SUN COMMUNITIES, INC. The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and the accompanying Notes, along with our 2021 Annual Report.
OVERVIEW
We are a fully integrated, self-administered and self-managed REIT. As ofJune 30, 2022 , we owned and operated or held an interest in a portfolio of 661 developed properties located in 39 states throughoutthe United States ,Ontario, Canada , theUnited Kingdom andPuerto Rico , including 339 MH communities, 161 RV resorts, 31 properties containing both MH and RV sites, and 130 marinas. We have been in the business of acquiring, operating, developing and expanding MH communities and RV resorts since 1975 and marinas since 2020. We lease individual sites with utilities access for placement of manufactured homes, RVs or boats to our customers. We are also engaged in the marketing, selling and leasing of new and pre-owned homes to current and future residents in our MH communities. The Rental Program operations within our MH communities support and enhance our occupancy levels, property performance and cash flows.
SIGNIFICANT ACCOUNTING POLICIES
We have identified significant accounting policies that, as a result of the
judgments, uncertainties and complexities of the underlying accounting standards
and operations involved could result in material changes to our financial
condition or results of operations under different conditions or using different
assumptions. Details regarding significant accounting policies are described
fully in our 2021 Annual Report.
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SUN COMMUNITIES, INC. NON-GAAP FINANCIAL MEASURES
In addition to the results reported in accordance with GAAP in our "Results of
Operations" below, we have provided information regarding net operating income
("NOI") and funds from operations ("FFO") as supplemental performance measures.
We believe NOI and FFO are appropriate measures given their wide use by and
relevance to investors and analysts following the real estate industry. NOI
provides a measure of rental operations and does not factor in depreciation,
amortization and non-property specific expenses such as general and
administrative expenses. FFO, reflecting the assumption that real estate values
rise or fall with market conditions, principally adjusts for the effects of GAAP
depreciation / amortization of real estate assets. In addition, NOI and FFO are
commonly used in various ratios, pricing multiples / yields and returns and
valuation calculations used to measure financial position, performance and
value.
NOI is derived from operating revenues minus property operating expenses and
real estate taxes. NOI is a non-GAAP financial measure that we believe is
helpful to investors as a supplemental measure of operating performance because
it is an indicator of the return on property investment and provides a method of
comparing property performance over time. We use NOI as a key measure when
evaluating performance and growth of particular properties and / or groups of
properties. The principal limitation of NOI is that it excludes depreciation,
amortization, interest expense and non-property specific expenses such as
general and administrative expenses, all of which are significant costs.
Therefore, NOI is a measure of the operating performance of our properties
rather than of the Company overall.
We believe that GAAP net income (loss) is the most directly comparable measure
to NOI. NOI should not be considered to be an alternative to GAAP net income
(loss) as an indication of our financial performance or GAAP cash flow from
operating activities as a measure of our liquidity; nor is it indicative of
funds available for our cash needs, including our ability to make cash
distributions. Because of the inclusion of items such as interest, depreciation
and amortization, the use of GAAP net income (loss) as a performance measure is
limited as these items may not accurately reflect the actual change in market
value of a property, in the case of depreciation and in the case of interest,
may not necessarily be linked to the operating performance of a real estate
asset, as it is often incurred at a parent company level and not at a property
level.
FFO is defined by the National Association of Real Estate Investment Trusts
("NAREIT") as GAAP net income (loss), excluding gains (or losses) from sales of
depreciable operating property, plus real estate related depreciation and
amortization, real estate related impairments, and after adjustments for
unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial
measure that management believes is a useful supplemental measure of our
operating performance. By excluding gains and losses related to sales of
previously depreciated operating real estate assets, impairment and excluding
real estate asset depreciation and amortization (which can vary among owners of
identical assets in similar condition based on historical cost accounting and
useful life estimates), FFO provides a performance measure that, when compared
period-over-period, reflects the impact to operations from trends in occupancy
rates, rental rates, and operating costs, providing perspective not readily
apparent from GAAP net income (loss). Management believes the use of FFO has
been beneficial in improving the understanding of operating results of REITs
among the investing public and making comparisons of REIT operating results more
meaningful. We also use FFO excluding certain gain and loss items that
management considers unrelated to the operational and financial performance of
our core business ("Core FFO"). We believe that Core FFO provides enhanced
comparability for investor evaluations of period-over-period results.
We believe that GAAP net income (loss) is the most directly comparable measure
to FFO. The principal limitation of FFO is that it does not replace GAAP net
income (loss) as a performance measure or GAAP cash flow from operations as a
liquidity measure. Because FFO excludes significant economic components of GAAP
net income (loss) including depreciation and amortization, FFO should be used as
a supplement to GAAP net income (loss) and not as an alternative to it.
Furthermore, FFO is not intended as a measure of a REIT's ability to meet debt
principal repayments and other cash requirements, nor as a measure of working
capital. FFO is calculated in accordance with our interpretation of standards
established by NAREIT, which may not be comparable to FFO reported by other
REITs that interpret the NAREIT definition differently.
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SUN COMMUNITIES, INC. RESULTS OF OPERATIONS
The following tables reconcile the Net income attributable to SUI common
shareholders to NOI and summarize our consolidated financial results for the
three and six months ended
Three Months Ended Six Months Ended
June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Net Income Attributable to SUI Common
Shareholders $ 74.0
(7.3) (2.8) (14.1) (5.4)
Brokerage commissions and other revenues, net (8.6) (6.9) (16.6) (12.9)
General and administrative 62.2 45.3 117.9 83.5
Catastrophic event-related charges, net 0.1 0.4 0.1 2.8
Business combination expense 15.0 (0.2) 15.5 1.0
Depreciation and amortization 150.2 127.1 298.7 251.0
Loss on extinguishment of debt (see Note 8) 0.1 8.1 0.4 8.1
Interest expense 55.3 37.7 100.5 77.2
Interest on mandatorily redeemable preferred
OP units / equity 1.1 1.0 2.1 2.0
(Gain) / loss on remeasurement of marketable
securities (see Note 15) 32.3 (27.5) 66.8 (31.2)
(Gain) / loss on foreign currency exchanges (9.0) 0.1 (6.8) 0.1
(Gain) / loss on disposition of properties 0.1 - (13.3) -
Other (income) / expense, net (0.4) 0.2 0.2 0.7
Gain on remeasurement of notes receivable
(see Note 4) - (0.1) (0.2) (0.5)
Income from nonconsolidated affiliates (see
Note 6) (0.9) (0.8) (1.8) (2.0)
(Gain) / loss on remeasurement of investment
in nonconsolidated affiliates (see Note 6) (0.4) 0.1 (0.5) -
Current tax expense (see Note 12) 3.9 1.2 5.2 1.0
Deferred tax benefit (see Note 12) (0.3) - (0.3) (0.1)
Preferred return to preferred OP units /
equity interests 3.1 3.0 6.1 5.9
Less: Income attributable to noncontrolling
interests 4.2 7.0 2.0 7.3
NOI $ 374.7 $ 303.7 $ 636.6 $ 524.1
Three Months Ended Six Months Ended
June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Real property NOI $ 304.8 $ 258.3 $ 537.6 $ 465.8
Home sales NOI 49.8 23.0 68.6 33.6
Service, retail, dining and entertainment
expenses NOI 20.1 22.4 30.4 24.7
NOI $ 374.7 $ 303.7 $ 636.6 $ 524.1
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SUN COMMUNITIES, INC. Seasonality of Revenue
The RV and Marina industries are seasonal in nature, and the results of operations in any one period may not be indicative of results in future periods.
In the RV segment, certain properties maintain higher occupancy during the summer months, while other properties maintain higher occupancy during the winter months. Based on the location of our properties with transient RV sites, our portfolio generally produces higher revenues between April and September than between October and March. Real property - transient revenue is included in RV segment revenue. As ofJune 30, 2022 , we recognized Real property - transient revenue of$42.7 million in the first quarter and$93.1 million in the second quarter. Real property - transient revenue was$266.6 million for the year endedDecember 31, 2021 . In 2021, Real property - transient revenue was recognized 11.9 percent in the first quarter, 27.3 percent in the second quarter, 44.9 percent in the third quarter and 15.9 percent in the fourth quarter. In the Marina segment, demand for wet slip storage increases during the summer months as customers contract for the summer boating season, which also drives non-storage revenue streams such as service, fuel and on-premises restaurants or convenience stores. Demand for dry storage increases during the winter season as seasonal weather patterns require boat owners to store their vessels on dry docks and within covered racks. As ofJune 30, 2022 , we recognized seasonal Real property revenue of$62.4 million in the first quarter and$79.4 million in the second quarter. Seasonal Real property revenue was$246.6 million for the year endedDecember 31, 2021 . In 2021, Seasonal Real property revenue was recognized 17.7 percent in the first quarter, 25.0 percent in the second quarter, 29.9 percent in the third quarter and 27.4 percent in the fourth quarter. 48 --------------------------------------------------------------------------------SUN COMMUNITIES, INC.
Comparison of the Three and Six Months Ended
Real Property Operations - Total Portfolio
The following tables reflect certain financial and other information for our Total Portfolio as of and for the three and six months endedJune 30, 2022 and 2021 (in millions, except for statistical information): Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2022 2021 Change % Change 2022 2021 Change % Change Financial Information Revenue Real property (excluding transient)$ 341.7 $ 289.5 $ 52.2 18.0 %$ 648.4 $ 558.2 $ 90.2 16.2 % Real property - transient 98.1 77.0 21.1 27.4 % 143.1 109.5 33.6 30.7 % Other 47.9 38.8 9.1 23.5 % 84.4 68.1 16.3 23.9 % Total Operating 487.7 405.3 82.4 20.3 % 875.9 735.8 140.1 19.0 % Expense Property Operating 182.9 147.0 35.9 24.4 % 338.3 270.0 68.3 25.3 % Real Property NOI$ 304.8 $ 258.3 $ 46.5 18.0 %$ 537.6 $ 465.8 $ 71.8 15.4 % As of June 30, 2022 June 30, 2021 Change Other Information Number of properties(1) 661 569 92 MH occupancy 95.6 % RV occupancy(2) 100.0 % MH & RV blended occupancy(3) 96.5 % 97.4 % (0.9) % Sites available for MH & RV development 15,181 9,443 5,738 Monthly base rent per site - MH$ 619 $ 599 (5) $ 20 Monthly base rent per site - RV(4)$ 547 $ 516 (5) $ 31 Monthly base rent per site - Total$ 601
Weighted average monthly rental rate - MH Rental Program$ 1,162
(1)Includes MH communities, RV resorts and marinas.
(2)Occupancy percentages include annual RV sites and exclude transient RV sites.
(3)Occupancy percentages include MH and annual RV sites and exclude transient RV sites.
(4)Monthly base rent pertains to annual RV sites and excludes transient RV sites.
(5)Canadian currency figures included within the six months ended
Total andSame Property Marina portfolio results for the three and six months endedJune 30, 2021 , include reclassification of$5.6 million and$8.4 million of expense, net from Real property operating expense to Service, retail, dining and entertainment expense, respectively, to more precisely align certain revenues and expenses within Real property results and Service, retail, dining and entertainment results. The reclassifications had no impact on previously reported total portfolio Marina NOI. Refer to Real Property Operations - Total Portfolio above for additional information regarding these reclassifications. For the three months endedJune 30, 2022 , the$46.5 million increase in Real Property NOI consists of$7.3 million from Same Property MH and RV,$3.1 million fromSame Property Marina ,$15.4 million from theUK operations and$20.7 million from other recently acquired properties as compared to the same period in 2021. For the six months endedJune 30, 2022 , the$71.8 million increase in Real Property NOI consists of$20.9 million from Same Property MH and RV,$3.5 million fromSame Property Marina ,$15.4 million from theUK operations and$32.0 million from other recently acquired properties as compared to the same period in 2021. 49 --------------------------------------------------------------------------------SUN COMMUNITIES, INC.
Real Property Operations - Same Property
A key management tool used when evaluating performance and growth of our
properties is a comparison of the Same Property portfolio. Same Property refers
to properties that we have owned for at least the preceding year, exclusive of
properties recently completed or under construction, and other properties as
determined by management. The Same Property data may change from time-to-time
depending on acquisitions, dispositions, management discretion, significant
transactions or unique situations.
In order to evaluate the growth of the Same Property portfolio, management has
classified certain items differently than our GAAP statements. The
reclassification difference between our GAAP statements and our Same Property
portfolio is the reclassification of utility revenues from real property revenue
to operating expenses. A significant portion of our utility charges are
re-billed to our residents.
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SUN COMMUNITIES, INC.
Real Property Operations - Same Property - MH and RV United States and
The following tables reflect certain financial and other information for our Same Property MH and RV portfolio as of and for the three and six months endedJune 30, 2022 and 2021 (in millions, except for statistical information). Three Months Ended Total Same Property - MH and RV MH RVJune 30 ,June 30 ,June 30 ,June 30 ,June 30 ,June 30, 2022 2021 Change % Change(1) 2022 2021 Change % Change(1) 2022 2021 Change % Change(1) Financial Information Revenue Real property (excluding transient)$ 236.4 $ 223.2 $ 13.2 5.9 %$ 184.0 $ 176.5 $ 7.5 4.3 %$ 52.4 $ 46.7 $ 5.7 12.1 % Real property - transient 65.5 65.2 0.3 0.6 % 0.2 0.4 (0.2) (42.8) % 65.3 64.8 0.5 0.8 % Other 12.7 11.9 0.8 6.5 % 5.6 4.9 0.7 12.3 % 7.1 7.0 0.1 2.4 % Total Operating 314.6 300.3 14.3 4.8 % 189.8 181.8 8.0 4.4 % 124.8 118.5 6.3 5.4 % Expense Property Operating 103.6 96.6 7.0 7.3 % 49.6 45.9 3.7 8.3 % 54.0 50.7 3.3 6.4 % Real Property NOI$ 211.0 $ 203.7 $ 7.3 3.6 %$ 140.2 $ 135.9 $ 4.3 3.1 %$ 70.8 $ 67.8 $ 3.0 4.6 %
(1) Percentages are calculated based on unrounded numbers.
Six Months Ended
Total Same Property - MH and RV MH RV
June 30 , June 30 , June 30 , June 30 , June 30 ,
June 30, 2022 2021 Change % Change(1) 2022 2021 Change % Change(1) 2022 2021 Change % Change(1)
Financial Information
Revenue
Real property
(excluding Transient) $ 469.5 $ 441.8 $ 27.7 6.3 % $ 366.5 $ 351.3 $ 15.2 4.3 % $ 103.0 $ 90.5 $ 12.5 13.7 %
Real property -
transient 104.7 95.5 9.2 9.6 % 0.7 1.0 (0.3) (30.5) % 104.0 94.5 9.5 10.0 %
Other 20.2 19.1 1.1 6.1 % 10.4 9.3 1.1 11.7 % 9.8 9.8 - 0.8 %
Total Operating 594.4 556.4 38.0 6.8 % 377.6 361.6 16.0 4.4 % 216.8 194.8 22.0 11.3 %
Expense
Property Operating 192.5 175.4 17.1 9.7 % 97.4 89.7 7.7 8.5 % 95.1 85.7 9.4 11.0 %
Real Property NOI $ 401.9 $ 381.0 $ 20.9 5.5 % $ 280.2 $ 271.9 $ 8.3 3.1 % $ 121.7 $ 109.1 $ 12.6 11.5 %
(1) Percentages are calculated based on unrounded numbers.
The amounts in the tables above reflect constant currency for comparative purposes. Canadian currency figures in the prior comparative period have been translated at the 2022 average exchange rate of$0.7835 USD per Canadian dollar. We have reclassified water and sewer revenues of$19.0 million and$17.4 million for the three months endedJune 30, 2022 and 2021, and$38.6 million and$34.7 million for the six months endedJune 30, 2022 and 2021, respectively, to reflect the utility expenses associated with our Same Property portfolio net of recovery. 51 -------------------------------------------------------------------------------- SUN COMMUNITIES, INC. As of June 30, 2022 June 30, 2021 Change Other Information Number of properties 425 425 - MH occupancy 97.3 % RV occupancy(1) 100.0 % MH & RV blended occupancy(2) 98.0 % Adjusted MH occupancy(3) 98.0 % Adjusted RV occupancy(4) 100.0 % Adjusted MH & RV blended occupancy(5) 98.5 % 96.8 % (6) 1.7 % Sites available for development 8,082 8,135 (53) Monthly base rent per site - MH$ 625 $ 600 (8)$ 25 Monthly base rent per site - RV(7)$ 558 $ 523 (8)$ 35 Monthly base rent per site - Total$ 608
Monthly base rent per site - MH Rental Program$ 1,168
(1)Occupancy percentages include annual RV sites and exclude transient RV sites.
(2)Occupancy percentages include MH and annual RV sites and exclude transient RV sites.
(3)Adjusted occupancy percentages include MH and exclude recently completed but vacant expansion sites.
(4)Adjusted occupancy percentages include annual RV sites and exclude transient RV sites and recently completed but vacant expansion sites.
(5)Adjusted occupancy percentages include MH and annual RV sites and exclude transient RV sites and recently completed but vacant expansion sites.
(6)The occupancy percentages for 2021 have been adjusted to reflect incremental growth period-over-period from newly rented MH expansion sites and the conversion of transient RV sites to annual RV sites.
(7)Monthly base rent pertains to annual RV sites and excludes transient RV sites.
(8)Canadian currency figures included within three months ended
For the three months ended
•The MH segment increase in NOI of$4.3 million , or 3.1 percent, when compared to the same period in 2021 is primarily due to an increase in Real property (excluding transient) revenue of$7.5 million , or 4.3 percent, partially offset by increased property operating expenses. Real property (excluding transient) revenue increased primarily due to a 4.1 percent increase in monthly base rent. •The RV segment increase in NOI of$3.0 million , or 4.6 percent, when compared to the same period in 2021 is primarily due to an increase in Real property (excluding transient) revenue of$5.7 million , or 12.1 percent, partially offset by increased operating expenses. The increase in Real property - (excluding transient) revenue was primarily due to a 6.8 percent increase in monthly base rent and conversions of transient RV sites to annual RV sites.
For the six months ended
•The MH segment increase in NOI of$8.3 million , or 3.1 percent, when compared to the same period in 2021 is primarily due to an increase in Real property (excluding transient) revenue of$15.2 million , or 4.3 percent, partially offset by increased operating expenses. Real property (excluding transient) revenue increased primarily due to a 4.1 percent increase in monthly base rent. •The RV segment increase in NOI of$12.6 million , or 11.5 percent, when compared to the same period in 2021 is primarily due to an increase in Real property (excluding transient) revenue of$12.5 million , or 13.7 percent, primarily due to an increase in monthly base rent and conversions of transient RV sites to annual RV sites. 52 --------------------------------------------------------------------------------SUN COMMUNITIES, INC.
Real Property Operations - Same Property - Marina
The following tables reflect certain financial and other information for ourSame Property Marina as of and for the three and six months endedJune 30, 2022 and 2021 (in millions, except for statistical information). Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2022 2021 Change % Change(1) 2022 2021 Change % Change(1) Financial Information Revenue Real property (excluding transient)$ 57.6 $ 53.7 $ 3.9 7.4 %$ 103.4 $ 97.0 $ 6.4 6.6 % Real property - transient 3.7 4.1 (0.4) (9.3) % 5.1 5.0 0.1 2.5 % Other 3.3 3.2 0.1 3.8 % 5.7 4.9 0.8 14.3 % Total Operating 64.6 61.0 3.6 6.1 % 114.2 106.9 7.3 6.8 % Expense Property Operating 17.2 16.7 0.5 3.4 % 41.6 37.8 3.8 10.0 % Real Property NOI$ 47.4 $ 44.3 $ 3.1 7.1 %$ 72.6 $ 69.1 $ 3.5 5.0 %
(1) Percentages are calculated based on unrounded numbers.
As of
June 30, 2022 June 30, 2021 Change % Change
Other Information
Number of properties 101 101 - - %
Wet slip and dry storage spaces 35,616 35,744 (128) (0.4) %
We have reclassified utility revenues of$2.9 million for the three months endedJune 30, 2022 and 2021, and$5.4 million and$5.5 million for the six months endedJune 30, 2022 and 2021, respectively, to reflect the utility expenses associated with ourSame Property Marina net of recovery. Same Property results for the three and six months endedJune 30, 2021 , include reclassification of$8.3 million of expense, net from Real property operating expense to Service, retail, dining and entertainment expense to more precisely align certain revenues and expenses within Real property results and Service, retail, dining and entertainment results. The reclassifications had no impact on previously reported total portfolio Marina NOI. Refer to Real Property Operations - Total Portfolio above for additional information regarding these reclassifications.
For the three months ended
For the six months ended
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SUN COMMUNITIES, INC. The following table reflects certain financial and other information for ourUK operations as of and fromApril 8, 2022 (date of acquisition) toJune 30, 2022 (in millions, except for statistical information): April 8, 2022 to June 30, 2022 Financial Information Revenues Real property (excluding transient) $ 16.9 Real property - transient 12.9 Other 0.6 Total Operating 30.4 Expenses Property Operating 15.0 Real Property NOI 15.4 Home Sales Revenue 60.6 Cost of home sales 32.1 Home selling expenses 2.3 NOI 26.2 Retail, dining and entertainment Revenue 11.5 Expense 12.6 Net Operating Loss (1.1) UK Operations NOI $ 40.5 Statistical information Number of properties 53 Developed sites 17,330 Occupied sites 15,841 Occupancy 91.4% Sites available for development 1,987 Home Sales New home sales volume 255 Pre-owned home sales volume 480 Total home sales volume 735 TheUK Operations Real Property NOI is included in Real Property NOI. TheUK Operations NOI, a component of our MH segment, is separately reviewed to assess the overall growth and performance of theUK Operations property portfolio and its financial impact on our operations. We have reclassified utility revenue of$2.5 million for the three months endedJune 30, 2022 , to reflect the utility expenses associated with ourUK Operations properties portfolio net of recovery. 54 -------------------------------------------------------------------------------- SUN COMMUNITIES, INC.
Home Sales Summary (excluding
We purchase new homes and acquire pre-owned and repossessed manufactured homes, generally located within our communities, from lenders, dealers, and former residents to sell or lease to current and prospective residents.
The following table reflects certain financial and statistical information for our Home Sales Program for the three and six months endedJune 30, 2022 and 2021 (in millions, except for average selling price and statistical information): Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 Change % Change June 30, 2022 June 30, 2021 Change % Change Financial Information New Homes New home sales$ 37.1 $ 34.7 $ 2.4 6.9 %$ 63.7 $ 57.7 $ 6.0 10.4 % New home cost of sales 29.9 28.2 1.7 6.0 % 51.5 46.9 4.6 9.8 % Gross profit - new homes 7.2 6.5 0.7 10.8 % 12.2 10.8 1.4 13.0 % Gross margin % - new homes 19.4 % 18.7 % 0.7 % 19.2 % 18.7 % 0.5 % Average selling price - new homes$ 164,159 $ 153,132 $ 11,027 7.2 %$ 170,321 $ 153,545 $ 16,776 10.9 %
Pre-owned Homes
Pre-owned home sales
(4.5) % $ 83.1 $ 76.3 $ 6.8 8.9 %
Pre-owned home cost of
sales 24.2 26.0 (1.8) (6.9) % 44.0 44.6 (0.6) (1.3) %
Gross Profit - pre-owned
homes 20.8 21.1 (0.3) (1.4) % 39.1 31.7 7.4 23.3 %
Gross margin % -
pre-owned homes 46.2 % 44.9 % 1.3 % 47.1 % 41.7 % 5.4 %
Average selling price -
pre-owned homes $ 59,920 $ 50,577 $ 9,343 18.5 % $ 57,708 $ 47,195 $ 10,513 22.3 %
Total Home Sales
Revenue from home sales $ 82.1 $ 81.8 $ 0.3 0.4 % $ 146.8 $ 134.0 $ 12.8 9.6 %
Cost of home sales 54.1 54.2 (0.1) (0.2) % 95.5 91.5 4.0 4.4 %
Home selling expenses 4.4 4.6 (0.2) (4.3) % 8.9 8.9 - - %
Home Sales NOI $ 23.6 $ 23.0 $ 0.6 2.6 % $ 42.4 $ 33.6 $ 8.8 26.2 %
Other Information
New home sales volume 226 227 (1) (0.4) % 374 376 (2) (0.5) %
Pre-owned home sales
volume 751 931 (180) (19.3) % 1,440 1,617 (177) (10.9) %
Total home sales volume 977 1,158 (181) (15.6) % 1,814 1,993 (179) (9.0) %
Gross Profit - New Homes
For the three months ended June 30, 2022 , the 10.8 percent increase in gross
profit is primarily driven by a 7.2 percent increase in new home average selling
price, outpacing the 6.0 percent increase in cost of sales as compared to the
same period in 2021.
For the six months ended June 30, 2022 , the 13.0 percent increase in gross
profit is primarily the result of a 10.9 percent increase in new home average
selling price outpacing the 9.8 percent increase in cost of sales as compared to
the same period in 2021.
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SUN COMMUNITIES, INC.
Gross Profit - Pre-owned Homes
For the three months ended June 30, 2022 , the 1.4 percent decrease in gross
profit is primarily driven by a 19.3 percent decrease in pre-owned home sales
volume, partially offset by an 18.5 percent increase in pre-owned home average
selling price, as compared to the same period in 2021.
For the six months ended June 30, 2022 , the $7.4 million , or 23.3 percent
increase in gross profit is primarily the result of a 5.4 percent increase in
gross margin, primarily due to a 22.3 percent increase in the pre-owned home
average selling price, partially offset by a 10.9 percent decrease in pre-owned
home sales volume, as compared to the same period in 2021.
Refer to the
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SUN COMMUNITIES, INC. Rental Program Summary
The following table reflects certain financial and other information for our Rental Program as of and for the three and six months endedJune 30, 2022 and 2021 (in millions, except for weighted average monthly rental rate and statistical information): Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2022 2021 Change % Change 2022 2021 Change % Change Financial Information Revenues$ 32.1 $ 35.8 $ (3.7) (10.3) %$ 64.3 $ 71.9 $ (7.6) (10.6) % Expenses 5.0 4.6 0.4 8.7 % 9.9 9.8 0.1 1.0 % Rental Program NOI$ 27.1 $ 31.2 $ (4.1) (13.1) %$ 54.4 $ 62.1 $ (7.7) (12.4) % Other Information Number of sold rental homes 193 281 (88) (31.3) % 370 492 (122) (24.8) % Number of occupied rentals, end of period 9,204 10,951 (1,747) (16.0) % Investment in occupied rental homes, end of period$ 535.0 $ 601.8 $ (66.8) (11.1) % Weighted average monthly rental rate, end of period$ 1,162 $ 1,065 $ 97 9.1 %
The Rental Program NOI is included in Real Property NOI. The Rental Program NOI is separately reviewed to assess the overall growth and performance of the Rental Program and its financial impact on our operations.
For the three months endedJune 30, 2022 , Rental Program NOI decreased$4.1 million , or 13.1 percent, as compared to the same period in 2021. The decrease is primarily due to a$3.7 million , or 10.3 percent, decrease in revenue driven by a 16.0 percent decrease in the number of occupied rental homes, as compared to the same period in 2021. For the six months endedJune 30, 2022 , Rental Program NOI decreased$7.7 million , or 12.4 percent, as compared to the same period in 2021. The decrease is primarily due to a decrease in Rental Program revenue of$7.6 million , or 10.6 percent, driven by a 16.0 percent decrease in number of occupied rental homes, as compared to the same period in 2021. 57 --------------------------------------------------------------------------------SUN COMMUNITIES, INC.
Marina Summary
The following table reflects certain financial and other information for our marinas as of and for the three and six months endedJune 30, 2022 and 2021 (in millions, except for statistical information): Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2022 2021 Change % Change 2022 2021 Change % Change Financial Information Revenues Real property (excluding transient)$ 82.0 $ 61.9 $ 20.1 32.5 %$ 149.0 $ 108.0 $ 41.0 38.0 % Real property - transient 5.1 4.2 0.9 21.4 % 7.6 5.1 2.5 49.0 % Other 4.5 3.0 1.5 50.0 % 7.4 4.6 2.8 60.9 % Total Operating 91.6 69.1 22.5 32.6 % 164.0 117.7 46.3 39.3 % Expenses Property Operating 23.8 19.1 4.7 24.6 % 57.0 42.7 14.3 33.5 % Real Property NOI 67.8 50.0 17.8 35.6 % 107.0 75.0 32.0 42.7 % Service, retail, dining and entertainment Revenue 127.3 82.9 44.4 53.6 % 198.5 127.3 71.2 55.9 % Expense 113.5 70.1 43.4 61.9 % 173.3 108.1 65.2 60.3 % NOI 13.8 12.8 1.0 7.8 % 25.2 19.2 6.0 31.3 % Marina NOI$ 81.6 $ 62.8 $ 18.8 29.9 %$ 132.2 $ 94.2 $ 38.0 40.3 % Statistical information Number of properties 130 114 16 14.0 % Total wet slips and dry storage 45,905 40,179 5,726 14.3 % Marina Real Property NOI is included in Real Property NOI. The Marina NOI is separately reviewed to assess the overall growth and performance of the Marina segment and its financial impact on our operations. We have reclassified utility revenues of$4.9 million and$3.7 million for the three months endedJune 30, 2022 and 2021, and$9.2 million and$6.3 million for the six months endedJune 30, 2022 and 2021, respectively, to reflect the utility expenses associated with our Marina net of recovery. Marina Property results for the three and six months endedJune 30, 2021 , include reclassification of$8.4 million of expense, net from Real property operating expense to Service, retail, dining and entertainment expense to more precisely align certain revenues and expenses within Real property results and Service, retail, dining and entertainment results. The reclassifications had no impact on previously reported total portfolio Marina NOI. Refer to Real Property Operations - Total Portfolio above for additional information regarding these reclassifications.
For the three months ended
•The$18.8 million , or 29.9 percent increase in Marina NOI is primarily due to a$17.8 million , or 35.6 percent, increase in Marina Real Property NOI and a$1.0 million or 7.8 percent, increase in Service, Retail,Dining and Entertainment NOI. •The$17.8 million , or 35.6 percent growth in Marina Real Property NOI is due to a$20.1 million , or 32.5 percent, increase in Real property (excluding transient) revenue primarily due to an increase in the number of owned Marina properties compared to the same period in 2021. 58 --------------------------------------------------------------------------------SUN COMMUNITIES, INC.
For the six months ended
•The$38.0 million , or 40.3 percent increase in Marina NOI is due to a$32.0 million , or 42.7 percent, increase in Marina Real Property NOI and a$6.0 million or 31.3 percent increase, in Service, Retail,Dining and Entertainment NOI. •The$32.0 million , or 42.7 percent, increase in Marina Real Property NOI is due primarily to a$41.0 million , or 38.0 percent, increase in Real property (excluding transient) revenue primarily due to an increase in the number of owned Marina properties compared to the same period in 2021, partially offset by an increase in Marina operating expenses. •The$6.0 million , or 31.3 percent, increase in Service, Retail, Dining and Entertainment NOI is primarily due to an increase in service revenue resulting from the acquisition of service-intensive marinas and entry into the superyacht market, combined with increased transient activity. 59
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