EDGAR 10-K Filing

Company CIK: 912593
Filing Year: 2021
Filename: 912593_10-K_2021_0000912593-21-000054.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS
GENERAL OVERVIEW
Sun Communities, Inc., a Maryland corporation, and all wholly-owned or majority-owned and controlled subsidiaries, including Sun Communities Operating Limited Partnership, a Michigan limited partnership (the “Operating Partnership”), Sun Home Services, Inc., a Michigan corporation (“SHS”) and Safe Harbor Marinas, LLC (“Safe Harbor”) are referred to herein as the “Company,” “us,” “we,” and “our.”
We are a fully integrated, self-administered and self-managed real estate investment trust (“REIT”). We own, operate and develop manufactured housing (“MH”) communities and recreational vehicle (“RV”) resorts throughout the United States and Ontario, Canada. We acquired Safe Harbor and its portfolio of marinas in October 2020. Through Safe Harbor, we own, operate, develop and manage marinas throughout the United States, with the majority of such marinas concentrated in coastal regions and others located in various inland regions. We are a fully-integrated real estate company which, together with our affiliates and predecessors, has been in the business of acquiring, operating, developing and expanding MH communities and RV resorts since 1975 and marinas since 2020. We lease individual parcels of land, or sites, with utility access for placement of manufactured homes and RVs to our MH and RV customers. The MH communities are designed to offer affordable housing to individuals and families, while also providing certain amenities. The RV resorts are designed to offer affordable vacation opportunities to individuals and families complemented by a diverse selection of amenities. The marina offerings to its members include wet slip rentals, dry storage space leases, end-to-end service (such as routine maintenance, repair and winterization), fuel sales and other high-end amenities. These services and amenities offer convenience and resort-quality experiences to our members.
As of December 31, 2020, we owned and operated or had an interest in a portfolio of 552 MH communities, RV resorts, and marinas (collectively, the “properties”) located in 39 states throughout the United States and Ontario, Canada, including 276 MH communities, 136 RV resorts, 34 properties containing both MH and RV sites, and 106 marinas. As of December 31, 2020, the properties contained an aggregate of 188,176 developed sites comprised of 96,688 developed MH sites, 27,564 annual RV sites (inclusive of both annual and seasonal usage rights), 25,043 transient RV sites, and 38,881 wet slips and dry storage spaces. Additionally, there are 10,025 additional MH and RV sites suitable for development.
We are engaged through SHS, a taxable REIT subsidiary, in the marketing, selling, and leasing of new and pre-owned homes to current and future residents in our communities. The operations of SHS support and enhance our occupancy levels, property performance and cash flows.
Our executive and principal property management office is located at 27777 Franklin Road, Suite 200, Southfield, Michigan 48034 and our telephone number is (248) 208-2500. We have regional property management offices located in Austin and Dallas, Texas, Newport, Rhode Island; Grand Rapids, Michigan; Denver, Colorado; Ft. Myers, Florida; and Orlando, Florida. Safe Harbor’s primary office is located in Dallas, Texas. We employed an aggregate of 4,872 full and part time employees as of December 31, 2020.
Our website address is www.suncommunities.com and we make available, free of charge, on or through our website all of our periodic reports, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and current reports on Form 8-K, as soon as reasonably practicable after we file such reports with the Securities and Exchange Commission (the “SEC”). Additionally, the SEC maintains a website at https://www.sec.gov, that contains reports, proxy information statements and other information about Sun.
SUN COMMUNITIES, INC.
STRUCTURE OF THE COMPANY
The Operating Partnership is structured as an umbrella partnership REIT, or UPREIT. We conduct substantially all of our operations through the Operating Partnership. The Operating Partnership owns, either directly or indirectly through other subsidiaries, all of our assets. This UPREIT structure enables us to comply with certain complex requirements under the federal tax rules and regulations applicable to REITs, and to acquire MH communities, RV resorts and marinas in transactions that defer some or all of the sellers’ tax consequences. The financial results of the Operating Partnership and our other subsidiaries are consolidated in our Consolidated Financial Statements. The financial results include certain activities that do not necessarily qualify as REIT activities under the Internal Revenue Code of 1986, as amended (the “Code”). We have formed taxable REIT subsidiaries, as defined in the Code, to engage in such activities. We use taxable REIT subsidiaries to offer certain services to our residents and engage in activities that would not otherwise be permitted under the REIT rules if provided directly by us or by the Operating Partnership. The taxable REIT subsidiaries include our home sales business, SHS, which provides manufactured home sales, leasing, and other services to current and prospective tenants of the properties.
Under the partnership agreement, the Operating Partnership is structured to make distributions with respect to certain of the Operating Partnership units (“OP units”) at the same time that distributions are made to our common stockholders. The Operating Partnership is structured to permit limited partners holding certain classes or series of OP units to exchange those OP units for shares of our common stock (in a taxable transaction) and achieve liquidity for their investment.
As the sole general partner of the Operating Partnership, we generally have the power to manage and have complete control over the conduct of the Operating Partnership’s affairs and all decisions or actions made or taken by us as the general partner pursuant to the partnership agreement are generally binding upon all of the partners and the Operating Partnership.
SUN COMMUNITIES, INC.
We do not own all of the OP units. The following table sets forth:
•the various series of OP units and the number of units of each series outstanding as of December 31, 2020;
•the relative ranking of the various series of OP units with respect to rights to the payment of distributions and the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Operating Partnership;
•the number of shares of our common stock issuable upon the exchange of each OP unit of the applicable series;
•the annual distribution rate on each series of OP Units; and
•information regarding the terms of redemption rights for each series of OP units, as applicable.
Ranking Description OP Units Outstanding at December 31, 2020
Exchange Rate(1)
Annual Distribution Rate(2)
Cash Redemption(3)
Redemption Period
1 Preferred OP units (or “Aspen preferred OP units”) 1,283,819(4)
Variable(5)
Variable(6)
Mandatory Variable(7)
1 Series A-1 preferred OP units 294,734 2.4390 6.00 % N/A N/A
2 Series C preferred OP units 306,303 1.1100 Variable(8)
N/A N/A
3 Series D preferred OP units 488,958 0.8000 Variable(9)
Holder’s Option Any time after earlier of January 31, 2024 or death of holder
4 Series E preferred OP units 90,000 0.6897 Variable(10)
N/A N/A
5 Series F preferred OP units 90,000 0.6250 3.00 % Holder’s Option Any time after earlier of May 14, 2025 or death of holder
6 Series G preferred OP units 240,710 0.6452 3.20 % Holder’s Option Any time after earlier of September 30, 2025 or death of holder
7 Series H preferred OP units 581,407 0.6098 3.00 % Holder’s Option Any time after earlier of October 30, 2025 or death of holder
8 Series I preferred OP units 922,000 0.6098 3.00 % Holder’s Option Any time after earlier of December 31, 2025 or death of holder
9 Series A-3 preferred OP units 40,268 1.8605 4.50 % N/A N/A
10 Common OP units 110,232,973 (11)
1.0000 Same distribution rate for common stock and common OP units N/A N/A
(1) 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.
(2) Except for common OP units, distributions are payable on the issue price of each OP unit, which is $27.00 per unit for all Aspen preferred OP units and $100.00 per unit for all other preferred OP units.
(3) The redemption price for each OP unit redeemed will be equal to its issue price plus all accrued but unpaid distributions.
(4) Of the outstanding Aspen preferred OP units, 270,000 are designated as “Aspen 2034 Units.”
(5) At any time prior to January 1, 2024 (or prior to January 1, 2034 with respect to the Aspen 2034 Units), at the holder’s option, each Aspen preferred OP unit may be exchanged into: (a) if the average closing price of our common stock for the preceding ten trading days is $68.00 per share or less, 0.397 common OP units, or (b) if the average closing price of our common stock for the preceding ten trading days is greater than $68.00 per share, the number of common OP units determined by dividing (i) the sum of (A) $27.00 plus (B) 25 percent of the amount by which the average closing price of our common stock for the preceding ten trading days exceeds $68.00 per share, by (ii) the average closing price of our common stock for the preceding ten trading days.
(6) The annual distribution rate for Aspen 2034 Units is 3.80%. The annual distribution rate on all other Aspen preferred OP units is equal to the 10-year U.S. Treasury bond yield plus 239 basis points; provided, however, that such aggregate distribution rate shall not be less than 6.5 % nor more than 9.0 %.
(7) We are required to redeem all outstanding Aspen preferred OP units other than the Aspen 2034 Units on January 2, 2024. We are required to redeem all outstanding Aspen 2034 Units on January 2, 2034. In addition, we are required to redeem the Aspen preferred OP units (including Aspen 2034 Units) of any holder thereof within five days after receipt of a written demand during the existence of certain uncured Aspen preferred OP unit defaults, including our failure to pay distributions on the Aspen preferred OP units when due and our failure to provide certain security for the payment of distributions on the Aspen preferred OP units.
(8) 4.50% until April 1, 2020 and 5.00% thereafter.
(9) 3.75% until January 31, 2021 and 4.00% thereafter.
(10) 5.25% until January 9, 2022 and 5.50% thereafter.
(11) Of the 110,232,973 common OP units, 107,626,361, or 97.6 percent were held by us, and 2,606,612, or 2.4 percent were owned by the limited partners.
SUN COMMUNITIES, INC.
REAL PROPERTY OPERATIONS
The majority of our MH and RV properties are designed and improved for several home and RV options of various sizes and designs. The marinas are designed and improved to provide storage solutions for the boating community in the water and on land.
An MH community is a residential subdivision designed and improved with sites for the placement of manufactured homes, related improvements, and amenities. Manufactured homes are detached, single-family homes which are produced off-site by manufacturers and installed on site within the community. Manufactured homes are available in a wide array of designs, providing owners with a level of customization generally unavailable in multi-family housing developments. Modern MH communities contain improvements similar to other garden-style residential developments, including centralized entrances, paved streets, curbs, gutters, and parkways. In addition, these communities also often provide a number of amenities, such as a clubhouse, a swimming pool, basketball courts, shuffleboard courts, tennis courts, and laundry facilities.
An RV resort is a resort or park designed and improved with sites for the placement of RVs for varied lengths of time. Properties may also provide vacation rental homes. RV resorts may include a number of amenities such as restaurants, golf courses, swimming pools, water parks, tennis courts, fitness centers, planned activities, and spacious social facilities.
Renters at our MH and RV properties lease the site on which a manufactured home, vacation rental home, or RV is located. We typically own the underlying land, utility connections, streets, lighting, driveways, common area amenities, and other capital improvements and are responsible for enforcement of community guidelines and maintenance. In eight of our 446 MH and RV properties, we do not own all of the underlying land and operate the communities pursuant to ground leases. Certain of the properties provide water and sewer service through public or private utilities, while others provide these services to residents from on-site facilities. Each owner of a home within our properties is responsible for the maintenance of the home and leased site. As a result, our capital expenditure needs tend to be less significant relative to multi-family rental apartment complexes.
A marina is designed and improved with wet slips on rivers, lakes, bays and oceans and dry storage systems that provide storage solutions for the placement of vessels ranging in size from small boats to super yachts for varied lengths of time. Dry storage systems also allow for the required maintenance to the vessels that we store. Marinas may also provide ancillary businesses, such as fuel stations, ship stores, restaurants, swimming pools, cabin and lodging rentals, boat rentals, tennis courts, fitness centers, shower and laundry facilities, planned activities and other services to create a robust member experience.
Renters at our marinas lease the wet slip or dry storage space on which the vessel is stored. We typically own the underlying land, building improvements, dock improvements, site improvements and other on-site amenity structures. Because we own the facilities and improvements on the land or submerged land at those marinas, we are responsible for the capital improvements and maintenance. In 25 of our 106 marinas, we do not own all of the underlying land and operate the marinas pursuant to ground leases.
We compete with other available MH communities and RV resorts, and alternative forms of housing (such as on-site constructed homes, apartments, condominiums and townhouses) as they provide housing alternatives to potential tenants of MH communities and RV resorts. In the marina business, we compete with other available marinas in the U.S.
PROPERTY MANAGEMENT
Our property management strategy emphasizes intensive, detail-oriented, hands-on management by dedicated, on-site community, resort, and marina general managers. We believe our focus on creating an exceptional resident and guest experience creates a competitive advantage. It enables us to continually monitor and address concerns, the performance of competitive properties, and local market conditions.
Our MH and RV property managers are overseen by John B. McLaren, our President and Chief Operating Officer, who has been in the MH industry since 1995, Bruce Thelen, our Executive Vice President of Operations and Sales, who has led our manufactured home sales and leasing subsidiary, Sun Home Services, Inc., since January 2018, three Senior Vice Presidents of Operations and Sales, 11 Divisional Vice Presidents and 39 Regional Vice Presidents. Each Regional Vice President is responsible for regular property inspections, oversight of property operations and sales functions, semi-annual market surveys of competitive communities, and interaction with local manufactured home dealers for eight to 15 properties.
SUN COMMUNITIES, INC.
Each property manager performs regular inspections in order to regularly monitor the physical condition of properties and to effectively address tenant concerns. In addition to a district or community manager, each district or property has on-site maintenance personnel and management support staff. We hold mandatory training sessions for all new property management personnel to ensure that policies and procedures are executed effectively and professionally. All of our property management personnel participate in on-going training to ensure that changes to policies and procedures are implemented consistently. Our internal training program has led to increased knowledge and accountability for daily operations and policies and procedures.
Our marina business is overseen by Baxter Underwood, the Chief Executive Officer of Safe Harbor, who has been in the marina business since 2006, two Chief Operating Officers and 14 Regional Vice Presidents that are responsible for regular marina inspections and oversight of operations.
HUMAN CAPITAL
Together as one team, we embrace the following core success attributes that make Sun Communities a great place to work.
•Commitment: At Sun Communities, we are committed to be the best in the industry. We work hard to keep team members motivated and rewarded. Committed team members are the key to success.
•Intensity: The work environment at Sun Communities is intense and full of positive energy. We work hard to increase confidence and determination of our team members to prepare them to meet the day-to-day challenges of the job.
•Empowerment: We provide team members with the skills, resources, opportunities and motivation to succeed in their career.
•Accountability: Every team member, no matter what role they hold, is equally responsible for contributing to the success of our company.
•Service: We have built our culture around a simple customer service philosophy: The Golden Rule. We treat others the way we want to be treated.
DIVERSITY
We make it a priority to recognize and appreciate the variety of characteristics that make individuals unique in an atmosphere that promotes and celebrates individual and collective achievement. We embrace diversity and create a culture surrounded by empowerment used to foster new ideas and economic growth. We believe it’s not just about gender or race, but being diverse in thoughts, life, and work experiences. We take pride in being different; it’s what sets us apart. We look to create an inclusive environment that challenges, inspires, rewards, and transforms our team to be the best of the best. We do not tolerate harassing, discriminatory, or retaliatory conduct that interferes unreasonably with an individual's work performance or that creates an intimidating, hostile, or offensive work environment because of any protected trait. Such discrimination or harassment is prohibited and is inconsistent with our policies, practices, and philosophy. Protected traits include race, color, religion, gender, sexual orientation, gender identity or expression, national origin, age, genetic information, disability, veteran status or any other trait protected under state or federal laws.
As of December 31, 2020, we employed 4,872 full and part time employees, of which 4,320 were located on-site as property managers, support staff, or maintenance personnel. Of those, approximately 83 percent were full-time, and 17 percent were part-time. Forty-three percent of our team members were female, and 57 percent were male. Fifty-one percent of our workers are age 50 and older, with approximately 20 percent being age 60 and older.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
We uphold a company-wide commitment to ESG goals through various programs and everyday business practices. We are fully committed to reducing our environmental impact across the scope of our operations and through the services we deliver to our residents and guests. We continue to identify opportunities to invest in energy-efficient technology, water efficiency, and waste reduction strategies throughout our communities, resorts, and corporate headquarters. By conserving natural resources, reducing our carbon footprint, and participating in efforts to protect the environment through our Sun Unity program, we are striving to achieve our environmental sustainability goals.
We recognize the important opportunity of providing access to affordable and sustainable housing. Our business contributes to a vitally important function in our economy by providing high-quality, yet affordable, housing for both all-age and age-restricted needs.
SUN COMMUNITIES, INC.
Manufactured homes cost up to 50 percent less per square foot than conventional site-built homes, expanding the opportunity for residents to own their home, despite an ever-increasing housing affordability gap. Our homes provide more space at less cost per square foot compared to other options.
As a nationwide provider of affordable housing, we believe we have a responsibility not only to our employees and residents, but also to the communities in which we live and work. These social responsibility efforts are initiated through our Sun Unity program, so we can join together as a team and give back to these communities to achieve goals like promotion, education and waste reduction.
TRAINING AND DEVELOPMENT
Our internal training program, Sun University, offers over 200 courses (including books, online courses, webinars, and live sessions) to our MH and RV team members on a range of topics, including leadership, communications, software, and operations. All new hires are required to complete information security training, and safety and compliance-related training, with routine refresher training annually on critical topics. In 2020, 100 percent of our team members received safety training.
Our human resources team, learning and development group and team relations specialists are aligned to support the attraction, development, and retention of our talent. Given the peak hiring demands during the summer at many of our RV and marina resorts, we focus operations efforts on ensuring the returning team member pipeline each year is robust. For salaried positions, our annual talent management processes focus on professional development in both soft-skill development and training. Our compensation philosophy is designed to attract and retain top talent. For eligible team members, we offer competitive salary, health, welfare, retirement and pet insurance benefits, in addition to tuition reimbursement and rent/vacation discounts at our properties.
COVID-19 RELIEF AND SUPPORT
The health and safety of our residents, guests and team members is our top priority. As we navigated the COVID-19 pandemic during 2020, we instituted our COVID-19 Response and Action Plan which established guidelines for safe operations of our communities, resorts, and the Main Office. Content contained within this plan include:
•Methods for preventing and reducing exposure and transmission of COVID-19 among individuals;
•Methods for identification and isolation of sick persons;
•Operational protocols for social distancing, including reduced occupancy requirements;
•Sanitation policies and procedures, including cleaning, disinfecting, and decontamination;
•Communications and training for team members and leaders that are necessary to implement the plan; and
•Procedures to ensure effective ongoing implementation of the plan.
Several temporary relief measures were extended to residents and guests including:
•Temporary suspensions of month-to-month fees, late fees, and rent increases.
•Temporary elimination of cancellation fees related to COVID-19, and extending this for future bookings in 2020.
•Enhanced cleaning procedures were put in place, as well as additional signage, and changes to policies and procedures further promoting social distancing.
•Amenity kits are being provided to guests upon check-in which include hand sanitizer, face masks and sanitation wipes.
•Contactless processes were put in place for rent collection, lease renewals, reservations and guest check-ins.
•Free housing was offered to frontline health care workers at various locations.
•Large quantities of personal protection equipment (PPE) and cleaning products were centrally procured and distributed to all of Sun’s locations.
SUN COMMUNITIES, INC.
To support the health and well-being of our team members and their families, we provide a variety of resources to assist in navigating the challenges of the COVID-19 pandemic. The resources touch on many of our well-being pillars including Social, Emotional, Community, and Financial. Examples include:
•Individuals who enter our facilities are required to complete a self health questionnaire no sooner than two hours prior to the start of each shift and are required to use no-contact infrared thermometers for temperature checks.
•We closed our offices for non-essential functions and added remote work flexibility.
•We have frequent communication regarding impacts of COVID-19 on our properties and our residents, guests and team members.
•Free COVID-19 testing.
•No copays on telemedicine consultations, including behavioral health services.
•Free virtual fitness classes, and access to a library of online resources for of yoga, meditation, and stress management.
•Free care packages for those diagnosed with COVID-19 that include personal care items and household supplies.
•Free educational assistance and tutoring programs through our “Back to School with Sun” initiative.
HOME SALES AND RENTALS
SHS is engaged in the marketing, selling and leasing of new and pre-owned homes to residents in our communities. Because tenants often purchase a home already on-site within a community, such services enhance occupancy and property performance. Additionally, because many of the homes on the properties are sold through SHS, better control of home quality in our communities can be maintained than if sales services were conducted solely through third-party brokers.
SHS also leases homes to prospective tenants. At December 31, 2020, SHS had 11,752 occupied leased homes in its portfolio. New and pre-owned homes are purchased for the Rental Program. Leases associated with the Rental Program generally have a term of one year. The Rental Program requires intensive management of costs associated with repair and refurbishment of these homes as the tenants vacate and the homes are re-leased, similar to apartment rentals. We received approximately 49,200 applications during 2020 to live in our MH and RV properties, providing a significant “resident boarding” system that allows us to market the purchase of a home to the qualified applicants. Through the Rental Program we demonstrate our product and lifestyle to the renters, while monitoring their payment history and converting qualified renters to owners.
Our home sales and leasing operations compete with other local and national MH dealers and MH community owners.
MARINA MEMBER BASE
We are engaged in the marketing and leasing of wet slips and dry storage spaces and have approximately 40,000 members throughout our marina network.
REGULATIONS AND INSURANCE
General
MH, RV and marina properties are subject to various laws, ordinances and regulations, including regulations relating to recreational facilities such as swimming pools, clubhouses, and other common areas. Each property has the necessary operating permits and approvals.
Insurance
Our management believes that the properties are covered by adequate fire, property, business interruption, general liability, and (where appropriate) flood and earthquake insurance provided by reputable companies with commercially reasonable deductibles and limits. We maintain a blanket policy that covers all of our properties. We have obtained title insurance insuring fee title to the properties in an aggregate amount which we believe to be adequate. Claims made to our insurance carriers that are determined to be recoverable are classified in other receivables as incurred.
SUN COMMUNITIES, INC.
SITE LEASES OR USAGE RIGHTS
Typical tenant leases for MH sites are year-to-year or month-to-month, renewable upon the consent of both parties, or, in some instances, as provided by statute. Certain of our leases, mainly at our Florida and California properties, are tied to the consumer price index or other indices as they relate to rent increases. Generally, market rate adjustments are made on an annual basis. These leases are cancellable for non-payment of rent, violation of community rules and regulations or other specified defaults. Typical resident agreements for RV sites are year-to-year or from move-in date until the end of the current calendar year. Generally, increases and market rate adjustments are made on an annual basis. These agreements are cancellable for non-payment of rent, violation of resort rules and regulations or other specified defaults.
During the five calendar years ended December 31, 2020, on average 2.8 percent of the homes in our MH and RV properties have been removed by their owners and 6.7 percent of the homes have been sold by their owners to a new owner who then assumes rental obligations as a community resident. The average cost to move a home is approximately $7,000. On average, our residents remain in our communities for approximately 11 years, while homes, which give rise to the rental stream, remain for over 42 years.
Leases for wet slips and dry storage spaces are year-to-year, season-to-season, month-to-month, or transient by night, renewable upon the consent of both parties. On average, our members maintain leases in our marinas for approximately eight years.
Please see the Risk Factors in Item 1A, and our accompanying Consolidated Financial Statements and related notes thereto beginning on page of this Annual Report on Form 10-K for more detailed information.
ACQUISITIONS
For the year ended December 31, 2020, we acquired 24 MH communities and RV resorts, totaling 6,919 sites and 106 marinas totaling over 38,800 wet slips and dry storage spaces for a total purchase price of approximately $3.0 billion.
EXPANSION / DEVELOPMENT
For the year ended December 31, 2020, we completed the construction of over 1,000 MH and RV sites in five ground-up and re-development properties and over 300 MH and RV expansion sites in eight properties.
SUN COMMUNITIES, INC.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K 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 we intend that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this filing 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” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements reflect our 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 filing. These risks and uncertainties may cause our actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks disclosed under “Risk Factors” in this Annual Report on Form 10-K and our other filings with the SEC, such risks and uncertainties include, but are not limited to:
•outbreaks of disease, including the COVID-19 pandemic, and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operations;
•changes in general economic conditions, the real estate industry, and the markets in which we operate;
•difficulties in our ability to evaluate, finance, complete and integrate acquisitions (including the Safe Harbor acquisition), developments and expansions successfully;
•our liquidity and refinancing demands;
•our ability to obtain or refinance maturing debt;
•our ability to maintain compliance with covenants contained in our debt facilities;
•availability of capital;
•changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar and the Australian dollar;
•our ability to maintain rental rates and occupancy levels;
•our ability to maintain effective internal control over financial reporting and disclosure controls and procedures;
•increases in interest rates and operating costs, including insurance premiums and real property taxes;
•risks related to natural disasters such as hurricanes, earthquakes, floods and wildfires;
•general volatility of the capital markets and the market price of shares of our capital stock;
•our ability to maintain our status as a REIT;
•changes in real estate and zoning laws and regulations;
•legislative or regulatory changes, including changes to laws governing the taxation of REITs;
•litigation, judgments or settlements;
•competitive market forces;
•the ability of purchasers of manufactured homes and boats to obtain financing; and
•the level of repossessions by manufactured home and boat lenders.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. We undertake no obligation to publicly update or revise any forward-looking statements included or incorporated by reference into this filing, whether as a result of new information, future events, changes in our expectations or otherwise, except as required by law.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. All written and oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by these cautionary statements.
SUN COMMUNITIES, INC.

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
Our prospects are subject to certain uncertainties and risks. Our future results could differ materially from current results, and our actual results could differ materially from those projected in forward-looking statements as a result of certain risk factors. These risk factors include, but are not limited to, those set forth below, other one-time events, and important factors disclosed previously and from time to time in our other filings with the SEC.
MATERIAL RISKS RELATING TO OUR MH, RV AND MARINA BUSINESSES
General economic conditions and the concentration of our MH, RV and Marina properties in certain geographic areas may affect our ability to generate sufficient revenue.
The market and economic conditions in our current markets generally, and specifically in metropolitan areas of our current markets, may significantly affect occupancy or rental rates. Occupancy and rental rates, in turn, may significantly affect our revenues, and if our properties do not generate revenues sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and ability to pay or refinance our debt obligations could be adversely affected.
As of December 31, 2020, 142 MH and RV properties, representing 26.3 percent of developed sites, are located in Florida; 79 properties, representing 18.1 percent of developed sites, are located in Michigan; 27 properties, representing 6.3 percent of developed sites, are located in Texas; and 40 properties, representing 6.0 percent of developed sites, are located in California. As of December 31, 2020, we have revenue concentrations of marinas in Florida, Rhode Island, and Connecticut of approximately 29.0 percent, 13.0 percent and 8.0 percent, respectively. As a result of the geographic concentration of our MH and RV properties in Florida, Michigan, Texas and California, and geographic concentration of our marinas in Florida, Rhode Island, and Connecticut, we are exposed to the risks of downturns in local economies or other local real estate market conditions which could adversely affect occupancy rates, rental rates, and property values in these markets.
Our revenue would also be adversely affected if tenants were unable to pay rent or if sites were unable to be rented on favorable terms. If we were unable to promptly relet or renew the leases for a significant number of the sites, or if the rental rates upon such renewal or reletting were significantly lower than expected rates, then our business and results of operations could be adversely affected. In addition, certain expenditures associated with each property (such as real estate taxes and maintenance costs) generally are not reduced when circumstances cause a reduction in income from the property. Furthermore, real estate investments are relatively illiquid and, therefore, will tend to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions.
The following factors, among others, may adversely affect the revenues generated by our properties:
•outbreaks of disease, including the COVID-19 pandemic, and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operation;
•the national and local economic climate which may be adversely impacted by, among other factors, plant closings, and industry slowdowns;
•local real estate market conditions such as the oversupply of MH and RV sites or a reduction in demand for MH and RV sites in an area;
•a decrease in the number of people interested in the RV lifestyle or boating;
•changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar and Australian dollar;
•the number of repossessed homes in a particular market;
•an oversupply of, or a reduced demand for, manufactured homes;
•the difficulty facing potential purchasers in obtaining affordable financing as a result of heightened lending criteria;
•an increase or decrease in the rate of manufactured home repossessions which provide aggressively priced competition to new manufactured home sales;
•the lack of an established MH dealer network;
•the housing rental market which may limit the extent to which rents may be increased to meet increased expenses without decreasing occupancy rates;
•the perceptions by prospective tenants of the safety, convenience and attractiveness of our MH properties and the neighborhoods where they are located;
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•zoning or other environmental regulatory restrictions;
•competition from other available MH communities and RV resorts and alternative forms of housing (such as apartment buildings and site-built single-family homes) and from other marinas;
•our ability to effectively manage, maintain and insure our properties;
•increased operating costs, including insurance premiums, real estate taxes, and utilities; and
•the enactment of rent control laws or laws taxing the owners of manufactured homes.
We may not be able to integrate or finance our expansion and development activities.
We build and develop new MH communities, RV resorts and marinas and we expand existing communities and marinas. Our construction and development pipeline may be exposed to the following risks which are in addition to those risks associated with the ownership and operation of established MH communities, RV resorts and marinas:
•we may not be able to obtain financing with favorable terms for development which may make us unable to proceed with the development;
•we may be unable to obtain, or face delays in obtaining, necessary zoning, building and other governmental permits and authorizations, which could result in increased costs and delays, and even require us to abandon development of the property entirely if we are unable to obtain such permits or authorizations;
•we may abandon development opportunities that we have already begun to explore and as a result we may not recover expenses already incurred in connection with exploring such development opportunities;
•we may be unable to complete construction and lease-up of a property on schedule resulting in increased debt service expense and construction costs;
•we may incur construction and development costs for a property which exceed our original estimates due to increased materials, labor or other costs, which could make completing the development uneconomical and we may not be able to increase rents to compensate for the increase in development costs which may impact our profitability;
•we may be unable to secure long-term financing on completion of development resulting in increased debt service and lower profitability;
•occupancy rates and rents at a newly developed property may fluctuate depending on several factors, including market and economic conditions, which may result in the property not being profitable; and
•climate change may cause new marina developments to be paused or restricted.
If any of the above risks occur, our business and results of operations could be adversely affected.
Competition affects occupancy levels and rents, which could adversely affect our revenues.
The MH, RV and marina industries are highly-fragmented. There is competition within the MH, RV and marina markets we currently serve and in new markets that we may enter. We have both national and regional competitors in the MH, RV and marina markets. Our properties are located in developed areas that include other MH communities, RV resorts and marinas. The number of competitive MH communities, RV resorts and marinas in a particular area could have a material adverse effect on our ability to lease sites and increase rents charged at our properties or at any newly acquired properties. We may be competing with others with greater resources. In addition, other forms of multi-family residential properties, such as private and federally funded or assisted multi-family housing projects and single-family housing, provide housing alternatives to potential tenants of MH communities and RV resorts.
The cyclical and seasonal nature of the RV and marina industries may lead to fluctuations in our operating results.
The RV and marina industries can experience cycles of growth and downturn due to seasonality patterns. Results of operations in any one period may not be indicative of results in future periods. In the RV market, certain properties maintain higher occupancy during the summer months, while other properties maintain higher occupancy during the winter months. The RV market typically shows a decline in demand over the winter months, yet usually produces higher growth in the spring and summer months due to higher use by vacationers. In the marina market, demand for wet slip storage increases during the summer months as customers contract for the summer boating season, which also drives non-storage revenue streams such as service, fuel and on-premise restaurants or convenience storage. Demand for dry storage increases during the winter season as seasonal weather patterns require boat owners to store their vessels on dry docks and within covered racks. Our results on a quarterly basis can fluctuate due to this cyclicality and seasonality.
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We may not be able to integrate or finance our acquisitions and our acquisitions may not perform as expected.
We have acquired and intend to continue to selectively acquire MH, RV and marina properties. Our acquisition activities and their success are subject to the following risks:
•we may be unable to acquire a desired property because of competition from other well-capitalized real estate investors, including both publicly traded REITs and institutional investment funds;
•even if we enter into an acquisition agreement for a property, it is usually subject to customary conditions to closing, including completion of due diligence investigations to our satisfaction, which may not be satisfied;
•even if we are able to acquire a desired property, competition from other real estate investors may significantly increase the purchase price;
•we may be unable to finance acquisitions on favorable terms;
•acquired properties may fail to perform as expected;
•acquired properties may be located in new markets where we face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area, and unfamiliarity with local governmental and permitting procedures; and
•we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations.
If any of the above risks occur, our business and results of operations could be adversely affected.
In addition, we may acquire properties subject to liabilities and we may be left with no, or limited, recourse, with respect to unknown liabilities. As a result, we may have to pay substantial sums to settle any liabilities asserted against us based upon ownership of newly acquired properties, which could adversely affect our cash flow.
We depend on Safe Harbor’s management to operate our recently-acquired marina business, and our acquisition of Safe Harbor presents us with new risks.
Before we acquired Safe Harbor in October 2020, we did not own or operate any marinas. Safe Harbor’s operations are separate from our other operations and we may experience inefficiencies in incorporating Safe Harbor’s financial reporting and coordinating information technology systems and controls with those of the Company as a whole. In addition, the successful operation of our marinas depends on our ability to retain key employees with experience in the marina business, including Baxter R. Underwood, who is the Chief Executive Officer of Safe Harbor. The loss of services of Mr. Underwood or other key employees could have a materially adverse effect on our ability to operate Safe Harbor. Although Mr. Underwood has entered into an employment and non-competition agreement, upon certain events he will have the option to eliminate the non-competition covenant by foregoing certain compensation and other benefits.
We do not currently maintain or contemplate obtaining any “key-man” life insurance on any of the key employees of Safe Harbor. Our entry into the marina business also subjects us to new laws and regulations and may lead to increased litigation and regulatory risk including but not limited to statutes and government regulations that govern the use of, and construction on, rivers, lakes and other waterways. Exposure to the marina industry may expose us to certain weather events and risks to which we have not previously been exposed. Additionally, the marina business may be affected in different ways or to a greater extent than our existing MH and RV business by the COVID-19 pandemic with respect to infection control, facility and work-site access, or other related issues.
Investments through joint ventures involve risks not present for properties in which we are the sole owner.
We have invested and may continue to invest as a joint venture partner in joint ventures. These investments involve risks, including, but not limited to, the possibility the other joint venture partner may have business goals which are inconsistent with ours, possess the ability to take or force action or withhold consent contrary to our requests, fail to provide capital or fulfill its obligations, or become insolvent and require us to assume and fulfill the joint venture’s financial obligations. Conflicts arising between us and our joint venture partners may be difficult to manage or resolve and it could be difficult to manage or otherwise monitor the existing business arrangements. We and our joint venture partners may each have the right to initiate a buy-sell arrangement, which could cause us to sell our interest, or acquire a joint venture partner’s interest, at a time when we otherwise would not have entered into such a transaction. Each joint venture agreement is individually negotiated, and our ability to operate, finance, or dispose of a property in our sole discretion may be limited to varying degrees depending on the terms of the applicable joint venture agreement.
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Many of our properties are located in areas that experience extreme weather conditions and natural disasters and climate change may adversely affect our business.
Extreme weather or weather-related conditions and other natural disasters, including hurricanes, flash floods, sea-level rise, tornadoes, wildfires or earthquakes, may interrupt our operations, damage our properties and reduce the number of customers who utilize our properties in the affected areas. Many of our properties are on coastlines that are subject to hurricane seasons, flash flooding and sea-level rise; in areas adversely affected by wildfires, such as the western United States; and in earthquake-prone areas, such as the West Coast. If there are prolonged disruptions at our properties due to extreme weather or natural disasters, our results of operations and financial condition could be materially adversely affected.
While we maintain insurance coverage that may cover certain of the costs and loss of revenue associated with the effect of extreme weather and natural disasters at our properties, our coverage is subject to deductibles and limits on maximum benefits. We cannot assure you that we will be able to fully collect, if at all, on any claims resulting from extreme weather or natural disasters.
If any of our properties are damaged or if their operations are disrupted as a result of extreme weather or natural disasters, or if extreme weather or natural disasters adversely impact general economic or other conditions in the areas in which our properties are located or from which they draw their tenants and customers, our business, financial condition and results of operations could be materially adversely affected.
Significant changes in the climate could exacerbate extreme weather conditions or natural disasters that may occur in areas where our properties are located, all of which may result in additional physical damage to or a decrease in demand for properties located in these areas or affected by these conditions. If the impact of climate change is material in nature, including significant property damage to or destruction of our properties, or occur for lengthy periods of time, our financial condition or results of operations may be adversely affected. In addition, changes in federal, state and local legislation and regulation based on concerns about climate change could result in increased capital expenditures on our properties (for example, to improve their energy efficiency and / or resistance to inclement weather) without a corresponding increase in revenue, resulting in adverse impacts to our net income.
Marinas may not be readily adaptable to other uses.
Marinas are specific-use properties and may contain features or assets that have limited alternative uses. These properties may also have distinct operational functions that involve specific procedures and training. If the operations of any of our marinas become unprofitable due to industry competition, operational execution or otherwise, then it may not be feasible to operate the property for another use, and the value of certain features or assets used at the property, or the property itself, may be impaired. Should any of these events occur, our financial condition, results of operations and cash flows could be adversely impacted.
We may be unable to obtain, renew or maintain permits, licenses and approvals necessary for the operation of our marinas.
The U.S. Army Corps of Engineers, the Coast Guard and other governmental bodies control much of the land located beneath and surrounding many of our marinas and lease such land to Safe Harbor under leases that typically range from five to 50 years. As a result, it is unlikely that we can obtain fee-simple title to the land on or near these marinas. If these governmental authorities terminate, fail to renew, or interpret in ways that are materially less favorable any of the permits, licenses and approvals necessary for operation of these properties, then our financial condition, results of operations and cash flows could be adversely impacted.
Some marinas must be dredged from time to time to remove silt and mud that collect in harbor-areas in order to assure that boat traffic can safely enter the harbor. Dredging and disposing of the dredged material can be very costly and require permits from various governmental authorities. If the permits necessary to dredge marinas or dispose of the dredged material cannot be timely obtained after the acquisition of a marina, or if dredging is not practical or is exceedingly expensive, the operations of such property would be materially and adversely affected.
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Our significant amount of debt could limit our operational flexibility or otherwise adversely affect our financial condition, and we may incur more debt in the future.
We have a significant amount of debt. As of December 31, 2020, we had approximately $4.8 billion of total debt outstanding, consisting of approximately $3.4 billion in debt that is collateralized by mortgage liens on 192 of the properties, $1.2 billion on our lines of credit, $35.2 million of mandatorily redeemable preferred equity, and $34.7 million of preferred OP units that are mandatorily redeemable. If we fail to meet our obligations under our secured debt, the lenders would be entitled to foreclose on all or some of the collateral securing such debt which could have a material adverse effect on us and our ability to make expected distributions, and could threaten our continued viability.
We are subject to the risks normally associated with debt financing, including the following risks:
•our cash flow may be insufficient to meet required debt payments, or we may need to dedicate a substantial portion of our cash flow to pay our debt rather than to other areas of our business;
•our existing indebtedness may limit our operating flexibility due to financial and other restrictive covenants, including restrictions on incurring additional debt;
•it may be more difficult for us to obtain additional financing for our operations, working capital requirements, capital expenditures, debt service or other general requirements;
•we may be more vulnerable in the event of adverse economic and industry conditions or a downturn in our business;
•we may be placed at a competitive disadvantage compared to our competitors that have less debt; and
•we may not be able to refinance at all or on favorable terms, as our debt matures.
If any of the above risks occurred, our financial condition and results of operations could be materially adversely affected.
Despite our current indebtedness levels, we may incur substantially more debt in the future. If new debt is added to our current debt levels, an even greater portion of our cash flow will be needed to satisfy our debt service obligations. As a result, the related risks that we now face could intensify and increase the risk of a default on our indebtedness.
We may incur liability under environmental laws arising from conditions at properties we acquire or operations at the properties we own and operate.
Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate is liable for the costs of removal or remediation of certain hazardous substances at, on, under, or in such property. Such hazardous substances may be used at or located on our properties, especially our marinas. Such laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous substances. The presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner’s ability to sell or rent the property, to borrow using the property as collateral or to develop the property. Persons who arrange for the disposal or treatment of hazardous substances also may be liable for the costs of removal or remediation of such substances at a disposal or treatment facility owned or operated by another person. In addition, certain environmental laws impose liability for the management and disposal of asbestos-containing materials and for the release of such materials into the air. These laws may result in fines or penalties and may permit third parties to seek recovery from owners or operators of real properties for personal injury associated with asbestos-containing materials.
As the purchaser of properties we acquire or in connection with the operation of properties we own or manage, we may be liable for removal or remediation costs, governmental fines and injuries to persons and property. When we arrange for the treatment or disposal of hazardous substances at landfills or other facilities owned by other persons, we may be liable for the removal or remediation costs at such facilities.
We subject our properties to a Phase I or similar environmental assessment as well as limited compliance evaluations (which involve general inspections without soil sampling or ground water analysis) completed by independent environmental and engineering consultants. In some cases, where these evaluations have recommended further, invasive investigations, those have also been conducted. These environmental evaluations have not revealed any significant environmental liability that would have a material adverse effect on our business. These audits cannot reflect conditions arising after the studies were completed, and no assurances can be given that existing environmental studies reveal all environmental liabilities, that any prior owner or operator of a property or neighboring owner or operator did not create any material environmental condition not known to us, or that a material environmental condition does not otherwise exist as to any one or more properties.
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Moreover, we cannot be sure that: (a) future laws, ordinances or regulations will not impose any material environmental liability; or (b) the current environmental condition of our properties will not be affected by tenants and occupants of the properties, by the condition of land or operations in the vicinity of our properties (such as the presence of underground storage tanks), or by unrelated third parties. Environmental liabilities that we may incur could have an adverse effect on our financial condition, results of operations and cash flows.
The current pandemic of the coronavirus, or COVID-19, has materially and adversely impacted and disrupted our financial condition, results of operations, cash flows and performance, and we expect it could continue to do so.
The COVID-19 pandemic has had, and it could continue to have, or a future pandemic could have, material and adverse effects on our ability to successfully operate, and on our financial condition, results of operations and cash flows, including in the following possible ways, among others:
•A downturn in the economy may affect the ability of the residents or customers in our MH communities and marinas to pay their rent.
•Travel restrictions may affect the ability of potential guests to travel to and use our RV resorts and marinas. A downturn in the economy may independently reduce demand for our RV resorts and marinas, and our RV revenue may decrease if we cannot convert as many transient RV sites to annual RV sites as planned.
•RV resorts may be subject to government restrictions which limit the ability to operate or provide certain amenities.
•We may have difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deterioration in credit and financing conditions may result in insufficient liquidity or affect our access to capital necessary to fund and grow our business and address maturing liabilities on a timely basis. As of December 31, 2020, we had drawn $40.4 million on our unsecured senior credit facility of which the total capacity, excluding the unexercised accordion feature, is $750.0 million, and approximately $1.2 billion on our Safe Harbor secured credit facility of which the total capacity is $1.8 billion.
•The financial impact of the COVID-19 pandemic could negatively impact our future compliance with financial covenants of our debt agreements and result in a default and potentially an acceleration of indebtedness, which non-compliance could negatively impact our ability to make additional borrowings under our senior credit facility and our Safe Harbor credit facility.
•Our ground up development and expansion activities, and conversions of transient RV sites to annual RV sites may be disrupted, and we may be delayed in our current projects and timelines, the magnitude of which will depend, in part, on the length and severity of the current governmental restrictions or limitations implemented in the future.
•Our revenue from home sales and brokerage fees may decrease as a result of stay-at-home orders and travel restrictions.
•The ancillary revenue from amenities at our properties, such as restaurants, golf courses, resort and marina activities, may decrease.
•The operation of our marinas may be disrupted by the COVID-19 pandemic with respect to infection control, facility and work-site access, or other related issues. As result, we may experience delays in our current projects and timelines, the magnitude of which will depend on governmental restrictions or limitations implemented in the future.
•Negative impacts on our results of operations and our access to capital could cause us to eliminate or reduce the amount of our distributions to stockholders, or to pay some or all of our distributions in common stock rather than cash.
•A general decline in business activity and demand for real estate transactions could adversely affect our ability or desire to acquire additional properties.
•A recession or additional market corrections resulting from the spread of COVID-19 could further affect the value of our common stock, which is still the below the pre-COVID-19 value. We expect our stock price to continue to be volatile.
•Governmental agencies that permit and approve our projects, suppliers, homebuilders, and other business partners and third parties may be prevented from conducting business activities in the ordinary course for an indefinite period of time, which could in turn negatively affect our business.
•We may have to furlough team members to reflect operating levels. Furloughed team members may not be available if we later desire to hire them back. Furloughs and reductions in pay and hours may negatively affect the morale of our team members.
•We may experience disruptions or inefficiencies in our ability to effectively operate our business because the vast majority of our team members, including at our Main Office in Southfield, Michigan, are working virtually from their homes.
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The extent to which the COVID-19 pandemic impacts our operations, financial condition and financial results will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. Nevertheless, the COVID-19 pandemic presents material uncertainty and risk with respect to our performance, financial condition, results of operations, cash flows and performance. Moreover, many risk factors set forth in this Annual Report on Form 10-K should be interpreted as heightened risks as a result of the impact of the COVID-19 pandemic.
Rent control legislation may harm our ability to increase rents.
State and local rent control laws in certain jurisdictions may limit our ability to increase rents at our MH properties to recover increases in operating expenses and the costs of capital improvements. Enactment of such laws has been considered from time to time in other jurisdictions. Certain properties are located, and we may purchase additional properties, in markets that are either subject to rent control or in which rent-limiting legislation exists or may be enacted.
TAX RISKS RELATED TO OUR STATUS AS A REIT
We may suffer adverse tax consequences and be unable to attract capital if we fail to qualify as a REIT.
We believe that since our taxable year ended December 31, 1994, we have been organized and operated, and intend to continue to operate, so as to qualify for taxation as a REIT under the Code. Although we believe that we have been and will continue to be organized and have operated and will continue to operate so as to qualify for taxation as a REIT, we cannot be assured that we have been or will continue to qualify as a REIT. Qualification as a REIT involves the satisfaction of numerous requirements (some on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations and involves the determination of various factual matters and circumstances not entirely within our control. In addition, frequent changes occur in the area of REIT taxation, which require us to monitor our tax status continually.
If we fail to qualify as a REIT in any taxable year, our taxable income could be subject to U.S. federal income tax at regular corporate rates. Moreover, unless entitled to relief under certain statutory provisions, we also would be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. This treatment would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability to us for the years involved. In addition, distributions to stockholders would no longer be required to be made.
Federal, state and foreign income tax laws governing REITs and related interpretations may change at any time, and any such legislative or other actions affecting REITs could have a negative effect on us.
Federal, state and foreign income tax laws governing REITs, or the administrative interpretations of those laws may be amended at any time. Federal, state, and foreign tax laws are under constant review by persons involved in the legislative process, at the Internal Revenue Service and the U.S. Department of the Treasury, and at various state and foreign tax authorities. Changes to tax laws, regulations, or administrative interpretations, which may be applied retroactively, could adversely affect us. We cannot predict whether, when, in what forms, or with what effective dates, the tax laws, regulations, and administrative interpretations applicable to us may be changed. Accordingly, we cannot assert that any such change will not significantly affect either our ability to qualify for taxation as a REIT or the income tax consequences to us.
We intend for the Operating Partnership to be taxed as a partnership, but we cannot guarantee that it will qualify.
We believe that the Operating Partnership has been organized as a partnership and will qualify for treatment as such under the Code. However, if the Operating Partnership is deemed to be a “publicly traded partnership,” it will be treated as a corporation instead of a partnership for federal income tax purposes unless at least 90 percent of its income is qualifying income as defined in the Code. The income requirements applicable to REITs and the definition of “qualifying income” for purposes of this 90 percent test are similar in most respects. Qualifying income for the 90 percent test generally includes passive income, such as specified types of real property rents, dividends, and interest. We believe that the Operating Partnership has and will continue to meet this 90 percent test, but we cannot guarantee that it has or will. If the Operating Partnership were to be taxed as a regular corporation, it would incur substantial tax liabilities, we would fail to qualify as a REIT for federal income tax purposes, and our ability to raise additional capital could be significantly impaired.
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Partnership tax audit rules could have a material adverse effect on us.
The Bipartisan Budget Act of 2015 changed the rules applicable to U.S. federal income tax audits of partnerships. Under the rules, effective for taxable years beginning in 2018, among other changes and subject to certain exceptions, any audit adjustment to items of income, gain, loss, deduction, or credit of a partnership (and a partner’s allocable share thereof) is determined, and taxes, interest, and penalties attributable thereto are assessed and collected, at the partnership level. Unless the partnership makes an election permitted under the new law or takes certain steps to require the partners to pay their tax on their allocable shares of the adjustment, it is possible that partnerships in which we directly or indirectly invest, including the Operating Partnership, would be required to pay additional taxes, interest and penalties as a result of an audit adjustment. We, as a direct or indirect partner of the Operating Partnership and other partnerships, could be required to bear the economic burden of those taxes, interest, and penalties even though the Company, as a REIT, may not otherwise have been required to pay additional corporate-level tax. The changes created by these rules are significant for collecting tax in partnership audits and, accordingly, there can be no assurance that these rules will not have a material adverse effect on us.
Our ability to accumulate cash may be restricted due to certain REIT distribution requirements.
In order to qualify as a REIT, we must distribute to our stockholders at least 90 percent of our REIT taxable income (calculated without any deduction for dividends paid and excluding net capital gain) and to avoid federal income taxation, our distributions must not be less than 100 percent of our REIT taxable income, including capital gains. As a result of the distribution requirements, we do not expect to accumulate significant amounts of cash. Accordingly, these distributions could significantly reduce the cash available to us in subsequent periods to fund our operations and future growth.
Our taxable REIT subsidiaries, or TRSs, are subject to special rules that may result in increased taxes.
As a REIT, we must pay a 100 percent penalty tax on certain payments that we receive if the economic arrangements between us and any of our TRSs are not comparable to similar arrangements between unrelated parties. The Internal Revenue Service may successfully assert that the economic arrangements of any of our inter-company transactions are not comparable to similar arrangements between unrelated parties. This would result in unexpected tax liability which would adversely affect our cash flows.
Dividends payable by REITs do not qualify for the reduced tax rates applicable to certain dividends.
The maximum federal tax rate for certain qualified dividends payable to domestic stockholders that are individuals, trusts and estates is 20 percent. Dividends payable by REITs, however, are generally not eligible for this reduced rate, although the Tax Cut and Jobs Act permits a 20 percent deduction equal to the amount of qualifying REIT dividends received, thus bringing the maximum federal tax rate on qualifying REIT dividends to 29.6 percent. While this rule does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable rates applicable to regular qualified corporate dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less competitive than investments in stock of non-REIT corporations that pay dividends, which could adversely affect the comparative value of the stock of REITs, including our common stock and preferred stock.
Prospective investors should consult their own tax advisors regarding the effect of this change on their effective tax rate with respect to REIT dividends.
Complying with REIT requirements may cause us to forego otherwise attractive opportunities.
To remain qualified as a REIT for federal income tax purposes, we must continually satisfy requirements and tests under the tax law concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our stock. In order to meet these tests, we may be required to forego or limit attractive business or investment opportunities and distribute all of our net earnings rather than invest in attractive opportunities or hold larger liquid reserves. Therefore, compliance with the REIT requirements may hinder our ability to operate solely to maximize profits.
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Our ability to use net operating loss carryforwards to reduce future tax payments may be limited if we experience a change in ownership, or if taxable income does not reach sufficient levels.
Under Section 382 of the Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percent change (by value) in its equity ownership over a rolling three-year period), the corporation’s ability to use its pre-ownership-change net operating loss carryforwards to offset its post-ownership-change income may be limited. We may experience ownership changes in the future. If an ownership change were to occur, we would be limited in the portion of net operating loss carryforwards that we could use in the future to offset taxable income for U.S. federal income tax purposes.
RISKS RELATED TO RELATED PARTY TRANSACTIONS AND OUR STRUCTURE
Some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests.
Lease of Executive Offices - Gary A. Shiffman, together with certain of his family members, indirectly owns an equity interest of approximately 28.1 percent in American Center LLC, the entity from which we lease office space for our principal executive offices. Each of Brian M. Hermelin, Ronald A. Klein and Arthur A. Weiss indirectly owns less than one percent interest in American Center LLC. Mr. Shiffman is our Chief Executive Officer and Chairman of the Board. Each of Mr. Hermelin, Mr. Klein and Mr. Weiss is a director of the Company. Under this agreement, we lease approximately 103,100 rentable square feet of permanent space. We subsequently entered into an additional office space operating lease which commenced in January 2020. Under this agreement, we lease approximately 20,087 rentable square feet of permanent space. The initial term of each lease is until October 31, 2026 and the average gross base rent is $18.95 per square foot until October 31, 2020 with graduated rent increases thereafter. As of December 31, 2020, the average gross base rent was $19.45 per square foot. Each of Mr. Shiffman, Mr. Hermelin, Mr. Klein and Mr. Weiss may have a conflict of interest with respect to his obligations as our officer and / or director and his ownership interest in American Center LLC.
Use of Airplane - Gary A. Shiffman is the beneficial owner of an airplane that we use from time to time for business purposes. During the years ended December 31, 2020 and 2019, we paid $0.3 million and $0.4 million for the use of the airplane, respectively. Mr. Shiffman may have a conflict of interest with respect to his obligations as our officer and director and his ownership interest in the airplane.
Telephone Services - Brian M. Hermelin is a principal and a beneficial owner of an entity that installs and maintains emergency telephone systems at our properties. During the years ended December 31, 2020 and 2019, we paid $0.2 million for these services, respectively. Mr. Hermelin may have a conflict of interest with respect to his obligations as our director and his position with and ownership interest in the provider of these services.
Legal Counsel - During 2017-2020, Jaffe, Raitt, Heuer, & Weiss, Professional Corporation acted as our general counsel and represented us in various matters. Arthur A. Weiss is the Chairman of the Board of Directors and a shareholder of such firm. We incurred legal fees and expenses owed to Jaffe, Raitt, Heuer, & Weiss of approximately $13.3 million, $11.1 million and $7.1 million in the years ended December 31, 2020, 2019 and 2018, respectively.
Tax Consequences Upon Sale of Properties - Gary A. Shiffman holds limited partnership interests in the Operating Partnership which were received in connection with the contribution of properties from partnerships previously affiliated with him. Prior to any redemption of these limited partnership interests for our common stock, Mr. Shiffman will have tax consequences different from those on us and our public stockholders upon the sale of any of these partnerships. Therefore, we and Mr. Shiffman may have different objectives regarding the appropriate pricing and timing of any sale of those properties.
Certain provisions in our governing documents may make it difficult for a third-party to acquire us.
9.8 percent Ownership Limit. In order to qualify and maintain our qualification as a REIT, not more than 50 percent of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer individuals. Thus, ownership of more than 9.8 percent, in number of shares or value, of the issued and outstanding shares of our capital stock by any single stockholder has been restricted, with certain exceptions, for the purpose of maintaining our qualification as a REIT under the Code. Such restrictions in our charter do not apply to Milton M. Shiffman, Gary A. Shiffman, and Robert B. Bayer; trustees, personal representatives and agents to the extent acting for them or their respective estates; or certain of their respective relatives.
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The 9.8 percent ownership limit, as well as our ability to issue additional shares of common stock or shares of other stock (which may have rights and preferences over the common stock), may discourage a change of control of the Company and may also: (a) deter tender offers for the common stock, which offers may be advantageous to stockholders; and (b) limit the opportunity for stockholders to receive a premium for their common stock that might otherwise exist if an investor were attempting to assemble a block of common stock in excess of 9.8 percent of our outstanding shares or otherwise effect a change of control of the Company.
Preferred Stock. Our charter authorizes the Board of Directors to issue up to 20,000,000 shares of preferred stock, none of which is currently outstanding, and to establish the preferences and rights (including the right to vote and the right to convert into shares of common stock) of any shares issued. The power to issue preferred stock could have the effect of delaying or preventing a change in control of the Company even if a change in control were in the stockholders’ interest.
Certain provisions of Maryland law could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest.
Certain provisions of the Maryland General Corporation Law (“MGCL”) may have the effect of inhibiting a third-party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of shares of our capital stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including:
•“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10 percent or more of the voting power of our shares or an affiliate thereof or an affiliate or associate of ours who was the beneficial owner, directly or indirectly, of 10 percent or more of the voting power of our then outstanding voting stock at any time within the two-year period immediately prior to the date in question) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose fair price and / or supermajority and stockholder voting requirements on these combinations; and
•“control share” provisions that provide that “control shares” of our company (defined as shares that, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
The provisions of the MGCL relating to business combinations do not apply, however, to business combinations that are approved or exempted by our Board of Directors prior to the time that the interested stockholder becomes an interested stockholder. As permitted by the statute, our Board of Directors has by resolution exempted Milton M. Shiffman, Robert B. Bayer, and Gary A. Shiffman, their affiliates and all persons acting in concert or as a group with the foregoing, from the business combination provisions of the MGCL and, consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations between us and these persons. As a result, these persons may be able to enter into business combinations with us that may not be in the best interests of our stockholders without compliance by our company with the supermajority vote requirements and the other provisions of the statute.
Also, pursuant to a provision in our bylaws, we have exempted any acquisition of our stock from the control share provisions of the MGCL. However, our Board of Directors may by amendment to our bylaws opt into the control share provisions of the MGCL at any time in the future.
SUN COMMUNITIES, INC.
Additionally, Subtitle 8 of Title 3 of the MGCL permits our Board of Directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to elect to be subject to certain provisions relating to corporate governance that may have the effect of delaying, deferring or preventing a transaction or a change of control of our company that might involve a premium to the market price of our common stock or otherwise be in our stockholders’ best interests. These provisions include a classified board; two-thirds vote to remove a director; that the number of directors may only be fixed by the Board of Directors; that vacancies on the board as a result of an increase in the size of the board or due to death, resignation or removal can only be filled by the board, and the director appointed to fill the vacancy serves for the remainder of the full term of the class of director in which the vacancy occurred; and a majority requirement for the calling by stockholders of special meetings. Other than a classified board, the filling of vacancies as a result of the removal of a director and a majority requirement for the calling by stockholders of special meetings, we are already subject to these provisions, either by provisions of our charter and bylaws unrelated to Subtitle 8 or by reason of an election to be subject to certain provisions of Subtitle 8. In the future, our Board of Directors may elect, without stockholder approval, to make us subject to the provisions of Subtitle 8 to which we are not currently subject.
Our Board of Directors has power to adopt, alter or repeal any provision of our bylaws or make new bylaws, provided, however, that our stockholders may alter or repeal any provision of our bylaws and adopt new bylaws if any such alteration, repeal or adoption is approved by the affirmative vote of a majority of all votes entitled to be cast on the matter.
GENERAL RISK FACTORS
Our share price could be volatile and could decline, resulting in a substantial or complete loss on our stockholders’ investment.
The stock markets, including the New York Stock Exchange (“NYSE”), on which we list our common stock, have experienced significant price and volume fluctuations. As a result, the market price of our common stock and preferred stock could be similarly volatile, and investors in our common stock and preferred stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. The price of our common stock and preferred stock could be subject to wide fluctuations in response to a number of factors, including:
•outbreaks of disease, including the COVID-19 pandemic, and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operation;
•issuances of other equity securities in the future, including new series or classes of preferred stock;
•our operating performance and the performance of other similar companies;
•our ability to maintain compliance with covenants contained in our debt facilities;
•actual or anticipated variations in our operating results, funds from operations, cash flows or liquidity;
•changes in expectations of future financial performance or changes in our earnings estimates or those of analysts;
•changes in our distribution policy;
•publication of research reports about us or the real estate industry generally;
•increases in market interest rates that lead purchasers of our common stock and preferred stock to demand a higher dividend yield;
•changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar and the Australian dollar;
•changes in market valuations of similar companies;
•adverse market reaction to the amount of our debt outstanding at any time, the amount of our debt maturing in the near-term and medium-term and our ability to refinance our debt, or our plans to incur additional debt in the future;
•additions or departures of key management personnel;
•speculation in the press or investment community;
•equity issuances by us, or share resales by our stockholders or the perception that such issuances or resales may occur;
•actions by institutional stockholders; and
•general market and economic conditions.
SUN COMMUNITIES, INC.
Many of the factors listed above are beyond our control. Those factors may cause the market price of our common stock or preferred stock to decline significantly, regardless of our financial condition, results of operations and prospects. It is impossible to provide any assurance that the market price of our common stock or preferred stock will not fall in the future, and it may be difficult for holders to resell shares of our common stock or preferred stock at prices they find attractive, or at all. In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources.
Substantial sales or issuances of our common or preferred stock could cause our stock price to fall.
The sale or issuance of substantial amounts of our common stock or preferred stock, whether directly by us or in the secondary market, the perception that such sales could occur or the availability of future issuances of shares of our common stock, preferred stock, OP units or other securities convertible into or exchangeable or exercisable for our common stock or preferred stock, could materially and adversely affect the market price of our common stock or preferred stock and our ability to raise capital through future offerings of equity or equity-related securities. In addition, we may issue capital stock that is senior to our common stock in the future for a number of reasons, including to finance our operations and business strategy, to adjust our ratio of debt to equity or for other reasons.
Based on the applicable conversion ratios then in effect, as of February 11, 2021, in the future we may issue to the limited partners of the Operating Partnership, up to approximately 5.7 million shares of our common stock in exchange for their OP units. The limited partners may sell such shares pursuant to registration rights, if available, or an available exemption from registration. As of February 11, 2021, options to purchase 1,500 shares of our common stock were outstanding under our equity incentive plans, and we currently have the authority to issue restricted stock awards or options to purchase up to an additional 899,254 shares of our common stock pursuant to our equity incentive plans. In addition, we have entered into an At-the-Market Offering Sales Agreement to issue and sell shares of common stock. As of February 11, 2021, our Board of Directors had authorized us to sell an additional $286.3 million of common stock under this agreement. No prediction can be made regarding the effect that future sales of shares of our common stock or our other securities will have on the market price of shares.
Our business operations may not generate the cash needed to make distributions on our capital stock or to service our indebtedness, and we may adjust our common stock distribution policy.
Our ability to make distributions on our common stock and preferred stock, and payments on our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to make distributions on our common stock or preferred stock, to pay our indebtedness or to fund our other liquidity needs.
The decision to declare and pay distributions on shares of our common stock in the future, as well as the timing, amount and composition of any such future distributions, will be at the sole discretion of our Board of Directors in light of conditions then existing, including our earnings, financial condition, capital requirements, debt maturities, the availability of debt and equity capital, applicable REIT and legal restrictions, general overall economic conditions and other factors. Any change in our distribution policy could have a material adverse effect on the market price of our common stock.
We rely on key management.
We depend on the efforts of our executive officers, Gary A. Shiffman, John B. McLaren, Karen J. Dearing, Bruce Thelen, and Baxter R. Underwood. The loss of services of one or more of these executive officers could have a temporary adverse effect on our operations. We do not currently maintain or contemplate obtaining any “key-man” life insurance on our executive officers.
The phase out of the London Interbank Offered Rate (LIBOR), or the replacement of LIBOR with a different reference rate, may adversely affect interest rates.
The Financial Conduct Authority (the authority that regulates LIBOR) has announced that it plans on phasing out LIBOR by the end of 2021. Many of our property-level real estate loans have fixed interest rates which will not be impacted by any change in LIBOR. Certain of our other loans, including a majority of the borrowings under our $750.0 million senior credit facility and our borrowings under Safe Harbor’s $1.8 billion credit facility, have interest rates based on LIBOR. Each of our senior credit facility and Safe Harbor’s credit facility provides that the administrative agent in consultation with us will endeavor to determine an interest rate to replace the current LIBOR rate, and until the parties agree on a successor LIBOR rate we can continue to borrow under the credit facilities using the prime rate. The replacement of LIBOR with an alternative rate or benchmark may adversely affect our interest rates and result in higher borrowing costs. This could materially and adversely affect our results of operations, cash flows and liquidity.
SUN COMMUNITIES, INC.
Cybersecurity breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.
We rely intensively on information technology to account for tenant transactions, manage the privacy of tenant data, communicate internally and externally, and analyze our financial and operating results. In the ordinary course of our business, we collect and store sensitive data, including our proprietary business information and that of our tenants, clients, vendors and employees in our facilities and on our network. In addition, we engage third party service providers that may have access to such information in connection with providing necessary information technology and security and other business services to us. This information may include personally identifiable information such as social security numbers, banking information and credit card information.
We address potential breaches or disclosure of this confidential information by implementing a variety of security measures intended to protect the confidentiality and security of this information including (among others) engaging reputable, recognized firms to help us design and maintain our information technology and data security systems, including testing and verification of their proper and secure operations on a periodic basis. We also maintain cyber risk insurance to provide some coverage for certain risks arising out of data and network breaches. Our senior leadership regularly updates the Board of Directors on security matters and meets at least annually to review program progress and plans, incidents if any, and emerging risks.
Despite our security measures, our information technology and infrastructure, as well as that of our third-party vendors, may be vulnerable to attacks by hackers (including through malware, ransomware, computer viruses, and email phishing schemes) or breached due to employee error, malfeasance, fire, flood or other physical event, or other disruptions. Any such breach or disruption could compromise our or a third-party vendor’s network and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could:
•result in legal claims or proceedings,
•disrupt our operations, including our ability to service our tenants and our ability to analyze and report our financial and operating results,
•decrease our revenues,
•damage our reputation,
•cause a loss of confidence,
•increase our insurance premiums, or
•have other material adverse effects on our business.
We depend on continuous access to the internet to use our cloud-based applications. Damage to, or failure of our information technology systems, including as a result of any of the reasons described above, could adversely affect our results of operations as we may incur significant costs or data loss. We continually assess new and enhanced information technology solutions to manage the risk of system failure or interruption.
Losses in excess of our insurance coverage or uninsured losses could adversely affect our operating results and cash flow.
We have a significant concentration of MH and RV properties in Florida and California and marinas on coastlines, where natural disasters or other catastrophic events such as hurricanes, flash floods, sea-level rise, tornadoes, wildfires and earthquakes could negatively impact our operating results and cash flows. We maintain comprehensive liability, fire, property, business interruption, general liability, and (where appropriate) flood and earthquake insurance, and other lines of insurance we have determined to be appropriate for our business, provided by reputable companies with commercially reasonable deductibles and limits. We believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss, the cost of the coverage and industry practice. However, certain types of losses including, but not limited to, riots or acts of war, may be either uninsurable or not economically insurable. In the event an uninsured loss occurs, we could lose both our investment in and anticipated profits and cash flow from the affected property. We would also continue to be obligated to repay any mortgage indebtedness or other obligations related to the community. If an uninsured liability to a third party were to occur, we would incur the cost of defense and settlement with, or court ordered damages to, that third party. A significant uninsured property or liability loss could have a material adverse effect on our business and our financial condition and results of operations.
SUN COMMUNITIES, INC.
Expanding social media platforms present new challenges.
Social media outlets continue to grow and expand, which presents us with new risks. Adverse content about us and our properties on social media platforms could result in damage to our reputation or brand. Improper posts by employees or others could result in disclosure of confidential or proprietary information regarding our operations.
Our operations are subject to regulation under various federal, state, and local laws and regulations that may expose us to significant costs and liabilities.
Our properties and the operations at them are subject to regulation under various federal, state and local laws and regulations. Compliance with laws and regulations that govern our operations may require expenditures and modifications of development plans and operations that could have a detrimental effect on the operations of our properties and our financial condition, results of operations and cash flows. There can be no assurance that the application of laws, regulations or policies, or changes in such laws, regulations and policies, will not occur in a manner that could have a detrimental effect on any property.
We may be adversely impacted by fluctuations in foreign currency exchange rates.
Our current and future investments in and operations of Canadian and Australian properties are or will be exposed to the effects of changes in the Canadian dollar and Australian dollar, respectively, against the U.S. dollar. Changes in foreign currency exchange rates cannot always be predicted; as a result, substantial unfavorable changes in exchange rates could have a material adverse effect on our financial condition and results of operations.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
SUN COMMUNITIES, INC.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
As of December 31, 2020, our properties were located throughout the US and in Ontario, Canada and consisted of 276 MH communities, 136 RV resorts, 34 properties containing both MH and RV sites, and 106 marinas.
As of December 31, 2020, our properties contained an aggregate of 188,176 developed sites comprised of 96,688 developed MH sites, 27,564 annual RV sites (inclusive of both annual and seasonal usage rights), 25,043 transient RV sites and 38,881 wet slips and dry storage spaces. There are 10,025 additional MH and RV sites suitable for development. Most of our properties include amenities oriented toward family and retirement living. Of our 552 properties, 185 each have 300 or more developed sites, with the largest having 2,341 developed MH and RV sites. See “Real Estate and Accumulated Depreciation, Schedule III,” included in our Consolidated Financial Statements, for detail on properties that are encumbered.
As of December 31, 2020, our MH and RV properties had an occupancy rate of 97.3 percent excluding transient RV sites. Since January 1, 2020, the MH and RV properties have averaged an aggregate annual turnover of homes (where the home is moved out of the community) of approximately 2.8 percent and an average annual turnover of residents (where the resident-owned home is sold and remains within the community, typically without interruption of rental income) of approximately 6.7 percent. The average renewal rate for residents in our Rental Program was 69.5 percent for the year ended December 31, 2020.
We believe that our properties’ high amenity levels, customer service loyalty, and customer retention program contribute to low turnover and generally high occupancy rates. All of the properties provide residents with attractive amenities with most offering a clubhouse, a swimming pool, and laundry facilities. Many of the properties offer additional amenities such as sauna / whirlpool spas, tennis courts, shuffleboard, basketball courts, and / or exercise rooms. Many RV resorts offer incremental amenities including golf, pro shops, restaurants, zip lines, waterparks, watersports, and thematic experiences.
Our MH and RV properties are principally located in the mid-western, southern and Southeastern regions of the U.S., and Ontario, Canada. Our marinas are principally located in the northeastern, southern, mid-Atlantic, western and mid-western regions of the U.S, with the majority of such marinas concentrated in coastal regions and others located in various inland regions. We believe that geographic diversification helps to insulate the portfolio from regional economic influences. We have concentrated our properties within certain areas of the regions in order to achieve economies of scale in management and operation.
The following tables set forth certain information relating to our MH and RV properties as of December 31, 2020. The occupancy percentage includes MH sites and annual RV sites and excludes transient RV sites.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
UNITED STATES
MIDWEST
Michigan
Academy / West Point MH Canton MI 441 - 98.0 % 98.2 %
Allendale Meadows Mobile Village MH Allendale MI 352 - 99.1 % 98.9 %
Alpine Meadows Mobile Village MH Grand Rapids MI 403 - 97.3 % 98.3 %
Apple Carr Village MH Muskegon MI 713 - 86.5 % (1)
78.5 % (1)
Arbor Woods MH Ypsilanti MI 458 - 99.1 % 99.1 %
Brentwood Mobile Village MH Kentwood MI 195 - 99.5 % 97.4 %
Broadview Estates MH Davison MI 474 - 87.1 % 82.3 %
Brookside Village MH Kentwood MI 196 - 100.0 % 100.0 %
Byron Center Mobile Village MH Kentwood MI 143 - 98.6 % 97.9 %
Camelot Villa MH Macomb MI 712 - 98.6 % 99.0 %
Cider Mill Crossings MH Fenton MI 621 - 87.6 % (1)
74.6 % (1)
Cider Mill Village MH Middleville MI 258 - 98.4 % 98.4 %
Country Acres Mobile Village MH Cadillac MI 182 - 95.1 % 95.1 %
Country Hills Village MH Hudsonville MI 239 - 99.6 % 99.6 %
Country Meadows Mobile Village MH Flat Rock MI 577 - 98.8 % 97.7 %
Country Meadows Village MH Caledonia MI 395 - 100.0 % 99.5 %
Creekwood Meadows MH Burton MI 336 - 99.1 % 94.0 %
SUN COMMUNITIES, INC.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
Cutler Estates Mobile Village MH Grand Rapids MI 259 - 98.8 % 98.8 %
Dutton Mill Village MH Caledonia MI 307 - 99.3 % 99.7 %
East Village Estates MH Washington Twp. MI 708 - 99.9 % 98.6 %
Egelcraft MH Muskegon MI 458 - 97.8 % 97.4 %
Fisherman's Cove MH Flint Twp. MI 162 - 98.1 % 97.5 %
Frenchtown Villa / Elizabeth Woods MH Newport MI 1,140 - 99.2 % 94.6 %
Grand Mobile Estates MH Grand Rapids MI 219 - 98.2 % 96.8 %
Hamlin MH Webberville MI 230 - 98.7 % 95.7 %
Hickory Hills Village MH Battle Creek MI 283 - 99.6 % 97.5 %
Hidden Ridge RV Resort(2)
RV Hopkins MI 196 139 100.0 % 100.0 %
Highland Green Estates
MH Highland MI 879 - 56.5 % N/A (4)
Holiday West Village MH Holland MI 341 - 99.7 % 100.0 %
Holly Village / Hawaiian Gardens MH Holly MI 425 - 97.9 % 96.2 %
Hunters Crossing MH Capac MI 114 - 100.0 % 98.2 %
Hunters Glen MH Wayland MI 396 - 98.7 % 97.2 %
Kensington Meadows MH Lansing MI 290 - 96.2 % 94.8 %
Kimberly Estates MH Newport MI 387 - 98.2 % 98.4 %
King's Court Mobile Village MH Traverse City MI 802 - 99.0 % 90.6 %
Knollwood Estates MH Allendale MI 161 - 96.9 % 97.5 %
Lafayette Place MH Warren MI 254 - 99.2 % 96.9 %
Lakeview MH Ypsilanti MI 392 - 99.0 % 98.5 %
Leisure Village MH Belmont MI 256 - 99.6 % 98.4 %
Lincoln Estates MH Holland MI 191 - 98.4 % 99.5 %
Meadow Lake Estates MH White Lake MI 425 - 99.3 % 98.6 %
Meadowbrook Estates MH Monroe MI 453 - 99.1 % 96.5 %
Meadowlands of Gibraltar MH Gibraltar MI 320 - 99.4 % 100.0 %
Northville Crossing MH Northville MI 756 - 99.7 % 99.1 %
Oak Island Village MH East Lansing MI 250 - 100.0 % 97.6 %
Petoskey KOA RV Resort(2)
RV Petoskey MI 52 156 100.0 % 100.0 %
Petoskey RV Resort(2)
RV Petoskey MI 9 144 100.0 % 100.0 %
Pinebrook Village MH Kentwood MI 185 - 98.9 % 97.8 %
Presidential Estates Mobile Village MH Hudsonville MI 364 - 99.2 % 97.8 %
Richmond Place MH Richmond MI 117 - 100.0 % 94.9 %
River Haven Village MH Grand Haven MI 721 - 96.1 % 90.7 %
Rudgate Clinton MH Clinton Township MI 667 - 99.3 % 98.4 %
Rudgate Manor MH Sterling Heights MI 931 - 98.8 % 97.6 %
Scio Farms Estates MH Ann Arbor MI 913 - 99.1 % 98.9 %
Sheffield Estates MH Auburn Hills MI 228 - 99.1 % 98.2 %
Shelby Forest MH Shelby Twp. MI 664 - 99.5 % 99.1 %
Shelby West MH Shelby Twp. MI 644 - 99.7 % 98.9 %
Silver Creek RV Resort(2)
RV Mears MI 160 104 100.0 % 100.0 %
Silver Springs MH Clinton Township MI 547 - 100.0 % 98.7 %
Southwood Village MH Grand Rapids MI 394 - 99.7 % 99.0 %
St. Clair Place MH St. Clair MI 100 - 97.0 % 90.0 %
Sunset Ridge MH Portland MI 388 - 87.6 % (1)
78.1 % (1)
Sycamore Village MH Mason MI 396 - 99.0 % 98.7 %
Tamarac Village MH Ludington MI 302 - 98.3 % 99.7 %
Tamarac Village RV Resort(2)
RV Ludington MI 110 3 100.0 % 100.0 %
Timberline Estates MH Coopersville MI 296 - 98.3 % 96.6 %
Town & Country Mobile Village MH Traverse City MI 192 - 99.0 % 99.0 %
Troy Villa MH Troy MI 282 - 86.9 % N/A (4)
SUN COMMUNITIES, INC.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
Warren Dunes Village MH Bridgman MI 314 - 98.7 % 89.2 % (1)
Waverly Shores Village MH Holland MI 415 - 100.0 % 100.0 %
West Village Estates MH Romulus MI 628 - 98.9 % 99.0 %
White Lake Mobile Home Village MH White Lake MI 315 - 98.4 % 98.7 %
Windham Hills Estates MH Jackson MI 469 - 98.3 % 95.5 %
Windsor Woods Village MH Wayland MI 314 - 99.7 % 99.7 %
Woodhaven Place MH Woodhaven MI 220 - 100.0 % 98.6 %
Michigan Total 29,086 546 96.6 % 96.0 %
Indiana
Brookside Mobile Home Village MH Goshen IN 570 - 97.2 % 95.6 %
Carrington Pointe MH Fort Wayne IN 468 - 85.5 % (1)
83.3 % (1)
Clear Water Mobile Village MH South Bend IN 227 - 97.4 % 95.2 %
Cobus Green Mobile Home Park MH Osceola IN 386 - 98.2 % 96.6 %
Deerfield Run MH Anderson IN 175 - 93.1 % 93.7 %
Four Seasons MH Elkhart IN 218 - 98.2 % 95.0 %
Jellystone Park™ at Barton Lake(2)
RV Fremont IN - 555 N/A N/A (4)
Lake Rudolph Campground & RV Resort(2)
RV Santa Claus IN - 534 N/A N/A
Liberty Farm MH Valparaiso IN 220 - 95.9 % 95.9 %
Pebble Creek MH Greenwood IN 296 - 98.6 % 93.2 %
Pine Hills MH Middlebury IN 129 - 98.4 % 98.4 %
Roxbury Park MH Goshen IN 398 - 97.7 % 98.2 %
Indiana Total 3,087 1,089 95.6 % 93.9 %
Ohio
Apple Creek MH Amelia OH 176 - 99.4 % 98.3 %
East Fork Crossing MH Batavia OH 350 - 99.7 % 99.4 %
Indian Creek RV & Camping Resort(2)
RV Geneva on the Lake OH 445 135 100.0 % 100.0 %
Oakwood Village MH Miamisburg OH 511 - 98.6 % 98.2 %
Orchard Lake MH Milford OH 147 - 97.3 % 97.3 %
Westbrook Senior Village MH Toledo OH 112 - 100.0 % 100.0 %
Westbrook Village MH Toledo OH 344 - 98.3 % 98.8 %
Willowbrook Place MH Toledo OH 266 - 99.2 % 98.1 %
Woodside Terrace MH Holland OH 439 - 96.8 % 93.8 %
Ohio Total 2,790 135 98.7 % 98.1 %
SOUTH
Texas
Austin Lone Star RV Resort(2)
RV Austin TX 55 102 100.0 % 100.0 %
Blazing Star(2)
RV San Antonio TX 117 145 100.0 % 100.0 %
Boulder Ridge MH Pflugerville TX 1,220 - 97.1 % (1)
78.9 % (1)
Branch Creek Estates MH Austin TX 400 - 100.0 % 98.0 %
Chisholm Point Estates MH Pflugerville TX 427 - 99.3 % 97.7 %
Comal Farms MH New Braunfels TX 367 - 98.6 % 99.7 %
Hill Country Cottage and RV Resort(2)
RV New Braunfels TX 67 302 100.0 %
100.0 %
Jellystone Park™ at Guadalupe River(2)
RV Kerrville TX - 251 N/A N/A
Jellystone Park™ at Hill Country(2)
RV Canyon Lake TX - 167 N/A N/A
La Hacienda RV Resort(2)
RV Austin TX 48 196 N/A N/A
Lone Star Jellystone Park(2)
RV Waller TX - 345 N/A N/A (4)
Oak Crest MH Austin TX 654 - 94.2 % 76.3 % (1)
Pecan Branch MH Georgetown TX 229 - 86.0 % (1)
78.6 % (1)
SUN COMMUNITIES, INC.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
Pine Trace MH Houston TX 680 - 98.5 % 98.4 %
River Ranch MH Austin TX 848 - 97.6 % 98.5 %
River Ridge Estates MH Austin TX 515 - 99.2 % 99.4 %
Saddlebrook MH San Marcos TX 562 - 99.1 % 97.9 %
Sandy Lake MH Carrollton TX 54 - 100.0 % 98.1 %
Sandy Lake RV Resort(2)
RV Carrollton TX 155 65 100.0 % 100.0 %
Stonebridge MH San Antonio TX 335 - 99.1 % 96.7 %
Summit Ridge MH Converse TX 446 - 99.1 % 96.2 %
Sunset Ridge MH Kyle TX 171 - 97.1 % 98.2 %
Travelers World MH San Antonio TX 8 - 100.0 % 100.0 %
Travelers World RV Resort(2)
RV San Antonio TX 22 133 100.0 % 100.0 %
Treetops RV Resort(2)
RV Arlington TX 70 104 100.0 % 100.0 %
Woodlake Trails MH San Antonio TX 316 - 90.5 % (1)
82.0 % (1)
Texas Total 7,766 1,810 97.5 % 92.0 %
SOUTHEAST
Florida
Arbor Terrace RV Park(2)
RV Brandenton FL 250 111 100.0 % 100.0 %
Ariana Village MH Lakeland FL 207 - 98.6 % 98.6 %
Bahia Vista Estates MH Sarasota FL 251 - 99.6 % 99.6 %
Baker Acres RV Resort(2)
RV Zephyrhills FL 281 71 100.0 % 100.0 %
Big Tree RV Resort(2)
RV Arcadia FL 344 67 100.0 % 100.0 %
Blue Heron Pines MH Punta Gorda FL 408 - 98.3 % 97.1 %
Blue Jay MH Dade City FL 206 - 99.5 % 99.5 %
Blue Jay RV Resort(2)
RV Dade City FL 32 21 100.0 % 100.0 %
Blueberry Hill(2)
RV Bushnell FL 310 95 100.0 % 100.0 %
Brentwood Estates MH Hudson FL 191 - 98.4 % 99.0 %
Buttonwood Bay MH Sebring FL 407 - 99.0 % 99.5 %
Buttonwood Bay RV Resort(2)
RV Sebring FL 361 171 100.0 % 100.0 %
Candlelight Manor MH South Daytona FL 128 - 99.2 % 96.1 %
Carriage Cove MH Sanford FL 467 - 100.0 % 99.6 %
Central Park MH Haines City FL 114 - 90.4 % 90.3 %
Central Park Resort RV Resort(2)
RV Haines City FL 193 171 100.0 % 100.0 %
Citrus Hill RV Resort(2)
RV Dade City FL 134 48 100.0 % 100.0 %
Club Naples(2)
RV Naples FL 219 85 100.0 % 100.0 %
Club Wildwood MH Hudson FL 478 - 100.0 % 99.8 %
Colony in the Wood MH Port Orange FL 383 - 99.0 % 98.4 %
Compass RV Resort(2)
RV St. Augustine FL - 175 N/A N/A
Country Squire MH Paisley FL 97 - 99.0 % 97.9 %
Country Squire RV Resort(2)
RV Paisley FL 23 2 100.0 % 100.0 %
Cypress Greens MH Lake Alfred FL 259 - 98.5 % 98.1 %
Daytona Beach RV Resort(2)
RV Port Orange FL 135 97 100.0 % 100.0 %
Deerwood MH Orlando FL 569 - 98.1 % 99.5 %
Dunedin RV Resort(2)
RV Dunedin FL 194 45 100.0 % 100.0 %
Ellenton Gardens RV Resort(2)
RV Ellenton FL 151 43 100.0 % 100.0 %
Emerald Coast MH Panama City Beach FL 42 - 95.2 % 92.9 %
Emerald Coast RV Resort(2)
RV Panama City Beach FL - 159 100.0 % 100.0 %
Fairfield Village MH Ocala FL 293 - 99.7 % 98.6 %
Flamingo Lake RV Resort(2)
RV Jacksonville FL - 422 N/A N/A (4)
Forest View MH Homosassa FL 300 - 98.7 % 98.7 %
Glen Haven MH Zephyrhills FL 52 - 100.0 % 98.1 %
SUN COMMUNITIES, INC.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
Glen Haven RV Resort(2)
RV Zephyrhills FL 165 53 100.0 % 100.0 %
Goldcoaster MH Homestead FL 527 - 99.6 % 99.8 %
Goldcoaster RV Resort(2)
RV Homestead FL 9 9 100.0 % 100.0 %
Grand Bay MH Dunedin FL 134 - 100.0 % 99.3 %
Grand Lakes RV Resort(2)
RV Citra FL 304 104 100.0 % 100.0 %
Grove Ridge RV Resort(2)
RV Dade City FL 163 83 100.0 % 100.0 %
Groves RV Resort(2)
RV Fort Myers FL 234 35 100.0 % 100.0 %
Gulfstream Harbor MH Orlando FL 974 - 99.6 % 99.2 %
Hacienda Del Rio MH Edgewater FL 730 - 98.8 % 98.9 %
Hidden River RV Resort(2)
RV Riverview FL 188 125 100.0 % 100.0 %
Holly Forest Estates MH Holly Hill FL 402 - 100.0 % 100.0 %
Homosassa River RV Resort(2)
RV Homosassa Springs FL 126 98 100.0 % 100.0 %
Horseshoe Cove RV Resort(2)
RV Bradenton FL 340 136 100.0 % 100.0 %
Indian Creek Park MH Ft. Myers Beach FL 353 - 100.0 % 99.7 %
Indian Creek RV Park(2)
RV Ft. Myers Beach FL 957 120 100.0 % 100.0 %
Island Lakes MH Merrit Island FL 301 - 100.0 % 100.0 %
King’s Lake MH DeBary FL 245 - 100.0 % 100.0 %
Kings Manor MH Lakeland FL 239 - 96.7 % 95.8 %
King’s Pointe MH Lake Alfred FL 226 - 99.6 % 98.7 %
Kissimmee Gardens MH Kissimmee FL 239 - 100.0 % 100.0 %
Kissimmee South MH Davenport FL 142 - 90.8 % 91.5 %
Kissimmee South RV Resort(2)
RV Davenport FL 130 71 100.0 % 100.0 %
La Costa Village MH Port Orange FL 658 - 100.0 % 100.0 %
Lake Josephine RV Resort(2)
RV Sebring FL 120 58 100.0 % 100.0 %
Lake Juliana Landings MH Auburndale FL 274 - 98.2 % 98.2 %
Lake Pointe Village MH Mulberry FL 362 - 99.4 % 99.4 %
Lake San Marino RV Park(2)
RV Naples FL 244 163 100.0 % 100.0 %
Lakeland RV Resort(2)
RV Lakeland FL 202 29 100.0 % 100.0 %
Lakeshore Landings MH Orlando FL 306 - 100.0 % 99.3 %
Lakeshore Villas MH Tampa FL 280 - 98.6 % 99.6 %
Lamplighter MH Port Orange FL 259 - 100.0 % 99.2 %
Majestic Oaks RV Resort(2)
RV Zephyrhills FL 219 35 100.0 % 100.0 %
Marco Naples RV Resort(2)
RV Naples FL 187 114 100.0 % 100.0 %
Meadowbrook Village MH Tampa FL 257 - 100.0 % 100.0 %
Mill Creek MH Kissimmee FL 34 - 88.2 % 91.2 %
Mill Creek RV Resort(2)
RV Kissimmee FL 136 20 100.0 % 100.0 %
Mouse Mountain Resort MH Davenport FL 44 - 97.7 % N/A (4)
Mouse Mountain RV Resort(2)
RV Davenport FL 116 144 100.0 % N/A (4)
Naples RV Resort(2)
RV Naples FL 106 61 100.0 % 100.0 %
New Ranch MH Clearwater FL 94 - 97.9 % 97.9 %
North Lake Estates(2)
RV Moor Haven FL 191 81 100.0 % 100.0 %
Oakview Estates MH Arcatia FL 119 - 100.0 % 100.0 %
Ocean Breeze MH Marathon FL 47 - 31.9 % (1)(5)
8.5 % (1)(5)
Ocean Breeze RV Resort RV Marathon FL - - - % (5)
- % (5)
Ocean Breeze - Jensen Beach MH Jensen Beach FL 284 - 73.6 % (1)
76.2 % (1)
Ocean Breeze - Jensen Beach RV Resort(2)
RV Jensen Beach FL 95 110 100.0 % 100.0 %
Orange City MH Orange City FL 4 - 100.0 % 100.0 %
Orange City RV Resort(2)
RV Orange City FL 409 112 100.0 % 100.0 %
Orange Tree Village MH Orange City FL 246 - 99.2 % 100.0 %
Paddock Park South MH Ocala FL 188 - 79.8 % 79.3 %
Palm Key Village MH Davenport FL 204 - 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
Palm Village MH Bradenton FL 146 - 100.0 % 100.0 %
Park Place MH Sebastian FL 475 - 96.2 % 94.9 %
Park Royale MH Pinellas Park FL 309 - 100.0 % 100.0 %
Pecan Park RV Resort(2)
RV Jacksonville FL 45 296 100.0 % 100.0 %
Pelican Bay MH Micco FL 216 - 99.1 % 98.6 %
Pelican RV Resort & Marina(2)
RV Marathon FL 62 23 100.0 % 100.0 %
Pleasant Lake RV Resort(2)
RV Jacksonville FL 292 49 100.0 % 100.0 %
Rainbow MH Frostproof FL 37 - 100.0 % 100.0 %
Rainbow RV Resort(2)
RV Frostproof FL 401 61 100.0 % 100.0 %
Rainbow Village of Largo(2)
RV Largo FL 251 58 100.0 % 100.0 %
Rainbow Village of Zephyrhills(2)
RV Zephyrhills FL 344 38 100.0 % 100.0 %
Red Oaks MH Bushnell FL 103 - 93.2 % 92.2 %
Red Oaks RV Resort(2)
RV Bushnell FL 507 410 100.0 % 100.0 %
Regency Heights MH Clearwater FL 391 - 99.0 % 98.2 %
Riptide RV Resort & Marina(2)
RV Key Largo FL 21 17 100.0 % 100.0 %
Riverside Club MH Ruskin FL 728 - 86.4 % 84.2 %
Rock Crusher Canyon RV Resort(2)
RV Crystal River FL 202 193 100.0 % 100.0 %
Royal Country MH Miami FL 864 - 99.9 % 99.9 %
Royal Palm Village MH Haines City FL 395 - 86.1 % 84.3 %
Saddle Oak Club MH Ocala FL 376 - 99.7 % 99.7 %
San Pedro Marina MH Islamorada FL - - - % (5)
- % (5)
San Pedro RV Resort & Marina(2)
RV Islamorada FL - - - % (5)
- % (5)
Saralake Estates MH Sarasota FL 202 - 99.5 % 100.0 %
Savanna Club MH Port St. Lucie FL 1,069 - 98.5 % 98.4 %
Seabreeze MH Islamorada FL - - - % (5)
- % (5)
Seabreeze RV Resort(2)
RV Islamorada FL - - - % (5)
- % (5)
Serendipity MH North Fort Myers FL 338 - 97.9 % 97.9 %
Settler's Rest RV Resort(2)
RV Zephyrhills FL 296 82 100.0 % 100.0 %
Shadow Wood Village MH Hudson FL 215 - 87.0 % (1)
73.0 % (1)
Shady Road Villas MH Ocala FL 130 - 85.4 % 70.0 %
Shell Creek Marina MH Punta Gorda FL 54 - 98.1 % 98.1 %
Shell Creek RV Resort & Marina(2)
RV Punta Gorda FL 150 35 100.0 % 100.0 %
Siesta Bay RV Park(2)
RV Fort Myers FL 738 59 100.0 % 100.0 %
Southern Charm MH Zephyrhills FL 1 - 100.0 % 100.0 %
Southern Charm RV Resort(2)
RV Zephyrhills FL 400 96 100.0 % 100.0 %
Southern Pines MH Bradenton FL 107 - 96.3 % 97.2 %
Southport Springs Golf & Country Club MH Zephyrhills FL 547 - 99.3 % 98.9 %
Spanish Main MH Thontosassa FL 56 - 87.5 % 87.5 %
Spanish Main RV Resort(2)
RV Thontosassa FL 235 44 100.0 % 100.0 %
Stonebrook MH Homosassa FL 215 - 93.5 % 92.1 %
Sun N Fun RV Resort(2)
RV Sarasota FL 1,026 493 100.0 % 100.0 %
Suncoast Gateway MH Port Richey FL 173 - 98.8 % 98.8 %
Sundance MH Zephyrhills FL 332 - 100.0 % 100.0 %
Sunlake Estates MH Grand Island FL 408 - 97.1 % 96.1 %
Sunset Harbor at Cow Key Marina MH Key West FL 77 - 98.7 % 98.7 %
Sweetwater RV Resort(2)
RV Zephyrhills FL 207 84 100.0 % 100.0 %
Tallowwood Isle MH Coconut Creek FL 274 - 95.6 % 95.6 %
Tampa East MH Dover FL 31 - 100.0 % 100.0 %
Tampa East RV Resort(2)
RV Dover FL 502 167 100.0 % 100.0 %
The Hamptons Golf & Country Club MH Auburndale FL 829 - 99.0 % 98.6 %
The Hideaway MH Key West FL 13 - 92.3 % 84.6 %
SUN COMMUNITIES, INC.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
The Hills MH Apopka FL 97 - 100.0 % 100.0 %
The Landings at Lake Henry MH Haines City FL 394 - 99.7 % 99.2 %
The Ridge MH Davenport FL 481 - 99.4 % 99.0 %
The Valley MH Apopka FL 148 - 100.0 % 100.0 %
Three Lakes(2)
RV Hudson FL 245 62 100.0 % 100.0 %
Vista del Lago MH Bradenton FL 136 - 99.3 % 97.8 %
Vista del Lago RV Resort(2)
RV Bradenton FL 35 5 100.0 % 100.0 %
Vizcaya Lakes MH Port Charlotte FL 108 - 92.6 % 91.7 %
Walden Woods MH Homosassa FL 213 - 100.0 % 100.0 %
Walden Woods II MH Homosassa FL 213 - 100.0 % 99.1 %
Water Oak Country Club Estates MH Lady Lake FL 1,310 - 93.6 % 91.9 % (1)
Waters Edge RV Resort(2)
RV Zephyrhills FL 141 76 100.0 % 100.0 %
Westside Ridge MH Auburndale FL 219 - 99.1 % 99.5 %
Windmill Village MH Davenport FL 509 - 99.6 % 99.6 %
Woodlands at Church Lake MH Groveland FL 291 - 81.8 % 78.4 %
Woodsmoke Camping Resort(2)
RV Fort Myers FL 181 119 100.0 % N/A (4)
Florida Total 39,803 6,011 98.1 % 97.7 %
SOUTHWEST
California
49'er Village RV Resort(2)
RV Plymouth CA 61 266 100.0 % 100.0 %
Alta Laguna MH Rancho Cucamonga CA 296 - 99.7 % 99.3 %
Caliente Sands MH Cathedral City CA 118 - 98.3 % 98.3 %
Cava Robles RV Resort(2)
RV Paso Robles CA - 332 N/A N/A
Chula Vista RV Resort(2)
RV San Diego CA - 237 N/A N/A
El Capitan Canyon(2)
RV Goleta CA - 163 N/A N/A (4)
Friendly Village of La Habra MH La Habra CA 330 - 100.0 % 99.7 %
Friendly Village of Modesto MH Modesto CA 289 - 99.0 % 98.6 %
Friendly Village of Simi MH Simi Valley CA 222 - 100.0 % 100.0 %
Friendly Village of West Covina MH West Covina CA 157 - 100.0 % 100.0 %
Forest Springs MH Grass Valley CA 373 86.6 % (1)
N/A (4)
Heritage MH Temecula CA 196 - 99.5 % 100.0 %
Indian Wells RV Resort(2)
RV Indio CA 163 175 100.0 % 100.0 %
Jellystone Park™ at Tower Park(2)
RV Lodi CA - 360 N/A N/A
Lakefront MH Lakeside CA 295 - 100.0 % 100.0 %
Lakeview Mobile Estates MH Yucaipa CA 296 - 100.0 % N/A (4)
Lazy J Ranch MH Arcata CA 220 - 99.5 % 98.6 %
Lemon Wood MH Ventura CA 231 - 99.1 % 99.6 %
Napa Valley MH Napa CA 257 - 99.6 % 100.0 %
Oak Creek MH Coarsegold CA 198 - 100.0 % 98.0 %
Ocean Mesa(2)
RV Goleta CA - 104 N/A N/A (4)
Ocean West MH McKinleyville CA 130 - 99.2 % 99.2 %
Palos Verdes Shores MH & Golf Community MH San Pedro CA 242 - 100.0 % 100.0 %
Pembroke Downs MH Chino CA 163 - 100.0 % 100.0 %
Pismo Dunes RV Resort(2)
RV Pismo Beach CA 330 1 100.0 % 100.0 %
Rancho Alipaz MH San Juan Capistrano CA 132 - 100.0 % 100.0 %
Rancho Caballero MH Riverside CA 303 - 100.0 % 100.0 %
Royal Palms MH Cathedral City CA 439 - 97.7 % 95.7 %
Royal Palms RV Resort(2)
RV Cathedral City CA 38 - 100.0 % 100.0 %
The Colony MH Oxnard CA 150 - 100.0 % 100.0 %
The Sands RV & Golf Resort(2)
RV Desert Hot Springs CA 254 260 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
Vallecito MH Newbury Park CA 303 - 100.0 % 100.0 %
Victor Villa MH Victorville CA 287 - 100.0 % 99.0 %
Vines RV Resort(2)
RV Paso Robles CA - 130 N/A N/A
Vista del Lago MH Scotts Valley CA 202 - 99.5 % 100.0 %
Wine Country RV Resort(2)
RV Paso Robles CA - 203 N/A N/A
California Total 6,675 2,231 98.9 % 99.3 %
Arizona
Blue Star MH Apache Junction AZ 4 - 100.0 % N/A
Blue Star(2)
RV Apache Junction AZ 88 57 100.0 % N/A
Brentwood West MH Mesa AZ 350 - 99.1 % 99.1 %
Buena Vista MH Buckeye AZ 400 - 84.8 % 75.5 %
Desert Harbor MH Apache Junction AZ 205 - 100.0 % 99.5 %
Fiesta Village MH Mesa AZ 153 - 83.0 % 85.1 %
Fiesta Village RV Resort(2)
RV Mesa AZ 7 4 100.0 % 100.0 %
La Casa Blanca MH Apache Junction AZ 198 - 100.0 % 100.0 %
Leaf Verde RV Resort(2)
RV Buckeye AZ 30 347 100.0 % N/A
Lost Dutchman MH Apache Junction AZ 177 - 98.9 % 96.6 %
Lost Dutchman RV Resort(2)
RV Apache Junction AZ 7 42 100.0 % 100.0 %
Mountain View MH Mesa AZ 170 - 98.8 % 97.6 %
Palm Creek Golf MH Casa Grande AZ 506 - 66.6 % (1)
60.7 % (1)
Palm Creek Golf & RV Resort(2)
RV Casa Grande AZ 948 887 100.0 % 100.0 %
Rancho Mirage MH Apache Junction AZ 312 - 100.0 % 100.0 %
Reserve at Fox Creek MH Bullhead City AZ 311 - 99.7 % 99.0 %
Sun Valley MH Apache Junction AZ 268 - 97.4 % 95.9 %
Verde Plaza MH Tucson AZ 189 - 88.4 % 87.8 %
Arizona Total 4,323 1,337 93.2 % 91.3 %
Colorado
Cave Creek MH Evans CO 447 - 99.3 % 98.9 %
Eagle Crest MH Firestone CO 441 - 99.5 % 99.5 %
Jellystone Park™ at Larkspur(2)
RV Lakespur CO - 536 N/A N/A
North Point Estates MH Pueblo CO 108 - 100.0 % 99.1 %
River Run Ranch MH Granby CO 36 - 55.6 % (1)
2.8 % (1)
River Run Ranch RV Resort(2)
RV Granby CO - 426 N/A N/A
Skyline MH Fort Collins CO 170 - 99.4 % 97.6 %
Smith Creek Crossing MH Granby CO 82 - 42.7 % (1)
5.8 % (1)
Swan Meadow Village MH Dillon CO 175 - 99.4 % 100.0 %
The Grove at Alta Ridge MH Thornton CO 409 - 100.0 % 99.5 %
Timber Ridge MH Fort Collins CO 585 - 99.5 % 99.5 %
Colorado Total 2,453 962 97.0 % 95.8 %
NORTHEAST
Connecticut
Beechwood MH Killingworth CT 297 - 97.3 % 98.7 %
Cedar Springs MH Southington CT 190 - 93.2 % 90.0 %
Forest Hill MH Southington CT 188 - 98.4 % 97.9 %
Grove Beach MH Westbrook CT 136 - 98.5 % 97.8 %
Hillcrest MH Uncasville CT 208 - 99.5 % 98.1 %
Lakeside MH Terryville CT 76 - 97.4 % 93.4 %
Lakeview CT MH Danbury CT 179 - 90.5 % 86.6 %
SUN COMMUNITIES, INC.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
Laurel Heights MH Uncasville CT 49 - 95.9 % 98.0 %
Marina Cove MH Uncasville CT 25 - 76.0 % 80.0 %
Millwood MH Uncasville CT 45 - - % (1)
- % (1)
New England Village MH Westbrook CT 60 - 100.0 % 100.0 %
Oak Grove MH Plainville CT 45 - 97.8 % 100.0 %
Rolling Hills MH Storrs CT 200 - 77.5 % 79.5 %
Seaport RV Resort(2)
RV Old Mystic CT 41 108 100.0 % 100.0 %
Three Gardens MH Southington CT 135 - 90.4 % 89.6 %
Yankee Village MH Old Saybrook CT 23 - 100.0 % 100.0 %
Connecticut Total 1,897 108 91.7 % 91.1 %
Maine
Augusta Village MH Augusta ME 59 - 89.8 % N/A (4)
Birch Hill Estates MH Bangor ME 376 - 98.7 % N/A (4)
Cedar Haven MH Holden ME 155 - 92.9 % N/A (4)
Hancock Heights Estates MH Hancock ME 113 - 100.0 % N/A (4)
Hid'n Pines RV Resort(2)
RV Old Orchard Beach ME 76 245 100.0 % 100.0 %
Holiday Park Estates MH Bangor ME 218 - 91.3 % N/A (4)
Maplewood Manor MH Brunswick ME 296 - 99.3 % 98.3 %
Merrymeeting MH Brunswick ME 43 - 100.0 % 100.0 %
Riverside Drive Park MH Augusta ME 163 - 85.3 % N/A (4)
Saco / Old Orchard Beach KOA(2)
RV Saco ME - 191 N/A N/A
Town & Country Village MH Lisbon ME 144 - 98.6 % 97.9 %
Wagon Wheel RV Resort & Campground(2)
RV Old Orchard Beach ME 232 54 100.0 % 100.0 %
Wild Acres RV Resort & Campground(2)
RV Old Orchard Beach ME 315 315 100.0 % 100.0 %
Maine Total 2,190 805 96.8 % 99.3 %
New Hampshire
Brook Ridge MH Hooksett NH 91 - 100.0 % 100.0 %
Crestwood MH Concord NH 320 - 98.8 % 98.4 %
Farmwood Village MH Dover NH 159 - 100.0 % 98.7 %
Glen Ellis Family Campground(2)
RV Glen NH 29 249 100.0 % 100.0 %
Hannah Village MH Lebanon NH 81 - 100.0 % 100.0 %
Hemlocks MH Tilton NH 103 - 99.0 % 99.0 %
Mi-Te-Jo Campground(2)
RV Milton NH 85 140 100.0 % 100.0 %
River Pines MH Nashua NH 480 - 99.0 % 98.8 %
Strafford / Lake Winnipesaukee South KOA(3)
RV Strafford NH - - N/A N/A
Westward Shores Cottages & RV Resort(2)
RV West Ossipee NH 429 71 100.0 % 100.0 %
New Hampshire Total 1,777 460 99.4 % 99.2 %
New Jersey
Big Timber Lake RV Camping Resort(2)
RV Cape May Court House NJ 332 196 100.0 % 100.0 %
Cape May Crossing MH Cape May NJ 28 - 100.0 % 100.0 %
Deep Run MH Cream Ridge NJ 243 - 100.0 % 100.0 %
Driftwood RV Resort & Campground(2)
RV Clemont NJ 634 73 100.0 % 100.0 %
Lake Laurie RV and Camping Resort(2)
RV Cape May NJ 407 224 100.0 % 100.0 %
Long Beach RV Resort & Campground(2)
RV Barnegat NJ 173 41 100.0 % 100.0 %
Seashore Campsites & RV Resort(2)
RV Cape May NJ 434 241 100.0 % 100.0 %
Shady Pines MH Galloway Twp. NJ 39 - 100.0 % 100.0 %
Shady Pines RV Resort(2)
RV Galloway Twp. NJ 57 38 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
New Jersey Total 2,347 813 100.0 % 100.0 %
New York
Adirondack Gateway RV Resort & Campground(2)
RV Gansevoort NY 318 24 100.0 % 100.0 %
Cherrywood MH Clinton NY 176 - 83.5 % 80.7 %
Jellystone Park™ at Birchwood Acres MH Greenfield Park NY 1 - 100.0 % 100.0 %
Jellystone Park™ at Birchwood Acres RV Resort(2)
RV Greenfield Park NY 111 193 100.0 % 100.0 %
Jellystone Park™ at Gardiner(2)
RV Gardiner NY - 338 N/A N/A
Jellystone Park™ of Western New York(2)
RV North Java NY 19 340 100.0 % 100.0 %
Kittatinny Campground & RV Resort(2)
RV Barryville NY - 527 N/A N/A (4)
Parkside Village MH Cheektowaga NY 156 - 100.0 % 100.0 %
Sky Harbor MH Cheektowaga NY 522 - 98.1 % 98.3 %
The Villas at Calla Pointe MH Cheektowaga NY 116 - 100.0 % 100.0 %
New York Total 1,419 1,422 97.3 % 96.9 %
OTHER
Pandion Ridge RV Resort(2)
RV Orange Beach AL - 142 N/A N/A
High Point Park MH Frederica DE 409 - 99.3 % 97.3 %
Leisure Point Resort MH Millsboro DE 202 - 90.6 % 90.0 %
Leisure Point RV Resort(2)
RV Millsboro DE 293 7 100.0 % 100.0 %
Massey’s Landing RV Resort(2)
RV Millsboro DE - 291 N/A N/A
Sea Air Village MH Rehoboth Beach DE 373 - 99.2 % 99.2 %
Sea Air Village RV Resort(2)
RV Rehoboth Beach DE 116 18 100.0 % 100.0 %
Countryside Village of Atlanta MH Lawrenceville GA 261 - 99.6 % 100.0 %
Countryside Village of Gwinnett MH Buford GA 331 - 99.7 % 99.1 %
Countryside Village of Lake Lanier MH Buford GA 548 - 99.1 % 99.8 %
Wymberly MH Martinez GA 215 - 100.0 % 99.5 %
Autumn Ridge MH Ankeny IA 413 - 98.1 % 97.1 %
Candlelight Village MH Sauk Village IL 310 - 97.7 % 92.2 %
Maple Brook MH Matteson IL 441 - 99.8 % 99.3 %
Oak Ridge MH Manteno IL 426 - 96.0 % 95.1 %
Sunset Lakes RV Resort(2)
RV Hillsdale IL 230 268 100.0 % 100.0 %
Wildwood Community MH Sandwich IL 476 - 98.9 % 98.7 %
Reunion Lake RV Resort(2)
RV Ponchatoula LA - 226 N/A N/A
Campers Haven RV Resort(2)
RV Dennisport MA 224 42 100.0 % 100.0 %
Cape Cod RV Resort(2)
RV East Falmouth MA 49 207 100.0 % N/A (4)
Peter's Pond RV Resort(2)
RV Sandwich MA 330 76 100.0 % 100.0 %
Castaways RV Resort & Campground(2)
RV Berlin MD 1 392 100.0 % 100.0 %
Fort Whaley RV Resort & Campground(2)
RV Whaleyville MD - 210 N/A N/A
Frontier Town RV Resort & Campground(2)
RV Berlin MD - 685 N/A N/A
Hyde Park MH Easton MD 240 - 99.2 % 98.3 %
Jellystone Park™ at Maryland(2)
RV Williamsport MD - 228 N/A N/A
Southside Landing MH Cambridge MD 96 - 88.5 % 81.3 %
Southern Hills / Northridge Place MH Stewartville MN 475 - 98.9 % 98.5 %
Pin Oak Parc MH O'Fallon MO 502 - 98.2 % 99.2 %
Southfork MH Belton MO 474 - 71.1 % 67.7 %
Jellystone Park™ at Memphis(2)
RV Horn Lake MS - 155 N/A N/A
Coastal Estates MH Hampstead NC 154 - 65.6 % (1)
100.0 %
Fort Tatham RV Resort & Campground(2)
RV Sylva NC 54 36 100.0 % 100.0 %
Glen Laurel MH Concord NC 260 - 100.0 % 100.0 %
Jellystone Park™ at Golden Valley(2)
RV Bostic NC - 258 N/A N/A
SUN COMMUNITIES, INC.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
Meadowbrook MH Charlotte NC 321 - 99.7 % 100.0 %
Sun Villa Estates MH Reno NV 324 - 100.0 % 99.7 %
Country Village Estates MH Oregon City OR 518 - 99.8 % 99.8 %
Crown Villa RV Resort RV Bend OR - 123 N/A N/A (4)
Forest Meadows MH Philomath OR 75 - 100.0 % 100.0 %
Oceanside RV Resort & Campground(2)
RV Coos Bay OR - 86 N/A N/A
Woodland Park Estates MH Eugene OR 398 - 100.0 % 100.0 %
Countryside Estates MH Mckean PA 304 - 96.4 % 95.4 %
Jellystone Park™ at Quarryville(2)
RV Quarryville PA - 256 N/A N/A
River Beach Campsites & RV(2)
RV Milford PA - - N/A N/A (4)
Lake in Wood RV Resort(2)
RV Narvon PA 278 144 100.0 % 100.0 %
Pheasant Ridge MH Lancaster PA 553 - 100.0 % 100.0 %
Carolina Pines RV Resort(2)
RV Conway SC 149 562 100.0 % 100.0 %
Country Lakes MH Little River SC 136 - 95.6 % 95.6 %
Crossroads MH Aiken SC 171 - 60.8 % (1)
25.7 % (1)
Crossroads RV Resort(2)
RV Aiken SC 22 - 100.0 % 100.0 %
Lakeside Crossing MH Conway SC 690 - 82.9 % (1)
76.6 % (1)
Ocean Pines MH Garden City SC 579 - 99.5 % 99.5 %
Southern Palms MH Ladson SC 194 - 100.0 %
100.0 %
Bell Crossing MH Clarksville TN 237 - 99.6 % 98.7 %
Sun Outdoors Sevierville Pigeon Forge(2)
RV Sevierville TN 70 238 100.0 % N/A
Archview RV Resort & Campground(2)
RV Moab UT - 113 N/A N/A
Canyonlands RV Resort & Campground(2)
RV Moab UT - 131 N/A N/A
Moab Valley RV Resort & Campground(2)
RV Moab UT - 131 N/A N/A
Pony Express RV Resort & Campground(2)
RV North Salt Lake UT - 185 N/A N/A
Slickrock RV Resort & Campground(2)
RV Moab UT - 190 N/A N/A
Chincoteague Island KOA RV Resort(3)
RV Chincoteague VA - - N/A N/A
Gwynn's Island RV Resort & Campground(2)
RV Gwynn VA 106 23 100.0 % 100.0 %
Jellystone Park™ at Luray(2)
RV East Luray VA - 255 N/A N/A
Jellystone Park™ at Natural Bridge(2)
RV Natural Bridge Station VA 62 237 100.0 % N/A (4)
New Point RV Resort(2)
RV New Point VA 292 32 100.0 % 100.0 %
Pine Ridge MH Prince George VA 376 - 98.9 % 90.2 % (1)
Shenandoah Acres Family Campground(2)
RV Stuarts Draft
VA 302 190 100.0 % N/A (4)
Sunset Beach RV Resort(3)
RV Cape Charles VA - - N/A N/A
Gig Harbor RV Resort(2)
RV Gig Harbor WA - 112 N/A N/A (4)
Thunderhill Estates MH Sturgeon Bay WI 266 - 97.0 % 98.5 %
Westward Ho RV Resort & Campground(2)
RV Glenbeulah WI 223 99 100.0 % 100.0 %
Other Total 14,549 6,348 96.5 % 95.3 %
US TOTAL / AVERAGE 120,162 24,077 97.3 % 96.3 %
CANADA
Arran Lake RV Resort & Campground(2)
RV Allenford ON 178 11 100.0 % 100.0 %
Craigleith RV Resort & Campground(2)
RV Clarksburg ON 82 29 100.0 % 100.0 %
Deer Lake RV Resort & Campground(2)
RV Huntsville ON 198 43 100.0 % 100.0 %
Grand Oaks RV Resort & Campground(2)
RV Cayuga ON 237 42 100.0 % 100.0 %
Gulliver's Lake RV Resort & Campground(2)
RV Millgrove ON 198 - 100.0 % 100.0 %
Hidden Valley RV Resort & Campground(2)
RV Normandale ON 206 39 100.0 % 100.0 %
Lafontaine RV Resort & Campground(2)
RV Tiny ON 215 48 100.0 % 100.0 %
Lake Avenue RV Resort & Campground(2)
RV Cherry Valley ON 125 11 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH/RV City State MH and Annual RV Sites as of 12/31/2020
Transient RV Sites as of 12/31/2020
Occupancy as of 12/31/2020
Occupancy as of 12/31/2019
Pickerel Park RV Resort & Campground(2)
RV Napanee ON 146 63 100.0 % 100.0 %
Sherkston Shores Beach Resort & Campground(2)
RV Sherkston ON 1,491 375 100.0 % 100.0 %
Silver Birches RV Resort & Campground(2)
RV Lambton Shores ON 137 25 100.0 % 100.0 %
Trailside RV Resort & Campground(2)
RV Seguin ON 205 32 100.0 % 100.0 %
Willow Lake RV Resort & Campground(2)
RV Scotland ON 370 3 100.0 % 100.0 %
Willowood RV Resort & Campground(2)
RV Amherstburg ON 117 210 100.0 % 100.0 %
Woodland Lake RV Resort & Campground(2)
RV Bornholm ON 185 35 100.0 % 100.0 %
CANADA TOTAL / AVERAGE 4,090 966 100.0 % 100.0 %
COMPANY TOTAL / AVERAGE 124,252 25,043 97.3 % 96.4 %
(1) Occupancy in these properties reflects the fact that these properties are in a lease-up phase following an expansion, redevelopment or initial construction.
(2) Occupancy percentage excludes transient RV sites. Percentage calculated by dividing revenue producing sites by developed sites. A revenue producing site is defined as a site that is occupied by a paying resident or reserved by a customer with annual or seasonal usage rights. A developed site is defined as an adequate sized parcel of land that has road and utility access which is zoned and licensed (if required) for use as a home site.
(3) We have an ownership interest in Sunset Beach, Strafford, and Chincoteague Island, but do not maintain and operate the property.
(4) No occupancy in these properties for the year ended December 31, 2019 as properties were acquired during the year ended December 31, 2020.
(5) Occupancy in these properties at December 31, 2020 reflects the redevelopment following asset impairments resulting from Hurricane Irma in September 2017.
SUN COMMUNITIES, INC.
The following tables set forth certain information relating to our Safe Harbor branded marinas as of December 31, 2020.
Marina Property Name City State Wet Slips and Dry Storage Spaces
as of 12/31/2020
UNITED STATES
NORTHEAST
Connecticut
Bruce & Johnsons Branford CT 663
Dauntless(1)
Essex CT 335
Dauntless Shipyard(1)
Essex CT -
Deep River Deep River CT 305
Essex Island(1)
Essex CT -
Ferry Point Old Saybrook CT 137
Harbor House(2)
Stamford CT -
Mystic Mystic CT 254
Pilots Point Westbrook CT 873
Stratford Stratford CT 183
Yacht Haven(2)
Stamford CT 504
Connecticut Total 3,254
Rhode Island
Cove Haven Barrington RI 340
Cowesett Warwick RI 706
Greenwich Bay Warwick RI 511
Island Park(3)
Portsmouth RI -
Jamestown Boatyard Jamestown RI 87
New England Boatworks Portsmouth RI 294
Newport Shipyard Newport RI 45
Sakonnet(3)
Portsmouth RI 369
Silver Spring South Kingstown RI 86
Wickford(4)
North Kingstown RI -
Wickford Cove(4)
North Kingstown RI 252
Rhode Island Total 2,690
New York
Capri Port Washington NY 332
Gaines Rouses Point NY 281
Glen Cove Glen Cove NY 497
Greenport(5)
Greenport NY 381
Haverstraw West Haverstraw NY 873
Post Road Mamaroneck NY 49
Stirling(5)
Greenport NY -
Willsboro Bay Willsboro NY 207
New York Total 2,620
Massachusetts
Fiddler's Cove North Falmouth MA 227
Green Harbor Marshfield MA 202
Hawthorne Cove Salem MA 364
Marina Bay Quincy MA 678
Onset Bay Buzzards Bay MA 230
Plymouth Plymouth MA 186
Sunset Bay Hull MA 306
SUN COMMUNITIES, INC.
Marina Property Name City State Wet Slips and Dry Storage Spaces
as of 12/31/2020
Massachusetts Total 2,193
Maryland
Annapolis Annapolis MD 184
Bohemia Vista Chesapeake Bay MD 127
Carroll Island Baltimore MD 380
Great Oak Landing Chestertown MD 427
Hacks Point Earleville MD 85
Narrows Point Grasonville MD 503
Oxford Oxford MD 136
Zahnisers Solomons MD 227
Maryland Total 2,069
New Jersey
Crystal Point Point Pleasant NJ 157
Manasquan River Brick Township NJ 235
New Jersey Total 392
Maine
Great Island Harpswell ME 330
Rockland Rockland ME 173
Maine Total 503
Vermont
Shelburne Shipyard Shelburne VT 116
Vermont Total 116
SOUTH
Georgia
Aqualand Flowery Branch GA 1,610
Bahia Bleu Thunderbolt GA 263
Hideaway Bay Flowery Branch GA 628
Trade Winds Appling GA 333
Georgia Total 2,834
Kentucky
Beaver Creek Monticello KY 257
Burnside Somerset KY 344
Grider Hill Albany KY 810
Jamestown Jamestown KY 694
Wisdom Dock Albany KY 290
Kentucky Total 2,395
Texas
Emerald Point Austin TX 519
Pier 121 Lewisville TX 1,310
Walden Montgomery TX 353
Texas Total 2,182
Arkansas
Brady Mountain Royal AR 578
SUN COMMUNITIES, INC.
Marina Property Name City State Wet Slips and Dry Storage Spaces
as of 12/31/2020
Arkansas Total 578
Tennessee
Eagle Cove Byrdstown TN 69
Holly Creek Celina TN 297
Tennessee Total 366
Mississippi
Aqua Yacht Iuka MS 432
Mississippi Total 432
Alabama
Sportsman Orange Beach AL 697
Alabama Total 697
Oklahoma
Harbors View Afton OK 132
Oklahoma Total 132
SOUTHEAST
Florida
Burnt Store Punta Gorda FL 697
Calusa Island Goodland FL 548
Cape Harbour Cape Coral FL 231
Harbortown Fort Pierce FL 354
New Port Cove Riviera Beach FL 328
North Palm Beach North Palm Beach FL 101
Old Port Cove North Palm Beach FL 210
Pier 77 Bradenton FL 185
Pineland Bokeelia FL 241
Regatta Pointe Palmetto FL 348
Riviera Beach Riviera Beach FL 8
Siesta Key Sarasota FL 252
South Fork(6)
Fort Lauderdale FL -
West Palm Beach West Palm Beach FL 70
Florida Total 3,573
South Carolina
Beaufort Beaufort SC 120
Bristol Charleston SC 146
Charleston City Charleston SC 255
City Boatyard Charleston SC 194
Port Royal Port Royal SC 161
Reserve Harbor Pawleys Island SC 228
Skull Creek Hilton Head SC 184
South Carolina Total 1,288
North Carolina
Kings Point Cornelius NC 785
Peninsula Yacht Club Cornelius NC 403
Skippers Landing Troutman NC 440
SUN COMMUNITIES, INC.
Marina Property Name City State Wet Slips and Dry Storage Spaces
as of 12/31/2020
South Harbour Village Southport NC 124
Westport Denver NC 628
North Carolina Total 2,380
MIDWEST
Michigan
Belle Maer Harrison Township MI 723
Grand Isle Grand Haven MI 763
Great Lakes Muskegon MI 648
Jefferson Beach St. Clair Shores MI 1,368
Toledo Beach La Salle Township MI 966
Michigan Total 4,468
Ohio
Lakefront Port Clinton OH 623
Sandusky Sandusky OH 793
Ohio Total 1,416
SOUTHWEST
California
Anacapa Isle Oxnard CA 453
Ballena Isle Alameda CA 356
Emeryville Emeryville CA 432
Loch Lomond San Rafael CA 525
Ventura Isle Ventura CA 537
California Total 2,303
US TOTAL / AVERAGE 38,881
(1) Wet slips and dry storage spaces from Dauntless Shipyard and Essex Island are grouped into Dauntless.
(2) Wet slips and dry storage spaces from Harbor House are grouped into Yacht Haven.
(3) Wet slips and dry storage spaces from Island Park are grouped into Sakonnet.
(4) Wet slips and dry storage spaces from Wickford are grouped into Wickford Cove.
(5) Wet slips and dry storage spaces from Stirling are grouped into Greenport.
(6) Property currently under development.
SUN COMMUNITIES, INC.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
We are involved in various legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material adverse impact on our results of operations or financial condition.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
None.
SUN COMMUNITIES, INC.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock has been listed on the NYSE since December 8, 1993, and traded under the symbol “SUI.” On February 11, 2021, the closing share price of our common stock was $147.19 per share on the NYSE, and there were 278 holders of record for the 107,616,246 outstanding shares of common stock.
On February 11, 2021, the following OP units of the Operating Partnership were outstanding:
OP Units OP Units
Issued and Outstanding Exchangeable
Shares of Common Stock
Aspen preferred OP units 1,283,819 407,840
Series A-1 preferred OP units 294,734 718,863
Series C preferred OP units 306,303 339,996
Series D preferred OP units 488,958 391,166
Series E preferred OP units 90,000 62,069
Series F preferred OP units 90,000 56,250
Series G preferred OP units 240,710 155,297
Series H preferred OP units 581,407 354,516
Series I preferred OP units 922,000 562,195
Series A-3 preferred OP units 40,268 74,917
Common OP units 2,589,760 2,589,760
Total 6,927,959 5,712,869
We have historically paid regular quarterly distributions to holders of our common stock and common OP units. In addition, we are obligated to make distributions to holders of shares of Aspen preferred OP units, Series A-1 preferred OP units, Series C preferred OP units, Series D preferred OP units, Series E preferred OP units, Series F preferred OP units, Series G preferred OP units, Series H preferred OP units, Series I preferred OP units, and Series A-3 preferred OP units. See “Structure of the Company” under Part I, Item 1 of this Annual Report on Form 10-K. Our ability to make distributions on our common stock and preferred OP units, payments on our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future. The decision to declare and pay distributions on shares of our common stock and common OP units in the future, as well as the timing, amount, and composition of any such future distributions, will be at the sole discretion of our Board of Directors in light of conditions then existing, including our earnings, financial condition, capital requirements, debt maturities, the availability of debt and equity capital, applicable REIT and legal restrictions, general overall economic conditions and other factors.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table reflects information about the securities authorized for issuance under our equity compensation plans as of December 31, 2020:
Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of shares of common stock remaining available for future issuance under equity compensation plans (excluding securities reflected in column a)
Plan Category (a) (b) (c)
Equity compensation plans approved by stockholders 1,500 $ 37.35 909,085
Equity compensation plans not approved by stockholders - - -
Total
1,500 - 909,085
SUN COMMUNITIES, INC.
Recent Sales of Unregistered Securities
From time to time, we may issue shares of common stock in exchange for OP units that may be tendered to the Operating Partnership for redemption in accordance with the terms and provisions of the limited partnership agreement of the Operating Partnership. Such shares are issued based on the exchange ratios and formulas described in “Structure of the Company” under Part I, Item 1 of this Annual Report on Form 10-K. Below is the activity of conversions for the quarter and year ended December 31, 2020:
Three Months Ended December 31, 2020
Year Ended December 31, 2020
OP Units Conversion Rate Units / Shares Common Stock Units / Shares Common Stock
Common OP units 1.0000 51,959 51,959 81,845 81,845
Series A-1 preferred OP units 2.4390 3,886 9,478 14,500 35,359
Series C preferred OP units 1.1100 2,636 2,926 4,121 4,573
All of the securities described above were issued in private placements in reliance on Section 4(a)(2) of the Securities Act, including Regulation D promulgated thereunder, based on certain investment representations made by the parties to whom the securities were issued. No underwriters were used in connection with any of such issuances.
Performance Graph
Set forth below is a line graph comparing the yearly percentage change in the cumulative total shareholder return on our common stock against the cumulative total return of a broad market index composed of all issuers listed on the NYSE and an industry index comprised of 13 publicly traded REITs, for the five year period ending on December 31, 2020. This line graph assumes a $100 investment on December 31, 2015, a reinvestment of distributions and actual increase of the market value of our common stock relative to an initial investment of $100. The comparisons in this table are required by the SEC and are not intended to forecast or be indicative of possible future performance of our common stock.
Peer Group
We utilize peer group data for quantitative benchmarking against external market participants. We select our peer group based on a number of quantitative and qualitative factors including, but not limited to, revenues, total assets, market capitalization, industry, sub-industry, location, total shareholder return history, executive compensation components, and peer decisions made by other companies. From time to time, we update our peer group based on analysis of the aforementioned factors and application of judgment.
SUN COMMUNITIES, INC.
Year Ended
Index December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020
Sun Communities, Inc. $ 100.00 $ 115.79 $ 144.67 $ 163.33 $ 246.48 $ 255.31
SNL U.S. REIT Residential Index $ 100.00 $ 104.99 $ 114.20 $ 116.24 $ 148.35 $ 131.90
NYSE Composite Index $ 100.00 $ 111.94 $ 132.90 $ 121.01 $ 151.87 $ 162.49
SUI Peer Group (1)
$ 100.00 $ 101.69 $ 108.03 $ 107.07 $ 133.81 $ 121.69
(1)SUI peer group includes: American Campus Communities, Inc., Apartment Investment and Management Company, AvalonBay Communities, Inc., Camden Property Trust, CubeSmart, Equity Lifestyles Properties, Inc., Essex Property Trust, Inc., Extra Space Storage Inc., Federal Realty Investment Trust, Invitation Homes, Inc., Mid-America Apartment Communities, Inc., The Macerich Company, and UDR, Inc.
The information included under the heading “Performance Graph” is not to be treated as “soliciting material” or as “filed” with the SEC, and is not incorporated by reference into any filing by the Company under the Securities Act or the Exchange Act that is made on, before or after the date of filing of this Annual Report on Form 10-K.
SUN COMMUNITIES, INC.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial information on a historical basis. The historical financial data has been derived from our historical financial statements. The following information should be read in conjunction with the information included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the Consolidated Financial Statements and the Notes thereto. In addition to the results presented in accordance with GAAP below, we have provided funds from operations (“FFO”) as a supplemental performance measure. Refer to Non-GAAP Financial Measures in Item 7 below for additional information.
Year Ended
December 31, 2020 December 31, 2019(1)
December 31, 2018(1)
December 31, 2017(1)
December 31, 2016(1)
(In thousands, except for share related data)
Financial Information
Total revenues $ 1,398,347 $ 1,264,037 $ 1,126,825 $ 982,570 $ 833,778
Net income $ 147,451 $ 177,379 $ 120,158 $ 81,819 $ 31,471
Net income attributable to Sun Communities Inc. common stockholders $ 131,614 $ 160,265 $ 105,493 $ 65,021 $ 17,369
Basic earnings per share $ 1.34 $ 1.80 $ 1.29 $ 0.85 $ 0.27
Diluted earnings per share $ 1.34 $ 1.80 $ 1.29 $ 0.85 $ 0.26
Cash distributions declared per common share $ 3.16 $ 3.00 $ 2.84 $ 2.68 $ 2.60
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities $ 489,668 $ 440,687 $ 385,615 $ 320,119 $ 225,653
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities $ 515,560 $ 456,932 $ 394,369 $ 337,384 $ 266,131
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per share - fully diluted $ 4.83 $ 4.75 $ 4.48 $ 3.95 $ 3.22
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per share - fully diluted $ 5.09 $ 4.92 $ 4.58 $ 4.17 $ 3.79
Balance Sheets
Total assets $ 11,206,586 $ 7,802,060 $ 6,710,026 $ 6,111,957 $ 5,870,776
Total debt $ 4,757,076 $ 3,434,402 $ 3,124,303 $ 3,079,238 $ 3,110,042
Total liabilities $ 5,314,879 $ 3,848,104 $ 3,479,112 $ 3,405,204 $ 3,441,605
(1)Financial information has been revised to reflect certain reclassifications in prior periods to conform to current period presentation.
SUN COMMUNITIES, INC.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 accompanying footnotes thereto included in this Annual Report on Form 10-K. In addition to the results presented in accordance with GAAP below, we have provided NOI and FFO as supplemental performance measures. Refer to Non-GAAP Financial Measures in this Item 7 for additional information.
OVERVIEW
We are a fully integrated, self-administered and self-managed REIT. As of December 31, 2020, we owned and operated or held an interest in a portfolio of 552 developed properties located in 39 states throughout the United States and one province in Canada, including 276 MH communities, 136 RV resorts, 34 properties containing both MH and RV sites, and 106 marinas. We have been in the business of acquiring, operating, developing, and expanding MH communities and RV resorts since 1975, and marinas since 2020. We lease individual sites with utility access for placement of manufactured homes, RVs or boats to our customers. We are also engaged through SHS in the marketing, selling, and leasing of new and pre-owned homes to current and future residents in our communities. The operations of SHS support and enhance our occupancy levels, property performance and cash flows.
COVID-19 IMPACT
The execution of our operational and financial plans has helped to mitigate the impact of COVID-19 on our business. As of December 31, 2020, only certain properties in California were subject to COVID-19 operating restrictions.
We continue to provide essential services using social distancing techniques and minimal contact. To promote social distancing, we are encouraging our residents to use our online rent payment portals and other payment methods. We have instituted numerous health and safety measures at our communities and our Main Office to keep team members safe. These measures include infrared thermometers at entrances to monitor team members’ temperatures, increased cleaning and sanitation of shared spaces and social distancing protocols throughout our footprint. We closely monitor and track orders by federal, state and local authorities and hold regular status calls with our operations and Main Office leadership teams. We have implemented and continue to encourage remote working arrangements, wherever possible, to keep our team members safe and to do our part to promote social distancing.
We are experiencing more traffic at our properties as would be expected with the lifting of shelter-in-place mandates and other travel restrictions and are receiving more applications to live in our MH communities than in the prior year. Demand for short term RV sites has increased as travelers seek drive-to vacation destinations where they have more control over their personal accommodations and are able to enjoy outdoor, socially distanced activities.
We provided a temporary hardship program to those residents who have been economically disadvantaged as a result of COVID-19 for the months of April and May. This hardship program deferred the payment of April and May rent over 12 months, with collections commencing on July 1, 2020. When the program ended in June, we had provided deferred relief of $4.4 million to approximately 4.0 percent of residents in our communities, including owner occupied sites and rental home sites. We accounted for these lease concessions consistent with ASC 842 as if those concessions had already existed in the lease, recognizing rental income and increasing resident lease receivables as the payments accrue. The deferrals impacted the timing, not the overall amount of lease payments due.
We halted increases to our monthly rental rates for a period of time but have resumed our rent increase process.
We remain committed to assisting individuals who are in the process of leasing a site, a wet slip, a dry storage space, or purchasing a home, while maintaining health and safety protocols including following strict social distancing. Virtual viewings of homes are being utilized to avoid or minimize contact.
The extent to which the COVID-19 pandemic impacts our operations, financial condition and financial results will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. The uncertainty of this situation precludes any prediction as to the full impact of the COVID-19 pandemic.
SUN COMMUNITIES, INC.
EXECUTIVE SUMMARY
2020 General Overview
•Total revenues for 2020 increased 10.6 percent to $1.4 billion.
•In October 2020, we acquired Safe Harbor for $2.0 billion, our largest acquisition to date. The Safe Harbor portfolio was comprised of 99 properties located in prime coastal markets with over 38,800 total wet slips and dry storage spaces.
•Including Safe Harbor, we acquired 130 properties, totaling over 45,800 MH and RV sites and marina wet slips and dry storage spaces for a total purchase price of $3.0 billion.
•Core FFO for 2020 was $5.09 per diluted share and OP unit, an increase of 3.5 percent over 2019.
•Achieved Same Community NOI growth of 4.0 percent.
•Attained Same Community occupancy of 98.8 percent.
•Gained 2,505 revenue producing sites.
•Brokered homes sales increased by 14.6 percent to 2,557 in 2020 as compared to 2,231 in 2019.
•Achieved 1-year, 3-year and 5-year total shareholder return of 3.6 percent, 76.5 percent and 155.1 percent, respectively, outperforming the MSCI US REIT, Russell 1000, U.S. REIT Residential, and S&P 500 indexes.
•Delivered over 300 total expansion sites in eight MH and RV properties.
•Completed the construction of over 1,000 total sites at four ground-up developments and one re-development property.
•Closed two underwritten registered public offerings for proceeds net of offering related expenses totaling approximately $1.9 billion.
•Our successful execution of our operational and financial plans has helped us mitigate the impact of COVID-19.
Property Operations
Occupancy in our MH and annual RV properties, as well as our ability to increase rental rates, directly affect revenues. Our revenue streams are predominantly derived from customers renting our sites on a long-term basis. Our Same Community properties continue to achieve revenue and occupancy increases which drive continued NOI growth. We continue to sell homes at a high level in our communities and expect this trend to continue.
Year Ended
Portfolio Information: December 31, 2020 December 31, 2019 December 31, 2018
Occupancy % - Total Portfolio - MH and Annual RV blended(1)
98.3 % 98.3 % 96.1 %
Occupancy % - Same Community - MH and Annual RV blended(1)(2)(3)
98.8 % 98.4 % 98.0 %
Core FFO $ 5.09 $ 4.92 $ 4.58
NOI - Total Portfolio (in thousands)
$ 649,233 $ 586,649 $ 524,178
NOI - Same Community (in thousands)
$ 592,772 $ 551,492 $ 512,357
Homes Sold 2,866 3,439 3,629
Number of Occupied Rental Homes 11,752 11,325 10,994
(1) Occupancy percent includes annual RV sites and excludes transient RV sites.
(2) Occupancy percent excludes recently completed but vacant expansion sites.
(3) Same community is based on the as reported year end same community count for each respective year.
SUN COMMUNITIES, INC.
Acquisition Activity
During the past three years, we have completed acquisitions of over 190 properties with over 24,200 sites and over 38,800 wet slips and dry storage spaces located in high growth areas and retirement and vacation destinations such as California, Florida, Texas, Arizona and the Eastern United States coastal areas.
During 2020, we acquired 24(1) MH communities and RV resorts, and 106(1) marinas, as detailed below:
MH & RV Property Name Property Type Sites Development Sites State Month Acquired
Cape Cod RV 230 - MA January
Jellystone Natural Bridge RV 299 - VA February
Forest Springs MH 372 - CA May
Crown Villa RV 123 - OR June
Flamingo Lake RV 421 - FL July
Woodsmoke RV 300 - FL September
Jellystone Lone Star RV 344 - TX September
El Capitan & Ocean Mesa RV 266 109 CA September
Highland Green Estates & Troy Villa MH 1,162 - MI September
Gig Harbor RV 115 - WA November
Maine MH Portfolio MH 1,083 - ME November
Mouse Mountain MH / RV 304 - FL December
Lakeview Mobile Estates MH 296 - CA December
Shenandoah Acres RV 522 - VA December
Jellystone at Barton Lake RV 555 - IN December
Kittatinny Portfolio RV 527 - NY & PA December
Total 6,919 109
Marina Property Name Property Type Wet Slips & Dry Storage State Month Acquired
Safe Harbor Marinas Marina 37,305 Various October
Safe Harbor Hideaway Bay Marina 628 GA November
Safe Harbor Anacapa Isle Marina 453 CA December
Annapolis Marina 184 MD December
Wickford Marina 60 RI December
Rybovich Portfolio Marina 78 FL December
Rockland Marina 173 ME December
38,881
(1) Refer to Note 3, “Real Estate Acquisitions and Dispositions,” for information on the acquisition of the Southfield office space not included in the table above, and additional detail on the acquisition of MH, RV and marina.
Disposition Activity
On July 1, 2020, we sold a manufactured home community located in Montana, containing 226 sites, for $12.6 million. The gain from the sale of the property was $5.6 million.
Construction Activity
There are 10,025 additional MH and RV sites suitable for development. In 2021, we expect to construct and expand between 1,150 - 1,600 additional sites.
Ground-up Developments - During the year ended December 31, 2020, we constructed over 1,000 total sites at four ground-up development properties and one re-development located in Colorado, North Carolina and South Carolina.
SUN COMMUNITIES, INC.
Expansions - We have been focused on expansion opportunities adjacent to our existing properties, and we have developed over 2,800 sites within the past three years. We have expanded over 300 total sites at eight MH and RV properties in 2020. We continue to expand our properties utilizing our inventory of owned and entitled land (approximately 10,000 sites available for development in 82 communities).
Markets
Our MH and RV properties are largely concentrated in Florida, Michigan, Texas and California. We have expanded our market share in multiple states through recent acquisitions and increased our property holdings in high growth areas of the U.S. including retirement and vacation destinations.
We have also experienced strong revenue growth through recent acquisitions of RV resorts. The age demographic of RV resorts is attractive, as the population of retirement age baby boomers in the U.S. is growing. RV resorts have become a trending vacation opportunity not only for the retiree population, but as an affordable vacation alternative for families and millennials.
The following table identifies our MH and RV markets by total sites:
December 31, 2020 December 31, 2019
Major Market Number of Properties Total Sites % of Total Sites Number of Properties Total Sites % of Total Sites
Florida 128 45,814 30.7 % 125 44,695 31.6 %
Michigan 74 29,632 19.8 % 72 28,475 20.2 %
Texas 24 9,576 6.4 % 23 9,238 6.5 %
California 35 8,906 6.0 % 31 7,933 5.6 %
Arizona 14 5,660 3.8 % 13 5,660 4.0 %
New York 9 2,841 1.9 % 8 2,314 1.6 %
Connecticut 16 2,005 1.3 % 16 2,005 1.4 %
Ontario, Canada 15 5,056 3.4 % 15 4,970 3.5 %
Ohio 9 2,925 2.0 % 9 2,920 2.1 %
Indiana 12 4,176 2.8 % 11 3,621 2.6 %
Georgia 4 1,355 0.9 % 4 1,355 1.0 %
Maryland 6 1,852 1.2 % 6 1,825 1.3 %
South Carolina 6 2,503 1.7 % 6 2,285 1.6 %
New Jersey 8 3,160 2.1 % 8 3,159 2.2 %
North Carolina 5 1,083 0.7 % 5 954 0.7 %
Colorado 10 3,415 2.3 % 10 2,714 1.9 %
Maine 13 2,995 2.0 % 7 1,911 1.4 %
Massachusetts 3 928 0.6 % 2 671 0.5 %
New Hampshire 10 2,237 1.5 % 10 2,236 1.6 %
Illinois 5 2,151 1.4 % 5 2,150 1.5 %
Virginia 8 1,875 1.3 % 6 1,084 0.8 %
Delaware 4 1,709 1.1 % 4 1,709 1.2 %
Pennsylvania 5 1,535 1.0 % 4 1,534 1.1 %
Tennessee 2 545 0.4 % 3 700 0.5 %
Oregon 5 1,200 0.8 % 4 1,077 0.8 %
Missouri 2 976 0.7 % 2 976 0.7 %
Alabama 1 142 0.1 % 1 142 0.1 %
Utah 5 750 0.5 % 5 753 0.5 %
Wisconsin 2 588 0.4 % 2 588 0.4 %
Minnesota 1 475 0.3 % 1 475 0.3 %
SUN COMMUNITIES, INC.
December 31, 2020 December 31, 2019
Major Market Number of Properties Total Sites % of Total Sites Number of Properties Total Sites % of Total Sites
Mississippi 1 155 0.1 % N/A N/A N/A
Iowa 1 413 0.3 % 1 413 0.3 %
Nevada 1 324 0.2 % 1 324 0.2 %
Louisiana 1 226 0.2 % 1 201 0.1 %
Washington 1 112 0.1 % N/A N/A N/A
Montana - - - % 1 226 0.2 %
446 149,295 422 141,293
Our marinas are largely concentrated in Florida, Connecticut, Rhode Island and New York.
The following table identifies our marina markets by total wet slips and dry storage spaces:
December 31, 2020
Major Market Number of Properties Wet Slips Dry Storage
Total Wet Slips / Dry Storages
% Wet Slips / Dry Storages
Florida 14 1,936 1,637 3,573 9.2 %
Connecticut 11 3,254 - 3,254 8.4 %
Rhode Island 11 2,690 - 2,690 6.9 %
New York 8 2,556 64 2,620 6.7 %
Maryland 8 1,881 188 2,069 5.3 %
Other 54 17,213 7,462 24,675 63.5 %
106 29,530 9,351 38,881
SUN COMMUNITIES, INC.
NON-GAAP FINANCIAL MEASURES
In addition to the results reported in accordance with GAAP in our “Results of Operations” below, we have provided information regarding net operating income (“NOI”) and funds from operations (“FFO”) as supplemental performance measures. We believe NOI and FFO are appropriate measures given their wide use by and relevance to investors and analysts following the real estate industry. NOI provides a measure of rental operations and does not factor in depreciation, amortization and non-property specific expenses such as general and administrative expenses. FFO, reflecting the assumption that real estate values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation / amortization of real estate assets. In addition, NOI and FFO are commonly used in various ratios, pricing multiples / yields and returns and valuation calculations used to measure financial position, performance and value.
NOI is derived from revenues minus property operating expenses and real estate taxes. NOI is a non-GAAP financial measure that we believe is helpful to investors as a supplemental measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. We use NOI as a key measure when evaluating performance and growth of particular properties and / or groups of properties. The principal limitation of NOI is that it excludes depreciation, amortization, interest expense and non-property specific expenses such as general and administrative expenses, all of which are significant costs. Therefore, NOI is a measure of the operating performance of our properties rather than of the Company overall.
We believe that GAAP net income (loss) is the most directly comparable measure to NOI. NOI should not be considered to be an alternative to GAAP net income (loss) as an indication of our financial performance or GAAP cash flow from operating activities as a measure of our liquidity; nor is it indicative of funds available for our cash needs, including our ability to make cash distributions. Because of the inclusion of items such as interest, depreciation and amortization, the use of GAAP net income (loss) as a performance measure is limited as these items may not accurately reflect the actual change in market value of a property, in the case of depreciation and in the case of interest, may not necessarily be linked to the operating performance of a real estate asset, as it is often incurred at a parent company level and not at a property level.
FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating property, plus real estate related depreciation and amortization, real estate related impairments, and after adjustments for unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure that management believes is a useful supplemental measure of our operating performance. By excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO provides a performance measure that, when compared period-over-period, reflects the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not readily apparent from GAAP net income (loss). Management believes the use of FFO has been beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. We also use FFO excluding certain gain and loss items that management considers unrelated to the operational and financial performance of our core business (“Core FFO”). We believe that Core FFO provides enhanced comparability for investor evaluations of period-over-period results.
We believe that GAAP net income (loss) is the most directly comparable measure to FFO. The principal limitation of FFO is that it does not replace GAAP net income (loss) as a performance measure or GAAP cash flow from operations as a liquidity measure. Because FFO excludes significant economic components of GAAP net income (loss) including depreciation and amortization, FFO should be used as a supplement to GAAP net income (loss) and not as an alternative to it. Further, FFO is not intended as a measure of a REIT’s ability to meet debt principal repayments and other cash requirements, nor as a measure of working capital. FFO is calculated in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that interpret the NAREIT definition differently.
SUN COMMUNITIES, INC.
RESULTS OF OPERATIONS
We report operating results under two segments: Real Property Operations and Home Sales and Rentals. The Real Property Operations segment owns, operates, develops, or has an interest in, a portfolio of MH communities, RV resorts and marinas throughout the U.S. and in Canada, and is in the business of acquiring, operating, and expanding MH communities, RV resorts and marinas. The Home Sales and Rentals segment offers MH and RV park model sales and leasing services to tenants and prospective tenants of our communities. We evaluate segment operating performance based on NOI and gross profit. Refer to Note 11, “Segment Reporting,” in our accompanying Consolidated Financial Statements for additional information.
Summary Statements of Operations
The following tables reconcile the Net income attributable to Sun Communities, Inc. common stockholders to NOI and summarize our consolidated financial results for the years ended December 31, 2020, 2019, and 2018 (in thousands):
Year Ended
December 31, 2020 December 31, 2019 December 31, 2018
Net Income Attributable to Sun Communities, Inc. Common Stockholders $ 131,614 $ 160,265 $ 105,493
Interest income (10,119) (17,857) (20,852)
Brokerage commissions and other revenues, net (17,230) (14,127) (6,205)
Home selling expenses 15,134 14,690 15,722
General and administrative expenses 111,288 93,964 81,429
Catastrophic weather-related charges, net 885 1,737 92
Business combination expense 23,008 - -
Depreciation and amortization 376,876 328,067 287,262
Loss on extinguishment of debt (see Note 8)
5,209 16,505 1,190
Interest expense 129,071 133,153 130,556
Interest on mandatorily redeemable preferred OP units / equity 4,177 4,698 3,694
(Gain) / loss on remeasurement of marketable securities (6,129) (34,240) 3,639
(Gain) / loss on foreign currency translation (8,039) (4,557) 8,234
Gain on disposition of property (5,595) - -
Other (income) / expense, net 3,768 1,100 (1,781)
Loss on remeasurement of notes receivable (see Note 4)
3,275 - -
Income from nonconsolidated affiliates (see Note 6)
(1,740) (1,374) (790)
Loss on remeasurement of investment in nonconsolidated affiliates (see Note 6)
1,608 - -
Current tax expense (see Note 12)
790 1,095 595
Deferred tax benefit (see Note 12)
(1,565) (222) (507)
Preferred return to preferred OP units / equity 6,935 6,058 4,486
Income attributable to noncontrolling interests 8,902 9,768 8,443
Preferred stock distribution - 1,288 1,736
NOI / Gross Profit $ 772,123 $ 700,011 $ 622,436
Year Ended
December 31, 2020 December 31, 2019 December 31, 2018
Real Property NOI $ 649,233 $ 586,649 $ 524,178
Home Sales NOI / Gross Profit 43,815 47,579 42,698
Rental Program NOI 115,283 104,382 95,968
Ancillary NOI / Gross Profit 38,615 30,206 25,207
Site rent from Rental Program (included in Real Property NOI)(1)
(74,823) (68,805) (65,615)
NOI / Gross Profit $ 772,123 $ 700,011 $ 622,436
(1) The renter’s monthly payment includes the site rent and an amount attributable to the home lease. The site rent is reflected in Real Property Operations’ segment revenue. For purposes of management analysis, site rent is included in Rental Program revenue to evaluate the incremental revenue gains associated with the implementation of the Rental Program, and to assess the overall growth and performance of the Rental Program and the financial impact on our operations.
SUN COMMUNITIES, INC.
Comparison of the Years Ended December 31, 2020, 2019 and 2018
Real Property Operations - Total Portfolio
The following tables reflect certain financial and other information for our Total Portfolio as of and for the years ended December 31, 2020, 2019 and 2018:
Year Ended Year Ended
Financial Information
(in thousands) December 31, 2020 December 31, 2019 (1)
Change % Change December 31, 2019 (1)
December 31, 2018 (1)
Change % Change
Income from real property $ 1,030,636 $ 914,907 $ 115,729 12.6 % $ 914,907 $ 816,830 $ 98,077 12.0 %
Property operating expenses
Payroll and benefits 101,245 88,085 13,160 14.9 % 88,085 74,653 13,432 18.0 %
Legal, taxes, and insurance 12,704 10,778 1,926 17.9 % 10,778 9,524 1,254 13.2 %
Utilities 116,182 101,910 14,272 14.0 % 101,910 93,205 8,705 9.3 %
Supplies and repairs 39,692 34,663 5,029 14.5 % 34,663 28,594 6,069 21.2 %
Other(2)
38,974 30,942 8,032 26.0 % 30,942 30,121 821 2.7 %
Real estate taxes 72,606 61,880 10,726 17.3 % 61,880 56,555 5,325 9.4 %
Property operating expenses 381,403 328,258 53,145 16.2 % 328,258 292,652 35,606 12.2 %
Real Property NOI $ 649,233 $ 586,649 $ 62,584 10.7 % $ 586,649 $ 524,178 $ 62,471 11.9 %
(1) Canadian currency figures included within the year ended December 31, 2019 and 2018 have been translated at 2020 and 2019 average exchange rates, respectively.
(2) Includes COVID-19 personal protective equipment expense of $2.9 million for the year ended December 31, 2020.
As of As of
Other Information December 31, 2020 December 31, 2019 Change December 31, 2019 December 31, 2018 Change
Number of properties(1)
552 422 130 422 371 51
MH occupancy 96.6 % 95.5 %
RV occupancy(2)
100.0 % 100.0 %
MH & RV blended occupancy(3)
97.3 % 96.4 % 0.9 % 96.4 % 96.1 % 0.3 %
Adjusted MH occupancy(4)
97.8 % 97.8 %
Adjusted RV occupancy(5)
100.0 % 100.0 %
Adjusted MH & RV blended occupancy(6)
98.3 % 98.3 % - % 98.3 % 98.0 % 0.3 %
Sites available for MH & RV development 10,025 10,293 (268) 10,293 11,258 (965)
Monthly base rent per site - MH $ 588 $ 571 (8)
$ 17 $ 571 $ 554 (8)
$ 17
Monthly base rent per site - RV(7)
$ 513 $ 486 (8)
$ 27 $ 485 $ 458 (8)
$ 27
Monthly base rent per site - Total $ 571 $ 552 (8)
$ 19 $ 551 $ 432 (8)
$ 119
(1) Include MH communities, RV resorts and marinas.
(2) Occupancy percentages include annual RV sites and exclude transient RV sites.
(3) Occupancy percentages include MH and annual RV sites, and exclude transient RV sites.
(4) Adjusted occupancy percentages include MH and exclude recently completed but vacant expansion sites.
(5) Adjusted occupancy percentages include annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.
(6) Adjusted occupancy percentages include MH and annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.
(7) Monthly base rent pertains to annual RV sites and excludes transient RV sites.
(8) Canadian currency figures included within the year ended December 31, 2019 and 2018 have been translated at 2020 and 2019 average exchange rates, respectively.
The $62.6 million increase in Real Property NOI from 2019 to 2020 consists of $22.6 million from Same Communities as detailed below and $40.0 million from recently acquired properties in the year ended December 31, 2020 as compared to 2019.
SUN COMMUNITIES, INC.
The $62.5 million increase in Real Property NOI from 2018 to 2019 consists of $37.7 million from Same Communities as detailed below and $24.8 million from recently acquired properties in the years ended December 31, 2019 as compared to 2018.
Real Property Operations - Same Communities
A key management tool used when evaluating performance and growth of our properties is a comparison of Same Communities. Same communities refer to properties that we have owned for at least the preceding year. The Same Community data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions, or unique situations. In order to evaluate the growth of the Same Communities, management has classified certain items differently than our GAAP statements. The reclassification difference between our GAAP statements and our Same Community portfolio is the reclassification of water and sewer revenues from income from real property to utilities. A significant portion of our utility charges are re-billed to our residents. For the years ended December 31, 2020 and 2019, Canadian currency figures included within the year ended December 31, 2019 have been translated at 2020 average exchange rates. For the years ended December 31, 2019 and 2018, Canadian currency figures included within the year ended December 31, 2018 have been translated at 2019 average exchange rates.
Year Ended Year Ended
Financial Information
(in thousands) December 31, 2020 December 31, 2019 Change % Change December 31, 2019 December 31, 2018 Change % Change
Income from real property(1)
$ 876,981 $ 846,231 $ 30,750 3.6 % $ 799,178 $ 752,324 $ 46,854 6.2 %
Property operating expenses
Payroll and benefits 81,897 82,727 (830) (1.0) % 72,519 68,630 3,889 5.7 %
Legal, taxes, and insurance 10,860 10,351 509 4.9 % 9,579 9,212 367 4.0 %
Utilities 66,214 63,410 2,804 4.4 % 58,044 57,309 735 1.3 %
Supplies and repairs (2)
33,616 33,153 463 1.4 % 30,025 27,158 2,867 10.6 %
Other(3)
27,916 26,738 1,178 4.4 % 19,966 20,535 (569) (2.8) %
Real estate taxes 63,706 59,649 4,057 6.8 % 57,553 55,667 1,886 3.4 %
Property operating expenses 284,209 276,028 8,181 3.0 % 247,686 238,511 9,175 3.8 %
Real Property NOI $ 592,772 $ 570,203 $ 22,569 4.0 % $ 551,492 $ 513,813 $ 37,679 7.3 %
(1) We adopted ASC 842, the new lease accounting standard, as of January 1, 2019 which required the reclassification of bad debt expense from Property operating expense to Income from real property. To assist with comparability within Same Community results, bad debt expense has been reclassified to be shown as a reduction of Income from real property for all periods presented.
(2) For the comparative periods December 31, 2020 and 2019, the year ended 2019 excludes less than $0.1 million of expenses incurred for recently acquired properties to bring the properties up to our operating standards. For the comparative periods December 31, 2019 and 2018, the year ended 2018 excludes $0.7 million of expenses incurred for recently acquired properties to bring the properties up to our operating standards. These costs did not meet our capitalization policy.
(3) Includes COVID-19 personal protective equipment expense of $2.4 million for the year ended December 31, 2020.
SUN COMMUNITIES, INC.
As of As of
Other Information December 31, 2020 December 31, 2019 Change December 31, 2019 December 31, 2018 Change
Number of properties 367 367 - 345 345 -
MH occupancy 97.4 % 95.8 %
RV occupancy(1)
100.0 % 100.0 %
MH & RV blended occupancy(2)
98.0 % 96.7 %
Adjusted MH occupancy(3)
98.5 % 97.9 %
Adjusted RV occupancy(4)
100.0 % 100.0 %
Adjusted MH & RV blended occupancy(5)
98.8 % 97.0 % (66)
1.8 % 98.4 % 96.2 % (6)
2.2 %
Sites available for development 6,682 6,314 368 6,314 7,348 (1,034)
Monthly base rent per site - MH $ 600 $ 580 (8)
$ 20 $ 577 $ 554 (8)
$ 23
Monthly base rent per site - RV(7)
$ 514 $ 488 (8)
$ 26 $ 489 $ 461 (8)
$ 28
Monthly base rent per site - Total $ 579 $ 558 (8)
$ 21 $ 557 $ 533 (8)
$ 24
(1) Occupancy percentages include annual RV sites and exclude transient RV sites.
(2) Occupancy percentages include MH and annual RV sites, and exclude transient RV sites.
(3) Adjusted occupancy percentages include MH and exclude recently completed but vacant expansion sites.
(4) Adjusted occupancy percentages include annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.
(5) Adjusted occupancy percentages include MH and annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.
(6) The occupancy percentages for 2019 and 2018 have been adjusted to reflect incremental growth period-over-period from filled MH expansion sites and the conversion of transient RV sites to annual RV sites.
(7) Monthly base rent pertains to annual RV sites and excludes transient RV sites.
(8) Canadian currency figures included within the year ended December 31, 2019 and 2018 have been translated at 2020 and 2019 average exchange rates, respectively.
Year ended December 31, 2020 and 2019
The Same Communities data includes all properties which we have owned and operated continuously since January 1, 2019, exclusive of properties recently completed or under construction, and other properties as determined by management. We have reclassified $37.7 million and $34.7 million for the years ended December 31, 2020 and 2019, respectively, from Income form real property to Utilities to reflect the utility expenses associated with our Same Community portfolio net of recovery.
The 4.0 percent growth in NOI is primarily due to increased Income from real property of $30.8 million, or 3.6 percent. The 3.6 percent increase is primarily attributable to a 1.8 percent increase in MH & RV blended occupancy and a 3.8 percent increase in total monthly base rent per site when compared to 2019, offset by discounts and bad debt expense. The increase in Income from real property was partially offset by a $8.2 million, or 3.0 percent, increase in Property operating expenses, primarily attributable to increases in payroll and benefits, supplies and repairs and real estate taxes.
Year ended December 31, 2019 and 2018
The Same Communities data includes all properties which we have owned and operated continuously since January 1, 2018, exclusive of properties recently completed or under construction, and other properties as determined by management. We have reclassified $34.7 million and $32.7 million for the years ended December 31, 2019 and 2018, respectively, from Income from real property to Utilities to reflect the utility expenses associated with our Same Community portfolio net of recovery.
The 7.3 percent growth in NOI is primarily due to increased Income from real property of $46.9 million, or 6.2 percent The 6.2 percent increase is primarily attributable to a 2.2 percent increase in MH & RV blended occupancy and a 4.5 percent increase in total monthly base rent per site when compared to 2018. The increase in Income from real property was partially offset by a $9.2 million, or 3.8 percent, increase in Property operating expenses, primarily attributable to increases in payroll and benefits, supplies and repairs and legal, taxes and insurance expenses.
SUN COMMUNITIES, INC.
Home Sales Summary
We purchase new homes and acquire pre-owned and repossessed manufactured homes, generally located within our communities, from lenders, dealers, and former residents to lease or sell to current and prospective residents.
The following table reflects certain financial and statistical information for our Home Sales Program for the years ended December 31, 2020, 2019 and 2018 (in thousands, except for average selling prices and statistical information):
Year Ended Year Ended
Financial Information December 31, 2020 December 31, 2019 Change % Change December 31, 2019 December 31, 2018 Change % Change
New homes
New home sales $ 79,728 $ 71,760 $ 7,968 11.1 % $ 71,760 $ 59,578 $ 12,182 20.4 %
New home cost of sales 65,533 61,557 3,976 6.5 % 61,557 51,913 9,644 18.6 %
NOI / Gross Profit -
new homes $ 14,195 $ 10,203 $ 3,992 39.1 % $ 10,203 $ 7,665 $ 2,538 33.1 %
Gross margin % -
new homes 17.8 % 14.2 % 3.6 % 14.2 % 12.9 % 1.3 %
Average selling price - new homes $ 139,874 $ 125,674 $ 14,200 11.3 % $ 125,674 $ 113,266 $ 12,408 11.0 %
Pre-owned homes
Pre-owned home sales $ 95,971 $ 110,176 $ (14,205) (12.9) % $ 110,176 $ 106,453 $ 3,723 3.5 %
Pre-owned home cost of sales 66,351 72,800 (6,449) (8.9) % 72,800 71,420 1,380 1.9 %
NOI / Gross Profit -
pre-owned homes $ 29,620 $ 37,376 $ (7,756) (20.8) % $ 37,376 $ 35,033 $ 2,343 6.7 %
Gross margin % -
pre-owned homes 30.9 % 33.9 % (3.0) % 33.9 % 32.9 % 1.0 %
Average selling price - pre-owned homes $ 41,799 $ 38,416 $ 3,383 8.8 % $ 38,416 $ 34,306 $ 4,110 12.0 %
Total home sales
Revenue from home sales $ 175,699 $ 181,936 $ (6,237) (3.4) % $ 181,936 $ 166,031 $ 15,905 9.6 %
Cost of home sales 131,884 134,357 (2,473) (1.8) % 134,357 123,333 11,024 8.9 %
NOI / Gross Profit -
home sales $ 43,815 $ 47,579 $ (3,764) (7.9) % $ 47,579 $ 42,698 $ 4,881 11.4 %
Statistical Information
New home sales volume 570 571 (1) (0.2) % 571 526 45 8.6 %
Pre-owned home sales volume 2,296 2,868 (572) (19.9) % 2,868 3,103 (235) (7.6) %
Total home sales volume 2,866 3,439 (573) (16.7) % 3,439 3,629 (190) (5.2) %
NOI / Gross Profit - new homes - For the year ended December 31, 2020, the $4.0 million, or 39.1 percent, increase in gross profit is primarily the result of a 11.3 percent increase in the average selling price, partially offset by an increase in the average cost of homes sold, as compared to 2019.
For the year ended December 31, 2019, the $2.5 million, or 33.1 percent, increase in gross profit is primarily the result of a 8.6 percent increase in new home sales volume coupled with a 11.0 percent increase in the average selling price, as compared to 2018.
NOI / Gross Profit - pre-owned homes - For the year ended December 31, 2020, the $7.8 million, or 20.8 percent, decrease in gross profit is primarily the result of a 19.9 percent decrease in pre-owned home sales volume, as compared to 2019.
For the year ended December 31, 2019, the $2.3 million, or 6.7 percent, increase in gross profit is primarily the result of a 12.0 percent increase in the average selling price, which is partially offset by a 7.6 percent decrease in pre-owned home sales volume, as compared to 2018.
SUN COMMUNITIES, INC.
Rental Program Summary
The following table reflects certain financial and other information for our Rental Program for the years ended December 31, 2020, 2019 and 2018 (in thousands, except for statistical information):
Year Ended Year Ended
Financial Information December 31, 2020 December 31, 2019 Change % Change December 31, 2019 December 31, 2018 Change % Change
Revenues
Rental home revenue $ 62,646 $ 57,572 $ 5,074 8.8 % $ 57,572 $ 53,657 $ 3,915 7.3 %
Site rent from Rental Program(1)
74,823 68,805 6,018 8.7 % 68,805 65,615 3,190 4.9 %
Rental Program revenue 137,469 126,377 11,092 8.8 % 126,377 119,272 7,105 6.0 %
Expenses
Repairs and refurbishment 11,886 12,591 (705) (5.6) % 12,591 10,456 2,135 20.4 %
Taxes and insurance 8,460 7,488 972 13.0 % 7,488 6,425 1,063 16.5 %
Other 1,840 1,916 (76) (4.0) % 1,916 6,423 (4,507) (70.2) %
Rental Program operating and maintenance 22,186 21,995 191 0.9 % 21,995 23,304 (1,309) (5.6) %
Rental Program NOI $ 115,283 $ 104,382 $ 10,901 10.4 % $ 104,382 $ 95,968 $ 8,414 8.8 %
Other Information
Number of sold rental homes 850 1,140 (290) (25.4) % 1,140 1,122 18 1.6 %
Number of occupied rentals,
end of period 11,752 11,325 427 3.8 % 11,325 10,994 331 3.0 %
Investment in occupied rental homes, end of period $ 629,162 $ 584,771 $ 44,391 7.6 % $ 584,771 $ 530,006 $ 54,765 10.3 %
Weighted average monthly rental rate, end of period $ 1,042 $ 997 $ 45 4.5 % $ 997 $ 949 $ 48 5.1 %
(1) The renter’s monthly payment includes the site rent and an amount attributable to the home lease. The site rent is reflected in Real Property Operations’ segment revenue. For purposes of management analysis, site rent is included in Rental Program revenue to evaluate the incremental revenue gains associated with the implementation of the Rental Program, and to assess the overall growth and performance of the Rental Program and the financial impact on our operations.
For the year ended December 31, 2020, Rental Program NOI increased $10.9 million, or 10.4 percent, as compared to 2019. The increase is primarily due to an increase in Rental Program revenue of $11.1 million, or 8.8 percent, primarily attributable to a 4.5 percent increase in the weighted average monthly rental rate and a 3.8 percent increase in the number of occupied rentals.
For the year ended December 31, 2019, Rental Program NOI increased $8.4 million, or 8.8 percent, as compared to 2018. The increase is primarily due to (a) an increase in Rental Program revenue of $7.1 million, or 6.0 percent, primarily attributable to a 5.1 percent increase in weighted average monthly rental rate, and a 3.0 percent increase in the number of occupied rentals, and (b) a decrease in Rental Program operating and maintenance expenses of $1.3 million, or 5.6 percent, resulting primarily from the capitalization of commission expenses under ASC 842 in the year ended December 31, 2019 as compared to 2018.
SUN COMMUNITIES, INC.
Other Items - Statements of Operations(1)
The following table summarizes other income and expenses for the years ended December 31, 2020, 2019 and 2018 (amounts in thousands):
Year Ended Year Ended
December 31, 2020 December 31, 2019 Change % Change December 31, 2019 December 31, 2018 Change % Change
Ancillary revenues, net $ 38,615 $ 30,206 $ 8,409 27.8 % $ 30,206 $ 25,207 $ 4,999 19.8 %
Interest income $ 10,119 $ 17,857 $ (7,738) (43.3) % $ 17,857 $ 20,852 $ (2,995) (14.4) %
Brokerage commissions and other revenues, net $ 17,230 $ 14,127 $ 3,103 22.0 % $ 14,127 $ 6,205 $ 7,922 127.7 %
Home selling expenses $ 15,134 $ 14,690 $ 444 3.0 % $ 14,690 $ 15,722 $ (1,032) (6.6) %
General and administrative expenses $ 111,288 $ 93,964 $ 17,324 18.4 % $ 93,964 $ 81,429 $ 12,535 15.4 %
Catastrophic weather-related charges, net $ 885 $ 1,737 $ (852) (49.1) % $ 1,737 $ 92 $ 1,645 1,788.0 %
Business combination expense $ 23,008 $ - $ 23,008 N/A $ - $ - $ - N/A
Depreciation and amortization $ 376,876 $ 328,067 $ 48,809 14.9 % $ 328,067 $ 287,262 $ 40,805 14.2 %
Loss on extinguishment of debt (see Note 8)
$ 5,209 $ 16,505 $ (11,296) (68.4) % $ 16,505 $ 1,190 $ 15,315 1,287.0 %
Interest expense $ 129,071 $ 133,153 $ (4,082) (3.1) % $ 133,153 $ 130,556 $ 2,597 2.0 %
Interest on mandatorily redeemable preferred OP units / equity $ 4,177 $ 4,698 $ (521) (11.1) % $ 4,698 $ 3,694 $ 1,004 27.2 %
Gain / (loss) on remeasurement of marketable securities (see Note 15)
$ 6,129 $ 34,240 $ (28,111) (82.1) % $ 34,240 $ (3,639) $ 37,879 (1,040.9) %
Gain / (loss) on foreign currency translation $ 8,039 $ 4,557 $ 3,482 76.4 % $ 4,557 $ (8,234) $ 12,791 (155.3) %
Gain on disposition of property $ 5,595 $ - $ 5,595 N/A $ - $ - $ - N/A
Other income / (expense), net $ (3,768) $ (1,100) $ (2,668) 242.5 % $ (1,100) $ 1,781 $ (2,881) (161.8) %
Loss on remeasurement of notes receivable (see Note 4)
$ (3,275) $ - $ (3,275) N/A $ - $ - $ - N/A
Income from nonconsolidated affiliates (see Note 6)
$ 1,740 $ 1,374 $ 366 26.6 % $ 1,374 $ 790 $ 584 73.9 %
Loss on remeasurement of investment in nonconsolidated affiliates (see Note 6)
$ (1,608) $ - $ (1,608) N/A $ - $ - $ - N/A
Current tax expense (see Note 12)
$ (790) $ (1,095) $ 305 (27.9) % $ (1,095) $ (595) $ (500) 84.0 %
Deferred tax benefit (see Note 12)
$ 1,565 $ 222 $ 1,343 605.0 % $ 222 $ 507 $ (285) (56.2) %
Preferred return to preferred OP units / equity $ 6,935 $ 6,058 $ 877 14.5 % $ 6,058 $ 4,486 $ 1,572 35.0 %
Income attributable to noncontrolling interests $ 8,902 $ 9,768 $ (866) (8.9) % $ 9,768 $ 8,443 $ 1,325 15.7 %
Preferred stock distribution $ - $ 1,288 $ (1,288) N/M $ 1,288 $ 1,736 $ (448) (25.8) %
(1) Only items determined by management to be material, of interest, or unique to the periods disclosed above are explained below.
N/M = Percentage change is not meaningful.
Ancillary revenues, net - for the year ended December 31, 2020, increased primarily due to the addition of boat rental and service revenue and increases in RV resort activity revenues as compared to 2019. For the year ended December 31, 2019, the increase was primarily due to increases in golf course, restaurant, and RV resort activity revenues as compared to 2018.
Interest income - for the year ended December 31, 2020 and 2019, decreased primarily due to lower balances on our notes receivable and derecognition of collateralized notes receivable in the fourth quarter of 2019. For the year ended December 31, 2019, the decrease was primarily due to lower balances on our notes receivable and derecognition of collateralized notes receivable in 2019 as we satisfied the criteria of paragraph ASC 860-10-40-5 to be accounted for as a sale.
SUN COMMUNITIES, INC.
Brokerage commissions and other revenues, net - for the year ended December 31, 2020, increased primarily due to a $1.6 million increase in brokerage commissions, and a $0.8 million increase in ground lease income, as compared to 2019. For the year ended December 31, 2019, the increase was primarily due to a $3.1 million increase in brokerage commissions, and a $1.8 million increase in dividend income from our investment in marketable securities, as compared to 2018.
General and administrative expenses - for the year ended December 31, 2020, increased due to an increase in wages and incentives driven by growth in acquisition activity as compared to the same period in 2019, and COVID-19 personal protective equipment expense that did not exist in 2019. For the year ended December 31, 2019, increased primarily due to an increase in wages and incentives driven by growth in acquisitions and our performance as compared to 2018.
Catastrophic weather related charges, net - for the year ended December 31, 2020, decreased primarily due to changes in estimates related to damage losses for recent weather events. For the year ended December 31, 2019, increased primarily due to estimated damage losses for recent weather events.
Business combination expenses - for the year ended December 31, 2020,were incurred as a result of our recent acquisitions of marinas. Refer to Note 3, “Real Estate Acquisitions and Dispositions” of our accompanying Consolidated Financial Statements for additional information.
Depreciation and amortization - for the year ended December 31, 2020, increased as a result of our recent property acquisitions and ongoing expansion and development activities. Refer to Note 3, “Real Estate Acquisitions and Dispositions” of our accompanying Consolidated Financial Statements for additional information.
Loss on extinguishment of debt - for the year ended December 31, 2020, decreased primarily due to fewer prepayment penalties related to debt and financing activity as compared to 2019. For the year ended December 31, 2019, the increase is primarily due to higher prepayment penalties related to debt and financing activity as compared to 2018. Refer to Note 8, “Debt and Lines of Credit,” in our accompanying Consolidated Financial Statements for additional information.
Gain / (loss) on remeasurement of marketable securities - for the year ended December 31, 2020, decreased due to lower gain on the remeasurement of our investment in marketable securities as compared to 2019. For the year ended December 31, 2019, increased primarily due to a $34.2 million gain on the remeasurement of our investment in marketable securities as compared to a $3.6 million remeasurement loss in 2018. Refer to Note 15, Fair Value of Financial Instruments,” in our accompanying Consolidated Financial Statements for additional information.
Gain / (loss) on foreign currency translation - for the year ended December 31, 2020, increased as compared to same period in 2019, primarily due to favorable fluctuations in exchange rate on Canadian and Australian denominated currencies. For the year ended December 31, 2019, there was a $4.6 million gain as compared to a $8.2 million loss in the same period in 2018.
Gain on disposition of property - for the year ended December 31, 2020, there was a $5.6 million gain resulting from the sale of a MH community in Montana. There were no property dispositions during the years ended December 30, 2019 and 2018. Refer to Note 3, “Real Estate Acquisitions and Dispositions,” in our accompanying Consolidated Financial Statements for additional information.
Loss on remeasurement of notes receivable - represents the adjustment of our in-house financing notes receivable portfolio, for which we elected the fair value option on January 1, 2020. Refer to Note 4, “Notes and Other Receivables,” and Note 15, “Fair Value of Financial Instruments,” in our accompanying Consolidated Financial Statements for additional information.
Loss on remeasurement of investment in nonconsolidated affiliates - represents the adjustment of our equity investment in GTSC LLC (“GTSC”), for which we elected the fair value option on January 1, 2020. Refer to Note 6, “Investments in Nonconsolidated Affiliates,” in our accompanying Consolidated Financial Statements for additional information.
Preferred return to preferred OP units / equity - for the year ended December 31, 2020 increased primarily as a result of preferred OP units issued in conjunction with various acquisitions. For the year ended December 31, 2019 the increase was primarily the result of issuing the Series D Preferred OP units in conjunction with an acquisition in January 2019. Refer to Note 3, “Real Estate Acquisitions and Dispositions,” and Note 9, “Equity and Temporary Equity,” of our accompanying Consolidated Financial Statements for additional information.
SUN COMMUNITIES, INC.
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO SUN COMMUNITIES, INC. COMMON STOCKHOLDERS TO FFO
The following table reconciles Net income attributable to Sun Communities, Inc. common stockholders to FFO for the years ended December 31, 2020, 2019, and 2018 (in thousands, except per share amounts):
Year Ended
December 31, 2020 December 31, 2019 December 31, 2018
Net Income Attributable to Sun Communities, Inc. Common Stockholders $ 131,614 $ 160,265 $ 105,493
Adjustments
Depreciation and amortization 376,897 328,646 288,206
Depreciation on nonconsolidated affiliates 66 - -
Gain / (loss) on remeasurement of marketable securities
(6,129) (34,240) 3,639
Loss on remeasurement of investment in nonconsolidated affiliates 1,608 - -
Loss on remeasurement of notes receivable 3,275 - -
Income attributable to noncontrolling interests 7,881 8,474 7,740
Preferred return to preferred OP units 2,231 2,610 2,206
Preferred distribution to Series A-4 preferred stock - 1,288 1,737
Gain on disposition of properties (5,595) - -
Gain on disposition of assets, net (22,180) (26,356) (23,406)
FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities(1)
$ 489,668 $ 440,687 $ 385,615
Adjustments
Business combination expense 23,008 - -
Other acquisition related costs(2)
2,326 1,146 1,001
Loss on extinguishment of debt 5,209 16,505 1,190
Catastrophic weather-related charges, net 885 1,737 92
Loss of earnings - catastrophic weather related(3)
- - (292)
(Gain) / loss on foreign currency translation (8,039) (4,557) 8,234
Other (income) / expense, net 3,768 1,100 (1,781)
Other adjustments(4)
(1,265) 314 310
Core FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities(1)
$ 515,560 $ 456,932 $ 394,369
Weighted average common shares outstanding - basic 97,521 88,460 81,387
Add
Common stock issuable upon conversion of stock options 1 1 2
Restricted stock 455 454 651
Common OP units 2,458 2,448 2,733
Common stock issuable upon conversion of certain preferred OP units 907 1,454 1,368
Weighted Average Common Shares Outstanding - Fully Diluted 101,342 92,817 86,141
FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities Per Share - Fully Diluted $ 4.83 $ 4.75 $ 4.48
Core FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities Per Share - Fully Diluted $ 5.09 $ 4.92 $ 4.58
(1)The effect of certain anti-dilutive convertible securities is excluded from these items.
(2)These costs represent the expense incurred to bring recently acquired properties up to our operating standards, including items such as tree trimming and painting costs that do not meet our capitalization policy.
(3)Adjustment represents estimated loss of earnings in excess of the applicable business interruption deductible in relation to our three Florida Keys communities that were impaired by Hurricane Irma which had not yet been received from our insurer.
(4)Adjustments include accelerated deferred compensation amortization upon retirement and deferred tax (benefit) / expense.
SUN COMMUNITIES, INC.
LIQUIDITY AND CAPITAL RESOURCES
Our principal liquidity demands have historically been, and are expected to continue to be, distributions to our stockholders and the unit holders of the Operating Partnership, capital improvement of properties, the purchase of new and pre-owned homes, property acquisitions, development and expansion of properties, and debt repayment.
Subject to market conditions, we intend to continue to identify opportunities to expand our development pipeline and acquire existing properties. We finance acquisitions through available cash, secured financing, draws on our lines of credit, the assumption of existing debt on properties, and the issuance of equity securities. We will continue to evaluate acquisition opportunities that meet our criteria. Refer to Note 3, “Real Estate Acquisitions and Dispositions,” in our accompanying Consolidated Financial Statements for information regarding recent property acquisitions.
We also intend to continue to strengthen our capital and liquidity positions by focusing on our core fundamentals, which are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We intend to meet our liquidity requirements through available cash balances, cash flows generated from operations, draws on our lines of credit, and the use of debt and equity offerings under our shelf registration statement. Refer to Note 8, “Debt and Lines of Credit,” and Note 9, “Equity and Temporary Equity,” in our accompanying Consolidated Financial Statements for additional information.
Capital Expenditures - MH and RV
Our MH and RV capital expenditures include expansion sites and development construction costs, lot modifications, recurring capital expenditures and rental home purchases.
For the years ended December 31, 2020 and 2019, expansion and development activities of $246.5 million and $281.8 million, respectively, related to costs consisting primarily of construction of sites and other costs necessary to complete home site improvements.
For the years ended December 31, 2020 and 2019, lot modification expenditures were $29.8 million and $31.1 million, respectively. These expenditures improve asset quality in our communities and are incurred when an existing home is removed and the site is prepared for a new home (more often than not, a multi-sectional home). These activities, which are mandated by strict manufacturer’s installation requirements and state building codes, include items such as new foundations, driveways, and utility upgrades.
For the years ended December 31, 2020 and 2019, recurring capital expenditures were $31.4 million and $30.4 million, respectively, related to our continued commitment to the upkeep of our properties.
For the years ended December 31, 2020 and 2019, revenue producing sites expenditure were $23.7 million and $9.6 million, respectively. These expenditures relate to revenue generating activities which consist primarily of garages, sheds, sub-metering of water, sewer and electricity. Revenue generating attractions at our RV resorts are also included here and, occasionally, a special capital project requested by residents and accompanied by an extra rental increase will be classified as revenue producing.
We invest in the acquisition of homes intended for the Rental Program. Expenditures for these investments depend upon the condition of the markets for repossessions and new home sales, as well as rental homes. We finance certain of our new home purchases with a $12.0 million manufactured home floor plan facility. Our ability to purchase homes for sale or rent may be limited by cash received from third-party financing of our home sales, available manufactured home floor plan financing and working capital available on our lines of credit.
Capital Expenditures - Marinas
For the year ended December 31, 2020, our marina capital expenditures (exclusive of acquisitions) were $14.1 million for the period since acquisition, and comprise capital improvements at recently acquired properties, recurring capital expenditures, revenue producing capital expenditures and expansion and development costs.
SUN COMMUNITIES, INC.
Cash Flow Activities
Our cash flow activities are summarized as follows (in thousands):
Year Ended
December 31, 2020 December 31, 2019 December 31, 2018
Net Cash Provided by Operating Activities $ 548,948 $ 476,734 $ 363,114
Net Cash Used for Investing Activities $ (2,486,517) $ (1,010,457) $ (733,743)
Net Cash Provided by Financing Activities $ 2,000,844 $ 505,880 $ 409,905
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash $ 189 $ 411 $ (523)
Cash, cash equivalents, and restricted cash increased by approximately by $63.5 million from $34.8 million as of December 31, 2019, to $98.3 million as of December 31, 2020.
Operating Activities - Net cash provided by operating activities increased by $72.2 million from $476.7 million for the year ended December 31, 2019 to $548.9 million for the year ended December 31, 2020.
Our net cash flows provided by operating activities from continuing operations may be adversely impacted by, among other things: (a) the market and economic conditions in our current markets generally, and specifically in metropolitan areas of our current markets; (b) lower occupancy and rental rates of our properties; (c) increased operating costs, such as wage and benefit costs, insurance premiums, real estate taxes and utilities, that cannot be passed on to our tenants; (d) decreased sales of manufactured homes; (e) current volatility in economic conditions and the financial markets; and (f) the effects of the COVID-19 pandemic. See “Risk Factors” in Part I, Item 1A in this Annual Report on Form 10-K.
Investing Activities - Net cash used for investing activities was $2.5 billion for the year ended December 31, 2020, compared to $1.0 billion for year ended December 31, 2019. Refer to Note 3, “Real Estate Acquisitions and Dispositions,” in our accompanying Consolidated Financial Statements for additional information.
Financing Activities - Net cash provided by financing activities was $2.0 billion for the year ended December 31, 2020, compared to $505.9 million for the year ended December 31, 2019. Refer to Note 8, “Debt and Lines of Credit,” and Note 9, “Equity and Temporary Equity,” in our accompanying Consolidated Financial Statements for additional information.
Financial Flexibility
On September 30, 2020 and October 1, 2020, we entered into two forward sale agreements (the “Forward Sale Agreements”) relating to an underwritten registered public offering of 9,200,000 shares of our common stock at a public offering price of $139.50 per share. The offering closed on October 5, 2020. We did not initially receive any proceeds from the sale of shares of our common stock in the offering. On October 26, 2020, we physically settled the Forward Sale Agreements (by the delivery of shares of our common stock) and received net proceeds of approximately $1.2 billion. We used approximately $1.1 billion of the net proceeds to fund the cash portion of the Safe Harbor purchase price, and the remainder for working capital and general corporate purposes.
In May 2020, we closed an underwritten registered public offering of 4,968,000 shares of common stock. Proceeds from the offering were $633.1 million after deducting expenses related to the offering. We used the net proceeds of this offering to repay borrowings outstanding under the revolving loan under our senior credit facility.
In July 2017, we entered into an at the market offering sales agreement (as amended, the “Sales Agreement”) with certain sales agents (collectively, the “Sales Agents”), whereby we may offer and sell shares of our common stock, having an aggregate offering price of up to $450.0 million, from time to time through the Sales Agents. The Sales Agents are entitled to compensation in an agreed amount not to exceed 2.0 percent of the gross price per share for any shares sold under the Sales Agreement. Through December 31, 2020, we have sold shares of our common stock for gross proceeds of $163.8 million under the Sales Agreement. There were no issuances of common stock under the Sales Agreement during the years ended December 31, 2020 and 2019.
In October 2019, we assumed a term loan facility with Citibank, N.A. (“Citibank”), in the amount of $58.0 million in relation to an acquisition. The term loan has a four-year term ending October 29, 2023, and bears interest at a floating rate based on the Eurodollar rate or Prime rate. The outstanding balance as of the years ended December 31, 2020 and 2019, was $45.0 million and $57.0 million respectively.
SUN COMMUNITIES, INC.
In May 2019, we amended and restated our credit agreement with Citibank and certain other lenders. Pursuant to the credit agreement, we entered into an unsecured senior credit facility with Citibank and certain lenders in the amount of $750.0 million, comprised of a $650.0 million revolving loan, with the ability to use up to $100.0 million for advances in Australian dollars, and a $100.0 million term loan (the “A&R Facility”). The A&R Credit Agreement has a four-year term ending May 21, 2023, which can be extended for two additional six-month periods, subject to the satisfaction of certain conditions as defined in the credit agreement. The credit agreement also provides for additional commitments in an amount not to exceed $350.0 million. The funding of these additional commitments is subject to certain conditions, including obtaining the consent of the lenders, some of which are outside of our control. If additional borrowings are made pursuant to any such additional commitments, the aggregate borrowing limit under the A&R Facility may be increased up to $1.1 billion.
The A&R Facility bears interest at a floating rate based on the Eurodollar rate or Bank Bill Swap Bid Rate plus a margin that is determined based on our leverage ratio calculated in accordance with the credit agreement, which margin can range from 1.20 percent to 2.10 percent for the revolving loan and 1.20 percent to 2.05 percent for the term loan. As of December 31, 2020, the margin based on our leverage ratio was 1.20 percent on the revolving loan and 1.20 percent on the term loan. We had $40.4 million and no borrowings on the revolving loan and the term loan, respectively, as of December 31, 2020. We had $123.6 million of borrowings on the revolving loan and no borrowings on the term loan, as of December 31, 2019.
The A&R Facility provides us with the ability to issue letters of credit. Our issuance of letters of credit does not increase our borrowings outstanding under our line of credit with Citibank, N.A. (“Citibank”), but does reduce the borrowing amount available. At December 31, 2020 and 2019, we had approximately $2.1 million and $2.8 million of outstanding letters of credit, respectively.
Pursuant to the terms of the A&R Facility, we are subject to various financial and other covenants. As of December 31, 2020, we were in compliance with these covenants and do not anticipate that we will be unable to meet these covenants in the near term as a result of COVID-19’s impact on our business. The most restrictive financial covenants for the A&R Facility are as follows:
Covenant Requirement As of December 31, 2020
Maximum leverage ratio <65.0% 29.2%
Minimum fixed charge coverage ratio >1.40 3.29
Minimum tangible net worth >$3,731,946 $7,322,394
Maximum dividend payout ratio <95.0% 57.9%
Maximum variable rate indebtedness <50.0% 7.4%
On October 30, 2020, in relation to the acquisition of Safe Harbor, we indirectly assumed approximately $829.0 million of Safe Harbor’s debt owed to Citizens Bank N.A. (“Citizens”). On December 22, 2020, the Safe Harbor facility was amended to, among other things, (a) increase the size of the revolving commitments available to Safe Harbor from $500 million to $1.3 billion, subject to borrowing base availability, (b) modify certain provisions relating to the determination of the borrowing base, (c) increase the cap on the incremental borrowing capacity from $350.0 million to $500.0 million, which allows Safe Harbor to request an increase to the revolving commitments and / or to establish additional term loans subject to the higher cap and the satisfaction of certain conditions, and (d) modify certain financial covenants. The revolving loan and term loan under the Safe Harbor facility both expire on October 11, 2024. The term loan component of the Safe Harbor facility can be extended for two additional 12-month periods, subject to the satisfaction of certain conditions set forth in the facility. The revolving commitments do not have an extension option.
The Safe Harbor facility bears interest at a floating rate based on an adjusted LIBOR rate or a base rate, plus a margin that is determined based on Safe Harbor’s ratio of consolidated funded debt to total asset value, calculated in accordance with the credit agreement, which margin can range from 1.375 percent to 2.250 percent for adjusted LIBOR rate loans and 0.375 percent to 1.250 percent for base rate loans. As of December 31, 2020, based on Safe Harbor’s ratio of consolidated funded debt to total asset value, the margin was 2.000 percent on any adjusted LIBOR rate loans and 1.000 percent on any base rate loans. The Safe Harbor facility is secured by the personal property of Safe Harbor and certain related entities and subsidiaries and a pledge of the equity interests in certain subsidiaries of Safe Harbor and related entities and subsidiaries, subject to customary exceptions. At the lenders’ option, the Safe Harbor facility will become immediately due and payable upon an event of default that is continuing under the credit agreement. Safe Harbor had $652.0 million and $500.0 million of borrowings under the revolving loan and term loan respectively, as of December 31, 2020.
The Safe Harbor facility provides Safe Harbor with the ability to issue letters of credit. Its issuance of letters of credit does not increase its borrowings outstanding under its line of credit with Citizens, but does reduce the borrowing amount available. At December 31, 2020, Safe Harbor had approximately $0.3 million of outstanding letters of credit.
SUN COMMUNITIES, INC.
Pursuant to the terms of the Safe Harbor facility, we are subject to various financial and other covenants. As of December 31, 2020, we were in compliance with these covenants and do not anticipate that we will be unable to meet these covenants in the near term as a result of COVID-19’s impact on our marina business. The most restrictive financial covenants for the Safe Harbor facility are as follows:
Covenant Requirement As of December 31, 2020
Maximum leverage ratio <60.0% 47.3%
Minimum fixed charge coverage ratio (pre-distribution) >1.35 3.67
Minimum fixed charge coverage ratio (post-distribution) >1.00 1.87
Minimum borrowing base coverage ratio >1.00 1.26
We anticipate meeting our long-term liquidity requirements, such as scheduled debt maturities, large property acquisitions, expansion and development of properties, and Operating Partnership unit redemptions through the issuance of certain debt or equity securities and / or the collateralization of our properties.
We had unrestricted cash on hand as of December 31, 2020 of approximately $83.0 million. As of December 31, 2020, there is approximately $1.355 billion of remaining capacity on the Citibank and Citizens lines of credit. At December 31, 2020 we had a total of 254 unencumbered MH and RV properties, of which 61 support the borrowing base for the $750.0 million revolving loan under our senior credit facility and 31 support the borrowing base for a term loan facility. The remaining 162 unencumbered MH and RV properties, with an estimated asset value of approximately $2.7 billion as of December 31, 2020 are available to secure potential mortgage debt. At December 31, 2020 we had a total of 106 unencumbered marinas, of which 102 support the borrowing base for our Safe Harbor facility.
From time to time, we may also issue shares of our capital stock, issue equity units in our Operating Partnership, obtain debt financing, or sell selected assets. Our ability to finance our long-term liquidity requirements in such a manner will be affected by numerous economic factors affecting the MH, RV and marina industries at the time, including the effects of the COVID-19 pandemic, the availability and cost of mortgage debt, our financial condition, the operating history of the properties, the state of the debt and equity markets, and the general national, regional, and local economic conditions. When it becomes necessary for us to approach the credit markets, the volatility in those markets could make borrowing more difficult to secure, more expensive, or effectively unavailable. See “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. If we are unable to obtain additional debt or equity financing on acceptable terms, our business, results of operations and financial condition would be adversely impacted.
As of December 31, 2020, our net debt to enterprise value was approximately 21.4 percent (assuming conversion of all common OP units, Series A-1 preferred OP units, Series A-3 preferred OP units, Series C preferred OP units, Series D preferred OP units, Series E preferred OP units, Series F preferred OP units, Series G preferred OP units, Series H preferred OP units, and Series I preferred OP units to shares of common stock). Our debt has a weighted average maturity of approximately 9.4 years and a weighted average interest rate of 3.4 percent.
Off-Balance Sheet Arrangements
Our off-balance sheet investments include nonconsolidated affiliates. These investments all have varying ownership structures. Substantially all of our nonconsolidated affiliates are accounted for under the equity method of accounting as we have the ability to exercise significant influence, but not control, over the operating and financial decisions of these joint venture arrangements. Refer to Note 6, "Investments in Nonconsolidated Affiliates," and Note 8, "Debt and Lines of Credit," in the accompanying Consolidated Financial Statements, for additional information on our off-balance sheet investments.
Nonconsolidated Affiliate Indebtedness
GTSC - During September 2019, GTSC entered into a warehouse line of credit with a maximum loan amount of $125.0 million. During September 2020, the maximum amount was increased to $180.0 million. As of December 31, 2020, the aggregate carrying amount of debt, including both our and our partners’ share, incurred by GTSC was approximately $167.7 million (of which our proportionate share is $67.1 million). The debt bears interest at a variable rate based on LIBOR plus 1.65 percent per annum and matures on September 15, 2023. Refer to Note 6, "Investments in Nonconsolidated Affiliates," for additional information on our nonconsolidated affiliates.
SUN COMMUNITIES, INC.
Sungenia Joint Venture - During May 2020, Sungenia joint venture (“Sungenia JV”) entered into a debt facility agreement with a maximum loan amount of $27.0 million Australian dollars, or $20.8 million converted at the December 31, 2020 exchange rate. As of December 31, 2020, the aggregate carrying amount of debt, including both our and our partners’ share, incurred by Sungenia JV was $6.7 million (of which our proportionate share is $3.3 million). The debt bears interest at a variable rate based on Australian BBSY plus 2.05 percent per annum and is available for a minimum of three years. Refer to Note 6, "Investments in Nonconsolidated Affiliates," for additional information on our nonconsolidated affiliates.
Contractual Cash Obligations
Our primary long-term liquidity needs are principal payments on outstanding indebtedness. As of December 31, 2020, our outstanding contractual obligations, including interest expense, were as follows:
Payments Due By Period
(In thousands)
Contractual Cash Obligations(1)
Total Due <1 Year 1-3 Years 3-5 Years After 5 Years
Collateralized term loans - Life Companies $ 1,664,922 $ 37,275 $ 79,318 $ 96,002 $ 1,452,327
Collateralized term loans - FNMA 1,156,688 9,794 97,113 26,767 1,023,014
Collateralized term loans - CMBS 267,280 5,713 81,618 179,949 -
Collateralized term loans - FMCC 369,971 6,803 131,827 174,312 57,029
Preferred equity - Sun NG Resorts - mandatory redeemable 35,249 - - 35,249 -
Preferred OP units - mandatorily redeemable 34,663 - - 27,373 7,290
Lines of credit and other debt 1,242,197 10,000 80,197 1,152,000 -
Total Principal Payments $ 4,770,970 $ 69,585 $ 470,073 $ 1,691,652 $ 2,539,660
Interest expense(2)
$ 1,284,756 $ 146,079 $ 277,762 $ 218,594 $ 642,321
Operating leases 86,671 4,967 9,775 10,532 61,397
Finance lease 4,694 217 409 4,068 -
Total Contractual Cash Obligations $ 6,147,091 $ 220,848 $ 758,019 $ 1,924,846 $ 3,243,378
(1)Contractual cash obligations in this table exclude debt premiums, discounts and deferred financing costs, as applicable.
(2)Our contractual cash obligations related to interest expense are calculated based on the current debt levels, rates and maturities as of December 31, 2020 (including finance leases), and actual payments required in future periods may be different than the amounts included above. Perpetual securities include one year of interest expense in the “After 5 Years” category.
SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES
Our Consolidated Financial Statements are prepared in accordance with United States of America generally accepted accounting principles (“GAAP”), which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses in the periods presented. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable; however, due to inherent uncertainties in making estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods. Our significant accounting estimates include acquisitions, impairment, fair value of installment notes receivable on manufactured homes and notes receivable from real estate developers, and share based compensation. Refer to Note 1, “Significant Accounting Policies,” in our accompanying Consolidated Financial Statements for information regarding our critical accounting estimates that affect the Consolidated Financial Statements and that use judgments and assumptions. In addition, the likelihood that materially different amounts could be reported under varied conditions and assumptions is discussed.
Impact of New Accounting Standards
Refer to Note 19, “Recent Accounting Pronouncements,” in our accompanying Consolidated Financial Statements for information regarding new accounting pronouncements.
SUN COMMUNITIES, INC.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the exposure to loss resulting from changes in market factors such as interest rates, foreign currency exchange rates, commodity prices, and equity prices.
Interest Rate Risk
Our principal market risk exposure is interest rate risk. We mitigate this risk by maintaining prudent amounts of leverage, minimizing capital costs, and interest expense while continuously evaluating all available debt and equity resources and following established risk management policies and procedures, which include the periodic use of derivatives. Our primary strategy in entering into derivative contracts is to minimize the variability that interest rate changes could have on our future cash flows. From time to time, we employ derivative instruments that effectively convert a portion of our variable rate debt to fixed rate debt. We do not enter into derivative instruments for speculative purposes.
Our variable rate debt totaled $1.2 billion and $183.9 million as of December 31, 2020 and 2019, respectively, and bears interest at Prime or various LIBOR rates. If Prime or LIBOR increased or decreased by 1.0 percent, our interest expense would have increased or decreased by approximately $3.4 million and $2.6 million for the years ended December 31, 2020 and 2019, respectively, based on the $339.5 million and $259.4 million average balances outstanding under our variable rate debt facilities, respectively.
Foreign Currency Exchange Rate Risk
Foreign currency exchange rate risk is the risk that fluctuations in currencies against the U.S. dollar will negatively impact our results of operations. We are exposed to foreign currency exchange rate risk as a result of remeasurement and translation of the assets and liabilities of our Canadian properties, and our Australian equity investment and joint venture into U.S. dollars. Fluctuations in foreign currency exchange rates can therefore create volatility in our results of operations and may adversely affect our financial condition.
At December 31, 2020 and 2019, our stockholder’s equity included $250.8 million and $202.5 million from our Canadian subsidiaries and Australian equity investments, respectively, which represented 4.5 percent and 5.2 percent of total stockholder’s equity, respectively. Based on our sensitivity analysis, a 10.0 percent strengthening of the U.S. dollar against the Canadian and Australian dollar would have caused a reduction of $25.1 million and $20.2 million to our total stockholder’s equity at December 31, 2020 and 2019, respectively.
SUN COMMUNITIES, INC.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements and supplementary data are filed herewith under Item 15.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure controls and procedures
We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures (pursuant to Rules 13a-15(e) or 15d-15(e) of the Exchange Act) at December 31, 2020. Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2020.
Management’s report on internal control over financial reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, misstatements due to error or fraud may not be prevented or detected on a timely basis.
Our management performed an assessment of the effectiveness of our internal control over financial reporting at December 31, 2020, utilizing the criteria discussed in the “Internal Control - Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. The objective of this assessment was to determine whether our internal control over financial reporting was effective at December 31, 2020. Based on management’s assessment, we have concluded that our internal control over financial reporting was effective at December 31, 2020.
The effectiveness of our internal control over financial reporting has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in its report which is included herein.
In October 2020, we completed the acquisition of Safe Harbor and are currently integrating Safe Harbor into our operations, compliance program and internal control processes. Safe Harbor constituted approximately 23 percent of our total assets as of December 31, 2020, including the goodwill and other intangible assets recorded as part of the purchase price allocation, and 3 percent of our revenues for the year ended December 31, 2020. SEC regulations allow companies to exclude acquisitions from their assessment of internal control over financial reporting during the first year following an acquisition. We have excluded the acquired operation of Safe Harbor from our assessment of our internal control over financial reporting.
Changes in internal control over financial reporting
There were no material changes in our internal control over financial reporting during the quarter ended December 31, 2020.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
None.
SUN COMMUNITIES, INC.
PART III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Pursuant to the general instructions of Item 401 of Regulation S-K, certain information regarding our executive officers is contained in Part I of this Form 10-K. Unless provided in an amendment to this Annual Report on Form 10-K, the other information required by this Item is incorporated herein by reference to the applicable information in the proxy statement for our 2021 annual meeting (the “Proxy Statement,”) including the information set forth under the captions “Proposal No.1 Election of Directors - Consideration of Director Nominees,” “Corporate Governance - Board of Directors,” “Corporate Governance - Committees of the Board of Directors,” “Security Ownership Information - Security Ownership of Directors and Executive Officers,” and “Information About Executive Officers - Executive Officers Biography.”

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the applicable information in the Proxy Statement, including the information set forth under the captions “Proposal No.1 Election of Directors - Director Compensation,” “Corporate Governance - Compensation Committee Interlocks and Insider Participation,” and “Executive Compensation.” The information in the section captioned “Executive Compensation - Compensation Committee Report” in the Proxy Statement or an amendment to this Annual Report on Form 10-K is incorporated by reference herein but shall be deemed furnished, not filed, and shall not be deemed to be incorporated by reference into any filing we make under the Securities Act or the Exchange Act.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the applicable information in the Proxy Statement, including the information set forth under the captions “Security Ownership Information.”

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the Proxy Statement, including the information set forth under the captions “Corporate Governance - Board of Directors,” “Corporate Governance - Committees of the Board of Directors,” “Corporate Governance - Board Leadership Structure and Independence of Non-Employee Directors,” and “Corporate Governance - Certain Relationships and Related Party Transactions.”

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the Proxy Statement, including the information set forth under the caption for the proposal related to “Ratification of Selection of Grant Thornton LLP.”
SUN COMMUNITIES, INC.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following documents are filed herewith as part of this Form 10-K:
1. Financial Statements
A list of the financial statements required to be filed as a part of this Annual Report on Form 10-K is shown in the “Index to the Consolidated Financial Statements and Financial Statement Schedules” filed herewith.
2. Financial Schedule
The financial statement schedule required to be filed as a part of this Annual Report on Form 10-K is shown in the “Index to the Consolidated Financial Statements and Financial Statement Schedules” filed herewith.
3. Exhibits
A list of the exhibits required by Item 601 of Regulation S-K to be filed as a part of this Annual Report on Form 10-K is filed herewith.