Sun Communities Inc., a real estate investment trust (REIT) that owns and operates, or has an interest in, manufactured housing and RV communities and marinas, reported its third-quarter results for 2023 in a release late Wednesday afternoon.
Financial Results for the Quarter and Nine Months Ended Sept. 30
For the quarter ended Sept. 30, 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 Sept. 30, 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 for the quarter and nine months ended Sept. 30, were $2.57 per common share and dilutive convertible securities and $5.76 per share, respectively.
Same Property Net Operating Income increased by 6.7% and 6.6% for the quarter and nine months ended Sept. 30, respectively, as compared to the corresponding periods in 2022.
“In the third quarter, we again delivered a 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 the UK.
“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,” he added. “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% on Sept. 30, as compared to 97.1% on Sept. 30, 2022.
During the quarter that ended Sept. 30, 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% increase.
Transient-to-annual RV site conversions totaled 537 sites during the third quarter of 2023 and accounted for 72.2% of the revenue-producing site gains. Total transient-to-annual RV site conversions totaled 1,815 for the nine months ended Sept. 30.
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