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 ofSeptember 30, 2022 , we owned and operated or held an interest in a portfolio of 662 developed properties located in 39 states throughoutthe United States , theUnited Kingdom ,Ontario, Canada andPuerto Rico , including 340 MH and 160 RV communities, 31 communities containing both MH and RV sites, and 131 marinas. We have been in the business of acquiring, operating, developing and expanding MH and RV communities 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.
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. In addition, we calculate Constant Currency NOI for our UK Operations by
translating the operating results from the UK at the foreign currency exchange
rate used for guidance. We believe that NOI and Constant Currency NOI provide
enhanced comparability for investor evaluation of period-over-period results.
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SUN COMMUNITIES, INC.
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"). In addition, we calculate Constant Currency Core
FFO by translating the operating results from the UK , Canada and Australia at
the foreign currency exchange rates used for guidance. We believe that Core FFO
and Constant Currency Core FFO provide 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.
Catastrophic Event-Related Charges
OnSeptember 28, 2022 , Hurricane Ian made landfall onFlorida's western coast. The storm primarily affected four properties in theFort Myers area. Three RV properties comprising approximately 2,500 sites, sustained significant flooding and wind damage from the hurricane, and the sea wall and certain docks at one marina were damaged. At other affected MH and RV properties, most of the damage was limited to trees, roofs, fences, skirting and carports. At other affected marina properties, docks, buildings, and landscaping sustained limited wind and water damage. We recognized$29.9 million for impaired assets. We expect these charges to be partially offset by insurance recoveries, currently estimated at$17.7 million . The estimated net charges of$12.2 million related to Hurricane Ian were recognized as Catastrophic event-related charges, net in our Consolidated Statements of Operations for the three months endedSeptember 30, 2022 . As ofSeptember 30, 2022 , we had not received any insurance recoveries. We maintain property, casualty, flood and business interruption insurance for our properties, subject to customary deductibles and limits. Expected insurance recoveries for loss of income and redevelopment costs greater than the impairment charge cannot be estimated at this time. The foregoing impairment, expected insurance recovery, and net charge estimates are based on current information available to the Company. We continue to assess these estimates. The actual final impairment, insurance recoveries and net charges could vary significantly from these estimates. Any changes to these estimates will be recognized in the period(s) in which they are determined. 46 --------------------------------------------------------------------------------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 nine months ended
Three Months Ended Nine Months Ended
September 30, September 30, September 30,
September 30, 2022 2021 2022 2021
Net Income Attributable to SUI Common
Shareholders $ 162.6
(11.2) (2.6) (25.3) (8.0)
Brokerage commissions and other revenues, net (10.8) (8.8) (27.4) (21.7)
General and administrative 69.1 43.2 187.0 126.7
Catastrophic event-related charges, net 12.2 0.3 12.3 3.1
Business combination expense 8.4 - 23.9 1.0
Depreciation and amortization 151.3 127.1 450.0 378.1
Loss on extinguishment of debt (see Note 8) 4.0 - 4.4 8.1
Interest expense 61.7 39.0 162.2 116.2
Interest on mandatorily redeemable preferred
OP units / equity 1.0 1.1 3.1 3.1
(Gain) / loss on remeasurement of marketable
securities (see Note 15) 7.2 (12.0) 74.0 (43.2)
(Gain) / loss on foreign currency exchanges (14.9) 7.0 (21.7) 7.1
(Gain) / loss on disposition of properties 0.8 (108.1) (12.5) (108.1)
Other (income) / expense, net (2.8) 9.3 (2.6) 10.0
(Gain) / loss on remeasurement of notes
receivable (see Note 4) 0.1 (0.1) (0.1) (0.6)
Income from nonconsolidated affiliates (see
Note 6) (2.0) (0.9) (3.8) (2.9)
(Gain) / loss on remeasurement of investment
in nonconsolidated affiliates (see Note 6) 0.4 0.1 (0.1) 0.1
Current tax expense (see Note 12) 7.3 0.4 12.5 1.4
Deferred tax expense / (benefit) (see
Note 12) (3.6) 1.2 (3.9) 1.1
Preferred return to preferred OP units /
equity interests 2.5 3.1 8.6 9.0
Add: Income attributable to noncontrolling
interests 11.9 15.3 13.9 22.6
NOI $ 455.2 $ 346.3 $ 1,091.8 $ 870.4
Three Months Ended Nine Months Ended
September 30, September 30, September 30,
September 30, 2022 2021 2022 2021
Real property NOI $ 371.6 $ 302.5 $ 909.2 $ 768.3
Home sales NOI 54.3 24.6 122.9 58.2
Service, retail, dining and entertainment
expenses NOI 29.3 19.2 59.7 43.9
NOI $ 455.2 $ 346.3 $ 1,091.8 $ 870.4
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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 ofSeptember 30, 2022 , we recognized Real property - transient revenue of$42.7 million in the first quarter,$93.1 million in the second quarter and$153.4 million in the third 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-premise 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 ofSeptember 30, 2022 , we recognized seasonal Real property revenue of$62.4 million in the first quarter,$79.4 million in the second quarter and$90.0 million in the third quarter. Seasonal Real property revenue was$246.6 million for the year endedDecember 31, 2021 . In 2021, seasonal Real property revenue was recognized 17.7 percent in the first quarter, 25.0 percent in the second quarter, 29.9 percent in the third quarter and 27.4 percent in the fourth quarter. 48 --------------------------------------------------------------------------------SUN COMMUNITIES, INC.
Comparison of the Three and Nine Months Ended
Real Property Operations - Total Portfolio
The following tables reflect certain financial and other information for our Total Portfolio as of and for the three and nine months endedSeptember 30, 2022 and 2021 (in millions, except for statistical information): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2022 2021 Change % Change 2022 2021 Change % Change Financial Information Revenue Real property (excluding transient)$ 359.8 $ 303.4 $ 56.4 18.6 %$ 1,008.2 $ 861.7 $ 146.5 17.0 % Real property - transient 160.4 126.4 34.0 26.9 % 303.5 235.8 67.7 28.7 % Other 65.5 48.3 17.2 35.6 % 149.9 116.4 33.5 28.8 % Total Operating 585.7 478.1 107.6 22.5 % 1,461.6 1,213.9 247.7 20.4 % Expense Property Operating 214.1 175.6 38.5 21.9 % 552.4 445.6 106.8 24.0 % Real Property NOI$ 371.6 $ 302.5 $ 69.1 22.8 %$ 909.2 $ 768.3 $ 140.9 18.3 % As of September 30, September 30, 2022 2021 Change Other Information Number of properties(1) 662 584 78 MH occupancy 95.5 % RV occupancy(2) 100.0 % MH & RV blended occupancy(3) 96.5 % 97.4 % (0.9) % Sites available for MH & RV development 16,078 10,312 5,766 Monthly base rent per site - MH $ 624$ 599 (5)$ 25 Monthly base rent per site - RV(4) $ 549$ 515 (5)$ 34 Monthly base rent per site - Total $
605
Weighted average monthly rental rate - MH Rental Program $
1,192
(1)Includes MH communities, RV communities 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 nine months ended
For the three months ended
For the nine months ended
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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 statement. 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. Additionally, prior period Canadian currency figures
have been translated at 2022 average exchange rates for constant currency
comparability.
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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 nine months endedSeptember 30, 2022 and 2021 (in millions, except for statistical information). Three Months Ended Total Same Property - MH and RV MH RVSeptember 30 ,September 30 ,September 30 ,September 30 ,September 30 ,September 30, 2022 2021 Change % Change(1) 2022 2021 Change % Change(1) 2022 2021 Change % Change(1) Financial Information Revenue Real property (excluding transient)$ 239.5 $ 225.0 $ 14.5 6.5 %$ 185.7 $ 177.6 $ 8.1 4.6 %$ 53.8 $ 47.4 $ 6.4 13.4 % Real property - transient 107.1 106.5 0.6 0.6 % 0.2 0.2 - 7.5 % 106.9 106.3 0.6 0.6 % Other 16.0 14.9 1.1 7.2 % 5.1 4.9 0.2 3.1 % 10.9 10.0 0.9 9.2 % Total Operating 362.6 346.4 16.2 4.7 % 191.0 182.7 8.3 4.6 % 171.6 163.7 7.9 4.8 % Expense Property Operating 114.3 113.1 1.2 1.0 % 52.6 50.8 1.8 3.7 % 61.7 62.3 (0.6) (1.1) %
Real Property NOI
6.4 %$ 138.4 $ 131.9 $ 6.5 4.9 %$ 109.9 $ 101.4 $ 8.5 8.4 %
(1) Percentages are calculated based on unrounded numbers.
Nine Months Ended
Total Same Property - MH and RV MH RV
September 30 , September 30 , September 30 , September 30 , September 30 , September 30,
2022 2021 Change % Change(1) 2022 2021 Change % Change(1) 2022 2021 Change % Change(1)
Financial Information
Revenue
Real property
(excluding transient) $ 708.3 $ 666.3 $ 42.0 6.3 % $ 552.3 $ 528.9 $ 23.4 4.4 % $ 156.0 $ 137.4 $ 18.6 13.6 %
Real property -
transient 211.5 201.8 9.7 4.8 % 0.9 1.2 (0.3) (23.5) % 210.6 200.6 10.0 4.9 %
Other 36.0 33.8 2.2 6.6 % 15.4 14.2 1.2 8.8 % 20.6 19.6 1.0 5.0 %
Total Operating 955.8 901.9 53.9 6.0 % 568.6 544.3 24.3 4.5 % 387.2 357.6 29.6 8.3 %
Expense
Property Operating 305.9 287.7 18.2 6.3 % 149.9 140.5 9.4 6.8 % 156.0 147.2 8.8 5.9 %
Real Property NOI
5.8 %$ 418.7 $ 403.8 $ 14.9 3.7 %$ 231.2 $ 210.4 $ 20.8 9.9 %
(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$0.7664 USD per Canadian dollar. We have reclassified utilities revenues of$22.1 million and$19.8 million for the three months endedSeptember 30, 2022 and 2021, and$60.6 million and$54.4 million for the nine months endedSeptember 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
September 30, 2022 September 30, 2021 Change
Other Information
Number of properties(1) 424 424 -
MH occupancy 97.3 %
RV occupancy(2) 100.0 %
MH & RV blended occupancy(3) 97.9 %
Adjusted MH occupancy(4) 98.0 %
Adjusted RV occupancy(5) 100.0 %
Adjusted MH & RV blended occupancy(6) 98.5 % 96.5 % (7) 2.0 %
Sites available for development 7,920 8,081 (161)
Monthly base rent per site - MH $ 629 $ 604 (9) $ 25
Monthly base rent per site - RV(8) $ 560 $ 524 (9) $ 36
Monthly base rent per site - Total $ 613 $ 585 (9) $ 28
Monthly base rent per site - MH Rental Program $ 1,198 $ 1,091 $ 107 (1)Financial results from properties disposed of during the year have been removed from Same Property reporting.
(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)Adjusted occupancy percentages include MH sites and exclude recently completed but vacant MH expansion sites.
(5)Adjusted occupancy percentages include annual RV sites and exclude transient RV sites.
(6)Adjusted occupancy percentages include MH and annual RV sites and exclude transient RV sites and recently completed but vacant expansion sites.
(7)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.
(8)Monthly base rent pertains to annual RV sites and excludes transient RV sites.
(9)Canadian currency figures included within three months ended
For the three months ended
•The MH segment increase in NOI of$6.5 million , or 4.9 percent, when compared to the same period in 2021 is primarily due to an increase in Real property (excluding transient) revenue of$8.1 million , or 4.6 percent, partially offset by increased property operating expenses. Real property (excluding transient) revenue increased primarily due to a 4.3 percent increase in monthly base rent. •The RV segment increase in NOI of$8.5 million , or 8.4 percent, when compared to the same period in 2021 is primarily due to an increase in Real property (excluding transient) revenue of$6.4 million , or 13.4 percent, combined with a reduction in property operating expenses. The increase in Real property - (excluding transient) revenue was primarily due to a 7.0 percent increase in monthly base rent and conversions of transient RV sites to annual RV sites.
For the nine months ended
•The MH segment increase in NOI of$14.9 million , or 3.7 percent, when compared to the same period in 2021 is primarily due to an increase in Real property (excluding transient) revenue of$23.4 million , or 4.4 percent, partially offset by increased property operating expenses. Real property (excluding transient) revenue increased primarily due to a 4.3 percent increase in monthly base rent. •The RV segment increase in NOI of$20.8 million , or 9.9 percent, when compared to the same period in 2021 is primarily due to an increase in Real property (excluding transient) revenue of$18.6 million , or 13.6 percent, primarily due to a 7.0 percent increase in monthly base rent and conversions of transient RV sites to annual RV sites. This increase was partially offset by an increase in property operating expenses. 52 --------------------------------------------------------------------------------SUN COMMUNITIES, INC.
Real Property Operations - Same Property - Marina
The following tables reflect certain financial and other information for ourSame Property Marina as of and for the three and nine months endedSeptember 30, 2022 and 2021 (in millions, except for statistical information). Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2022 2021 Change % Change(1) 2022 2021 Change % Change(1)
Financial Information Revenue Real property (excluding transient)$ 64.0 $ 58.6 $ 5.4 9.1 %$ 167.3 $ 155.6 $ 11.7 7.5 % Real property - transient 4.4 5.4 (1.0) (17.4) % 9.5 10.4 (0.9) (7.8) % Other 3.9 3.9 - 0.3 % 9.5 8.8 0.7 8.0 % Total Operating 72.3 67.9 4.4 6.5 % 186.3 174.8 11.5 6.7 % Expense Property Operating 21.9 21.9 - - % 63.5 59.6 3.9 6.3 %
Real Property NOI
9.6 %$ 122.8 $ 115.2 $ 7.6 6.8 %
(1) Percentages are calculated based on unrounded numbers.
As of
September 30, 2022 September 30, 2021 Change % Change
Other Information
Number of properties 101 101 - - %
Wet slip and dry storage spaces 35,621 35,744 (123) (0.3) %
We have reclassified utility revenues of $2.9 million for the three months ended
September 30, 2022 and 2021, and $8.3 million and $8.4 million for the nine
months ended September 30, 2022 and 2021, respectively, to reflect the utility
expenses associated with our Same Property Marina net of recovery.
For the three months ended
For the nine months ended
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SUN COMMUNITIES, INC. The following table reflects certain financial and other information for ourUK operations as of and for the three months endedSeptember 30, 2022 and the period from date of acquisition toSeptember 30, 2022 (in millions, except for statistical information): Three Months Ended YTD Since Acquisition September 30, 2022 September 30, 2022 Financial Information Revenues Real property (excluding transient) $ 21.2 $ 38.1 Real property - transient 21.8 34.7 Other 0.4 1.0 Total Operating 43.4 73.8 Expenses Property Operating 18.2 33.2 Real Property NOI 25.2 40.6 Home Sales Revenue 84.1 144.7 Cost of home sales 43.6 75.7 Home selling expenses 1.3 3.6 NOI 39.2 65.4 Retail, dining and entertainment Revenue 16.3 27.8 Expense 16.2 28.8 Net Operating Gain / (Loss) 0.1 (1.0) UK Operations NOI $ 64.5 $ 105.0 Adjustment Foreign currency translation impact 8.8 11.9 UK Operations NOI - Constant Currency $ 73.3 $ 116.9 Other information Number of properties 54 Developed sites 17,952 Occupied sites 16,463 Occupancy 91.7% Sites available for development 3,047 Home Sales New home sales volume 319 574 Pre-owned home sales volume 566 1,046 Total home sales volume 885 1,620
We have reclassified utility revenue of$3.1 million and$5.6 million for the three months endedSeptember 30, 2022 and for the period from date of acquisition throughSeptember 30, 2022 , respectively, to reflect the utility expenses associated with ourUK Operations portfolio net of recovery. 54 --------------------------------------------------------------------------------SUN COMMUNITIES, INC.
Home Sales Summary (excluding
We purchase new homes and acquire pre-owned and repossessed manufactured homes, generally located within our communities, from lenders, dealers, and former residents to sell or lease to current and prospective residents.
The following table reflects certain financial and statistical information for our Home Sales Program for the three and nine months endedSeptember 30, 2022 and 2021 (in millions, except for average selling price and statistical information): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2022 2021 Change % Change 2022 2021 Change % Change Financial Information New Homes New home sales$ 31.7 $ 31.5 $ 0.2 0.6 %$ 95.4 $ 89.2 $ 6.2 7.0 % New home cost of sales 26.8 25.9 0.9 3.5 % 78.3 72.8 5.5 7.6 % Gross profit - new homes 4.9 5.6 (0.7) (12.5) % 17.1 16.4 0.7 4.3 % Gross margin % - new homes 15.5 % 17.7 % (2.2) % 17.9 % 18.4 % (0.5) % Average selling price - new homes$ 183,237 $ 151,850 $ 31,387 20.7 %$ 174,406 $ 152,943 $ 21,463 14.0 % Pre-owned Homes Pre-owned home sales$ 34.9 $ 49.6 $ (14.7) (29.6) %$ 118.0 $ 125.9 $ (7.9) (6.3) % Pre-owned home cost of sales 19.4 25.8 (6.4) (24.8) % 63.4 70.4 (7.0) (9.9) % Gross Profit - pre-owned homes 15.5 23.8 (8.3) (34.9) % 54.6 55.5 (0.9) (1.6) % Gross margin % - pre-owned homes 44.4 % 48.0 % (3.6) % 46.3 % 44.1 % 2.2 % Average selling price - pre-owned homes$ 63,339 $ 52,006 $ 11,333 21.8 %$ 59,267 $ 48,981 $ 10,286 21.0 % Total Home Sales Revenue from home sales$ 66.6 $ 81.1 $ (14.5) (17.9) %$ 213.4 $ 215.1 $ (1.7) (0.8) % Cost of home sales 46.2 51.7 (5.5) (10.6) % 141.7 143.2 (1.5) (1.0) % Home selling expenses 5.3 4.8 0.5 10.4 % 14.2 13.7 0.5 3.6 % Home Sales NOI$ 15.1 $ 24.6 $ (9.5) (38.6) %$ 57.5 $ 58.2 $ (0.7) (1.2) % Other Information New home sales volume 173 207 (34) (16.4) % 547 583 (36) (6.2) % Pre-owned home sales volume 551 955 (404) (42.3) % 1,991 2,572 (581) (22.6) % Total home sales volume 724 1,162 (438) (37.7) % 2,538 3,155 (617) (19.6) % Gross Profit -New Homes For the three months endedSeptember 30, 2022 , the 12.5 percent decrease in gross profit is primarily driven by a 16.4 percent decrease in new home sales volume as compared to the same period in 2021, partially offset by a 20.7 percent increase in new home average selling price. For the nine months endedSeptember 30, 2022 , the 4.3 percent increase in gross profit is primarily the result of a 14.0 percent increase in new home average selling price, partially offset by a decrease of 6.2 percent in new home sales volume. Gross Profit - Pre-owned Homes For the three months endedSeptember 30, 2022 , the 34.9 percent decrease in gross profit is primarily driven by a 42.3 percent decrease in pre-owned home sales volume as compared to the same period in 2021. For the nine months endedSeptember 30, 2022 , the 1.6 percent decrease in gross profit is primarily the result of a 22.6 percent decrease in pre-owned home sales volume, as compared to the same period in 2021, partially offset by a 21.0 percent increase in average pre-owned home selling price.
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 nine months endedSeptember 30, 2022 and 2021 (in millions, except for weighted average monthly rental rate and statistical information): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2022 2021 Change % Change 2022 2021 Change % Change
Financial Information
Revenues$ 31.4 $ 33.9 $ (2.5) (7.4) %$ 95.7 $ 105.8 $ (10.1) (9.5) % Expenses 6.0 5.5 0.5 9.1 % 15.9 15.3 0.6 3.9 %
Rental Program NOI
(10.6) % $ 79.8 $ 90.5 $ (10.7) (11.8) %
Other Information
Number of sold rental homes 138 307 (169) (55.0) % 508 799 (291) (36.4) %
Number of occupied rentals,
end of period 9,126 10,123 (997) (9.8) %
Investment in occupied
rental homes, end of period $ 543.8 $ 559.0 $ (15.2) (2.7) %
Weighted average monthly
rental rate, end of period $ 1,192 $ 1,085 $ 107 9.9 %
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 endedSeptember 30, 2022 , Rental Program NOI decreased$3.0 million , or 10.6 percent, as compared to the same period in 2021. The decrease is primarily due to a 9.8 percent decrease in the number of occupied rental homes, as compared to the same period in 2021.
For the nine months ended
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SUN COMMUNITIES, INC. Marina Segment Summary
The following table reflects certain financial and other information for our marinas as of and for the three and nine months endedSeptember 30, 2022 and 2021 (in millions, except for statistical information): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2022 2021 Change % Change 2022 2021 Change % Change
Financial Information Revenues Real property (excluding transient)$ 91.1 $ 72.9 $ 18.2 25.0 %$ 240.1 $ 180.9 $ 59.2 32.7 % Real property - transient 7.1 6.3 0.8 12.7 % 14.7 11.4 3.3 28.9 % Other 11.9 5.2 6.7 128.8 % 19.3 9.8 9.5 96.9 % Total Operating 110.1 84.4 25.7 30.5 % 274.1 202.1 72.0 35.6 % Expenses Property Operating 32.3 26.6 5.7 21.4 % 89.3 69.3 20.0 28.9 % Real Property NOI 77.8 57.8 20.0 34.6 % 184.8 132.8 52.0 39.2 % Service, retail, dining and entertainment Revenue 112.3 74.7 37.6 50.3 % 310.9 202.0 108.9 53.9 % Expense 98.8 68.0 30.8 45.3 % 272.1 176.1 96.0 54.5 % NOI 13.5 6.7 6.8 101.5 % 38.8 25.9 12.9 49.8 % Marina NOI$ 91.3 $ 64.5 $ 26.8 41.6 %$ 223.6 $ 158.7 $ 64.9 40.9 % Other information Number of properties 131 120 11 9.2 % Total wet slips and dry storage 46,185 43,615 2,570 5.9 %
The Marina NOI is separately reviewed to assess the overall growth and performance of the Marina segment and its financial impact on our results of operations.
We have reclassified utility revenues of$5.6 million and$4.3 million for the three months endedSeptember 30, 2022 and 2021, and$14.8 million and$10.5 million for the nine months endedSeptember 30, 2022 and 2021, respectively, to reflect the utility expenses associated with our Marina portfolio net of recovery.
For the three months ended
•The$26.8 million , or 41.6 percent increase in Marina NOI is primarily due to a$20.0 million , or 34.6 percent, increase in Marina Real Property NOI and a$6.8 million , or 101.5 percent, increase in Service, Retail,Dining and Entertainment NOI. •The$20.0 million , or 34.6 percent growth in Marina Real Property NOI is due to an increase in the number of owned Marina properties compared to the same period in 2021.
For the nine months ended
•The$64.9 million , or 40.9 percent increase in Marina NOI is due to a$52.0 million , or 39.2 percent, increase in Marina Real Property NOI and a$12.9 million , or 49.8 percent increase, in Service, Retail,Dining and Entertainment NOI. •The$52.0 million , or 39.2 percent, increase in Marina Real Property NOI is due primarily to an increase in the number of owned Marina properties compared to the same period in 2021. •The$12.9 million , or 49.8 percent, increase in Service, Retail, Dining and Entertainment NOI is due primarily to an increase in the number of owned marina properties offering service compared to the same period in 2021. 57
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