<PAGE>   1



                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


 |X| Quarterly report pursuant to Section 13 of 15(d) of the Securities Exchange
                                  Act of 1934

               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999.

                                       OR


    | | Transition pursuant to Section 13 or 15(d) of the Securities Exchange
                                  Act of 1934

                       COMMISSION FILE NUMBER 333-2522-01


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
             (Exact Name of Registrant as Specified in its Charter)

                     Michigan                           38-3144240
             (State of Incorporation)       (I.R.S. Employer Identification No.)

               31700 Middlebelt Road                      48334
                    Suite 145                           (Zip Code)
            Farmington Hills, Michigan
      (Address of Principal Executive Offices)


       Registrant's telephone number, including area code: (248) 932-3100

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]





                                  Page 1 of 19

<PAGE>   2


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                                      INDEX

                                     -------

<TABLE>
<CAPTION>
                                                                                         PAGES
                                                                                         -----

PART I
------
<S>                                                                                      <C>
Item 1.       Financial Statements:

                  Consolidated Balance Sheets as of September 30, 1999 and
                           December 31, 1998                                                3

                  Consolidated Statements of Income for the Periods
                           Ended September 30, 1999 and 1998                                4

                  Consolidated Statements of Cash Flows for the Nine Months
                           Ended September 30, 1999 and 1998                                5

                  Notes to Consolidated Financial Statements                             6-10


Item 2.       Management's Discussion and Analysis of Financial
                           Condition and Results of Operations                          11-17



PART II
-------
Item 2.(c)    Changes in Securities and Use of Proceeds                                    18

Item 6.(a)    Exhibits required by Item 601 of Regulation S-K                              18

Item 6.(b)    Reports on Form 8-K                                                          18

              Signatures                                                                   19
</TABLE>





                                       2



<PAGE>   3

                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEETS

                    SEPTEMBER 30, 1999 AND DECEMBER 31, 1998

                                 (IN THOUSANDS)

                                    --------


<TABLE>
<CAPTION>
                                    ASSETS                                    1999                  1998
                                                                        ---------------        -------------
<S>                                                                     <C>                    <C>
Investment in rental property, net                                      $       770,848        $     732,212
Cash and cash equivalents                                                        15,974                9,646
Investment in and advances to affiliate                                           9,623               11,316
Notes receivable                                                                 68,514               44,059
Other assets                                                                     35,197               26,806
                                                                        ---------------        -------------

                  Total assets                                          $       900,156        $     824,039
                                                                        ===============        =============


     LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
     Line of credit                                                     $        38,000        $      26,000
     Debt                                                                       350,192              339,164
     Accounts payable and accrued expenses                                       23,015               12,637
     Deposits and other liabilities                                               8,573               12,051
                                                                        ---------------        -------------

                  Total liabilities                                             419,780              389,852
                                                                        ---------------        -------------

Partners' Capital:
     Preferred Operating Partnership Units ("POP Units"),
         unlimited authorized, 3,325 and 1,325 issued and
         outstanding in 1999 and 1998, respectively                              85,783               35,783
     Operating Partnership Units ("OP Units"), unlimited
         authorized; 20,137 and 20,072 issued and
         outstanding in 1999 and 1998, respectively
            General partner                                                     344,325              348,266
            Limited partners                                                     55,247               55,440
     Unearned compensation                                                       (4,979)              (5,302)
                                                                        ---------------        -------------

                  Total partners' capital                                       480,376              434,187
                                                                        ---------------        -------------

                  Total liabilities and partners' capital               $       900,156        $     824,039
                                                                        ===============        =============
</TABLE>


         The accompanying notes are an integral part of the consolidated
                             financial statements.





                                       3

<PAGE>   4


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                        CONSOLIDATED STATEMENTS OF INCOME

                FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND 1998

                    (IN THOUSANDS EXCEPT FOR PER SHARE DATA)

                                    -------

<TABLE>
<CAPTION>
                                                              For the Three Months            For the Nine Months
                                                               Ended September 30,             Ended September 30,
                                                                1999         1998             1999          1998
                                                              --------     -------          -------       -------
<S>                                                           <C>          <C>              <C>            <C>
Revenues:
        Income from property                                  $31,310      $28,294          $93,251        $85,180
        Other income                                            2,680        2,109            6,258          4,466
                                                              -------      -------          -------        -------

                Total revenues                                 33,990       30,403           99,509         89,646
                                                              -------      -------          -------        -------
Expenses:
        Property operating and maintenance                      7,118        6,544           20,407         19,095
        Real estate taxes                                       2,255        2,122            6,666          6,502
        Property management                                       713          646            1,970          1,658
        General and administrative                                890          771            2,752          2,468
        Depreciation and amortization                           7,277        6,115           21,294         18,121
        Interest                                                7,010        6,178           20,028         17,808
                                                              -------      -------          -------        -------

                Total expenses                                 25,263       22,376           73,117         65,652
                                                              -------      -------          -------        -------

Income before other                                             8,727        8,027           26,392         23,994
Other, net                                                         --        2,093               --          3,030
                                                              -------      -------          -------        -------
Net income                                                      8,727       10,120           26,392         27,024

Less distribution to Preferred OP Units                           627          627            1,879          1,879
                                                              -------      -------          -------        -------

Earnings attributable to OP Units                             $ 8,100      $ 9,493          $24,513        $25,145
                                                              =======      =======          =======        =======

Net income attributed to:
        General Partner                                       $ 6,985      $ 8,410          $21,084        $22,214
        Limited Partners                                        1,115        1,083            3,429          2,931
                                                              -------      -------          -------        -------
                                                              $ 8,100      $ 9,493          $24,513        $25,145
                                                              =======      =======          =======        =======
Earnings per OP Unit:
        Basic                                                 $  0.41      $  0.50           $  1.23       $  1.32
                                                              =======      =======           =======       =======
        Diluted                                               $  0.40      $  0.49           $  1.21       $  1.30
                                                              =======      =======           =======       =======

Weighted average OP Units outstanding                          19,971       19,075            19,957        19,048
                                                              =======      =======           =======       =======
</TABLE>




         The accompanying notes are an integral part of the consolidated
                             financial statements.





                                        4

<PAGE>   5


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

                                 (IN THOUSANDS)

                                     ------



<TABLE>
<CAPTION>
                                                                                    1999               1998
                                                                               -------------       ------------
<S>                                                                            <C>                 <C>
Cash flows from operating activities:
    Earnings attributable to OP Units                                          $      24,513       $     25,145
    Adjustments to reconcile net income to net
          cash provided by operating activities:
       Other, net                                                                         --             (3,030)
       Depreciation and amortization                                                  21,294             18,121
       Amortization of deferred financing costs                                          658                491
       Increase in other assets                                                       (9,713)            (4,355)
       Increase in accounts payable and other liabilities                              6,900             10,281
                                                                               -------------       ------------
               Net cash provided by operating activities                              43,652             46,653
                                                                               -------------       ------------

Cash flows from investing activities:
    Investment in rental properties                                                  (57,963)           (80,755)
    Investment in and advances to affiliate                                            1,693             (1,755)
    Proceeds related to asset sales                                                   12,534             20,773
    Investment in notes receivable                                                   (24,298)           (14,145)
                                                                               -------------       ------------

               Net cash used in investing activities                                 (68,034)           (75,882)
                                                                               --------------      ------------

Cash flows from financing activities:
    Borrowings on line of credit, net                                                 12,000              4,000
    Repayments on notes payable and other debt                                        (1,277)              (708)
    Net proceeds from notes payable                                                       --             65,000
    Capital contribution                                                              51,726              1,337
    Distributions                                                                    (30,352)           (27,660)
    Payments for deferred financing costs                                             (1,387)            (2,770)
                                                                               -------------       ------------

               Net cash provided by financing activities                              30,710             39,199
                                                                               -------------       ------------

Net increase in cash and cash equivalents                                              6,328              9,970

Cash and cash equivalents, beginning of period                                         9,646              2,198
                                                                               -------------       ------------

Cash and cash equivalents, end of period                                       $      15,974       $     12,168
                                                                               =============       ============

Supplemental information:
    Debt assumed for rental properties                                         $       1,700       $     18,356
    Capitalized lease obligation for rental properties                         $      10,605       $      9,479
    OP units issued for rental properties                                      $          --       $      1,704
    Common stock issued as unearned compensation                               $          --       $      5,631
</TABLE>


         The accompanying notes are an integral part of the consolidated
                              financial statements




                                       5


<PAGE>   6


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     -----


1.  BASIS OF PRESENTATION:

    These unaudited condensed consolidated financial statements of Sun
    Communities Operating Limited Partnership (the "Company"), have been
    prepared pursuant to the Securities and Exchange Commission ("SEC") rules
    and regulations and should be read in conjunction with the financial
    statements and notes thereto of the Company as of December 31, 1998. The
    following notes to consolidated financial statements present interim
    disclosures as required by the SEC. The accompanying consolidated financial
    statements reflect, in the opinion of management, all adjustments necessary
    for a fair presentation of the interim financial statements. All such
    adjustments are of a normal and recurring nature. Certain reclassifications
    have been made to the prior period financial statements to conform with
    current period presentation.

    The Company owns 100 percent of the preferred stock of an affiliate, Sun
    Home Services, Inc., is entitled to 95 percent of the operating cash flow,
    and accounts for its investment utilizing the equity method of accounting.
    The common stock is owned by three officers of the Company who are entitled
    to receive 5 percent of the operating cash flow.

    Sun Communities, Inc. ("Sun"), a self-administered and self-managed Real
    Estate Investment Trust with no independent operations of its own, is the
    sole general partner of the Company. As general partner, Sun has unilateral
    control and complete responsibility for management of the Company. Pursuant
    to the terms of the Company's partnership agreement, the Company is required
    to reimburse Sun for the net expenses incurred by Sun. Amounts paid on
    behalf of Sun by the Company are reflected in the statement of operations as
    general and administrative expenses. The balance sheet of Sun as of
    September 30, 1999 is identical to the accompanying Company balance sheet,
    except as follows:







                                       6


<PAGE>   7


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    --------



1. BASIS OF PRESENTATION: CONTINUED

<TABLE>
<CAPTION>
                                                       As Presented
                                                          Herein                                Sun Communities, Inc.
                                                    September 30, 1999        Adjustments        September 30, 1999
                                                    ------------------        -----------        ------------------
                                                                             (in thousands)
<S>                                                 <C>                     <C>                 <C>
       Notes receivable...........................  $          68,514       $       (2,600)     $         65,914
                                                    =================       ==============      ================

       Total assets...............................  $         900,156       $       (2,600)     $        897,556
                                                    =================       ==============      ================

       Minority interests.........................                          $      141,030      $        141,030
                                                                                                ================

       Preferred OP Units.........................  $          85,783              (85,783)
       General partner............................            344,325             (344,325)
       Limited partners...........................             55,247              (55,247)

       Common stock...............................                                     174      $            174
       Additional paid-in capital.................                                 390,382               390,382
       Distributions in excess of
           accumulated earnings...................                                 (37,379)              (37,379)
       Officers' notes............................                                 (11,452)              (11,452)
       Unearned compensation......................             (4,979)                  --                (4,979)
                                                    -----------------       --------------      ----------------
           Partners' capital/Stockholders'........
               equity.............................  $         480,376       $       (2,600)     $        336,746
                                                    =================       ==============      ================
       Total liabilities and partners'
           capital/Stockholders' equity...........  $         900,156       $       (2,600)     $        897,556
                                                    =================       ==============      ================
</TABLE>

2.    RENTAL PROPERTY:

      The following summarizes rental property (in thousands):
<TABLE>
<CAPTION>                                                                    September 30,         December 31,
                                                                                 1999                  1998
                                                                            --------------      ----------------
<S>                                                                         <C>                 <C>
              Land                                                          $       76,888      $         71,930
              Land improvements and buildings                                      725,981               679,755
              Furniture, fixtures, equipment                                        16,938                15,209
              Land held for future development                                      19,386                26,511
              Property under development                                            21,693                 9,747
                                                                            --------------      ----------------
                                                                                   860,886               803,152
              Accumulated depreciation                                              90,038                70,940
                                                                            --------------      ----------------

              Rental property, net                                          $      770,848      $        732,212
                                                                            ==============      ================
</TABLE>



      Through September 30, 1999, the cost of acquisitions totaled approximately
      $29.3 million for five existing communities comprised of 1,085 developed
      sites and 301 development sites and $8.2 million for two development
      communities planned for approximately 1,238 sites.




                                       7

<PAGE>   8

                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    --------


3.  NOTES RECEIVABLE:

    Notes receivable consisted of the following (amounts in thousands):

<TABLE>
<CAPTION>
                                                                                     September 30,      December 31,
                                                                                         1999               1998
                                                                                     ------------      --------------
<S>                                                                                  <C>                <C>
      Mortgage notes receivable with minimum monthly interest payments at 7%,
               maturing June 30, 2012, collateralized by manufactured
               housing/recreational vehicle communities located in Dover, DE (a).    $  15,093          $   15,093

      Note receivable, bears interest at LIBOR + 2.35% and payable on demand.           25,148              10,774

      Note receivable, bears interest at 9.75% and matures September 2005                4,000               4,000

      Installment loans on manufactured homes with interest payable monthly
               at a weighted average interest rate and maturity of 11% and 21
               years, respectively. (b)                                                 19,861               5,339

      Notes receivable, other, various interest rates ranging from 6% to 9.5%
               or prime + 1.5%, various maturity dates through December 31, 2003.        1,812               1,853

      10 year note receivable from an officer of the general partner
               bearing interest at LIBOR + 1.75%, with a minimum and maximum
               interest rate of 6% and 9%, respectively, collateralized by
               80,000 shares of Sun's common stock with personal liability up
               to $1.3 million                                                           2,600               2,600

      Mortgage note receivable, bears interest at 13% payable on demand                     --               4,400
                                                                                     ---------          ----------
                                                                                     $  68,514          $   44,059
                                                                                     =========          ==========
</TABLE>


      (a)      The stated interest rate is 12%. The excess of the interest
               earned at the stated rate over the pay rate is recognized upon
               receipt of payment.




                                       8


<PAGE>   9


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     -----


4.     DEBT:

       The following table sets forth certain information regarding debt (in
thousands):

<TABLE>
<CAPTION>
                                                                               September 30,        December 31,
                                                                                   1999                 1998
                                                                              -------------       ---------------
<S>                                                                           <C>                <C>
           Collateralized term loan, interest at 7.01%,
                  due September 9, 2007                                       $      44,054      $        44,425
           Senior notes, interest at 7.375%, due May 1, 2001                         65,000               65,000
           Senior notes, interest at 7.625%, due May 1, 2003                         85,000               85,000
           Senior notes, interest at 6.97%, due December 3, 2007                     35,000               35,000
           Callable/redeemable notes, interest at 6.77%,
                  due May 14, 2015, callable/redeemable
                  May 16, 2005                                                       65,000               65,000
           Capitalized lease obligations, interest ranging
                  from 5.5% to 6.3%, due March 2001 through
                  January 2004                                                       36,746               26,542
           Mortgage notes, other                                                     19,392               18,197
                                                                              -------------      ---------------
                                                                              $     350,192      $       339,164
                                                                              =============      ===============
</TABLE>



       The Company had $87 million available to borrow under its line of credit
       at September 30, 1999. Effective July 1, 1999, the Company increased its
       line of credit facility from $100 million to $125 million and extended
       the maturity date to January 1, 2003. Borrowings under the line of credit
       bear interest at the rate of LIBOR plus 1.05%.

5.     OTHER INCOME:


       The components of other income are as follows for the periods ended
       September 30, 1999 and 1998 (in thousands):


<TABLE>
<CAPTION>
                                                                For the Three Months          For the Nine Months
                                                                 Ended September 30,          Ended September 30,
                                                                 1999          1998           1999          1998
                                                              ----------    ---------       --------    ----------
<S>                                                           <C>           <C>             <C>         <C>
           Interest and other                                 $    1,912    $    1,323      $  4,640    $    2,986
           Income from affiliate                                     768           786         1,618         1,480
                                                              ----------    ----------      --------     ---------
                                                              $    2,680    $    2,109      $  6,258    $    4,466
                                                              ==========    ==========      ========    ==========
</TABLE>






                                        9



<PAGE>   10


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     ------


6.     EARNINGS PER OP UNIT:

<TABLE>
<CAPTION>
                                                                        For the Three Months         For the Nine Months
                                                                         Ended September 30,          Ended September 30,
                                                                          1999        1998          1999           1998
                                                                       ---------    --------      --------        -------
<S>                                                                    <C>          <C>          <C>             <C>
       Earnings used for basic and diluted earnings per
          OP unit computation                                          $   8,100    $  9,493     $   24,513      $ 25,145
                                                                       =========    ========     ==========      ========


       Total units used for basic earnings per OP unit                    19,971      19,075         19,957        19,048
       Dilutive securities, principally Sun's stock options                  177         140            161           167
                                                                       ---------    --------     ----------      --------
       Total shares used for diluted earnings per OP unit
          computation                                                     20,148      19,215         20,118        19,215
                                                                       =========    ========    ===========      ========
</TABLE>



       Diluted earnings per OP unit reflect the potential dilution that would
       occur if securities were exercised or converted into OP units.
       Convertible POP Units are excluded from the computations as their
       inclusion would have an antidilutive effect on earnings per share in 1999
       and 1998.





                                       10


<PAGE>   11


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                     ------

OVERVIEW

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 notes thereto. Capitalized terms are used as
defined elsewhere in this Form 10-Q.

RESULTS OF OPERATIONS

Comparison of the nine months ended September 30, 1999 and 1998

For the nine months ended September 30, 1999, income before other, net,
increased by 10.0 percent from $24.0 million to $26.4 million, when compared to
the nine months ended September 30, 1998. The increase was due to increased
revenues of $9.9 million while expenses increased by $7.5 million.

Income from property increased by $8.1 million from $85.2 million to $93.3
million, or 9.5 percent, due to acquisitions ($3.0 million), rent increases
($3.2 million), lease up of manufactured home sites ($1.2 million) and other
community revenues ($0.7 million).

Other income increased by $1.8 million from $4.5 million to $6.3 million due
primarily to a $1.7 million increase in interest and other income.

Property operating and maintenance expenses increased by $1.3 million from $19.1
million to $20.4 million, or 6.9 percent, due primarily to acquisitions and
timing.

Real estate taxes increased by $0.2 million from $6.5 million to $6.7 million,
or 2.5 percent, due to acquisitions.

Property management expenses increased by $0.3 million from $1.7 million to $2.0
million, representing 2.1 percent and 1.9 percent of income from property in
1999 and 1998, respectively.

General and administrative expenses increased by $0.3 million from $2.5 million
to $2.8 million, or 11.5 percent, due primarily to increased staffing to manage
the growth of the Company. General and administrative expenses as a percentage
of income from property remained constant at 2.9 percent in both periods.

Earnings before interest, taxes, depreciation and amortization ("EBITDA")
increased by $7.8 million, from $59.9 million to $67.7 million. EBITDA as a
percent of revenues increased to 68.1 percent in 1999 compared to 66.8 percent
in 1998.

Depreciation and amortization increased by $3.2 million from $18.1 million to
$21.3 million, or 17.5 percent, due primarily to acquisitions of communities in
1999 and 1998.




                                       11

<PAGE>   12

                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                     ------


RESULTS OF OPERATIONS CONTINUED

Interest expense increased by $2.2 million from $17.8 million to $20.0 million,
or 12.5 percent, primarily due to increased average debt outstanding.

Other, net of $3.0 million in 1998 represents a gain from the disposition of
certain assets.

Comparison of the three months ended September 30, 1999 and 1998

For the three months ended September 30, 1999, income before minority interests
and other, net, increased by 8.7 percent from $8.0 million to $8.7 million, when
compared to the three months ended September 30, 1998. The increase was due to
increased revenues of $3.6 million while expenses increased by $2.9 million.

Income from property increased by $3.0 million from $28.3 million to $31.3
million, or 10.7 percent, due to acquisitions ($0.8 million), rent increases
($1.1 million), lease up of manufactured home sites ($0.5 million) and increases
in rents and other community revenues ($0.6 million).

Other income increased by $0.6 million from $2.1 million to $2.7 million due
primarily to an increase in interest and other income.

Property operating and maintenance expenses increased by $0.6 million from $6.5
million to $7.1 million, or 8.8 percent, due primarily to acquisitions and
timing.

Real estate taxes increased by $0.1 million from $2.1 million to $2.2 million
due to acquisitions.

Property management expenses increased by $0.1 million from $0.6 million to $0.7
million, representing 2.3 percent of income from property in both 1999 and 1998.

General and administrative expenses increased by $0.1 million from $0.8 million
to $0.9 million, or 15.4 percent, due primarily to increased staffing to manage
the growth of the Company. General and administrative expenses as a percentage
of income from property increased slightly from 2.7 percent in 1998 to 2.8
percent in 1999.

Earnings before interest, taxes, depreciation and amortization ("EBITDA")
increased by $2.7 million from $20.3 million to $23.0 million. EBITDA as a
percent of revenues increased to 67.7 percent in 1999 compared to 66.8 percent
in 1998.

Depreciation and amortization increased by $1.2 million from $6.1 million to
$7.3 million, or 19.0 percent, due primarily to acquisitions of communities in
1999 and 1998.

Interest expense increased by $0.8 million from $6.2 million to $7.0 million, or
13.5 percent, primarily due to increased average debt outstanding.




                                       12


<PAGE>   13


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                     ------


RESULTS OF OPERATIONS CONTINUED

Other, net of $2.1 million in 1998 represents a gain from the disposition of
certain assets.

SAME PROPERTY INFORMATION

The following table reflects property-level financial information as of and for
the nine months ended September 30, 1999 and 1998. The "Same Property" data
represents information regarding the operation of communities owned as of
January 1, 1998 and September 30, 1999. Site, occupancy, and rent data for those
communities is presented as of the last day of each period presented. The table
includes sites where the Company is providing financing and managing the
properties. Such amounts relate to the total portfolio data and include 923
sites in 1999 and 1998.


<TABLE>
<CAPTION>
                                                             SAME PROPERTY               TOTAL PORTFOLIO
                                                       ------------------------     -----------------------
                                                         1999            1998         1999           1998
                                                       --------        --------     --------      ---------
<S>                                                    <C>             <C>          <C>           <C>
Income from property                                   $ 65,834        $ 61,903     $ 93,251      $  85,180
                                                       --------        --------     --------      ---------
Property operating expenses:
        Property operating and maintenance               12,031          11,832       20,407         19,095
        Real estate taxes                                 5,081           5,199        6,666          6,502
                                                       --------        --------     --------      ---------
                Property operating expenses              17,112          17,031       27,073         25,597
                                                       --------        --------     --------      ---------

Property EBITDA                                        $ 48,722        $ 44,872      $66,178      $  59,583
                                                       ========        ========      =======      =========

Number of operating properties                               79              79          110            104
Developed sites                                          27,458          26,965       39,336         36,956
Occupied sites                                           26,280          25,633       36,325         33,484
Occupancy %                                                95.7%(1)        95.1%(1)     94.7%(1)       95.2%(1)
Weighted average monthly rent per site                 $    275 (1)    $    264 (1)     $276 (1)   $    267 (1)
Sites available for development                           1,228           1,789        6,500          5,854
Sites planned for development in current year               136             374          550          1,220
</TABLE>


(1)  Occupancy % and weighted average rent relates to manufactured housing
sites, excluding recreational vehicle sites.

On a same property basis, property revenues increased by $3.9 million from $61.9
million to $65.8 million, or 6.4 percent, due primarily to increases in rents
and occupancy related charges including water and property tax pass through.
Also contributing to revenue growth was the increase of 647 leased sites at
September 30, 1999 compared to September 30, 1998.

Property operating expenses increased by $0.1 million from $17.0 million to
$17.1 million or 0.5 percent, due to increased occupancies and costs. Property
EBITDA increased by $3.8 million from $44.9 million to $48.7 million, or 8.6
percent.





                                       13


<PAGE>   14


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                     ------


LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents increased by $6.3 million to $16.0 million at
September 30, 1999 compared to $9.7 million at December 31, 1998 because cash
provided by operating and financing activities exceeded cash used in investing
activities.

Net cash provided by operating activities decreased by $3.0 million to $43.7
million for the nine months ended September 30, 1999 compared to $46.7 million
for the same period in 1998. This decrease was primarily due to other assets
increasing by $5.4 million and accounts payable and other liabilities, including
distributions, decreasing by $3.4 million offset by a $5.6 million increase in
income before minority interests, depreciation and amortization and other.

Net cash used in investing activities decreased by $7.9 million to $68.0 million
from $75.9 million due to a $14.6 million decrease in rental property
acquisition activities, net of proceeds from asset sales, and a $3.5 million
decrease in investments in and advances to affiliates, offset by an increase of
$10.2 million used to finance notes receivable.

Net cash provided by financing activities decreased by $8.5 million to $30.7
million for the nine months ended September 30, 1999 compared to $39.2 million
for the same period in 1998. This decrease was primarily because $63.6 million
of notes payable, net of deferred financing costs, were issued in 1998 and none
issued in 1999, and distributions increased by $2.7 million offset by $50.4
million of additional capital contributions and increased borrowings on the line
of credit of $8.0 million.

The Company expects to meet its short-term liquidity requirements generally
through its working capital provided by operating activities. The Company
expects to meet certain long-term liquidity requirements such as scheduled debt
maturities and property acquisitions through the issuance of debt securities, or
general or limited partnership interests. The Company considers these sources to
be adequate and anticipates they will continue to be adequate to meet operating
requirements, capital improvements, investment in development, and payment of
distributions by the Company in accordance with REIT requirements in both the
short and long term. The Company may also meet these short-term and long-term
requirements by utilizing its $125 million line of credit which bears interest
at LIBOR plus 1.05% and is due January 1, 2003. See "Special Note Regarding
Forward-Looking Statements."

On September 29, 1999, the Company completed a private placement of 2,000,000
Series A Preferred Units to institutional investors in exchange for a capital
contribution of $50 million. Series A Preferred Units, which may be called by
the Company at par on or after September 29, 2004, have no stated maturity or
mandatory redemption and pay a cumulative, quarterly dividend at an annualized
rate of 9.125%. The Series A Preferred Units are convertible into preferred
stock of Sun under certain circumstances. The Company used the proceeds from
such private placement to reduce outstanding indebtedness under its revolving
credit facility.

At September 30, 1999, the Company's debt to total market capitalization
approximated 33% (assuming conversion of all Common and Preferred OP Units to
shares of common stock), with a weighted average maturity of approximately 5.5
years and a weighted average interest rate of 7.0%.



                                       14


<PAGE>   15

                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                     ------


LIQUIDITY AND CAPITAL RESOURCES CONTINUED:

Recurring capital expenditures approximated $4.6 million for the nine months
ended September 30, 1999, including $0.4 million for additional space and
related costs at corporate headquarters.

OTHER

Year 2000 Update

The Year 2000 ("Y2K") issue concerns the inability of computerized information
systems and non-information systems to accurately calculate, store or use a date
after 1999. This could result in computer system failures or miscalculations
causing disruptions of operations.

In 1997, the Company implemented a corporate-wide Y2K program to minimize any
such disruption caused by the failures of its own internal systems or those of
its business supply chain. In the first phase of the project, the Company
reviewed its inventory of computer hardware and software, and other devices with
embedded microprocessors. The Company also discussed its software applications
and internal operational programs with its current information systems' vendors.
Finally, in this assessment phase, key members of the business supply chain were
contacted and interviewed regarding their awareness of the Y2K problem and the
status of their own Y2K project. The first phase was completed on schedule and
all key members of the Company's business supply chain reported that they were
aware of the Y2K problem and were in the process of readying for the Y2K issue.

In the second phase of the project, all systems found to be Y2K non-compliant
were upgraded, fixed, replaced and tested. The second phase was also completed
on schedule in December 1998. The Company believes that as a result of this
Implementation/Testing phase, its applications and programs will properly
recognize calendar dates beginning in the year 2000. The Company plans to
continue monitoring Y2K communications from its software vendors and anticipates
that some vendors will recommend further patches/upgrades and testing.

In the third and final phase of the Y2K program, the Company surveyed its
material third-party service providers, such as its banks, payroll processor,
stock transfer agent and telecommunications provider. The purpose of the survey
is to follow-up on the status of their Y2K compliance efforts and assess what
effect their possible non-compliance might have on the Company. In addition, the
Company discussed with its material vendors the possibility of any interface
difficulties and/or electrical or mechanical problems relating to the Y2K issue
which may affect properties owned or operated by the Company. The third phase
was completed on schedule in April 1999. While all surveyed vendors reported
that they were aware of the Y2K issue and were scheduled to have all systems
remedied before December 31, 1999, most vendors were reluctant to guarantee that
their Y2K issues would not adversely affect the operations of the Company. The
Company has therefore developed contingency plans for all important business
functions dependent on members of its business supply chain.




                                       15

<PAGE>   16

                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                     ------


OTHER CONTINUED:

Year 2000 Update, Continued

The Company believes that its expenditures for assessing its Y2K issues, though
difficult to quantify, to date have not been material because the Company's Y2K
evaluation has been conducted by its own personnel or by its vendors in
connection with their servicing operations. The Company received a third-party
assessment of its Y2K program methodology and has addressed the recommendations
that were deemed appropriate by the Company. The Company is not aware of any
other Y2K related conditions that it believes would likely require material
expenditures in the future. See "Special Note Regarding Forward-Looking
Statements."

Based on its current information, the Company believes that the risk posed by
any foreseeable Y2K related problem with its internal systems and the systems at
its properties (including both information and non-information systems) or with
its vendors is minimal. Y2K related problems with the Company's software
applications and internal operational programs or with the electrical or
mechanical systems at its properties are unlikely to cause more than minor
disruptions in the Company's operations. The Company believes that the risk
posed by Y2K related problems for certain third-party service providers is
marginally greater, though, based on its current information, the Company does
not believe any such problems would have a material effect on its operations.
Any Y2K related problems at these third-party service providers could delay the
processing of financial transactions or payroll and could disrupt the Company's
internal and external communications.

While the Company believes that it will be Y2K capable by December 31, 1999,
there can be no assurance that the Company has been or will be successful in
identifying and assessing Y2K issues, or that, to the extent identified, the
Company's efforts to resolve such issues will be effective such that Y2K issues
will not have a material adverse effect on the Company's business, financial
condition, or results of operation.

Special Note Regarding Forward-Looking Statements

This Form 10-Q contains various "forward-looking statements" within the meaning
of the Securities Act of 1933 and the Securities Exchange Act of 1934, and the
Company intends that such forward-looking statements be subject to the safe
harbors created thereby. The words "may", "will", "expect", "believe",
"anticipate", "should", "estimate", and similar expressions identify
forward-looking statements. These forward-looking statements reflect the
Company's current views with respect to future events and financial performance,
but are based upon current assumptions regarding the Company's operations,
future results and prospects, and are subject to many uncertainties and factors
relating to the Company's operations and business environment which may cause
the actual results of the Company to be materially different from any future
results expressed or implied by such forward-looking statements. Please see the
section entitled "Risk Factors" of the Company's Registration Statement on Form
S-3 filed with the Securities and Exchange Commission on August 31, 1999 for a
list of uncertainties and factors.





                                       16


<PAGE>   17


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                     ------

OTHER CONTINUED:

Special Note Regarding Forward-Looking Statements, Continued

Such factors include, but are not limited to, the following: (i) changes in the
general economic climate; (ii) increased competition in the geographic areas in
which the Company owns and operates manufactured housing communities; (iii)
changes in government laws and regulations affecting manufactured housing
communities; and (iv) the ability of the Company to continue to identify,
negotiate and acquire manufactured housing communities and/or vacant land which
may be developed into manufactured housing communities on terms favorable to the
Company. The Company undertakes no obligation to publicly update or revise any
forward-looking statements whether as a result of new information, future
events, or otherwise.


Recent Accounting Pronouncements

In June 1998, FASB issued SFAS No. 133 "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"). This Statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. This statement is effective for fiscal
quarters after June 15, 2000. The Company has no derivative instruments at
September 30, 1999.








                                       17


<PAGE>   18


                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP


PART II

ITEM 2.(C) - CHANGES IN SECURITIES AND USE OF PROCEEDS

On September 29, 1999, the Company completed a private placement of 2 million
Series A Preferred Units to institutional investors in exchange for a capital
contribution of $50 million. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources."

ITEM 6.(A) - EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K

             EXHIBIT NO.                       DESCRIPTION
             -----------                       -----------

                27                         Financial Data Schedule



ITEM 6.(B) - REPORTS ON FORM 8-K

The Company did not file any reports on Form 8-K during the period covered by
this Form 10-Q.















                                       18








<PAGE>   19


                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Dated: November 5, 1999



                   SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
                   BY: Sun Communities, Inc., General Partner

                   BY: /s/   Jeffrey P. Jorissen
                      ----------------------------------------------------------
                             Jeffrey P. Jorissen, Chief Financial Officer
                             and Secretary


















                                       19










<PAGE>   20



                  SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
                                  EXHIBIT INDEX





<TABLE>
<CAPTION>

  PAGE                                                FILED             NUMBER
EXHIBIT NO.             DESCRIPTION                  HEREWITH           HEREIN
-----------             -----------                  --------           ------
<S>                     <C>                          <C>                <C>
27                      Financial Data Schedule         X
</TABLE>