Sun Communities (SUI) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

April 26, 2022 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen and thank you for standing by. Welcome to the Sun Communities First Quarter 2022 Earnings Conference Call. At this time, management would like me to inform you that certain statements made during this call which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. Factors and risks that could cause actual results to differ materially from expectations are detailed in yesterday’s press release and from time-to-time in the company’s periodic filings with the SEC. The company undertakes no obligation to advise or update any forward-looking statements to reflect events or circumstances after the date of this release.

Having said that, I would like to introduce management with us today, Gary Shiffman, Chairman and Chief Executive Officer; John McLaren, President and Chief Operating Officer; Karen Dearing, Chief Financial Officer; and Fernando Castro-Caratini, Senior Vice President, Finance and Capital Markets. After their remarks, we will have an opportunity to ask questions.

I will now turn the program over to Gary Shiffman, Chairman and Chief Executive Officer. Mr. Shiffman, you may begin.

Gary Shiffman

Good morning and thank you for joining us as we discuss our first quarter 2022 results and growth initiatives and provide an update on our outlook. As anticipated, we delivered another strong quarter building on 2021’s momentum and positioning us for another solid year as we execute on each of our growth pillars, including organic growth, accretive acquisitions and developments.

For the quarter, core FFO per share was $1.34, which is a 6.3% increase over last year. The ongoing demand for attainable housing and affordable vacationing continues to be evident in our platform is driving compelling ongoing organic growth. Applications to live in a Sun Community increased 6% and same property occupancy increased 160 basis points over the same time last year. Revenue-producing sites increased by approximately 30% compared to the first quarter of 2021. The majority of those were conversions of transient RV to annual RV leases, which provides us a 50% revenue uplift within the first year.

In terms of acquisitions, in the first quarter and year-to-date through this call, we have completed approximately $1.6 billion of transactions, including the £950 million or $1.2 billion acquisition of Park Holidays. We are pleased to have completed the acquisition of the Park Holidays portfolio, which expands Sun’s total addressable market and takes advantage of our relative cost of capital within a very fragmented UK market. The acquisition of these 40 properties in many highly desirable seaside locations provides Sun with an additional platform for growth, driving on our expertise and proven track record. Park Holidays is a mirror image of our manufactured housing business with the same supply and demand drivers, the key revenues and a highly experienced and dedicated management team.