portfolio (excluding marinas) (a)(b)(c)(d) | $ | 0.78 | $ | 0.86 | $ | 4.81 | $ | 5.05 | ||||||
(a) Excludes results from the Company's marina portfolio. The historical earnings attributable to the marina portfolio were $11.2 million for the first quarter 2024, and $74.2 million for the full year 2024. The historical Core FFO attributable to the marina portfolio was $46.9 million for the first quarter 2024, and $266.3 million for the full year 2024. The historical results of the marina portfolio may be materially different from the results of the marina portfolio for any future period. For illustrative purposes only, if these amounts were combined with our Consolidated Portfolio (excluding marinas) guidance stated above, it would imply a first quarter and full year 2025 combined EPS guidance range of between $(0.19) and $(0.11), and between $1.70 and $1.94, respectively, and a first quarter and full year 2025 combined Core FFO guidance range of between $1.14 and $1.22, and between $6.82 and $7.06, respectively. The historical results of the marina portfolio may be materially different from the results of the marina portfolio for any future period, and, given the inherent uncertainties related to the operations and financial impact to the Company of its marina portfolio during the pendency of the Safe Harbor Sale, investors are encouraged not to place undue reliance upon such amounts.
(b) The diluted share counts for the quarter ending March 31, 2025 and the year ending December 31, 2025 are estimated to be 132.4 million and 132.5 million, respectively.
(c) No reconciliation of the forecasted range for Core FFO per share attributable to the Consolidated Portfolio (excluding marinas) is included in this release because we are unable to quantify certain amounts that would be required to be included in the reconciliation to the comparable GAAP financial measure without unreasonable efforts, particularly with respect to the allocations of itemized adjustments to the Consolidated Portfolio (excluding marinas) during the pendency of the Safe Harbor Sale, and we believe such reconciliation would imply a degree of precision that could be confusing or misleading to investors.
(d) The Company's guidance translates forecasted results from operations in the UK using the relevant exchange rate provided in the table presented below. The impact of fluctuations in Canadian and Australian foreign currency rates on guidance are not material.
| Currencies | Exchange Rates | |
| U.S. dollar ("USD") / pound sterling ("GBP") | 1.24 | |
| USD / Canadian dollar ("CAD") | 0.70 | |
| USD / Australian dollar ("AUD") | 0.62 |
Supplemental Guidance Tables:
| Same Property Portfolio (in millions and %)(a) | FY 2024 Actual Results | Expected Change in FY 2025 | |||||||
| North America (MH and RV) | |||||||||
| Revenues from real property | $ | 1,388.9 | 3.9 | % | - | 4.5 | % | ||
| Total property operating expenses | 475.5 | 2.6 | % | - | 3.3 | % | |||
| Total North America Same Property NOI(b) | $ | 913.4 | 4.3 | % | - | 5.6 | % | ||
| MH NOI (284 properties) | $ | 632.9 | 5.9 | % | - | 6.9 | % | ||
| RV NOI (157 properties) | $ | 280.5 | 0.5 | % | - | 2.5 | % | ||
| UK (51 properties) | |||||||||
| Revenues from real property | $ | 142.5 | 4.6 | % | - | 5.2 | % | ||
| Total property operating expenses | 68.9 | 7.6 | % | - | 8.6 | % | |||
| Total UK Same Property NOI(b) | $ | 73.6 | 0.9 | % | - | 2.9 | % | ||
| Average Rental Rate Increases Expected | |||
| North America | |||
| MH | 5.2 | % | |
| Annual RV | 5.1 | % | |
| UK | 3.7 | % | |
For the first quarter ending March 31, 2025, the Company's guidance range assumes North America Same Property NOI growth of 3.0% - 4.3% and UK Same Property NOI growth of (5.4%) - (2.6%).
| Consolidated Portfolio Guidance For 2025 (excluding marinas) (in millions and %) | FY 2024 Actual Results | Expected Change / Range in FY 2025 | |||||||||
| Revenues from real property | $ | 1,703.0 | 2.2 | % | - | 2.9 | % | ||||
| Total property operating expenses | 687.8 | 1.5 | % | - | 2.4 | % | |||||
| Total Real Property NOI(c) | $ | 1,015.2 | 2.1 | % | - | 3.8 | % | ||||
| Service, retail, dining and entertainment NOI | $ | 23.6 | $ | 23.4 | - | $ | 25.7 | ||||
| Interest income | $ | 20.2 | $ | 19.1 | - | $ | 20.3 | ||||
| Brokerage commissions and other, net(d) | $ | 44.5 | $ | 32.8 | - | $ | 39.3 | ||||
| FFO contribution from North American home sales | $ | 9.9 | $ | 3.5 | - | $ | 5.1 | ||||
| FFO contribution from UK home sales | $ | 59.9 | $ | 56.4 |
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