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Gary Shiffman

In an conference call following Sun Communities Inc.’s fourth-quarter and full-year 2016 earnings results on Thursday (Feb. 23), Gary Shiffman, CEO and chairman of the Southfield, Mich., company highlighted Sun’s performance gains.

Sun has 349 RV and manufactured housing parks it owns or has an interest in across 29 states in the U.S. and in Ontario.

“Since 2016 was marked by sustained success in achieving strong results for our stakeholders, we delivered another year of industry leading results with same-community NOI (net operating income)  growth of 7.1% of the year and 9.1% for the fourth quarter, driven by revenue increases of over 6% for the year and the quarter,” he said.

“We’ve now increased or maintained occupancy for 20 consecutive quarters and ended 2016 with same-community occupancy of 96.6 % and overall portfolio occupancy of 96.2 %. We expect continued high occupancy going forward,” he continued, “given the strong fundamentals, creating demand for our communities.

“We are highly encouraged by our market positioning and the inherit leverages that will drive Sun’s growth. For 2017 we are anticipating a solid same-community growth between 6.4% and 6.8%,” Shiffman said. The company also plans expansions at six RV resorts this year as a result of continued strong demand, he said.

Chief Operating Officer John McLaren talked about Sun’s integration of Carefree Communities Inc. over the last seven months of 2016. “Sun purchased Carefree in the beginning of June for roughly $1.7 billion, enhancing Sun’s irreplaceable portfolio with additional high-quality RV assets, retirement communities, and exposure to the Western states. The RV winter season is in full swing and operations in Carefree are proceeding smoothly,” he said.

“As Gary has discussed in the past, integrative acquisitions is one of Sun’s core competencies, having added approximately $4.3 billion in assets over the past five years,” he continued. “We’ve developed a very efficient and effective process of integrating large acquisitions on the Sun platform. With respect to Carefree, the integration we now consider to be substantially complete and successfully on-boarded over 1300 team members.”

Sun decided to speed up improvements at Carfree’s Ocean Breeze property in Jensen Beach, Fla. That project, planned for three years, is now set to be finished this year, McLaren said.

In Sun’s existing communities, RV revenue rose by 9.3% in the fourth quarter and 7.5% for the year. The company saw a jump of 9.4% in growth in annual/seasonal RV revenue for the fourth quarter and 9.1% gains in transient RV revenue for the quarter.

For the year, Sun saw annual/seasonal RV revenue up by 9.4% and transient revenue up by 5%. This year, the company plans to convert 700 of its transient RV sites into annual/seasonal sites, plus building another 400 sites across six communities in the company’s portfolio, according to Executive Vice President and CFO Karen Dearing.

In terms of future acquistions, Shiffman said Sun doesn’t see any large portfolios of high-quality properties coming available soon, but the company is looking at buying some functionally obsolete communities to bring up to Sun standards. He noted that Sun has a “very good pipeline” of parks for acquisition, all single or double parks.