The report from Sun Communities (SUI), Inc via Yahoo that follows has reams of information in the form of facts, figures, and quotable quotes. That is routine fare for such quarterly and year-to-date 2023 press releases for a publicly traded firm. That is why MHProNews routinely provides them to manufactured home industry readers and others interested in inherently affordable manufactured housing. Such ‘official’ data from publicly traded firms have to operate under Securities and Exchange Commission (SEC) rules that are supposed to insure that what is provided will not lack materiality, so investors can make a better-informed decision. As such, MHProNews has demonstrated through fact checks and analysis how these firms often contradict remarks and stances formally taken by the Manufactured Housing Institute (MHI). Two examples of that observation are provided. The first is for a vertically integrated producer of HUD Code manufactured homes and the second is for a manufactured home community operator that is another Real Estate Investment Trust (REIT) as is Sun. Beyond the data and remarks from Sun below are other insights from another large Manufactured Housing Institute (MHI) member in Part II that will shed light on Sun’s statements and data. Furthermore, Part II will have insights relevant to certain evidence-based allegations involving a felony and civil conspiracy working its way through various legal processes that include Sun’s Chairman, President and CEO Gary Shiffman. “In Manufactured Housing, we are pleased with our ability to outpace inflation rates in rental income, while also realizing a steady increase in occupancy levels,” Shiffman said, per the release carried by Yahoo.  But what went unsaid may be of equal or greater material interest to numbers of investors, stockholders, and shareholders looking into SUI. Additionally, the 5-year stock trend provided herein below will yield an at-a-glance insight that may cause some to wonder what’s going on at the multi-billion-dollar MHC giant Sun.

Note that highlighting below is added by MHProNews.

 

Part I

Sun Communities, Inc. Reports 2023 Second Quarter and Year-to-Date Results, What CEO Gary Shiffman Did, Didn’t Say; plus MHVille Stocks, REITs Updates

Sun Communities, Inc.

Wed, July 26, 2023 at 5:29 PM EDT

Net Earnings per Diluted Share of $0.72 for the Quarter Increased by 18% Year-over-Year

Core FFO per Share of $1.96 for the Quarter, in line with Guidance

Same Property NOI Grew by 6.3% and 6.5%, for the Quarter and Year-to-Date over the 2022 Periods;
Strong Demand and Effective Expense Management Drove Outperformance

Same Property Adjusted Occupancy for MH and RV Increased by 170 Basis Points, Year-over-Year

Solid Transient-to-Annual RV Site Conversions of over 750 Sites

Revising Full-Year Core FFO per Share Guidance for 2023 to $7.09 – $7.23

Increasing Guidance for Total Same Property NOI Growth to 5.3% – 6.1%

Southfield, MI, July 26, 2023 (GLOBE NEWSWIRE) — Sun Communities, Inc. (NYSE: SUI) (the “Company” or “SUI”), a real estate investment trust (“REIT”) that owns and operates, or has an interest in, manufactured housing (“MH”) and recreational vehicle (“RV”) communities and marinas (collectively, the “properties”), today reported its second quarter results for 2023.

Financial Results for the Quarter and Six Months Ended June 30, 2023

• For the quarter ended June 30, 2023, net income attributable to common shareholders was $89.8 million, or $0.72 per diluted share, compared to net income attributable to common shareholders of $74.0 million, or $0.61 per diluted share for the same period in 2022, an 18% increase.
• For the six months ended June 30, 2023, net income attributable to common shareholders was $59.7 million, or $0.48 per diluted share, compared to net income attributable to common shareholders of $74.7 million, or $0.63 per diluted share, for the same period in 2022.

Non-GAAP Financial Measures

• Core Funds from Operations (“Core FFO”) for the quarter and six months ended June 30, 2023, were $1.96 per common share and dilutive convertible securities (“Share”) and $3.19 per Share, respectively, representing 3.0% and 5.3% decreases as compared to the corresponding periods in 2022.
• Same Property Net Operating Income (“NOI”) increased by 6.3% and 6.5% for the quarter and six months ended June 30, 2023, respectively, as compared to the corresponding period in 2022.

“We delivered strong second quarter results that were in line with our expectations, driven by the reliability of our real property operations which produce steady growth through economic cycles,” said Gary A. Shiffman, Chairman, President and CEO. “This growth was demonstrated across each of our segments which possess sustained compelling market dynamics. In Manufactured Housing, we are pleased with our ability to outpace inflation rates in rental income, while also realizing a steady increase in occupancy levels. In our RV segment, we continued to successfully convert transient guests into annual residents at a record pace. Our outperformance in Marinas was primarily fueled by robust demand, as our members recognize the value of our industry-leading marina network. In the UK, where a more challenging macro environment is creating home sales headwinds, we continue to see strength in real property income generation. Overall, we remain highly confident in our ability to produce solid cash flow growth and generate value throughout our exceptional MH, RV and Marina portfolios.”

OPERATING HIGHLIGHTS

North America Portfolio Occupancy

• Total MH and annual RV occupancy was 97.1% at June 30, 2023, as compared to 97.2% at June 30, 2022.
• During the quarter ended June 30, 2023, the number of MH and annual RV revenue producing sites increased by 1,039 sites, as compared to an increase of 950 sites during the corresponding period in 2022, a 9.4% increase.
• Transient-to-annual RV site conversions totaled over 750 sites during the second quarter of 2023 and account for 72.6% of the revenue producing site gains.

Same Property Results

For the properties owned and operated by the Company since at least January 1, 2022, the following table reflects the percentage changes for the quarter and six months ended June 30, 2023:

Same Property adjusted blended occupancy for MH and RV increased 170 basis points to 98.7% at June 30, 2023, from 97.0% at June 30, 2022.

INVESTMENT ACTIVITY

During the quarter ended June 30, 2023, the Company expanded its existing communities by over 110 sites.

BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

As of June 30, 2023, the Company had $7.6 billion in debt outstanding with a weighted average interest rate of 4.0% and a weighted average maturity of 7.1 years. At June 30, 2023, the Company’s net debt to trailing twelve-month Recurring EBITDA ratio was 6.2 times.

2023 GUIDANCE UPDATE

The Company is updating full-year 2023 and establishing third quarter 2023 guidance for diluted EPS and Core FFO per Share as follows:

^(a) Other adjustments consist primarily of deferred taxes, changes in remeasurement gains / (losses), contingent legal and insurance gains and other items presented in the table that reconciles Net income attributable to SUI common shareholders to Core FFO on page 6.

^(b) The Company’s updated guidance translates forecasted results from operations in the UK using the relevant exchange rate in effect provided in the 2023 Guidance Assumptions table presented below. The impact of fluctuations in Canadian and Australian foreign currency rates on revised and initial guidance are not material.

The 2.2% downward revision to the midpoint of full-year guidance is due primarily to lower expected UK home sales NOI, higher interest expense related to short-term interest rate increases since April 26, 2023, and a modest reduction to expected Service, retail, dining and entertainment NOI as compared to prior guidance. In addition to the assumptions underlying the Company’s revised 2023 guidance detailed in the table below, the Company expects total same property NOI to increase 3.2% – 4.5% during the third quarter ending September 30, 2023:

The estimates and assumptions presented above represent a range of possible outcomes and may differ materially from actual results. These estimates include contributions from all acquisitions, dispositions and capital markets activity completed through July 26, 2023, and the effect of a property disposition under contract expected to close during the third quarter 2023. These estimates exclude all other prospective acquisitions, dispositions and capital markets activity. The estimates and assumptions are forward-looking based on the Company’s current assessment of economic and market conditions and are subject to the other risks outlined below under the caption Cautionary Statement Regarding Forward-Looking Statements.

EARNINGS CONFERENCE CALL

A conference call to discuss second quarter results will be held on Thursday, July 27, 2023 at 12:00 P.M. (ET). To participate, call toll-free at (877) 407-9039. Callers outside the U.S. or Canada can access the call at (201) 689-8470. A replay will be available following the call through August 10, 2023 and can be accessed toll-free by calling (844) 512-2921 or (412) 317-6671. The Conference ID number for the call and the replay is 13739127. The conference call will be available live on the Company’s website located at www.suncommunities.com. The replay will also be available on the website.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains various “forward-looking statements” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this document that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as “forecasts,” “intends,” “intend,” “intended,” “goal,” “estimate,” “estimates,” “expects,” “expect,” “expected,” “project,” “projected,” “projections,” “plans,” “predicts,” “potential,” “seeks,” “anticipates,” “anticipated,” “should,” “could,” “may,” “will,” “designed to,” “foreseeable future,” “believe,” “believes,” “scheduled,” “guidance,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements reflect the Company’s current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this document, some of which are beyond the Company’s control. These risks and uncertainties and other factors may cause the Company’s actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks described under “Risk Factors” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and in the Company’s other filings with the Securities and Exchange Commission, from time to time, such risks, uncertainties and other factors include, but are not limited to:

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements included or incorporated by reference into this document, whether as a result of new information, future events, changes in the Company’s expectations or otherwise, except as required by law.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. All written and oral forward-looking statements attributable to the Company or persons acting on the Company’s behalf are qualified in their entirety by these cautionary statements.

Company Overview and Investor Information

The Company

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of June 30, 2023, the Company owned, operated, or had an interest in a portfolio of 671 developed MH, RV and Marina properties comprising approximately 180,060 developed sites and approximately 48,180 wet slips and dry storage spaces in the U.S., the UK and Canada.

For more information about the Company, please visit www.suncommunities.com.

Financial and Operating Highlights
(amounts in millions, except for *)

^(a)  Excludes the effects of certain anti-dilutive convertible securities.

^(b)  Total wet slips and dry storage spaces are adjusted each quarter based on site configuration and usability.

^(c)  Revenue producing site net gains do not include occupied sites acquired during the year.
^(d)  
Portfolio Overview as of June 30, 2023

Consolidated Balance Sheets
(amounts in millions)

Consolidated Statements of Operations
(amounts in millions, except for per share amounts)

^(a) Refer to Definitions and Notes for additional information.

^(b) Excludes the effect of certain anti-dilutive convertible securities.

N/M = Percentage change is not meaningful.

N/A = Percentage change is not applicable.

Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO
(amounts in millions, except for per share data)

^(a) Refer to Definitions and Notes for additional information, including the Home sales contribution to FFO.

^(b) Excludes the effect of certain anti-dilutive convertible securities.

Reconciliation of Net Income Attributable to SUI Common Shareholders to NOI
(amounts in millions)

^(a) Refer to Definitions and Notes for additional information.

Reconciliation of Net Income Attributable to SUI Common Shareholders to Recurring EBITDA
(amounts in millions)

^(a) Refer to Definitions and Notes for additional information.

Real Property Operations – Total Portfolio
(amounts in millions, except statistical information)

N/M = Not meaningful. N/A = Not applicable.

^(a) UK amounts for the quarter and six months ended June 30, 2022 cover April 8, 2022 (date of acquisition) to June 30, 2022.

^(b) MH annual sites included 9,721 and 9,204 rental homes in the Company’s Rental Program during the quarter ended June 30, 2023 and 2022, respectively. The Company’s investment in occupied rental homes at June 30, 2023 was $630.0 million, an increase of 17.8% from $535.0 million at June 30, 2022.

Real Property Operations – Same Property Portfolio^(a)
(amounts in millions, except for statistical information)

^(a) Refer to the Definitions and Notes for additional information.

^(b) Same Property results for the Company’s MH and RV properties reflect constant currency for comparative purposes. Canadian currency figures in the prior comparative period have been translated at the average exchange rate of $0.7445 USD and $0.7420 USD per Canadian dollar during the quarter and six months ended June 30, 2023, respectively.

^(c) Percentages are calculated based on unrounded numbers.

Real Property Operations – Same Property Portfolio^(a) (Continued)

(amounts in millions, except for statistical information)

^(d) The Company nets certain utility revenues (which include utility reimbursement revenues from residents) against related utility expenses in property operating expenses as follows (in millions):

^(e) Total Same Property operating expenses consist of the following components for the periods shown (in millions) and exclude amounts invested into recently acquired properties to bring them up to the Company’s standards:

Real Property Operations – Same Property Portfolio^(a) (Continued)

N/M = Not meaningful.

^(a) Refer to Definitions and Notes for additional information.

^(b) Same Property adjusted blended occupancy for MH and RV combined increased to 98.7% at June 30, 2023, from 97.0% at June 30, 2022. The 170 basis point increase was driven by MH expansion fills and the conversion of transient RV sites to annual sites.

^(c) Calculated using actual results without rounding.

^(d) Occupied rental program sites in Same Property are included in total sites.

Home Sales Summary
(amounts in millions, except for *)

^(a) UK amounts for the quarter and six months ended June 30, 2022 cover the period from April 8, 2022 (date of acquisition) through June 30, 2022.

Operating Statistics for MH and Annual RVs (excluding UK Operations)

^(a) Percentage calculated on a trailing 12-month basis.

^(b) Net increase in revenue producing sites.

Acquisitions
(amounts in millions, except for *)

^(a) In conjunction with the acquisition of this ground-up development project, the Company issued 31,289 Common OP units valued at $4.4 million. The Company also delivered 68 of the 140 sites during the first quarter.

^(b) In conjunction with this acquisition, the Company issued one million Series K preferred OP units to cover the total purchase price of $100.0 million.

Capital Expenditures and Investments
(amounts in millions, except for *)

^(a) Refer to Definitions and Notes for additional information.

^(b) Average based on actual number of MH and RV sites and Marina wet slips and dry storage spaces associated with the recurring capital expenditures in each period.

Capitalization Overview
(Shares and units in thousands, dollar amounts in millions, except for *)

^(a) Refer to “Securities” within Definitions and Notes for additional information related to our securities outstanding.

^(b) Refer to “Enterprise Value” and “Net Debt” within Definitions and Notes for additional information.

Summary of Outstanding Debt

(amounts in millions, except for *)

^(a)  Includes the effect of amortizing deferred financing costs, loan premiums / discounts and derivatives.

^(b)  As of June 30, 2023, the Company’s revolving credit facilities consisted of:

• $355.0 million borrowed on its U.S. line of credit at the Secured Overnight Financing Rate (“SOFR”) plus 85 basis points.
• $465.2 million USD equivalent borrowed on its GBP line of credit at the Daily Sterling Overnight Index Average (“SONIA”) plus 85 basis points.
• $64.6 million USD equivalent borrowed on its Australian line of credit at the Bank Bill Swap Bid Rate (“BBSY”) plus 85 basis points.

^(c)  As of June 30, 2023, an aggregate of £500.0 million ($633.1 million) was swapped to a weighted average fixed rate of 3.87%.

^(d)  Mandatorily redeemable preferred equity and OP unit distributions are included within the line item ‘Interest on mandatorily redeemable preferred OP units / equity’ on the Company’s Consolidated Statements of Operations.

Debt Maturities^(e)

^(e) Debt maturities include the unamortized deferred financing costs and discount / premiums associated with outstanding debt.

^(f) For the secured debt maturing between 2023 – 2027:

Debt Analysis

^(a) Refer to page 8 for additional detail on the Company’s TTM Recurring EBITDA.

^(b) Percentage includes the impact of hedge activities.

 

 

Definitions and Notes

Capital Expenditures and Investment Activity – The Company classifies its investments in properties into the following categories:

• Recurring Capital Expenditures – Property recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing assets used to operate the communities and marinas. Recurring capital expenditures at the Company’s MH and RV properties include items such as: major road, driveway and pool improvements; clubhouse renovations; adding or replacing streetlights; playground equipment; signage; maintenance facilities; manager housing and property vehicles. Recurring capital expenditures at the Company’s marinas include items such as: dredging, dock repairs and improvements, and equipment maintenance and upgrades. The minimum capitalized amount is five hundred dollars.
• Non-Recurring Capital Expenditures – The following investment and reinvestment activities are non-recurring in nature:
  • Lot Modifications – Lot modification capital expenditures are incurred to modify the foundational structures required to set a new home after a previous home has been removed. These expenditures are necessary to create a revenue stream from a new site renter and often improve the quality of the community. Other lot modification expenditures include land improvements added to annual RV sites to aid in the conversion of transient RV guests to annual contracts. See page 13 for move-out rates.
  • Growth Projects – Growth projects consist of revenue-generating or expense-reducing activities at MH, RV and marina properties. These include, but are not limited to, utility efficiency and renewable energy projects, site, slip or amenity upgrades such as the addition of a garage, shed or boat lift, and other special capital projects that substantiate an incremental rental increase.
  • Rebranding – Rebranding includes new signage at the Company’s RV communities and costs of building an RV mobile application and updated website.
  • Acquisitions – Total acquisition investments represent the purchase price paid for operating properties and land parcels for future ground-up development and expansions activities (detailed for the current calendar year on page 14), plus any capital improvements identified during due diligence needed to bring acquired properties up to the Company’s operating standards.

Capital improvements subsequent to acquisition often require 24 to 36 months to complete after closing and include upgrading clubhouses; landscaping; new street light systems; new mail delivery systems; pool renovations including larger decks, heaters and furniture; new maintenance facilities; lot modifications; and new signage including main signs and internal road signs.

For the six months ended June 30, 2023, the components of total acquisition investment are as follows (in millions):

^(a) Includes the value allocated to infrastructure improvements associated with acquired land, when applicable.

• Expansions and Developments – Expansion and development expenditures consist primarily of construction costs such as roads, activities, and amenities, and costs necessary to complete home and RV site improvements, such as driveways, sidewalks and landscaping at the Company’s MH and RV communities. Expenditures also include costs to rebuild after damage has been incurred at MH, RV or marina properties, and research and development.

Enterprise Value – Equals total equity market capitalization, plus total indebtedness reported on the Company’s balance sheet and less cash and cash equivalents (excluding restricted cash).

GAAP – U.S. Generally Accepted Accounting Principles.

Home Sales Contribution to FFO – The reconciliation of NOI from home sales to FFO from home sales for the quarter and six months ended June 30, 2023 is as follows (amounts in millions, except for *):

Interest Expense – The following is a summary of the components of the Company’s interest expense (in millions):

NAREIT – The National Association of Real Estate Investment Trusts is the worldwide representative voice for REITs and real estate companies with an interest in U.S. real estate and capital markets. More information is available at www.reit.com.

Net Debt – The carrying value of debt, which includes unamortized premiums, discounts and deferred financing costs, less unrestricted cash.

Other Acquisition Related Costs – In the Company’s Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO on page 6, ‘Other acquisition related costs’ represent (a) nonrecurring integration expenses associated with acquisitions during the quarter and six months ended June 30, 2023 and 2022, (b) costs associated with potential acquisitions that will not close, (c) costs associated with the termination of the bridge loan commitment during the quarter ended March 31, 2022 related to the acquisition of Park Holidays and (d) expenses incurred to bring recently acquired properties up to the Company’s operating standards, including items such as tree trimming and painting costs that do not meet the Company’s capitalization policy.

Other adjustments, net – In the Company’s Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO on page 6, ‘Other adjustments, net’ consists of the following (in millions):

Other income / (expense), net – In the Company’s Consolidated Statements of Operations on page 5, ‘Other income / (expense), net’ consists of the following (in millions):

Same Property – The Company defines Same Properties as those the Company has owned and operated continuously since at least January 1, 2022. Same properties exclude ground-up development properties, acquired properties and properties sold after December 31, 2021. The Same Property data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions or unique situations.

Securities – The Company had the following securities outstanding as of June 30, 2023:

^(a) Exchange rates are subject to adjustment upon stock splits, recapitalizations and similar events. The exchange rates of certain series of OP units are approximated to four decimal places.

^(b) Calculation may yield minor differences due to fractional shares paid in cash to the shareholder at conversion.

^(c) Annual distribution is based on the last quarterly distribution annualized.

Share – In addition to reporting net income on a diluted basis (“EPS”), the Company reports FFO and Core FFO on a per common share and dilutive convertible securities basis (per “Share”). For the periods presented below, the Company’s diluted weighted average common shares outstanding for EPS and FFO are as follows:

Non-GAAP Supplemental Measures

Investors and analysts following the real estate industry use non-GAAP supplemental performance measures, including net operating income (“NOI”), earnings before interest, tax, depreciation and amortization (“EBITDA”) and funds from operations (“FFO”) to assess REITs. The Company believes that NOI, EBITDA and FFO are appropriate measures given their wide use by and relevance to investors and analysts. Additionally, NOI, EBITDA 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 provides a measure of rental operations that does not factor in depreciation, amortization and non-property specific expenses such as general and administrative expenses.

EBITDA provides a further measure to evaluate ability to incur and service debt; EBITDA also provides further measures to evaluate the Company’s ability to fund dividends and other cash needs.

FFO, reflecting the assumption that real estate values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets.

• Net Operating Income (“NOI”)
  • Total Portfolio NOI – The Company calculates NOI by subtracting property operating expenses and real estate taxes from operating property revenues. NOI is a non-GAAP financial measure that the Company believes 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. The Company uses 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 the properties of the Company rather than of the Company overall. The Company believes that NOI provides enhanced comparability for investor evaluation of properties performance and growth over time.

The Company believes 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 the Company’s financial performance or GAAP cash flow from operating activities as a measure of the Company’s liquidity; nor is it indicative of funds available for the Company’s cash needs, including its 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.

• Same Property NOI – This is a key management tool used when evaluating performance and growth of the Company’s Same Property portfolio. The Company believes that Same Property NOI is helpful to investors as a supplemental comparative performance measure of the income generated from the Same property portfolio from one period to the next. Same Property NOI does not include the revenues and expenses related to home sales, service, retail, dining and entertainment activities at the properties.

• Earnings before interest, tax, depreciation and amortization (“EBITDA“)
  • EBITDAre – NAREIT refers to EBITDA as “EBITDAre” and calculates it as GAAP net income (loss), plus interest expense, plus income tax expense, plus depreciation and amortization, plus or minus losses or gains on the disposition of depreciated property (including losses or gains on change of control), plus impairment write-downs of depreciated property and of investments in nonconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity’s share of EBITDAre of nonconsolidated affiliates. EBITDAre is a non-GAAP financial measure that the Company uses to evaluate its ability to incur and service debt, fund dividends and other cash needs and cover fixed costs. Investors utilize EBITDAre as a supplemental measure to evaluate and compare investment quality and enterprise value of REITs. Investors utilize EBITDAre as a supplemental measure to evaluate and compare investment quality and enterprise value of REITs.
  • Recurring EBITDA – The Company also uses EBITDAre excluding certain gain and loss items that management considers unrelated to measurement of the Company’s performance on a basis that is independent of capital structure (“Recurring EBITDA”). The Company believes that GAAP net income (loss) is the most directly comparable measure to EBITDAre. EBITDAre is not intended to be used as a measure of the Company’s cash generated by operations or its dividend-paying capacity, and should therefore not replace GAAP net income (loss) as an indication of the Company’s financial performance or GAAP cash flow from operating, investing and financing activities as measures of liquidity.
• Funds from Operations (“FFO”)
  • FFO – NAREIT defines FFO 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 nonconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure that management believes is a useful supplemental measure of the Company’s operating performance. By excluding gains and losses related to sales of previously depreciated operating real estate assets, real estate related impairment and 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.
  • Core FFO – In addition to FFO, the Company uses FFO excluding certain gain and loss items that management considers unrelated to the operational and financial performance of the Company’s core business (“Core FFO”). The Company believes that Core FFO provides enhanced comparability for investor evaluations of period-over-period results.

The Company believes 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 financial performance measure or GAAP cash flow from operating activities as a measure of the Company’s liquidity. 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 the Company’s interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that interpret the NAREIT definition differently.

Certain financial information has been revised to reflect reclassifications in prior periods to conform to current period presentation. ##

 

Part II – Additional Information with More MHProNews Analysis and Commentary

There are pages of points that could be made from the above and other relevant information. For the purpose of this analysis, let’s boil it down to a few. First, in fairness and based upon their declared statements, Sun Communities (SUI) has established a well performing business model in a strictly financial sense.  For some, that is all that matters.

Notice: the graphic below can be expanded to a larger size.

That said, several fair questions ought to be asked and answered. For instance.

• 1) While some vacancy in RV sites is understandable, given the affordable housing crisis, given the strong fundamentals of manufactured housing, why aren’t essentially every manufactured home community (MHC) operated by Sun at 99.5 (+/-) percent occupancy rate? That question and the honest answer matters.
• 2) When Chairman, President and CEO Gary Shiffman himself said that manufactured home communities (MHCs) could often be developed on a more profitable basis than buying an existing property. That remark by Shiffman should be a five-star, red flag waving topic.  Here is what Shiffman said.

• 3) To rephrase the above from an investor’s perspective, the apparent ploy explored at this link here and shown below of allowing constrained supply is not only harmful to investors but also to consumers’ interests (by virtue of driving site rents higher). For those investors who want to claim that they are ‘socially responsible’ investors that still seek a profit, what the above and following reveals is that Sun is arguably being actionably and perhaps illegally mismanaged in what then Knudson Law’s Samuel Strommen said was an apparent felony conspiracy to monopolize manufactured housing. Strommen’s well footnoted thesis has been de facto supported by an array of other legal and economic researchers. See the evidence-packed report and analysis bringing those threads by Strommen and others together linked here. That concern merits some additional insights.

Stated several times in Sun’s June 2023 investor relations presentation (pitch deck) is this phrase: “COMPELLING SUPPLY-DEMAND FUNDAMENTALS.” As a quick segue, that investor pitch will be unpacked in a planned upcoming report. That noted, while Sun doesn’t say precisely what fellow MHI member Equity LifeStyle Properties (ELS) does (see below), the same principle pitched by fellow MHI members ELS apparently applies to SUI. When Sun says that a “compelling” “supply-demand” constrained “fundamentals,” that’s arguably a nod toward fellow MHI members ELS and Frank Rolfe‘s remarks, among others.

Notice: the graphic below can be expanded to a larger size.

 

So, while Cavco Industries (CVCO) president and CEO William C. “Bill” Boor was busily telling Congress on behalf of MHI that they want to see the Manufactured Housing Improvement Act (MHIA) of 2000’s “enhanced preemption” provision enforced, when “supply constraints” and “almost no new supply” are being pitched by longtime MHI executive committee member ELS, one need not read too much between the lines to see paltering, posturing and the proverbial wink and a nod of deception and misdirection at work.

 

 

While MHARR has expressed such notions differently than MHProNews, their leadership has come to a very similar conclusion.

‘A Cruelly-Unfulfilled Promise and Mandate’ MHARR’s Mark Weiss, J.D., Rips Duty to Serve (DTS) Subversion-Names, Documents Groups Failing Manufactured Housing Consumers, Professionals; plus MHVille Stocks Update

 

Additionally, it is revealing what company insiders – employees and other workers – at Sun, ELS, Cavco and other MHI member brands have to say about the firm that they work(ed) for, often for years.  Short version? It isn’t a pretty picture. The facts linked below are not the type of material that made Sun’s press release, nor their investor pitch deck for that matter. Each of these reports (linked above, below) are among the top ones for July 2023.

 

1000s Unhappy Working at Clayton Homes, Skyline Champion, Cavco, Sun, ELS, RHP, Flagship, Impact, Yes!, Havenpark Communities-What Will They Do? Facts, WalkOut Threat Op-Ed; plus MHMarkets Update

‘Like No Place Else!’ in MHVille – Research-Reports-Analysis Reveal and Yield Understanding for News and Trends Keeping Manufactured Home Production at Historically Low Levels

 

Former MHI and current members have questioned openly or obliquely the leadership of MHI. Sun Communities is apparently part of the in group at MHI that have a board seat. So, it isn’t ‘just’ MHProNews, or MHARR that has mocked MHI for their years of ineffective ‘leadership.’

Since Loss of Stinebert at Manufactured Housing Institute (MHI) ‘Empowered F-cking Greedy, Selfish Leaders of Companies to Make MHI a Tool for Themselves’-plus MHVille Markets Update

 

Smiling nicely, sounding intelligent, and getting praise from the same circle of admirers are not substitute for actual results.

 

You Can’t Make This Up – Lesli Gooch, Ph.D., Manufactured Housing Institute CEO Proclaims – ‘I Commend the Teams at FHFA, Fannie Mae, and Freddie Mac’ – Saturday Satire; plus MHVille Markets Update

Surprising Praise for Dr. Lesli Gooch, Ph.D., CEO Manufactured Housing Institute Speaker at MH FacTOURy Summit Lauded in Benzinga – ‘Crisis’ Facts, Analysis; plus Sunday MHVille Headlines Review

 

Additionally, when outside researchers – including attorneys, who tend to think logically and systematically – de facto have a similar stance as what MHI critics have, that should be yet another red flag that the association is saying one thing, doing another, and it all favors a few insiders.  Doug Ryan at Prosperity Now made that argument publicly and tied it in with the problem of monopolization.

Monopolization hurts the majority.  Oligopoly style monopolization can also be illegal. That noted, the late Sam Zell said the following that ought to be memorized as revealing for what has actually been occurring in manufactured housing for most of the 21st century.

 

 

The problem for potentially several publicly traded companies is manufactured housing that they have run afoul of each other’s on the record remarks. MHI takes a stance, supposedly on behalf of what MHI’s board and executive committee decides that MHI’s lead staff should follow. MHI issues remarks, which have at various times apparently been shared to MHI members via email, where they can’t be found via an internet search. Then, MHI fails to put some of those items on their own website. MHI aligned bloggers and trade publishers also routinely fail to report this disconnect. That pattern has been carefully documented for a period of years by MHProNews, with an illustrated at-a-glance illustrated example linked here.

That said, the web of deception has apparently caught up with MHI and their leading brands. As a MHEC member remarked to MHProNews about an MHI related topic, ‘the noose is beginning to close’ around MHI’s leadership. An eye-opening executive summary of that pattern, with linked examples is found below.

 

 

When third-party researchers keep mentioning the same issues time and again as to what is holding back manufactured housing, even the proud leaders of MHI ought to get the message.

 

Andrew Justus, J.D., Niskanen Center Housing Policy Analyst, Hill Op-Ed Asks and Answers – ‘What’s Holding Back Manufactured Homes?’ Sunday Weekly MHVille Headlines in Review

Harvard’s Joint Center for Housing Studies ‘STATE Of The NATION’S HOUSING 2023’ – Manufactured Housing Industry’s 21st Century Collapse-Facts+Analysis Yields Causes, Cures; plus MHMarket Update

 

When conventional housing is rising despite rising interest rates while manufactured housing is sliding, the excuses given by MHI and its defenders ring hollow.

 

Conv Housing Up 20%+ YoY But Manufactured Homes Drop Sharply–HUD-Census Bureau New Single Family Sales June 2023 vs NTL, State-by-State Manufactured Housing Data-The MOAT; plus MHMarkets Update

 

MHPros will know in a matter of days what the latest data is for manufactured housing producers. But whatever it reveals, what has already occurred has been documented by MHI’s own designated spokesperson before Congress.

 

 

Right or wrong, like it or not, Sun’s CEO Shiffman is credibly accused of felonious behavior. Apparently, Sun’s board doesn’t care.

MHI’s leadership is credibly accused of felony antitrust behavior. Apparently, MHI’s board doesn’t care.

Cavco may have danced beyond their multi-year battle with the Securities and Exchange Commission (SEC) having paid 7 figures in fines and still more on legal costs.  But that legal episode reveals that there can be a day of reckoning.

 

 

 

 

The organizational and leadership risks are arguably growing. Given that a Cavco analyst finally asked the right question, that reality is becoming more apparent.

 

 

Sun’s financials indicate that the firm is doing ‘well.’

But the points raised above, including those remarks by Shiffman’s to “Drew” quoted above make it clear that Sun could be doing better. If Sun were pursuing that path of robust development instead of consolidation, ‘stakeholders’ – like the residents – would arguably be better off. That’s the law of supply and demand at work.

The outline and linked information above could be the outline for a variety of legal challenges by residents, shareholders, public officials and others. Tick tock. Several of the most popular articles on MHProNews in July of 2023 had to do with purported problems involving Shiffman and Sun. There are plenty of reasons to think that MHI linked firms like Sun could meet with an ugly end in the foreseeable future. Stay tuned.  ##

Did the Late Sam Zell Overpay? Fresh Equity LifeStyle Properties (ELS), Manufactured Housing Institute New Document Insights – The Truth Hiding in Plain Sight, plus MHVille Stocks, REITs Update

Manufactured Housing’s Rorschach Test – How You See the Facts, Visuals, Narratives and Evidence Speaks Volumes; plus Sunday Weekly Manufactured Home Industry (MHVille) Headlines in Review

Whistleblower$ Rewarded, Organization Risk$-What Legal Experts Say Can Impact Dirty Firms-Benefit Accountants, Former or Current Employees-Manufactured Housing’s Dark Side; plus MHVille Markets

Part III. Daily Business News on MHProNews Markets and Headline News Segment

 

Headlines from left-of-center CNN Business – from the evening of 8.2.2023

• Stocks slide on US downgrade
• But US Treasuries are still the ultimate safe asset, even after Fitch’s shocking ratings cut
• Taylor Swift gives ‘life-changing’ $100,000 bonuses to Eras Tour truck drivers
• Hyundai invents a roomier glove compartment just for EVs
• Writers union and Hollywood will resume talks, aiming to end the strike
• Fitch tells CNN why it downgraded America now
• MrBeast sues to shut down the ghost kitchen-produced MrBeast Burger
• Toyota unveils the retro-styled return of the Land Cruiser
• Laid-off Yellow drivers will have a tough time finding good jobs
• Americans are ‘unwittingly funding’ blacklisted Chinese companies, Congressional panel says
• America’s credit rating got downgraded again. Here’s what happened the last time
• Global markets slide after Fitch downgrades US debt
• Trump’s media mouthpieces have faced legal peril over his election lies. Now it’s his turn
• 99-year-old trucking company Yellow shuts down, putting 30,000 out of work
• Tiger Woods joins PGA policy board after players’ concerns about transparency
• Fitch downgrades US debt on debt ceiling drama and Jan. 6 insurrection
• Starbucks’ sales in China come roaring back
• GM recalls more vehicles with Takata air bag inflators that could explode
• Lunchables is heading to the produce aisle with a fresh fruit snack tray
• Warner Bros. apologizes for ‘Barbenheimer’ tweets that sparked criticism in Japan
• Amazon Clinic rolls out nationwide as e-commerce giant expands its health care footprint
• Meta begins blocking news access on its platforms in Canada
• The number of available jobs in the US just fell to its lowest level in more than two years
• Beef over beef: Taco Bell is accused of false advertising and allegedly skimping on fillings

 

Notice: the graphic below can be expanded to a larger size.

Headlines from right-of-center Newsmax 8.2.2023

• Judge Releases Hunter Biden Plea Deal
• The federal judge who rejected Hunter Biden’s plea deal released the proposed settlement publicly on Wednesday. [Full Story]
• Newsmax TV
• Dershowitz: 3rd Trump Indictment ‘a Certainty’
• Comer on Archer Testimony: Today Was a ‘Bombshell’ | video
• Huckabee: ‘Big Mistake’ to Rush Biden Impeachment | video
• Burchett: Dems Spin ‘Illusion’ on Archer Testimony | video
• Sarah Palin: House Must Act on Archer Testimony
• Lewandowski: More Indictments Mean Stronger Trump Polls | video
• Waltz: Bowe Bergdahl ‘Sympathized With Taliban’ | video
• Greene: Archer Advances Shot at Impeachment | video
• Tiger Woods Joins PGA Tour Board, Backs Commissioner
• Tiger Woods has joined the PGA Tour policy board for the first time in his 27 years on tour, giving Commissioner Jay Monahan key support as he rebuilds trust while forging ahead with details of a business partnership with Saudi backers of LIV Golf…. [Full Story]
• CNN Sports Anchor Rips Don Geronimo for ‘Barbie’ Remark
• CNN Sports anchor Rachel Nichols on Monday tore into sports radio [Full Story] | video
• Gallup Poll: Confidence in Military Lowest in 2 Decades
• Americans’ confidence in the U.S. military is at the lowest point in [Full Story] | video
• Secret Chinese Lab in US May Indicate Preparations for ‘War’
• The discovery in California earlier this month of an illegal lab [Full Story] | Platinum Article
• Cedar Point Unveils 420-Foot Top Thrill 2 Coaster
• Cedar Point, the popular amusement park in northern Ohio, announced a [Full Story]
• Trump Ad Calls Biden ‘Corrupt Third-World Dictator’
• President Joe Biden is compared to a “corrupt Third-World dictator” [Full Story]
• Biden Appliance Plan ‘Expensive, Inefficient’
• A new Biden administration proposal regarding home water heaters is [Full Story] | Platinum Article
• VP Harris Dismisses, Touts Approval Ratings
• Vice President Kamala Harris this week downplayed the importance of [Full Story]
• Russia Accuses Ukraine of Moscow Drone Attack
• Russian authorities accused Kyiv early Tuesday of yet another attack [Full Story]
• Related
• Russian Chief of General Staff Visits Troops in Ukraine
• Ukraine Thwarts Russian Saboteur Group Attempt to Cross Border
• Ukraine: Russian Shelling of Hospital Kills Doctor in Kherson
• Russian Missiles Hit Zelenskyy’s Hometown; 6 Dead, Dozens Injured
• Report: Zelenskyy Could Push Peace Plan at UN
• Russia’s Medvedev: We’d Launch Nukes If Ukraine Succeeds
• Super PAC Raised $78M, Aims to Stop Trump Win in 2024
• A super PAC with ties to billionaire Charles Koch has raised $78 [Full Story]
• Netanyahu to Newsmax: Deal or Not, Israel Will Defend Itself Against Iran
• Israeli Prime Minister Benjamin Netanyahu told Newsmax on Monday even [Full Story] | video
• Related
• Netanyahu to Newsmax: Despite Tensions, Israel, US Strong Allies |video
• Israel’s Netanyahu to Newsmax: Acting on Mandate to Reform Judiciary |video
• J. Lt. Gov. Sheila Oliver Dies at 71
• New Jersey Lt. Gov. Sheila Oliver, who made history as the first [Full Story]
• Rasmussen Poll: Most Suspect Biden Covered for Son
• According to the latest Rasmussen Reports poll, 60% of likely voters [Full Story]
• Dodgers Host Faith and Family Day After Drag Uproar
• Nearly two months after the Los Angeles Dodgers received backlash for [Full Story]
• Trump PAC Picking Up Large Chunk of His Legal Bills
• Former President Donald Trump’s legal battles have taken a bite out [Full Story]
• Judge: Voting Machine Supervisor Can’t Sue Trump
• A Pennsylvania judge ruled that a voting machine supervisor can’tsue [Full Story]
• Noem Blasts Mum AG Garland, Dems on Illegal Leak
• South Dakota Gov. Kristi Noem is calling out what she considers to be [Full Story]
• Ed Rollins Quits DeSantis: ‘Flawed Candidate’
• Republican campaign strategist Ed Rollins is turning away from [Full Story]
• Illinois to Allow Noncitizens to Become Police Officers
• Illinois Democrat Gov. J.B. Pritzker has signed a bill to allow [Full Story]
• NY Times Poll: Trump, Biden Tied
• Former President Donald Trump is tied with President Joe Biden – 43% [Full Story]
• Nebraska Gov. Pillen Sends Army Guard to Texas Border
• Nebraska’s Republican Gov. Jim Pillen is sending more than 60 [Full Story]
• Job Openings Fall to 2-Year Low in June
• S. job openings fell to the lowest level in more than two years in [Full Story]
• Saudi Arabia to Host Ukraine Peace Talks in August
• Saudi Arabia and Ukraine confirmed on Sunday that the Saudi Kingdom [Full Story]
• BlackRock, MSCI Draw Scrutiny for China Investments
• A U.S. congressional committee on China said asset management giant [Full Story]
• DeSantis Invites VP Harris to Black History Discussion
• Florida Gov. Ron DeSantis wants to meet with Vice President Kamala [Full Story]
• Vets in Congress Seek Retrial of Army Deserter Bergdahl
• Five military veterans in Congress reportedly want Defense Secretary [Full Story]
• Chinese Zoo Denies Bears Are ‘Humans in Disguise’
• A zoo in eastern China is denying suggestions some of its bears might [Full Story]
• Trump Intensifies War Against Senate Republicans
• Former President Donald Trump is stepping up his push for primary [Full Story]
• RFK Jr. Secret Service Claims Made ‘to Score Political Points’
• Democrat presidential hopeful Robert F. Kennedy Jr.’s claim that he’s [Full Story] | Platinum Article
• Meta Prepares AI Chatbots With ‘Personalities’
• Meta Platforms is preparing to launch a range of artificial [Full Story]
• MTG ‘Hopes’ Bobulinski Will Be Next to Testify Against Bidens
• On the heels of testimony from one former business partner of Hunter [Full Story] | video
• The Cost of a Walk-in Tub if You’re over 65
• The Senior Scoop
• More Newsfront
• Finance
• Job Openings Fall to 2-Year Low in June
• U.S. job openings fell to the lowest level in more than two years in June, but remained at levels consistent with tight labor market conditions despite hefty interest rate increases from the Federal Reserve to dampen demand…. [Full Story]
• Zito: Yellow’s Fall Does Not Mean Economy’s at Code Red
• Low-Risk Game Plan for Real Estate Investing
• Vintage Apple Computer Expected to Auction for $200k
• 45%: Parents Need More Control of Kids’ Education
• More Finance
• Health
• Just 5-Minute Bursts of Exercise Lowers Cancer Risk
• Taking the stairs rather than an elevator. Raking leaves. Toting heavy grocery bags. Pushing a vacuum. Playing hard with your kids or pets. Short bursts of vigorous physical activity during everyday events like these – most lasting less than a minute – can help lower cancer…… [Full Story]
• Study: 5 Creative Activities That Boost Mental Health
• Kombucha May Help Control Blood Sugar
• Review Pinpoints Most Effective Acne Treatment
• New Long COVID Treatment Studies Bring Hope

Triad Financial Services Parent ECN Capital Charged by CLC with ‘Foreign Election Interference’ Linking Ron DeSantis Campaign, Triad Pres Mike Tolbert Exclusive Reply to MHIndustry Pros, Others