EDGAR 10-K Filing

Company CIK: 912593
Filing Year: 2024
Filename: 912593_10-K_2024_0000912593-24-000094.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS
GENERAL OVERVIEW
Sun Communities, Inc., 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., ("SHS"), Safe Harbor Marinas, LLC ("Safe Harbor"), and the entities through which we operate our holiday parks business in the United Kingdom ("UK") (collectively, "Park Holidays"), are referred to herein as the "Company," "SUI," "we," "us," or "our."
We are a fully integrated real estate investment trust ("REIT"). We own manufactured housing ("MH") and recreational vehicle ("RV") communities and marinas in the United States ("U.S."), the UK and Canada (marinas and, together with MH and RV, the "properties"). We self-administer, self-manage, and operate or hold an interest in, and develop the majority of our properties, and a select number of our communities are operated by independent third party contractors on our behalf under management agreements. Others are operated by lessees under ground lease arrangements. Together with our affiliates and predecessors, we have been in the business of acquiring, operating, developing and expanding MH and RV communities since 1975 and marinas since 2020.
We lease individual parcels of land ("sites"), with utility access for the placement of manufactured homes and RVs to our MH and RV customers. Our MH communities are designed to offer affordable housing to individuals and families, while also providing certain amenities. In the UK, our MH communities are referred to as holiday parks and are predominantly located at irreplaceable seaside locations in the south of England. Our RV communities are designed to offer affordable vacation opportunities to individuals and families complemented by a diverse selection of high-quality amenities.
The majority of our marinas are concentrated in coastal regions. Our marinas offer wet slip and 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 and guests.
As of December 31, 2023, we owned and operated, directly or indirectly, or had an interest in, a portfolio of 667 developed properties located in the U.S., the UK and Canada, including 353 MH communities, 179 RV communities and 135 marinas. As of December 31, 2023, the properties contained an aggregate of 227,340 developed sites comprised of 118,430 developed MH sites, 32,390 annual RV sites (inclusive of both annual and seasonal usage rights), 28,490 transient RV sites, and 48,030 wet slips and dry storage spaces. Additionally, we own or control land to support developing and expanding over 17,980 additional MH and RV sites suitable for development.
Through SHS, a taxable REIT subsidiary, we market, sell, and lease new and pre-owned homes to current and future residents in our MH 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 300, Southfield, Michigan 48034 and our telephone number is (248) 208-2500. We also have principal offices in Dallas, Texas, and in Bexhill-on-Sea, East Sussex, UK. We have regional property management offices throughout the U.S. We employed an aggregate of 6,780 full and part time employees as of December 31, 2023.
Our website address is www.suninc.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 SEC. Additionally, the SEC maintains a website at https://www.sec.gov, that contains reports, proxy information statements and other information about us.
SUN COMMUNITIES, INC.
STRUCTURE OF THE COMPANY
The Company is a REIT and the general partner of the Operating Partnership. 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.
The Operating Partnership is structured as an umbrella partnership REIT ("UPREIT"). We conduct substantially all of our operations through the Operating Partnership, which, directly or indirectly through other subsidiaries, owns substantially 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 properties 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 of the Operating Partnership 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 our properties. Currently, all of our UK operations are conducted through taxable REIT subsidiaries.
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 shareholders. 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.
SUN COMMUNITIES, INC.
As of December 31, 2023, we owned 95.4% of all of the OP Units and the limited partners of the Operating Partnership own the rest. The following table sets forth:
•The various series of OP units and the number of units of each series outstanding as of December 31, 2023;
•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, directly or indirectly, 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, 2023
Exchange Rate(1)
Annual Distribution Rate(2)
Cash Redemption(3)
Redemption Period
1 Series A-1 preferred OP units 202,144 2.4390 6.0 % N/A N/A
2 Series C preferred OP units 305,848 1.1100 5.0 % N/A N/A
3 Series D preferred OP units 488,958 0.8000 4.0 % Holder's Option Any time
4 Series E preferred OP units 80,000 0.6897 5.5 % N/A N/A
5 Series F preferred OP units 90,000 0.6250 3.0 % Holder's Option Any time after earlier of May 14, 2025 or death of holder
6 Series G preferred OP units 210,710 0.6452 3.2 % Holder's Option Any time after earlier of September 30, 2025 or death of holder
7 Series H preferred OP units 581,238 0.6098 3.0 % Holder's Option Any time after earlier of October 30, 2025 or death of holder
8 Series J preferred OP units 238,000 0.6061 2.85 % Holder's Option During the 30-day period following a change of control of the Company or any time after April 21, 2026
9 Series K preferred OP units 1,000,000 0.5882(4)
4.0 % Holder's Option Within 60 days after March 23, 2028
10 Series L preferred OP units 20,000 0.6250(5)
3.5 % N/A N/A
11 Series A-3 preferred OP units 40,268 1.8605 4.5 % N/A N/A
12 Common OP units 127,171,415(6)
1.0 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. Holders of OP units generally may exchange them at any time.
(2)Except for Common OP units, distributions are payable on the issue price of each OP unit, which is $100.00 per unit for all these preferred OP units.
(3)The redemption price for each preferred OP unit redeemed will be equal to its issue price plus all accrued but unpaid distributions.
(4)Each Series K preferred OP unit is exchangeable for 0.5882 common OP units. Each such common OP unit will be exchangeable for one share of our common stock. We have the right to cause the holders of Series K preferred OP units to exchange such units into common OP units at the applicable exchange rate (a) within 60 days after March 23, 2028 or (b) if at any time the trading price of our common stock for each of the preceding 60 trading days is equal to or greater than 120% of the Series K conversion price of $170 (as it may be adjusted under the Operating Partnership's partnership agreement). If in connection with an exchange pursuant to clause (a) above the recent average price of our common stock (as determined under the Operating Partnership's partnership agreement) is less than the Series K conversion price, we will be required to make an additional cash payment in respect of each exchanged Series K preferred OP unit equal to the product of (i) the Series K exchange rate and (ii) the difference between such average price and the Series K conversion price.
(5)Each Series L preferred OP unit is exchangeable for 0.6250 common OP units. Each such common OP unit will be exchangeable for one share of our common stock. We have the right to cause the holders of Series L preferred OP units to exchange such units into common OP units at the applicable exchange rate (a) any time after December 31, 2028 or (b) if at any time the trading price of our common stock for each of the preceding 60 trading days is equal to or greater than 120% of the Series L conversion price of $160 (as it may be adjusted under the Operating Partnership's partnership agreement). If in connection with an exchange pursuant to clause (a) above the recent average price of our common stock (as determined under the Operating Partnership's partnership agreement) is less than the Series L conversion price, we will be required to make an additional cash payment in respect of each exchanged Series L preferred OP unit equal to the product of (i) the Series L exchange rate and (ii) the difference between such average price and the Series L conversion price.
(6)Of the 127,171,415 Common OP units, 124,436,432 or 97.8% were held by us, and 2,734,983 or 2.2% were owned by various limited partners.
SUN COMMUNITIES, INC.
REAL PROPERTY OPERATIONS
Throughout this report, we use the terms resident to represent a "resident" in the U.S. and a "customer" in the UK.
An MH community is a residential subdivision with sites for the placement of manufactured homes, related improvements and amenities. Manufactured homes are detached single-family homes that 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 complexes. 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 community is a resort with sites for the placement of RVs for varied lengths of time. RV communities may also provide vacation rental homes and 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.
From 2021 to 2023, we rebranded 151 RV communities under the "Sun Outdoors" umbrella guided by our belief that the Sun Outdoors brand supports our competitive advantage in the outdoor market. Implementation consisted of the conversion of the communities' digital presence (website, social media, reservation software and other internal systems) and the replacement of signage at the communities. Sun Outdoors offers RV sites, vacation rentals and tent camping with world-class amenities in the U.S. and Canada.
A marina is a specially-designed harbor that can be located on oceans, lakes, bays or rivers and typically includes 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 of the vessels that we store. Marinas also provide ancillary services, 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 MH and RV communities lease the site on which a manufactured home, RV or vacation rental home 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 certain MH and RV communities, we do not own all of the underlying land and operate the communities pursuant to ground leases. Certain communities provide water and sewer service through public or private utility companies, while other communities 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.
Renters at our marinas lease the wet slip or dry storage space on which a 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 certain marinas, we do not own all of the underlying land and operate the marinas pursuant to ground leases.
We compete with other available MH and RV communities, 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 and RV communities. We also 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 MH and RV community and marina managers. We believe our focus on creating an exceptional resident, guest and member experience creates a competitive advantage. It enables us to continually monitor and address concerns, the performance of competitive properties and local market conditions. As of December 31, 2023, of our 6,780 employees, 1,192 were located on-site as property managers, and of those, 99.3% were full-time employees.
SUN COMMUNITIES, INC.
Our MH and RV property managers in the U.S. and Canada are overseen by our Chief Operating Officer, four Senior Vice Presidents of Operations and Sales, 11 Divisional Vice Presidents and 43 Regional Vice Presidents. Each Regional Vice President oversees one to 16 properties and 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. Each property manager performs regular inspections in order to monitor the physical condition of properties and to effectively address tenant concerns. In addition to an on-site 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.
Park Holidays' MH and RV property managers are overseen by a Chief Executive Officer of Park Holidays, a Chief Operating Officer, and two Regional Operations Directors.
Our marina business is overseen by a Chief Executive Officer of Safe Harbor, two Executive Vice Presidents of Operations, two Senior Vice Presidents of Operations and 15 Regional Vice Presidents who are responsible for regular marina inspections and oversight of operations.
HOME SALES AND RENTALS
We are engaged in the marketing, selling and leasing of new and pre-owned homes to current and future residents in our MH communities through SHS in the U.S. and Park Holidays in the UK. Because tenants often purchase a home already on-site within a community, the services SHS and Park Holidays provide enhance occupancy and property performance. Additionally, because many of the homes on the properties are sold through SHS and Park Holidays, 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. As of December 31, 2023, SHS's portfolio consists of over 10,230 occupied leased homes. New and pre-owned homes are purchased for our Rental Program. Leases associated with our Rental Program generally have a term of one year. The Rental Program requires management of costs associated with repair and refurbishment of these homes as the tenants vacate and the homes are re-leased. In 2023, we received over 51,200 applications to live in our MH and RV properties, providing a significant "resident onboarding" system that allows us to market the purchase of a home to qualified applicants. Through our Rental Program, we demonstrate our product and lifestyle to the renters, while monitoring their payment history and converting qualified renters to owners.
Park Holidays also rents homes for short-stays to allow people to experience the community park and facilities. Their short-stay experiences may, in turn, lead guests to ultimately purchase a home in a Park Holidays community. Holiday makers drive the pipeline for future home sales opportunities.
Our home sales and leasing operations compete with other national, and local MH dealers and MH community owners and other holiday park owners in the U.S. and UK.
MARINA MEMBER BASE
We are engaged in the marketing and leasing of wet slips and dry storage spaces and have approximately 48,000 members throughout our marina network as of December 31, 2023.
SUN COMMUNITIES, INC.
SITE LEASES OR USAGE RIGHTS
Typical tenant leases for MH sites in the U.S. 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. During the five calendar years ended December 31, 2023, on average less than 1.0% of the homes in our MH communities have been removed by their owners and 6.1% of the homes have been sold by their owners to a new owner who then assumes rental obligations as a community resident. On average, our residents remain in our communities for approximately 15 years. Site license fees for MH sites in the UK are for a term of 20, 30 or 40 years depending on the product originally purchased. The holiday homeowner must pay an annual site fee for their holiday home to remain on the property. On average, Park Holidays homeowners remain in the communities for over seven years.
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 community rules and regulations or other specified defaults.
Leases for wet slips and dry storage spaces at our marinas 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 8.3 years.
ACQUISITIONS
During the year ended December 31, 2023, we acquired one MH community with 68 sites and 72 development sites, and one marina with 24 wet slips and dry storage spaces, for a total purchase price of approximately $107.0 million.
EXPANSION / DEVELOPMENT
During the year ended December 31, 2023, we acquired four land parcels located in the U.S. and one land parcel in the UK for the potential development of over 1,350 sites, expanded our existing communities by over 440 sites and delivered 360 sites at five ground-up development properties.
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
With increased insurance claims across the industry and other market conditions, it has been more difficult to obtain insurance, in particular property insurance covering named windstorms, business interruption, flood and earthquake insurance. With fewer insurers willing to provide policies, and policies increasingly including lower coverage limits, higher deductibles and higher premiums, we have changed our insurance purchasing philosophy and strategy resulting in us self-insuring a greater risk to offset insurance market fluctuations. Our management believes that the properties are covered by adequate comprehensive liability, fire, property, business interruption, general liability, and (where appropriate) flood and earthquake insurance through a combination of our self-insurance partially covering our risk and 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.
HUMAN CAPITAL
Human capital management is key to our success and focuses on diversity, equity and inclusion, employee retention and talent development practices. We are committed to building an equitable and inclusive culture that inspires and supports the growth of our employees, serves our communities and shapes a more sustainable business. The most significant measures and objectives that we focus on in managing our business and our related human capital initiatives include the following:
Culture
We foster a growth culture that is grounded in our vision and culture statements: We are an inspired, engaged and collaborative team committed to providing extraordinary service to our residents, guests and team members. Together as one team, we embrace the following seven key behaviors that make our company a great place to work:
•Live the Golden Rule: Treat others the way you want to be treated;
•Do the right thing;
•We over me;
•Nothing changes if nothing changes;
•Mindset is everything;
•Keep it simple; and
•Be yourself and thrive.
Leadership, Talent, Training and Development
We expect our leaders to be role models and lead in a way that enables our organization to achieve success. Our strategy is anchored in promoting the right internal talent and hiring the right external talent for career opportunities across our organization. We are focused on hiring and developing talent that mirrors the markets we serve, and investing in learning opportunities and capabilities that equip our workforce with the skills they need while improving engagement and retention.
•Our internal training program offers over 310 courses to our team members on a range of topics, including leadership, communication, inclusion and diversity, software and operations. Our internal training program has led to increased knowledge and accountability for daily operations and policies and procedures. In 2023, team members logged nearly 85,700 hours of training.
•We hold ongoing training sessions for all property management personnel to ensure that policies and procedures are executed effectively, professionally and consistently.
We are dedicated to attracting, developing and retaining our talent, focusing our efforts on ensuring that the returning seasonal team member pipeline remains robust each year and our annual talent management processes focus on the professional development of salaried team members. As of December 31, 2023, nearly 12% of our employees had over 10 years' tenure.
Our compensation philosophy, aimed to apply merit-based, equitable compensation practices, is designed to attract and retain top talent. For eligible team members, we offer competitive salary, health, welfare, retirement and pet insurance benefits, tuition reimbursement and rent / vacation discounts at our properties.
Inclusion, Diversity, Equity and Accessibility ("IDEA")
We make it a priority to recognize and appreciate the diverse characteristics that make individuals unique in an atmosphere that promotes and celebrates individual and collective achievement. We believe it's not just about gender or race, but about being diverse in thoughts, life and work experiences. Our inclusive environment challenges, inspires, rewards and transforms our team to be the best. We do not tolerate harassing, discriminatory or retaliatory conduct as such conduct is prohibited and inconsistent with our policies, practices and philosophy. We continue to put our resources and energy into strategies and initiatives to create a more equitable environment.
SUN COMMUNITIES, INC.
Workforce Diversity
We believe we are a stronger organization when our workforce represents a diversity of ideas and experiences. We value and embrace diversity in our employee recruiting, hiring and development practices. As of December 31, 2023, 40% of our employees were female, 23% of our employees (excluding those in Canada and the UK) were racially or ethnically diverse, and 44% of our employees were aged 50 years and older, with approximately 24% being aged 60 years and older.
Training and Resources
We offer training and resources on diversity, equity and inclusion to our employees. Diversity education and training programs for our team focus on unconscious bias, gender identity and transitions, generational differences, religion in the workplace, and self-awareness and self-assessments.
Pay Equity
We are committed to providing a total compensation package that is market-based, performance driven, fair and internally equitable. Our goal is to be competitive both within the general employment market as well as with our competitors in the real estate industry, with our strongest performers being paid more.
•Compensation for each position is determined by utilizing reliable third-party compensation surveys to obtain current market data. Additionally, position descriptions and compensation are routinely reviewed for market competitiveness.
•On an annual basis, the performance of all team members is evaluated and merit increases are allocated based on performance. This process ensures equitable performance review and corresponding pay practices that attract, retain and reward top talent.
Business Integrity
Our Code of Conduct and Business Ethics is grounded in our commitment to do the right thing. It serves as the foundation of our approach to ethics and compliance, and our anti-corruption compliance program is focused on conducting business in a fair, ethical and legal manner.
Workplace Health and Safety
We actively seek to minimize health, safety and environmental risks to our team members, residents, and guests by utilizing safe operating procedures and practices:
•As part of our commitment to safety, we oversee annual safety training programs for employees to provide tools and safeguards for accident prevention. Our managers are responsible for ensuring that team members receive the appropriate training to perform their jobs safely;
•All team members participate in safety training during the onboarding process, and thereafter, team members in the field complete an annual safety training course; and
•We uphold a safe workplace by complying with safety and health laws and regulations, maintaining internal requirements and remediating risks. Senior leadership review safety concerns throughout the year on regular site visits, and we also conduct comprehensive safety inspections annually on a subset of properties on a rolling basis.
SUN COMMUNITIES, INC.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG"): OUR COMMITMENT TO A SUSTAINABLE FUTURE
We continue to embrace a company-wide commitment to ESG practices and procedures implemented through executive commitments, sponsorship of various programs and our everyday business practices.
Environmental
The International Energy Agency ("IEA") estimates that the energy usage related to operating buildings (commercial and residential) accounts for 26% of global energy-related emissions. In recognition of the impact buildings have on global annual greenhouse gas ("GHG") emissions, in 2022 we adopted goals to achieve Carbon Neutrality by 2035 inclusive of ISO 14064:1 ("ISO 14064") categories 1, 2, 3 and 4, and Net Zero Emissions by 2045 (inclusive of all five ISO 14064 categories).
The main tactics we intend to use to achieve our commitment will be seen across all our properties as we work toward achieving our climate change goals through various means, including:
•Renewable Energy - Expanding the use of renewable energy throughout our portfolio through additional on-site energy generation, and the consideration for purchase of off-site generated energy and Renewable Energy Certificates (RECs);
•Energy Efficient Buildings - Increasing the use of certified energy efficient manufactured homes, including ENERGY STAR®, in our communities as well as energy-efficient lighting and building control systems;
•Waste - Reducing total waste and increasing diversion from landfills by evaluating all disposal options locally available, including recycling, and adopting the best solution(s) at each property; and
•Material Procurement - Partnering with our supply chain and consultants to collect emissions data on products and services.
During 2023, we completed a top ESG priority by expanding our data coverage to encompass our UK operations and Marina segment. Through collection of primary source data (e.g., utility bills and invoices) and accepted estimation methods, we were able to complete full reporting of all direct and indirect source emissions.
We are fully committed to reducing our environmental impact through investments in energy-efficiency technology, water conservation initiatives and waste reduction strategies implemented across the scope of our operations and through the services we deliver to our residents and guests.
Social
In addition to our commitments and practices discussed above, in the "Human Capital" section, we recognize the important social opportunity we have to provide housing that is both affordable and sustainable. Our business contributes to a vitally important function in our economy by providing high-quality, affordable housing that accommodates all-age and age-restricted communities. Our homes provide more space at less cost per square foot compared to other options.
According to Zillow.com's September 2023 rent index, the average MH site rent in a Sun community is approximately 50% less than the monthly cost of other rental options.
By providing safe, well-located and affordable communities, Sun is expanding the opportunity for home ownership, despite an ever-increasing housing affordability gap.
Another way we support the communities in which we operate is through volunteerism and sponsorship efforts. In 2023, our team members reported approximately 16,000 volunteer hours, an increase of 72% compared to the prior year.
Governance
Aligning Company policies and procedures with the interests of all stakeholders is always a priority for Sun. Among the best practices and policies described in our annual ESG reports and on our website, www.suninc.com, our Code of Conduct and Business Ethics policy serves as the foundation for our approach to ethics and compliance, and our anti-corruption compliance program is focused on conducting business in a fair, ethical and legal manner. Additionally, our publicly available policies outline the expectations we have of supply chain vendors and service providers with whom we partner to operate our properties.
SUN COMMUNITIES, INC.
Providing properties to our residents and guests is a privilege and also poses a responsibility to keep stakeholder data secure. Item 1C of this filing and our annual ESG reports provide information on our approach and standards for cybersecurity.
Increasing engagement with investors remains a priority. During 2023, we held nearly 240 meetings with investment firms, a 37% increase from over 170 meetings in 2022. Through focused outreach to investors, we deepen and evolve our understanding of their priorities, which we integrate into our ongoing ESG materiality assessments to identify considerations that are important to stakeholders.
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 document that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as "forecasts," "intends," "intend," "intended," "goal," "estimate," "estimates," "expects," "expect," "expected," "project," "projected," "projections," "plans," "predicts," "potential," "seeks," "anticipates," "anticipated," "should," "could," "may," "will," "designed to," "foreseeable future," "believe," "believes," "scheduled," "guidance," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements reflect 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 document, some of which are beyond our control. These risks and uncertainties and other factors 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 in our other filings with the SEC, from time to time, such risks, uncertainties and other factors include, but are not limited to:
•changes in general economic conditions, including inflation, deflation and energy costs, the real estate industry and the markets within which we operate;
•difficulties in our ability to evaluate, finance, complete and integrate acquisitions, 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 and our unsecured notes;
•availability of capital;
•outbreaks of disease and related restrictions on business operations;
•changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, Australian dollar and Pound sterling;
•our ability to maintain rental rates and occupancy levels;
•our ability to maintain effective internal control over financial reporting and disclosure controls and procedures;
•our remediation plan and our ability to remediate the material weakness in our internal control over financial reporting;
•expectations regarding the amount or frequency of impairment losses, including as a result of the write-down of intangible assets, including goodwill;
•increases in interest rates and operating costs, including insurance premiums and real estate taxes;
•risks related to natural disasters such as hurricanes, earthquakes, floods, droughts 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, including costs associated with prosecuting or defending claims and any adverse outcomes;
•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 document, 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.
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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.
RISKS RELATED TO THE RESTATEMENT OF OUR PRIOR FINANCIAL STATEMENTS
We have identified a material weakness in our internal control over financial reporting which resulted in a material misstatement in certain of our previously issued interim unaudited consolidated financial statements, and we cannot provide assurances that this weakness will be effectively remediated or that additional material weaknesses will not occur in the future.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.
During the preparation of this Annual Report, we identified a material weakness in our internal control over financial reporting relating to the design of management's review controls over assessments of goodwill impairment for our Park Holidays business. As a result of this weakness, we concluded that our disclosure controls and procedures were not effective as of March 31, 2023, June 30, 2023 and September 30, 2023 and that our internal control over financial reporting and disclosure controls and procedures were not effective as of December 31, 2023. We have restated our interim unaudited consolidated financial statements as of March 31, 2023, June 30, 2023 and September 30, 2023 in this Annual Report.
We are actively engaged in the planning for, and implementation of, remediation efforts to address this material weakness but there can be no assurance that those efforts will be successful. A material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are designed and operating effectively. If we do not remediate this material weakness in a timely manner, or if additional material weaknesses in our internal control over financial reporting are discovered, they may adversely affect our ability to record, process, summarize and report financial information timely and accurately and our financial statements may contain material misstatements or omissions. In addition, we may experience delays or be unable to meet our reporting obligations or to comply with SEC rules and regulations, which could result in investigations and sanctions by regulatory authorities. Any of these results may, among other adverse consequences, cause investors to lose confidence in our reported financial information, incur the expense of remediation, result in regulatory scrutiny, litigation, investigations or enforcement actions, limit our ability to access the capital markets, lead to a decline in our stock price, and otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows.
For more information relating to the Company's internal control over financial reporting, the material weakness described above and the remediation activities undertaken by us, see "Controls and Procedures" in Part II, Item 9A, of this Annual Report on Form 10-K.
If we fail to maintain an effective system of internal controls, we may not be able to accurately report financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock.
We are required to establish and maintain internal control over financial reporting and disclosure controls and procedures. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. Disclosure controls and procedures are processes designed to ensure that information required to be disclosed is communicated to management and reported in a timely manner. We cannot be certain that we will successfully maintain adequate control over our financial reporting and disclosure controls and procedures. See "Controls and Procedures" in Part II, Item 9A, of this Annual Report on Form 10-K for a discussion of the material weakness in our internal control over financial reporting that management has concluded exist in connection with preparing our financial statements for the year ended December 31, 2023. Deficiencies, including any material weakness, in our internal control over financial reporting that may occur could result in misstatements or restatements of our financial statements or a decline in the price of our securities. In addition, to the extent we make additional significant acquisitions, our internal controls will become more complex and may require significantly more resources to ensure that our disclosure controls and procedures remain effective. Acquisitions can pose challenges in implementing the required processes, procedures and controls in the operations of the companies that we acquire. Companies that are acquired by us may not have disclosure controls and procedures or internal control over financial reporting that are as thorough or effective as those required by the securities laws that currently apply to us.
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Moreover, the existence of any material weakness or significant deficiency in our internal controls and procedures has required and would require management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner. If we cannot provide reliable financial reports, our reputation and operating results could be materially adversely affected, which could also cause investors to lose confidence in our reported financial information, which in turn could result in a reduction in the trading price of our common stock.
We have concluded that certain of our previously issued interim unaudited consolidated financial statements should not be relied upon and have restated certain of our previously issued financial statements, which was time-consuming and expensive and could expose us to additional risks that could have a negative effect on us.
As discussed in the Explanatory Note, we determined to restate our unaudited consolidated financial statements as of March 31, 2023, June 30, 2023 and September 30, 2023, and that such interim unaudited financial statements should no longer be relied upon. As a result, we have incurred unanticipated costs for accounting and legal fees related to this restatement, and have become subject to a number of additional risks and uncertainties, which may affect investor confidence in the accuracy of our financial disclosures and may raise reputational issues for our business. We expect to continue to face many of the risks and challenges related to the restatement, including the following:
•we may fail to remediate material weaknesses in our internal control over financial reporting and other material weaknesses may be identified in the future, which would adversely affect the accuracy and timing of our financial reporting;
•the processes undertaken to affect the restatement may not have been adequate to identify and correct all errors in our historical financial statements and, as a result, we may discover additional errors and our financial statements remain subject to the risk of future restatement;
•the incurrence of restatement-related expenses; and
•diversion of management and other human resources attention from the operation of our business.
We cannot assure that all of the risks and challenges described above will be eliminated and that lost business opportunities can be recaptured or that general reputational harm will not persist. If one or more of the foregoing risks or challenges persist, there may be a material adverse effect on our business, financial condition, results of operations, and cash flows.
We have been and may in the future be required to write down intangible assets, including goodwill, due to impairment, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
We have in the past and may in the future be required to write down intangible assets, including goodwill, due to impairment, which would reduce earnings. We periodically calculate the fair value of our intangible assets to test for impairment. This calculation may be affected by several factors, including changes in general economic conditions, including inflation, deflation and energy costs; changes in foreign currency exchange rates; our rental rates and occupancy levels; increases in interest rates and operating costs, including insurance premiums and real estate taxes; the effects of natural disasters; and competitive market forces. Certain events can also trigger an immediate review of goodwill and intangible assets. If the carrying value of our intangible assets exceeds its fair value, the goodwill and other intangible assets are considered impaired, which would result in impairment losses and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Refer to Note 1, "Significant Accounting Policies," Note 6, "Goodwill and Other Intangible Assets," and Note 22, "Quarterly Financial Data (Unaudited and Restated)", in our accompanying Consolidated Financial Statements, "Controls and Procedures" in Part II, Item 9A, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of this Annual Report for information on impairments to the goodwill for our Park Holidays portfolio in the UK that we recognized at each of March 31, 2023, June 30, 2023 and September 30, 2023.
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 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 flows and ability to pay or refinance our debt obligations could be adversely affected.
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As of December 31, 2023, 150 of our MH and RV communities and marinas, representing 21.8% of developed sites, are located in Florida; 92 communities, representing 16.5% of developed sites, are located in Michigan; 55 communities, representing 9.4% of developed sites, are located in the UK; 48 communities, representing 6.4% of developed sites, are located in California; and 32 communities, representing 5.7% of developed sites, are located in Texas. As of December 31, 2023, we have revenue concentrations of marinas in Florida, Rhode Island and Georgia of approximately 32.8%, 8.7% and 8.0%, respectively. As a result of the geographic concentration of our MH and RV communities in Florida, Michigan, the UK, California and Texas, and of our marinas in Florida, Rhode Island and Georgia, 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 and members 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:
•the international, national and local economic climate which may be adversely impacted by, among other factors, plant closings, industry slowdowns and inflation;
•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, and an oversupply of, or a reduced demand for, manufactured homes;
•increased operating costs, including insurance premiums, real estate taxes and utilities;
•competition from other available MH and RV communities and alternative forms of housing (such as apartment buildings and site-built single-family homes), and other marinas;
•a decrease in the number of people interested in the RV lifestyle or boating;
•outbreaks of disease and related restrictions on business operations;
•changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, Australian dollar and Pound sterling;
•the number of repossessed homes in a particular market;
•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;
•zoning or other environmental regulatory restrictions;
•our ability to effectively manage, maintain and insure our properties; 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 and RV communities 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 and RV communities 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;
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•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 are many international, national and regional competitors in the MH, RV and marina markets we currently serve and in new markets that we may enter. Our properties are located in developed areas that include other MH and RV communities, and marinas. The number of competitive MH and RV communities 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 and RV communities.
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 business, certain properties maintain higher occupancy during the summer months, while other properties maintain higher occupancy during the winter months. The RV business 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 business, 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 or within covered racks. Our results on a quarterly basis can fluctuate due to this cyclicality and seasonality.
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;
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•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 flows.
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.
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, droughts, 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 U.S.; 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.
While they are unpredictable, the impacts of climate change may change residential migration and vacation trends, which could reduce demand for our properties. If the areas in which our properties are located become less desirable places to live or vacation, the value of our properties and their ability to generate revenue may be materially adversely affected.
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In addition, changes in federal, state, local and foreign legislation and regulation based on concerns about climate change, as well as voluntary measures we take to combat climate change, could result in increased capital expenditures at our properties. For example, these could include expenditures to improve energy efficiency, improve resistance to inclement weather and for infrastructure improvement to support existing and emerging low-carbon technologies. These expenditures may not result in a corresponding increase in revenue, resulting in material adverse impacts to our financial results.
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.
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, local and foreign 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.
As part of our standard acquisition due diligence, 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. While these environmental evaluations have not revealed any significant environmental liability that would have a material adverse effect on our business, they cannot reflect conditions arising after the studies were completed. 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 future laws, ordinances or regulations will not impose any material environmental liability, or 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.
We are subject to additional risks from our international investments.
Park Holidays represents our first major investment in the UK. We may also pursue other significant acquisition opportunities outside the U.S. Our ownership of Park Holidays and any other international investments subjects us to additional risks, including:
•the laws, rules and regulations applicable in such jurisdictions outside of the U.S., including those related to property ownership by foreign entities, consumer and data protection, privacy, network security, encryption, payments and restricting us from removing profits earned from activities within the country to the U.S. (i.e., nationalization of assets located within a country);
•complying with a wide variety of foreign laws;
•fluctuations in exchange rates between foreign currencies and the U.S. dollar, and exchange controls;
•limited experience with local business and cultural factors that differ from our usual standards and practices;
•changes in the availability, cost and terms of mortgage funds and other borrowings resulting from varying national economic policies or changes in interest rates;
•reliance on local management;
•challenges in establishing effective controls and procedures to regulate operations in different regions and to monitor and ensure compliance with applicable regulations, such as applicable laws related to corrupt practices, employment, licensing, construction, climate change or environmental compliance;
•unexpected changes in regulatory requirements, tax, tariffs, trade barriers and other laws within jurisdictions outside the U.S. or between the U.S. and such jurisdictions;
•potentially adverse tax consequences with respect to our properties;
•the impact of regional or country-specific business cycles and economic instability, including deterioration in political relations with the U.S., instability in, or further withdrawals from, the European Union or other international trade alliances or agreements;
•the impact of disruptions in global, regional or local supply chains, including disruptions occurring as a result of outbreaks of disease; and
•political instability, uncertainty over property rights, civil unrest, drug trafficking, political activism or the continuation or escalation of terrorist activities.
If we are unable to adequately address these risks, they could have a significant adverse effect on our operations.
We depend on Safe Harbor's management to operate our marina business.
Safe Harbor's operations are separate from our other operations. 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 material 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.
Public health crises, such as outbreaks of disease, could materially and adversely affect our financial condition, operating results and cash flows.
A public health crisis, such as the COVID-19 pandemic, could have material and adverse effects on our ability to successfully operate our business and on our financial condition. The government and societal responses to public health crises are highly uncertain and we cannot predict with confidence the impact a public health crisis would have on our operations and financial condition.
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Rent control legislation may harm our ability to increase rents.
National, 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.
RISKS RELATED TO OUR DEBT FINANCINGS
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, 2023, we had approximately $7.8 billion of total debt outstanding, consisting of approximately $3.5 billion in collateralized term loans and debt that is secured by mortgage liens on 156 of our properties, $2.2 billion of senior unsecured notes and $2.1 billion on our line of credit and other debt. Including the impact of hedge activity, as of December 31, 2023, approximately 84% of our total debt was fixed rate financing and approximately 16% of our total debt was floating rate financing. 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 flows may be insufficient to meet required debt payments, or we may need to dedicate a substantial portion of our cash flows to pay our debt rather than to other areas of our business;
•our existing debt 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;
•increases in interest rates will increase the costs of our floating rate debt and make obtaining new debt more expensive;
•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 debt 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 flows 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 debt.
Covenants in our credit agreements and senior unsecured note indentures could limit our flexibility and adversely affect our financial condition.
The terms of our financing agreements and other debt require us to comply with a number of customary financial and other covenants. These covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the instruments governing the applicable debt even if we have satisfied our payment obligations. Our financing agreements contain certain cross-default provisions that could be triggered in the event that we default on our other debt. These cross-default provisions may require us to repay or restructure our senior credit facility in addition to any mortgage or other debt that is in default. If our properties were foreclosed upon, or if we are unable to refinance our debt at maturity or meet our payment obligations, the amount of our distributable cash flows and our financial condition would be adversely affected.
Our senior credit facility contains various financial covenants including, but not limited to a maximum leverage ratio, a minimum fixed charge coverage ratio and a maximum secured leverage ratio. In addition to our senior credit facility, our senior unsecured notes also contain various covenants including an aggregate debt test, a secured debt test, a debt service test, and a maintenance of total unencumbered assets test. These covenants may restrict our ability to pursue certain business initiatives or certain transactions that might otherwise be advantageous. Furthermore, failure to meet certain of these financial covenants could cause an event of default under and / or accelerate some or all of such debt which could have a material adverse effect on us.
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An increase in market interest rates could raise our interest costs on existing and future debt or adversely affect our stock price, and a decrease in interest rates may lead to additional competition for the acquisition of real estate or adversely affect our results of operations.
Our interest costs for any new debt and our current debt obligations may rise if interest rates increase. This increased cost could make the financing of any new acquisition more expensive as well as lower our current period earnings. Rising interest rates could limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing. In addition, an increase in interest rates could decrease the access our customers have to credit, thereby decreasing the demand for manufactured homes and recreational vehicles. An increase in market interest rates may lead prospective purchasers of our common stock to expect a higher dividend yield, which could adversely affect the market price of our common stock. Decreases in interest rates may lead to additional competition for the acquisition of real estate due to a reduction in desirable alternative income-producing investments. Increased competition for the acquisition of real estate may lead to a decrease in the yields on real estate targeted for acquisition. In such circumstances, if we are not able to offset the decrease in yields by obtaining lower interest costs on our borrowings, our results of operations may be adversely affected.
Our hedging strategies may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on your investment.
We use various derivative financial instruments to provide a level of protection against interest rate risks, but no hedging strategy can protect us completely. These instruments involve risks, such as the risk that the counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes, that a court could rule that such agreements are not legally enforceable and that we may have to post collateral to enter into hedging transactions, which we may lose if we are unable to honor our obligations. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the REIT income tests. In addition, the nature and timing of hedging transactions may influence the effectiveness of our hedging strategies. Poorly designed strategies or improperly executed transactions could actually increase our risk and losses. Moreover, hedging strategies involve transaction and other costs. We cannot assure you that our hedging strategy and the derivatives that we use will adequately offset the risk of interest rate volatility or that our hedging transactions will not result in losses that may reduce the overall return on your investment.
A downgrade in our credit ratings could have material adverse effects on our business and financial condition.
We intend to manage our operations to maintain our investment grade credit ratings from S&P Global and Moody's. These ratings are based on a number of factors, which include assessments of our financial strength, liquidity, capital structure, asset quality, and sustainability of cash flows and earnings. Changes in these factors could lead to a downgrade of our ratings, leading to an adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our financial condition, results of operations and liquidity.
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 on an annual and quarterly basis established under highly technical and complex Code provisions for which there are 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 requires us to continually monitor our tax status.
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 shareholders because of the additional tax liability to us for the years involved. In addition, distributions to shareholders would no longer be required to be made.
SUN COMMUNITIES, INC.
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. 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. Such changes could 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% 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% test are similar in most respects. Qualifying income for the 90% 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% 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.
Partnership tax audit rules could have a material adverse effect on us.
Under the rules applicable to U.S. federal income tax audits of partnerships, 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 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. These rules are significant for collecting tax in partnership audits and 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 shareholders at least 90% 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% 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% 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 shareholders that are individuals, trusts and estates is 20%. Dividends payable by REITs, however, are generally not eligible for this reduced rate, although the Tax Cut and Jobs Act permits a 20% deduction equal to the amount of qualifying REIT dividends received, thus bringing the maximum federal tax rate on qualifying REIT dividends to 29.6%. 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.
SUN COMMUNITIES, INC.
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 shareholders 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.
RISKS RELATED TO OUR STRUCTURE
Certain provisions in our governing documents may make it difficult for a third-party to acquire us.
9.8% Ownership Limit. In order to qualify and maintain our qualification as a REIT, not more than 50% 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%, in number of shares or value, of the issued and outstanding shares of our capital stock by any single shareholder 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.
The 9.8% 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 shareholders; and (b) limit the opportunity for shareholders 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% 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 shareholders' 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 shareholders 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 shareholder" (defined generally as any person who beneficially owns 10% 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% 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 shareholder becomes an interested shareholder, and thereafter impose fair price and / or supermajority and shareholder 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 shareholder, entitle the shareholder 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 shareholder by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
SUN COMMUNITIES, INC.
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 shareholder becomes an interested shareholder. 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 shareholder 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.
Additionally, Subtitle 8 of Title 3 of the MGCL permits our Board of Directors, without shareholder 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 shareholders' 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 shareholders 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 shareholders 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 shareholder 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 shareholders 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 shareholders' investment.
Our common stock has experienced significant price and volume fluctuations. In the future, 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:
•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 and our unsecured notes;
•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, Australian dollar and Pound sterling;
•changes in market valuations of similar companies;
•outbreaks of disease, and related restrictions on business operations;
•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;
SUN COMMUNITIES, INC.
•additions or departures of key management personnel;
•speculation in the press or investment community;
•equity issuances by us, or share resales by our shareholders or the perception that such issuances or resales may occur;
•actions by institutional shareholders;
•litigation or threatened litigation, which may divert our management's time and attention, require us to pay damages and expenses or restrict the operation of our business;
•failure to qualify and maintain our qualification as a REIT; and
•general market and economic conditions.
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 20, 2024, in the future we may issue to the limited partners of the Operating Partnership, up to approximately 5.3 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 20, 2024, there were no outstanding options to purchase shares of our common stock under our equity incentive plans, and we had the authority to issue restricted stock awards or options to purchase up to an additional 3.0 million 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 sell shares of common stock. As of December 31, 2023, we have remaining capacity to sell up to an additional $1.1 billion 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 debt, 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 debt 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 flows 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 debt 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, including Gary A. Shiffman, Bruce D. Thelen, Fernando Castro-Caratini, Marc Farrugia, Aaron Weiss 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.
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 flows and upon renewal of our insurance policies, our coverage may change and our costs may increase.
We have a significant concentration of MH and RV properties and marinas on coastlines and in other areas where natural disasters or other catastrophic events such as hurricanes, flash floods, sea-level rise, droughts, tornadoes, wildfires or 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 through a combination of self-insurance partially covering the risk and insurance 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 flows from the affected property. We would also continue to be obligated to repay any mortgage debt 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.
We renew our insurance policies annually. As a result of increased insurance claims across the industry and other market conditions, it has been more difficult to obtain insurance, but in particular property insurance covering named windstorms, business interruption, flood and earthquake insurance. There are fewer insurers willing to provide policies, and policies increasingly include lower coverage limits, higher deductibles and higher premiums. These conditions may cause us to change the types and amounts of insurance we carry and may provide us with reduced coverage and / or higher costs. This may require a change in our insurance purchasing philosophy and strategy which can result in the assumption of greater risks to offset insurance market fluctuations.
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, local and foreign 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, local and foreign 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, Australian and UK properties are or will be exposed to the effects of changes in the Canadian dollar, Australian dollar and Pound sterling, 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.
Deterioration in general economic conditions in the United States, and globally, including the effect of prolonged periods of inflation, could harm our business and results of operations.
Our business and results of operations could be adversely affected by changes in national or global economic conditions. These conditions include but are not limited to inflation, deflation, rising interest rates, availability of capital markets, energy availability and costs, the negative impacts caused by outbreaks of disease and public health crises, negative impacts resulting from military conflicts and the effects of governmental initiatives to manage economic conditions.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
As of December 31, 2023, our properties were located in the U.S., the UK and Canada, and consisted of 353 MH communities, 179 RV communities and 135 marinas.
As of December 31, 2023, our properties contained an aggregate of 227,340 developed sites comprised of 118,430 developed MH sites, 32,390 annual RV sites (inclusive of both annual and seasonal usage rights), 28,490 transient RV sites and 48,030 wet slips and dry storage spaces. There are 17,980 additional MH and RV sites suitable for development. Most of our properties include amenities oriented toward family and retirement living. Of our 667 properties, 318 properties have 300 or more developed sites, with the largest having 2,340 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, 2023, our MH and RV properties had an occupancy rate of 96.4% excluding transient RV sites. Since January 1, 2019, our MH and RV properties have a five-year average annual turnover of homes (where the home is moved out of the community) of approximately 3.0% and a five-year 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 6.9%. The average renewal rate for residents in our Rental Program was 70.4% for the year ended December 31, 2023.
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 communities offer incremental amenities including golf, pro shops, restaurants, zip lines, waterparks, watersports and thematic experiences.
Our MH and RV communities are principally located in the midwestern, southern and southeastern regions of the U.S., in the south of England in the UK and in Canada. Our marinas are principally located in the northeastern, southern, mid-Atlantic, western and midwestern 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 operations.
The following tables set forth certain information relating to our MH and RV properties as of December 31, 2023. The occupancy percentage includes MH sites and annual RV sites and excludes transient RV sites.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
NORTH AMERICA
UNITED STATES
MIDWEST
Michigan
Academy / West Point MH Canton MI 440 - 99.5 % 98.0 %
Allendale Meadows MH Allendale MI 350 - 99.7 % 97.4 %
Alpine Meadows MH Grand Rapids MI 400 - 99.3 % 98.5 %
Andover MH Grass Lake MI 130 - 97.6 % 100.0 %
Apple Carr Village MH Muskegon MI 710 - 97.3 % 97.5 %
Arbor Woods MH Ypsilanti MI 460 - 98.9 % 98.0 %
Brentwood Village MH Kentwood MI 200 - 96.4 % 98.5 %
Broadview Estates MH Davison MI 470 - 98.7 % 97.9 %
Brookside Village MH Kentwood MI 200 - 99.5 % 99.5 %
Byron Center MH Byron Center MI 140 - 97.9 % 97.2 %
Camelot Villa MH Macomb MI 710 - 98.5 % 98.2 %
Charlevoix Estates MH Charlevoix MI 180 - 99.5 % 98.9 %
Cider Mill Crossings MH Fenton MI 620 - 98.6 % 97.6 %
Cider Mill Village MH Middleville MI 260 - 98.1 % 98.4 %
Country Acres MH Cadillac MI 180 - 94.5 % 95.1 %
Country Hills Village MH Hudsonville MI 240 - 100.0 % 100.0 %
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Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Country Meadows MH Flat Rock MI 580 - 97.4 % 98.4 %
Country Meadows Village MH Caledonia MI 400 - 100.0 % 100.0 %
Creek Wood MH Burton MI 340 - 98.8 % 98.5 %
Cutler Estates MH Grand Rapids MI 260 - 98.8 % 99.2 %
Dutton Mill Village MH Caledonia MI 310 - 99.3 % 98.0 %
East Village Estates MH Washington Twp. MI 710 - 99.3 % 98.6 %
Egelcraft MH Muskegon MI 460 - 99.6 % 98.9 %
Fisherman's Cove MH Flint Twp. MI 160 - 98.8 % 96.3 %
Fox Run MH Boyne City MI 140 - 16.4 % (1)
N/A (2)
Frenchtown Villa / Elizabeth Woods MH Newport MI 1,140 - 97.5 % 98.9 %
Grand Village MH Grand Rapids MI 220 - 95.9 % 97.7 %
Hamlin MH Webberville MI 230 - 100.0 % 97.0 %
Hickory Hills Village MH Battle Creek MI 280 - 99.6 % 98.2 %
Highland Greens Estates MH Highland MI 880 - 76.0 % 67.5 %
Holiday West Village MH Holland MI 340 - 99.7 % 100.0 %
Holly Village / Hawaiian Gardens MH Holly MI 420 - 97.9 % 97.9 %
Hunters Crossing MH Capac MI 110 - 100.0 % 98.2 %
Hunters Glen MH Wayland MI 400 - 99.5 % 99.7 %
Huntington Run MH Kalamazoo MI 210 - 84.5 % (1)
100.0 %
Jellystone Park™ Petoskey(3)
RV Petoskey MI 50 240 100.0 % 100.0 %
Kensington Meadows MH Lansing MI 290 - 98.3 % 95.5 %
Kimberly Estates MH Newport MI 390 - 97.9 % 98.4 %
King's Court MH Traverse City MI 800 - 99.5 % 99.0 %
Knollwood Estates MH Allendale MI 160 - 98.1 % 96.9 %
Lafayette Place MH Warren MI 250 - 96.5 % 95.3 %
Lakeview MH Ypsilanti MI 390 - 99.0 % 97.4 %
Leisure Village MH Belmont MI 260 - 100.0 % 99.2 %
Lincoln Estates MH Holland MI 190 - 99.5 % 99.5 %
Meadow Lake Estates MH White Lake MI 420 - 99.5 % 97.9 %
Meadowbrook Estates MH Monroe MI 450 - 96.5 % 95.8 %
Meadowlands of Gibraltar MH Gibraltar MI 320 - 99.4 % 99.4 %
Meadowstone MH Hastings MI 230 - 95.7 % 97.0 %
Northville Crossing MH Northville MI 760 - 99.7 % 99.5 %
Oak Island Village MH East Lansing MI 250 - 98.4 % 97.2 %
Pinebrook Village MH Kentwood MI 190 - 99.5 % 96.2 %
Pineview Estates MH Flint MI 1,010 - 95.7 % 86.9 %
Presidential Estates MH Hudsonville MI 360 - 99.2 % 99.7 %
Richmond Place MH Richmond MI 120 - 99.1 % 94.9 %
River Haven Village MH Grand Haven MI 720 - 98.6 % 99.0 %
River Ridge MH Saline MI 290 - 99.7 % 99.7 %
Rudgate Clinton MH Clinton Township MI 670 - 98.8 % 99.1 %
Rudgate Manor MH Sterling Heights MI 930 - 98.4 % 98.0 %
Scio Farms MH Ann Arbor MI 910 - 99.6 % 99.3 %
Sheffield Estates MH Auburn Hills MI 230 - 96.9 % 98.2 %
Shelby Forest MH Shelby Twp. MI 660 - 98.6 % 98.5 %
Shelby West MH Shelby Twp. MI 640 - 99.8 % 98.8 %
Silver Springs MH Clinton Township MI 550 - 98.5 % 98.9 %
Southwood Village MH Grand Rapids MI 390 - 98.2 % 99.0 %
St. Clair Place MH St. Clair MI 100 - 98.0 % 98.0 %
Stonebridge MH Richfield Twp. MI - - N/A (1)
N/A (1)
Sun Outdoors Kensington Valley(3)
RV New Hudson MI 320 170 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Sun Outdoors Petoskey Bay Harbor(3)
RV Petoskey MI 10 150 100.0 % 100.0 %
Sun Retreats Gun Lake(3)
RV Hopkins MI 310 20 100.0 % 100.0 %
Sun Retreats Silver Lake(3)
RV Mears MI 230 30 100.0 % 100.0 %
Sunset Ridge MH Portland MI 500 - 88.2 % (1)
98.7 %
Sycamore Village MH Mason MI 400 - 99.2 % 98.5 %
Sylvan Crossing MH Chelsea MI 280 - 54.4 % (1)
49.1 % (1)
Sylvan Glen Estates MH Brighton MI 480 - 98.9 % 98.5 %
Tamarac Village MH Ludington MI 300 - 99.3 % 98.3 %
Tamarac Village RV Resort RV Ludington MI 110 - 100.0 % 100.0 %
Tanglewood Village MH Brownstown MI 250 - 100.0 % 100.0 %
Timberline Estates MH Coopersville MI 300 - 99.0 % 97.3 %
Town & Country MH Traverse City MI 190 - 99.5 % 99.0 %
Troy Villa MH Troy MI 280 - 90.8 % 85.1 %
Warren Dunes Village MH Bridgman MI 310 - 100.0 % 99.7 %
Waverly Shores Village MH Holland MI 410 - 99.8 % 100.0 %
West Village Estates MH Romulus MI 630 - 98.9 % 99.5 %
White Lake MH White Lake MI 320 - 98.7 % 95.9 %
Windham Hills MH Jackson MI 470 - 98.1 % 96.8 %
Windsor Woods Village MH Wayland MI 310 - 99.4 % 98.7 %
Woodhaven Place MH Woodhaven MI 220 - 99.5 % 94.5 %
Michigan Total 32,890 610 97.1 % 96.7 %
Indiana
Brookside Manor MH Goshen IN 570 - 99.1 % 97.5 %
Carrington Pointe MH Fort Wayne IN 470 - 99.4 % 97.9 %
Clear Water MH South Bend IN 230 - 98.7 % 98.7 %
Cobus Green MH Osceola IN 380 - 99.7 % 99.7 %
Four Seasons MH Elkhart IN 220 - 97.2 % 95.9 %
Jellystone Park™ at Barton Lake(3)
RV Fremont IN 60 500 100.0 % 100.0 %
Liberty Farm MH Valparaiso IN 220 - 92.3 % 95.5 %
Pebble Creek MH Greenwood IN 300 - 99.3 % 99.0 %
Pine Hills MH Middlebury IN 130 - 97.7 % 99.2 %
Roxbury Park MH Goshen IN 400 - 95.7 % 93.2 %
Sun Outdoors Lake Rudolph(3)
RV Santa Claus IN - 530 N/A N/A
The Willows MH Goshen IN 170 - 93.7 % (1)
82.8 % (1)
Indiana Total 3,150 1,030 97.8 % 96.6 %
SOUTH
Texas
Austin Lone Star(3)
RV Austin TX 80 70 100.0 % 100.0 %
Bluebonnet Lake MH Austin TX - - N/A (1)
N/A (1)
Boulder Ridge MH Pflugerville TX 1,220 - 99.3 % 98.6 %
Branch Creek Estates MH Austin TX 400 - 99.8 % 99.5 %
Chisholm Point MH Pflugerville TX 430 - 99.5 % 99.3 %
Comal Farms MH New Braunfels TX 370 - 98.9 % 98.9 %
Coyote Ranch Resort(3)
RV Wichita Falls TX - 160 N/A N/A
Creeks Crossing MH Kyle TX 200 - 94.9 % (1)
56.6 % (1)
Jellystone Park™ at Guadalupe River(3)
RV Kerrville TX - 260 N/A N/A
Jellystone Park™ at Hill Country(3)
RV Canyon Lake TX - 170 N/A N/A
Jetstream NASA(3)
RV Houston TX 110 90 100.0 % 100.0 %
Lantana Ranch South MH Brookshire TX - - N/A (1)
N/A (1)
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Lone Star Jellystone Park(3)
RV Waller TX - 350 N/A N/A
Oak Crest MH Austin TX 650 - 97.9 % 98.2 %
Pearwood(3)
RV Pearland TX 130 10 100.0 % 100.0 %
Pecan Branch MH Georgetown TX 230 - 98.7 % 99.1 %
Pine Acre Trails MH Conroe TX 250 - 44.2 % (1)
6.0 % (1)
Pine Trace MH Houston TX 680 - 98.2 % 97.6 %
River Ranch MH Austin TX 850 - 99.4 % 98.9 %
River Ridge Estates MH Austin TX 510 - 99.0 % 98.4 %
Saddlebrook MH San Marcos TX 560 - 99.3 % 99.1 %
Sandy Lake MH Carrollton TX 50 - 100.0 % 100.0 %
Sandy Lake RV Resort(3)
RV Carrollton TX 210 10 100.0 % 100.0 %
Stonebridge MH San Antonio TX 330 - 99.1 % 100.0 %
Summit Ridge MH Converse TX 440 - 97.8 % 99.3 %
Sun Outdoors Lake Travis(3)
RV Austin TX 110 140 100.0 % 100.0 %
Sun Retreats San Antonio West(3)
RV San Antonio TX 110 160 100.0 % 100.0 %
Sun Retreats Texas Hill Country(3)
RV New Braunfels TX 130 240 100.0 % 100.0 %
Sunset Ridge MH Kyle TX 450 - 72.5 % (1)
76.8 % (1)
Traveler's World MH San Antonio TX 10 - 100.0 % 100.0 %
Traveler's World RV Resort(3)
RV San Antonio TX 30 130 100.0 % 100.0 %
Treetops(3)
RV Arlington TX 130 40 100.0 % 100.0 %
Woodlake Trails MH San Antonio TX 320 - 99.1 % 94.3 % (1)
Texas Total 8,990 1,830 96.1 % 94.3 %
SOUTHEAST
Florida
Arbor Terrace(3)
RV Bradenton FL 330 40 100.0 % 100.0 %
Ariana Village MH Lakeland FL 210 - 99.5 % 99.0 %
Bahia Vista Estates MH Sarasota FL 250 - 99.2 % 100.0 %
Baker Acres(3)
RV Zephyrhills FL 310 50 100.0 % 100.0 %
Big Tree(3)
RV Arcadia FL 400 10 100.0 % 100.0 %
Blue Heron Pines MH Punta Gorda FL 410 - 99.3 % 99.8 %
Blue Jay MH Dade City FL 210 - 98.1 % 99.5 %
Blue Jay RV Resort RV Dade City FL 50 - 100.0 % 100.0 %
Blueberry Hill(3)
RV Bushnell FL 380 20 100.0 % 100.0 %
Brentwood Estates MH Hudson FL 190 - 99.5 % 99.5 %
Buttonwood Bay MH Sebring FL 410 - 99.3 % 99.5 %
Buttonwood Bay RV Resort(3)
RV Sebring FL 410 120 100.0 % 100.0 %
Candlelight Manor MH South Daytona FL 130 - 98.4 % 99.2 %
Carriage Cove MH Sanford FL 470 - 99.6 % 99.4 %
Central Park MH Haines City FL 130 - 83.6 % (1)
89.5 %
Central Park RV Resort(3)
RV Haines City FL 260 90 100.0 % 100.0 %
Citrus Hill(3)
RV Dade City FL 180 10 100.0 % 100.0 %
Club Wildwood MH Hudson FL 480 - 99.6 % 99.8 %
Colony in the Wood MH Port Orange FL 380 - 94.5 % 97.1 %
Cypress Greens MH Lake Alfred FL 260 - 99.2 % 98.5 %
Deerwood MH Orlando FL 570 - 99.8 % 99.3 %
Ellenton Gardens(3)
RV Ellenton FL 160 20 100.0 % 100.0 %
Fairfield Village MH Ocala FL 290 - 100.0 % 100.0 %
Flamingo Lake(3)
RV Jacksonville FL 180 240 100.0 % 100.0%
Forest View MH Homosassa FL 300 - 98.7 % 98.7 %
Glen Haven MH Zephyrhills FL 50 - 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Glen Haven RV Resort(3)
RV Zephyrhills FL 200 20 100.0 % 100.0 %
Goldcoaster MH Homestead FL 540 - 98.9 % 99.4 %
Goldcoaster RV Resort RV Homestead FL 10 - 100.0 % 100.0 %
Grand Bay MH Dunedin FL 130 - 100.0 % 100.0 %
Grove Ridge(3)
RV Dade City FL 200 40 100.0 % 100.0 %
Gulfstream Harbor MH Orlando FL 970 - 99.8 % 99.8 %
Hacienda Del Rio MH Edgewater FL 800 - 90.9 % (1)
91.0 % (1)
Hidden River(3)
RV Riverview FL 250 50 100.0 % 100.0 %
Holly Forest MH Holly Hill FL 400 - 99.8 % 100.0 %
Horseshoe Cove RV Resort(3)
RV Bradenton FL 410 60 100.0 % 100.0 %
Indian Creek MH Ft. Myers Beach FL - - - % (4)
- % (4)
Indian Creek RV Resort RV Ft. Myers Beach FL - - - % (4)
- % (4)
Island Lakes MH Merritt Island FL 300 - 100.0 % 100.0 %
King's Lake MH DeBary FL 240 - 100.0 % 100.0 %
Kings Manor MH Lakeland FL 240 - 98.7 % 96.2 %
Kings Pointe MH Lake Alfred FL 230 - 100.0 % 100.0 %
Kissimmee Gardens MH Kissimmee FL 240 - 99.6 % 99.2 %
Kissimmee South MH Davenport FL 140 - 96.5 % 96.5 %
Kissimmee South RV Resort(3)
RV Davenport FL 160 40 100.0 % 100.0 %
La Costa Village MH Port Orange FL 660 - 100.0 % 100.0 %
Lake Juliana Landings MH Auburndale FL 270 - 99.3 % 98.5 %
Lake Pointe Village MH Mulberry FL 360 - 99.4 % 99.2 %
Lake San Marino RV Park(3)
RV Naples FL 330 80 100.0 % 100.0 %
Lakeland(3)
RV Lakeland FL 220 10 100.0 % 100.0 %
Lakeshore Landings MH Orlando FL 310 - 99.7 % 98.7 %
Lakeshore Villas MH Tampa FL 280 - 99.6 % 98.9 %
Lamplighter MH Port Orange FL 260 - 99.2 % 99.6 %
Majestic Oaks(3)
RV Zephyrhills FL 230 30 100.0 % 100.0 %
Marco Naples(3)
RV Naples FL 210 90 100.0 % 100.0 %
Meadowbrook Village MH Tampa FL 260 - 100.0 % 100.0 %
Mill Creek MH Kissimmee FL 30 - 100.0 % 91.2 %
Mill Creek RV Resort(3)
RV Kissimmee FL 140 10 100.0 % 100.0 %
North Lake(3)
RV Moore Haven FL 230 40 100.0 % 100.0 %
Oakview Estates MH Arcadia FL 120 - 92.4 % 95.8 %
Ocean Breeze Resort - Jensen Beach MH Jensen Beach FL 330 - 87.5 % (1)
79.7 % (1)
Ocean Breeze Resort - Jensen Beach RV Resort(3)
RV Jensen Beach FL 70 90 100.0 % 100.0 %
Ocean Breeze - Marathon MH Marathon FL 50 - 100.0 % 100.0 % (5)
Ocean Breeze - Marathon RV Resort RV Marathon FL - - N/A (5)
- % (5)
Ocean View MH Jensen Beach FL 70 - 11.3 % (1)
N/A (1)
Orange City MH Orange City FL - - 100.0 % 100.0 %
Orange City RV Resort(3)
RV Orange City FL 510 10 100.0 % 100.0 %
Orange Tree Village MH Orange City FL 250 - 100.0 % 100.0 %
Paddock Park South MH Ocala FL 190 - 84.6 % 80.9 %
Palm Key Village MH Davenport FL 200 - 100.0 % 100.0 %
Palm Village MH Bradenton FL 150 - 100.0 % 100.0 %
Park Place MH Sebastian FL 480 - 97.9 % 97.7 %
Park Royale MH Pinellas Park FL 310 - 99.0 % 100.0 %
Pecan Park(3)
RV Jacksonville FL 160 180 100.0 % 100.0 %
Pelican Bay MH Micco FL 220 - 97.7 % 99.1 %
Pleasant Lake RV Resort(3)
RV Bradenton FL 330 10 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Rainbow MH Frostproof FL 40 - 100.0 % 100.0 %
Rainbow RV Resort RV Frostproof FL 460 - 100.0 % 100.0 %
Rainbow Village Largo(3)
RV Largo FL 280 30 100.0 % 100.0 %
Rainbow Village Zephyrhills(3)
RV Zephyrhills FL 340 40 100.0 % 100.0 %
Red Oaks MH Bushnell FL 100 - 92.2 % 93.2 %
Red Oaks RV Resort(3)
RV Bushnell FL 600 310 100.0 % 100.0 %
Regency Heights MH Clearwater FL 390 - 100.0 % 99.2 %
Riverside Club MH Ruskin FL 730 - 96.7 % 94.2 % (1)
Royal Country MH Miami FL 860 - 99.9 % 99.9 %
Royal Palm Village MH Haines City FL 390 - 88.9 % 87.3 %
Saddle Oak Club MH Ocala FL 380 - 99.7 % 99.5 %
Saralake Estates MH Sarasota FL 200 - 100.0 % 99.5 %
Savanna Club MH Port St. Lucie FL 1,080 - 98.1 % 98.9 %
Serendipity MH North Fort Myers FL 340 - 90.5 % 92.9 %
Settler's Rest(3)
RV Zephyrhills FL 330 50 100.0 % 100.0 %
Shadow Wood Village MH Hudson FL 260 - 96.9 % 85.4 % (1)
Shady Road Villas MH Ocala FL 130 - 95.3 % 93.8 %
Shell Creek MH Punta Gorda FL 50 - 92.6 % 98.1 %
Shell Creek RV Resort(3)
RV Punta Gorda FL 150 30 100.0 % 100.0 %
Siesta Bay RV Ft. Myers FL - - - % (4)
- % (4)
Southern Charm MH Zephyrhills FL - - 100.0 % 100.0 %
Southern Charm RV Resort(3)
RV Zephyrhills FL 430 70 100.0 % 100.0 %
Southern Leisure RV Resort(3)
RV Chiefland FL 410 90 100.0 % 100.0 %
Southport Springs Golf & Country Club MH Zephyrhills FL 550 - 99.5 % 99.5 %
Spanish Main MH Thonotosassa FL 60 - 98.2 % 96.4 %
Spanish Main RV Resort(3)
RV Thonotosassa FL 250 30 100.0 % 100.0 %
Stonebrook MH Homosassa FL 210 - 94.0 % (1)
93.5 % (1)
Sun Outdoors Islamorada MH Islamorada FL 60 - 42.9 % (5)
5.0 % (5)
Sun Outdoors Islamorada RV Resort(3)
RV Islamorada FL - 80 100.0 % - % (5)
Sun Outdoors Key Largo(3)
RV Key Largo FL 10 30 100.0 % 100.0 %
Sun Outdoors Marathon(3)
RV Marathon FL 10 80 100.0 % 100.0 %
Sun Outdoors Panama City Beach MH Panama City Beach FL 40 - 100.0 % 97.6 %
Sun Outdoors Panama City Beach RV Resort(3)
RV Panama City Beach FL - 160 N/A N/A
Sun Outdoors Sarasota(3)
RV Sarasota FL 1,150 370 100.0 % 100.0 %
Sun Outdoors St. Augustine(3)
RV St. Augustine FL - 170 N/A N/A
Sun Outdoors Sugarloaf Key(3)
RV Summerland Key FL - 100 N/A N/A
Sun Retreats Crystal River(3)
RV Crystal River FL 310 90 100.0 % 100.0 %
Sun Retreats Daytona Beach(3)
RV Port Orange FL 180 50 100.0 % 100.0 %
Sun Retreats Dunedin(3)
RV Dunedin FL 200 40 100.0 % 100.0 %
Sun Retreats Estero Bay(3)
RV Fort Myers FL 280 20 100.0 % 100.0 %
Sun Retreats Fort Myers Beach RV Ft. Myers FL - - N/A (4)
- % (4)
Sun Retreats Homosassa River(3)
RV Homosassa Springs FL 150 80 100.0 % 100.0 %
Sun Retreats Lake Josephine(3)
RV Sebring FL 170 10 100.0 % 100.0 %
Sun Retreats Naples(3)
RV Naples FL 150 20 100.0 % 100.0 %
Sun Retreats Naples East(3)
RV Naples FL 270 30 100.0 % 100.0 %
Sun Retreats Ocala Orange Lake(3)
RV Citra FL 340 70 100.0 % 100.0 %
Sun Retreats Orlando ChampionsGate MH Davenport FL 40 - 67.4 % (1)
68.2 % (1)
Sun Retreats Orlando ChampionsGate RV Resort(3)
RV Davenport FL 100 170 100.0 % 100.0 %
Suncoast Gateway MH Port Richey FL 170 - 98.8 % 98.8 %
Sundance MH Zephyrhills FL 330 - 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Sunlake Estates MH Grand Island FL 410 - 97.3 % 96.8 %
Sunset Harbor at Cow Key Marina MH Key West FL 80 - 98.7 % 98.7 %
Sweetwater(3)
RV Zephyrhills FL 230 60 100.0 % 100.0 %
Tallowwood Isle MH Coconut Creek FL 270 - 97.1 % 97.1 %
Tampa East MH Dover FL 30 - 100.0 % 100.0 %
Tampa East RV Resort(3)
RV Dover FL 620 50 100.0 % 100.0 %
The Hamptons Golf & Country Club MH Auburndale FL 830 - 99.9 % 99.9 %
The Hideaway MH Key West FL 10 - 100.0 % 100.0 %
The Hills MH Apopka FL 100 - 99.0 % 99.0 %
The Landings at Lake Henry MH Haines City FL 390 - 99.5 % 99.2 %
The Ridge MH Davenport FL 480 - 99.4 % 99.8 %
The Valley MH Apopka FL 150 - 100.0 % 100.0 %
ThemeWorld(3)
RV Davenport FL 140 10 100.0 % 100.0 %
Three Lakes(3)
RV Hudson FL 280 30 100.0 % 100.0 %
Tranquility MHC MH Bushnell FL 20 - 48.0 % 30.8 %
Vista del Lago MH Bradenton FL 140 - 99.3 % 100.0 %
Vista del Lago RV Resort RV Bradenton FL 40 - 100.0 % 100.0 %
Vizcaya Lakes MH Port Charlotte FL 120 - 88.9 % 95.4 %
Walden Woods I MH Homosassa FL 210 - 100.0 % 100.0 %
Walden Woods II MH Homosassa FL 210 - 100.0 % 100.0 %
Water Oak Country Club Estates MH Lady Lake FL 1,610 - 80.0 % (1)
79.3 % (1)
Waters Edge(3)
RV Zephyrhills FL 190 30 100.0 % 100.0 %
Westside Ridge MH Auburndale FL 220 - 100.0 % 99.1 %
Windmill Village MH Davenport FL 510 - 99.8 % 99.8 %
Woodlands at Church Lake MH Groveland FL 290 - 92.7 % 86.9 %
Florida Total 40,650 3,760 97.7 % 97.4 %
Virginia
Jellystone Park™ Chincoteague Island(6)
RV Chincoteague VA 50 300 100.0 % N/A
Jellystone Park™ at Luray(3)
RV East Luray VA - 250 N/A N/A
Jellystone Park™ at Natural Bridge(6)
RV Natural Bridge Station VA 70 230 100.0 % 100.0 %
Pine Ridge MH Prince George VA 380 - 99.7 % 99.5 %
Sun Outdoors Cape Charles(6)
RV Cape Charles VA 60 600 100.0 % N/A
Sun Outdoors Chesapeake Bay(3)
RV Temperanceville VA - 250 N/A N/A
Sun Outdoors Chincoteague Bay RV Chincoteague VA - - N/A (1)
N/A (1)
Sun Retreats Gwynn's Island(3)
RV Gwynn VA 120 10 100.0 % 100.0 %
Sun Retreats New Point RV New Point VA 320 - 100.0 % 100.0 %
Sun Retreats Shenandoah Valley(3)
RV Stuarts Draft
VA 450 60 100.0 % 100.0 %
Sunset Beach RV Resort(6)
RV Cape Charles VA 50 250 100.0 % N/A
Virginia Total 1,500 1,950 99.9 % 99.8 %
SOUTHWEST
California
49'er Village(3)
RV Plymouth CA 110 220 100.0 % 100.0 %
Alta Laguna MH Rancho Cucamonga CA 300 - 100.0 % 100.0 %
Bel Air Estates MH Menifee CA 200 - 89.9 % 88.9 %
Caliente Sands MH Cathedral City CA 120 - 99.2 % 98.3 %
Cisco Grove Campground & RV RV Emigrant Gap CA 20 - 100.0 % 100.0 %
El Capitan Canyon(3)
RV Goleta CA - 170 N/A N/A
El Capitan Horse Ranch RV Goleta CA - - N/A N/A (2)
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Forest Springs MH Grass Valley CA 370 - 93.3 % (1)
92.0 % (1)
Friendly Village of La Habra MH La Habra CA 330 - 100.0 % 99.1 %
Friendly Village of Modesto MH Modesto CA 290 - 99.3 % 98.6 %
Friendly Village of Simi MH Simi Valley CA 220 - 100.0 % 99.5 %
Friendly Village of West Covina MH West Covina CA 160 - 99.4 % 98.7 %
Heritage MH Temecula CA 190 - 100.0 % 100.0 %
Indian Wells(3)
RV Indio CA 170 170 100.0 % 100.0 %
Jellystone Park™ at Tower Park(3)
RV Lodi CA - 360 N/A N/A
Lakefront MH Lakeside CA 290 - 100.0 % 99.7 %
Lakeview Estates MH Yucaipa CA 300 - 99.7 % 99.7 %
Lazy J Ranch MH Arcata CA 220 - 99.1 % 98.6 %
Lemon Wood MH Ventura CA 230 - 100.0 % 100.0 %
Menifee Development MH Menifee CA - - N/A (1)
N/A (1)
Moreno 66 Development MH Moreno Valley CA - - N/A (1)
N/A (1)
Napa Valley MH Napa CA 260 - 99.6 % 100.0 %
Oak Creek MH Coarsegold CA 200 - 100.0 % 99.0 %
Ocean West MH McKinleyville CA 130 - 99.2 % 99.2 %
Palos Verdes Shores MH & Golf Community MH San Pedro CA 240 - 100.0 % 100.0 %
Pembroke Downs MH Chino CA 160 - 100.0 % 100.0 %
Pismo Dunes Resort(3)
RV Pismo Beach CA 330 - 100.0 % 100.0 %
Rancho Alipaz MH San Juan Capistrano CA 130 - 100.0 % 100.0 %
Rancho Caballero MH Riverside CA 300 - 99.3 % 99.7 %
Royal Palms MH Cathedral City CA 440 - 99.1 % 98.4 %
Royal Palms RV Resort RV Cathedral City CA 40 - 100.0 % 100.0 %
Sun Outdoors Central Coast Wine Country(3)
RV Paso Robles CA - 200 N/A N/A
Sun Outdoors Paso Robles(3)
RV Paso Robles CA - 330 N/A N/A
Sun Outdoors San Diego Bay MH San Diego CA - - N/A (1)
N/A (1)
Sun Outdoors San Diego Bay RV Resort(3)
RV San Diego CA - 250 N/A N/A
Sun Outdoors Santa Barbara(3)
RV Goleta CA - 100 N/A N/A
Sunrise Estates MH Banning CA 180 - 91.7 % (1)
90.6 % (1)
The Colony MH Oxnard CA 150 - 100.0 % 100.0 %
Vallecito MH Newbury Park CA 300 - 100.0 % 100.0 %
Victor Villa MH Victorville CA 290 - 98.6 % 99.3 %
Vines(3)
RV Paso Robles CA 50 80 100.0 % N/A
Vista del Lago MH Scotts Valley CA 200 - 99.5 % 100.0 %
California Total 6,920 1,880 98.8 % 98.6 %
Arizona
Blue Star MH Apache Junction AZ - - 100.0 % 100.0 %
Blue Star RV Apache Junction AZ 150 - 100.0 % 100.0 %
Brentwood West MH Mesa AZ 350 - 100.0 % 99.7 %
Buena Vista MH Buckeye AZ 400 - 98.3 % 92.0 %
Desert Harbor MH Apache Junction AZ 210 - 99.5 % 100.0 %
La Casa Blanca MH Apache Junction AZ 200 - 99.5 % 99.0 %
Leaf Verde(3)
RV Buckeye AZ 220 160 100.0 % 100.0 %
Lost Dutchman MH Apache Junction AZ 220 - 92.0 % (1)
87.2 % (1)
Lost Dutchman RV Resort RV Apache Junction AZ - - N/A N/A
Mountain View MH Mesa AZ 170 - 97.1 % 97.6 %
Palm Creek Resort & Residences MH Casa Grande AZ 510 - 82.0 % (1)
78.7 % (1)
Palm Creek Resort & Residences RV Resort(3)
RV Casa Grande AZ 1,130 700 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Rancho Mirage MH Apache Junction AZ 310 - 99.7 % 99.7 %
Reserve at Fox Creek MH Bullhead City AZ 310 - 99.4 % 99.7 %
Spanish Trails West MH Casa Grande AZ 130 - 13.2 % (1)
0.5 % (1)
Spanish Trails West RV Resort(3)
RV Casa Grande AZ 10 60 100.0 % N/A (1)
Sun Valley MH Apache Junction AZ 270 - 98.1 % 98.1 %
Arizona Total 4,590 920 94.7 % 91.3 %
Colorado
Cave Creek MH Evans CO 450 - 99.8 % 100.0 %
Eagle Crest MH Firestone CO 440 - 99.5 % 99.8 %
Jellystone Park™ at Larkspur(3)
RV Larkspur CO - 540 N/A N/A
North Point Estates MH Pueblo CO 110 - 99.1 % 95.4 %
Skyline MH Fort Collins CO 170 - 100.0 % 100.0 %
Smith Creek Crossing MH Granby CO 310 - 43.2 % (1)
34.8 % (1)
Sun Outdoors Rocky Mountains MH Granby CO 40 - 100.0 % 100.0 %
Sun Outdoors Rocky Mountains RV Resort(3)
RV Granby CO - 450 100.0 % N/A
Swan Meadow Village MH Dillon CO 170 - 100.0 % 100.0 %
The Foothills MH Fort Collins CO - - N/A N/A
The Grove at Alta Ridge MH Thornton CO 410 - 99.8 % 100.0 %
Timber Ridge MH Ft. Collins CO 580 - 99.1 % 99.3 %
Willow Crossing MH Fort Lupton CO 220 - 11.9 % (1)
- % (1)
Colorado Total 2,900 990 87.0 % 88.2 %
NORTHEAST
Connecticut
Beechwood MH Killingworth CT 300 - 98.7 % 98.3 %
Cedar Springs MH Southington CT 190 - 98.4 % 97.4 %
Forest Hill MH Southington CT 190 - 99.5 % 97.9 %
Grove Beach MH Westbrook CT 140 - 100.0 % 100.0 %
Hillcrest MH Uncasville CT 210 - 99.0 % 99.5 %
Lakeside MH Terryville CT 80 - 96.1 % 96.1 %
Lakeview CT MH Danbury CT 180 - 97.2 % 95.0 %
Laurel Heights MH Uncasville CT 50 - 91.8 % 89.8 %
Marina Cove MH Uncasville CT 20 - 92.0 % 92.0 %
Millwood MH Uncasville CT 40 - 31.1 % (1)
13.3 % (1)
New England Village MH Westbrook CT 60 - 100.0 % 100.0 %
Oak Grove MH Plainville CT 40 - 93.3 % 93.3 %
Rolling Hills MH Storrs CT 200 - 82.0 % 78.0 %
Sun Outdoors Mystic(3)
RV Old Mystic CT 70 80 100.0 % 100.0 %
Three Gardens MH Southington CT 130 - 98.5 % 96.3 %
Yankee Village MH Old Saybrook CT 20 - 100.0 % 100.0 %
Connecticut Total 1,920 80 95.0 % 93.4 %
Maine
Augusta Village MH Augusta ME 60 - 94.9 % 94.9 %
Birch Hill Estates MH Bangor ME 380 - 99.5 % 96.6 %
Hancock Heights Estates MH Hancock ME 110 - 97.3 % 97.3 %
Holiday Park Estates MH Bangor ME 220 - 97.7 % 92.7 %
Jellystone Park™ Androscoggin Lake(3)
RV North Monmouth ME 50 160 100.0 % 100.0 %
Maplewood Manor MH Brunswick ME 300 - 98.3 % 99.3 %
Merrymeeting MH Brunswick ME 40 - 100.0 % 97.7 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Norway Commons MH Norway ME 260 - 74.0 % (1)
83.1 % (1)
Riverside Drive Park MH Augusta ME 160 - 92.6 % 81.0 %
Sun Outdoors Old Orchard Beach Downtown(3)
RV Old Orchard Beach ME 90 230 100.0 % 100.0 %
Sun Outdoors Saco Old Orchard Beach(3)
RV Saco ME 20 170 100.0 % N/A
Sun Outdoors Wells Beach(3)
RV Wells ME - 230 N/A N/A
Sun Retreats at Wild Acres(3)
RV Old Orchard Beach ME 380 250 100.0 % 100.0 %
Sun Retreats Old Orchard Beach(3)
RV Old Orchard Beach ME 260 30 100.0 % 100.0 %
Town & Country Village MH Lisbon ME 140 - 98.6 % 97.9 %
Maine Total 2,470 1,070 96.0 % 95.4 %
New Jersey
Cape May Crossing MH Cape May NJ 30 - 100.0 % 100.0 %
Deep Run MH Cream Ridge NJ 240 - 100.0 % 100.0 %
Hospitality Creek Campground(3)
RV Williamstown NJ 70 170 100.0 % 100.0%
Shady Pines MH Galloway Township NJ 40 - 100.0 % 100.0 %
Shady Pines RV Resort(3)
RV Galloway Township NJ 70 20 100.0 % 100.0 %
Sun Outdoors Cape May(6)
RV Cape May NJ 100 250 100.0 % N/A
Sun Retreats Avalon(3)
RV Cape May Court House NJ 460 70 100.0 % 100.0 %
Sun Retreats Cape May Wildwood(3)
RV Cape May NJ 480 150 100.0 % 100.0 %
Sun Retreats Long Beach Island(3)
RV Barnegat NJ 180 30 100.0 % 100.0 %
Sun Retreats Pleasant Acres Farm(3)
RV Sussex NJ 160 130 100.0 % 100.0 %
Sun Retreats Sea Isle(3)
RV Clermont NJ 690 20 100.0 % 100.0 %
Sun Retreats Seashore(3)
RV Cape May NJ 450 230 100.0 % 100.0 %
New Jersey Total 2,970 1,070 100.0 % 100.0 %
New York
Cherrywood MH Clinton NY 180 - 98.9 % 93.8 % (1)
Jellystone Park™ at Birchwood Acres(6)
MH Greenfield Park NY - - 100.0 % 100.0 %
Jellystone Park™ at Birchwood Acres RV Resort(6)
RV Greenfield Park NY 130 180 100.0 % 100.0 %
Jellystone Park™ at Gardiner(3)
RV Gardiner NY 20 310 100.0 % 100.0 %
Jellystone Park™ of Western New York(3)
RV North Java NY 10 340 100.0 % 100.0 %
Kittatinny Campground & RV Resort(3)
RV Barryville NY - 330 N/A N/A
Parkside Village MH Cheektowaga NY 160 - 99.4 % 100.0 %
Sky Harbor MH Cheektowaga NY 520 - 98.7 % 97.7 %
Sun Outdoors Association Island(3)
RV Henderson NY 40 260 100.0 % 100.0 %
Sun Retreats Adirondack Gateway RV Gansevoort NY 340 - 100.0 % 100.0 %
The Villas at Calla Pointe MH Cheektowaga NY 120 - 100.0 % 100.0 %
New York Total 1,520 1,420 99.3 % 98.5 %
OTHER
Sun Outdoors Orange Beach(3)
RV Orange Beach AL - 500 N/A N/A
Fort Dupont RV Delaware City DE - - N/A N/A
High Point Park MH Frederica DE 410 - 98.3 % 97.8 %
Jellystone Park™ at Delaware Beaches(3)
RV Delaware City DE - 260 N/A N/A
Sea Air Village MH Rehoboth Beach DE 380 - 99.2 % 99.2 %
Sea Air Village RV Resort(3)
RV Rehoboth Beach DE 120 10 100.0 % 100.0 %
Sun Outdoors Rehoboth Bay(6)
RV Millsboro DE 10 290 100.0 % N/A
Sun Retreats Rehoboth Bay MH Millsboro DE 200 - 100.0 % 95.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Sun Retreats Rehoboth Bay RV Resort RV Millsboro DE 300 - 100.0 % 100.0 %
Countryside Village of Atlanta MH Lawrenceville GA 260 - 98.9 % 99.2 %
Countryside Village of Gwinnett MH Buford GA 330 - 100.0 % 98.2 %
Countryside Village of Lake Lanier MH Buford GA 550 - 99.6 % 99.1 %
Wymberly MH Martinez GA 280 - 81.9 % (1)
78.3 % (1)
Autumn Ridge MH Ankeny IA 410 - 97.8 % 97.6 %
Jellystone Park™ of Chicago(3)
RV Millbrook IL 150 240 100.0 % 100.0 %
Maple Brook MH Matteson IL 440 - 99.3 % 99.8 %
Oak Ridge MH Manteno IL 430 - 99.5 % 99.8 %
Sun Retreats Rock River(3)
RV Hillsdale IL 270 230 100.0 % 100.0 %
Wildwood Community MH Sandwich IL 480 - 99.2 % 99.2 %
Jellystone Park™ at Mammoth Cave(6)
RV Cave City KY - 330 N/A N/A
Sun Outdoors New Orleans North Shore(3)
RV Ponchatoula LA - 330 N/A N/A
Sun Retreats Cape Cod(3)
RV East Falmouth MA 80 180 100.0 % 100.0 %
Sun Retreats Dennis Port(3)
RV Dennisport MA 230 20 100.0 % 100.0 %
Sun Retreats Peters Pond(3)
RV Sandwich MA 370 40 100.0 % 100.0 %
Hyde Park MH Easton MD 240 - 99.6 % 100.0 %
Jellystone Park™ at Maryland(3)
RV Williamsport MD - 230 N/A N/A
Southside Landing MH Cambridge MD 100 - 100.0 % 100.0 %
Sun Outdoors Frontier Town(6)
RV Berlin MD 30 660 100.0 % N/A
Sun Outdoors Ocean City(3)
RV Berlin MD - 390 100.0 % 100.0 %
Sun Outdoors Ocean City Gateway(6)
RV Whaleyville MD 20 190 100.0 % N/A
Southern Hills / Northridge Place MH Stewartville MN 470 - 97.7 % 97.5 %
Jellystone Park™ at Memphis(3)
RV Horn Lake MS - 160 N/A N/A
Sun Outdoors Yellowstone North(3)
RV Gardiner MT - 80 N/A N/A
Coastal Estates MH Hampstead NC 150 - 94.8 % (1)
82.5 % (1)
Glen Laurel MH Concord NC 260 - 98.8 % 98.8 %
Jellystone Park™ at Golden Valley(3)
RV Bostic NC - 360 N/A N/A
Meadowbrook MH Charlotte NC 320 - 99.7 % 100.0 %
Sun Retreats Nantahala(3)
RV Sylva NC 70 20 100.0 % 100.0 %
Stoneridge Villas MH Gardnerville NV - - N/A (1)
N/A (1)
Sun Villa Estates MH Reno NV 320 - 99.7 % 99.1 %
Brook Ridge MH Hooksett NH 90 - 100.0 % 100.0 %
Crestwood MH Concord NH 320 - 99.7 % 100.0 %
Farmwood Village MH Dover NH 160 - 100.0 % 100.0 %
Glen Ellis Family Campground(3)
RV Glen NH - 300 N/A N/A
Hannah Village MH Lebanon NH 80 - 100.0 % 100.0 %
Hemlocks MH Tilton NH 100 - 100.0 % 100.0 %
River Pines MH Nashua NH 480 - 99.6 % 100.0 %
Strafford / Lake Winnipesaukee South KOA(6)
RV Strafford NH 10 130 100.0 % N/A
Westward Shores Cottages & RV Resort(3)
RV West Ossipee NH 430 70 100.0 % 100.0 %
Apple Creek MH Amelia OH 180 - 98.9 % 98.3 %
East Fork Crossing MH Batavia OH 350 - 99.4 % 100.0 %
Oakwood Village MH Miamisburg OH 510 - 99.0 % 98.8 %
Orchard Lake MH Milford OH 150 - 99.3 % 98.0 %
Sun Retreats Geneva on the Lake(3)
RV Geneva on the Lake OH 510 120 100.0 % 100.0 %
Westbrook Senior Village MH Toledo OH 110 - 100.0 % 100.0 %
Westbrook Village MH Toledo OH 340 - 97.7 % 94.5 %
Willowbrook Place MH Toledo OH 270 - 97.4 % 95.1 %
Woodside Terrace MH Holland OH 440 - 96.4 % 95.7 %
Country Village Estates MH Oregon City OR 520 - 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Forest Meadows MH Philomath OR 130 - 72.9 % (1)
58.1 % (1)
Sun Outdoors Bend(3)
RV Bend OR - 120 N/A N/A
Sun Outdoors Coos Bay(3)
RV Coos Bay OR - 80 N/A N/A
Sun Outdoors Portland South(3)
RV Wilsonville OR - 130 N/A N/A
Woodland Park Estates MH Eugene OR 400 - 100.0 % 99.7 %
Countryside Estates MH Mckean PA 300 - 98.7 % 98.7 %
Jellystone Park™ at Quarryville(3)
RV Quarryville PA - 260 N/A N/A
Pheasant Ridge MH Lancaster PA 550 - 99.6 % 99.8 %
River Beach Campsites & RV RV Milford PA - - N/A N/A
Sun Retreats Lancaster County(3)
RV Narvon PA 290 140 100.0 % 100.0 %
Country Lakes MH Little River SC 140 - 100.0 % 100.0 %
Crossroads MH Aiken SC 170 - 94.0 % (1)
92.3 % (1)
Crossroads RV Resort RV Aiken SC 20 - 100.0 % 100.0 %
Lakeside Crossing MH Conway SC 690 - 98.4 % 94.8 % (1)
Ocean Pines MH Garden City SC 580 - 99.8 % 99.8 %
Southern Palms MH Ladson SC 190 - 100.0 %
100.0 %
Sun Outdoors Myrtle Beach(3)
RV Conway SC 160 670 100.0 % 100.0 %
Bell Crossing MH Clarksville TN 240 - 97.0 % 99.6 %
Sun Outdoors Pigeon Forge(3)
RV Sevierville TN 70 240 100.0 % 100.0 %
Bear Lake Development Land RV Garden City UT - - N/A (1)
N/A (1)
Sun Outdoors Arches Gateway(3)
RV Moab UT - 130 N/A N/A
Sun Outdoors Canyonlands Gateway(3)
RV Moab UT - 110 N/A N/A
Sun Outdoors Garden City Utah(3)
RV Garden City UT - 180 N/A N/A
Sun Outdoors Moab Downtown(3)
RV Moab UT - 130 N/A N/A
Sun Outdoors North Moab(3)
RV Moab UT - 190 N/A N/A
Sun Outdoors Salt Lake City(3)
RV North Salt Lake UT - 190 N/A N/A
47 North MH Cle Elum WA - - N/A (1)
N/A (1)
Sun Outdoors Gig Harbor(3)
RV Gig Harbor WA - 110 N/A N/A
Sun Retreats Birch Bay(3)
RV Blaine WA 370 300 100.0 % 100.0 %
Fond du Lac East / Kettle Moraine KOA(3)
RV Glenbeulah WI 240 80 100.0 % 100.0 %
Thunderhill Estates MH Sturgeon Bay WI 270 - 98.9 % 98.1 %
Other Total 17,540 8,200 98.7 % 98.1 %
US TOTAL / AVERAGE 128,010 24,810 97.3 % 96.7 %
CANADA
Pleasant Beach Campground RV Sherkston ON 100 - 100.0 % 100.0 %
Sun Retreats Amherstburg(3)
RV Amherstburg ON 220 80 100.0 % 100.0 %
Sun Retreats Arran Lake RV Allenford ON 190 - 100.0 % 100.0 %
Sun Retreats Blue Mountains(3)
RV Clarksburg ON 90 20 100.0 % 100.0 %
Sun Retreats Cayuga(3)
RV Cayuga ON 250 30 100.0 % 100.0 %
Sun Retreats Flamborough RV Millgrove ON 200 - 100.0 % 100.0 %
Sun Retreats Georgian Bay(3)
RV Seguin ON 230 10 100.0 % 100.0 %
Sun Retreats Hay Bay(3)
RV Napanee ON 200 10 100.0 % 100.0 %
Sun Retreats Huntsville RV Huntsville ON 230 - 100.0 % 100.0 %
Sun Retreats Ipperwash(3)
RV Lambton Shores ON 140 20 100.0 % 100.0 %
Sun Retreats Penetanguishene(3)
RV Tiny ON 220 40 100.0 % 100.0 %
Sun Retreats Sandbanks RV Cherry Valley ON 140 - 100.0 % 100.0 %
Sun Retreats Sherkston Shores(3)
RV Sherkston ON 1,700 240 100.0 % 100.0 %
Sun Retreats Stratford RV Bornholm ON 210 - 100.0 % 100.0 %
Sun Retreats Turkey Point(3)
RV Normandale ON 210 30 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Sun Retreats Willow Lake RV Scotland ON 370 - 100.0 % 100.0 %
CANADA TOTAL / AVERAGE 4,700 480 100.0 % 100.0 %
NORTH AMERICA TOTAL 132,710 25,290 97.4 % 96.8 %
UNITED KINGDOM
England
Alberta(3)
MH Whitstable, Kent England 330 10 94.5 % 93.6 %
Amble Links MH Amble, Northumberland England 660 - 91.2 % 93.6 %
Ashbourne Heights(3)
MH Ashbourne, Derbyshire England 110 120 90.4 % 90.2 %
Beauport MH Hastings, Sussex England 820 - 94.3 % 95.1 %
Birchington Vale MH Birchington, Kent England 490 - 97.3 % 97.1 %
Bodmin Holiday Park (formerly Cornwall)(3)
MH Bodmin, Cornwall England 10 60 69.2 % (1)
64.3 %
Bowland Fell(3)
MH Skipton, Yorkshire England 270 40 86.0 % 88.4 %
Broadland Sands(3)
MH Lowestoft, Suffolk England 440 180 95.7 % 91.0 %
Carlton Meres(3)
MH Saxmundham, Suffolk England 350 180 89.3 % 86.7 %
Chantry MH West Witton, Yorkshire England 140 - 79.1 % 77.9 %
Chichester Lakeside(3)
MH Chichester, Sussex England 500 100 94.2 % 93.0 %
Coghurst Hall(3)
MH Hastings, Sussex England 490 30 92.0 % 92.8 %
Dawlish Sands MH Dawlish, Devon England 170 - 91.6 % 94.6 %
Dovercourt(3)
MH Harwich, Essex England 530 110 91.0 % 92.8 %
Felixstowe Beach(3)
MH Felixstowe, Suffolk England 330 10 89.7 % 95.4 %
Glendale(3)
MH Wigton, Cumbria England 350 30 71.4 % 93.2 %
Golden Sands(3)
MH Dawlish, Devon England 300 120 86.6 % 80.6 %
Harts(3)
MH Isle of Sheppey, Kent England 480 160 87.2 % 87.6 %
Hedley Wood(3)
MH Holsworthy, Devon England 80 170 66.7 % (1)
63.2 %
Henfold MH Dorking, Surrey England - - N/A (1)
N/A (1)
Hengar Manor(3)
MH Bodmin, Cornwall England 120 60 80.9 % 80.2 %
Littondale(3)
MH Skipton, Yorkshire England 90 10 92.2 % 88.3 %
Malvern View(3)
MH Stanford Bishop, Worcester England 320 30 87.2 % 89.1 %
Marlie(3)
MH Romney, Kent England 380 130 90.9 % 91.8 %
Martello Beach(3)
MH Clacton on Sea, Essex England 460 100 90.0 % 86.6 %
New Beach(3)
MH Dymchurch, Kent England 510 90 95.5 % 93.0 %
Newhaven(3)
MH Buxton, Derbyshire England 80 120 79.3 % 90.7 %
Oaklands MH Clacton on Sea, Essex England 290 - 88.4 % 93.2 %
Old Kerrow MH Ilfracombe, Devon England - - N/A N/A (2)
Oyster Bay MH Truro, Cornwall England 160 - 71.3 % 87.4 %
Pakefield(3)
MH Pakefield, Suffolk England 320 30 91.4 % 88.4 %
Par Sands(3)
MH Par, Cornwall England 280 20 92.6 % 94.4 %
Pentire(3)
MH Bude, Cornwall England 120 10 92.3 % 93.2 %
Pevensey Bay(3)
MH Pevensey Bay, Sussex England 350 100 89.5 % 87.2 %
Polperro(3)
MH Looe, Cornwall England 70 90 71.6 % 54.1 %
Ribble Valley MH Clitheroe, Lancashire England 310 - 80.2 % 85.4 %
Rye Harbour MH Rye, Sussex England 240 - 89.3 % 88.8 %
Sand le Mere(3)
MH Hull, Yorkshire England 690 210 86.1 % 77.8 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2023
Transient RV Sites as of 12/31/2023
Occupancy as of 12/31/2023
Occupancy as of 12/31/2022
Sandhills(3)
MH Christchurch, Dorset England 130 10 88.8 % 92.5 %
Sandy Bay MH Canvey Island, Essex England 730 - 80.0 % 80.0 %
Seaview(3)
MH Whitstable, Kent England 590 60 95.6 % 97.6 %
Seawick(3)
MH Clacton on Sea, Essex England 580 90 93.5 % 90.3 %
Solent Breezes(3)
MH Fareham, Hampshire England 250 10 91.9 % 87.9 %
St. Osyth Beach(3)
MH Clacton on Sea, Essex England 480 30 94.6 % 96.8 %
Steeple Bay(3)
MH Sothminster, Essex England 450 80 89.9 % 89.2 %
Stowford MH Ilfracombe, Devon England - - N/A (1)
N/A (2)
Suffolk Sands(3)
MH Felixstowe, Suffolk England 360 20 94.4 % 94.6 %
Tarka(3)
MH Barnstaple, Devon England 120 10 87.3 % 93.5 %
Trevella(3)
MH Newquay, Cornwall England 180 180 88.0 % 91.6 %
Vernon Dene MH North Ripley, Bransgore England - - N/A (1)
N/A (1)
Waterside(3)
MH Paignton, Devon England 200 30 87.4 % 91.3 %
West Mersea(3)
MH West Mersea, Essex England 400 40 96.8 % 97.5 %
Winchelsea Sands(3)
MH Winchelsea, Sussex England 260 10 85.1 % 82.9 %
Wood Farm(3)
MH Charmouth, Dorset England 130 110 83.1 % 90.4 %
Yorkshire Dales MH Leyburn, Yorkshire England 110 - 83.9 % 79.4 %
England Total 16,610 3,000 89.6 % 90.4 %
Scotland
Burghead(3)
MH Burghead, Moray Scotland 80 20 63.8 % 67.5 %
Lossiemouth(3)
MH Lossiemouth, Moray Scotland 130 20 72.1 % 76.0 %
Silver Sands(3)
MH Lossiemouth, Moray Scotland 420 110 93.6 % 94.2 %
Turnberry(3)
MH Girvan, Ayrshire Scotland 260 20 80.5 % 83.5 %
Scotland Total 890 170 84.0 % 85.9 %
Wales
Brynteg(3)
MH Llanryg, Caernafon Wales 290 30 92.5 % 94.9 %
Plas Coch MH Llanedwen, Anglesey Wales 320 - 95.7 % 95.1 %
Wales Total 610 30 94.2 % 95.0 %
UNITED KINGDOM TOTAL 18,110 3,200 89.5 % 89.9 %
COMPANY TOTAL / AVERAGE 150,820 28,490 96.4 % 96.0 %
(1)Occupancy in these properties reflects the fact that these properties are held for future development or are in a lease-up phase following an expansion, redevelopment or initial construction.
(2)No occupancy in these properties for the year ended December 31, 2022 as properties were acquired during the year ended December 31, 2023.
(3)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 adequately sized parcel of land that has road and utility access which is zoned and licensed (if required) for use as a home site.
(4)Occupancy in these properties at December 31, 2022 reflects the redevelopment following asset impairments resulting from Hurricane Ian in October 2022.
(5)Occupancy in these properties at December 31, 2022 reflects the redevelopment following asset impairments resulting from Hurricane Irma in September 2017.
(6)We have an ownership interest in these properties, but do not maintain and operate these properties.
SUN COMMUNITIES, INC.
The following tables set forth certain information relating to our Safe Harbor branded marinas as of December 31, 2023.
Marina Property Name City State / Municipal Wet Slips and Dry Storage Spaces
as of 12/31/2023
Wet Slips and Dry Storage Spaces
as of 12/31/2022
UNITED STATES
NORTHEAST
Connecticut
Bruce & Johnsons Branford CT 670 670
Dauntless(1)
Essex CT 340 340
Dauntless Shipyard(1)
Essex CT - -
Deep River Deep River CT 310 310
Essex Island(1)
Essex CT - -
Ferry Point Old Saybrook CT 140 140
Harbor House(2)
Stamford CT - -
Mystic Mystic CT 260 260
Pilots Point Westbrook CT 880 880
Stratford Stratford CT 210 210
Yacht Haven(2)
Stamford CT 520 520
Connecticut Total 3,330 3,330
Rhode Island
Allen Harbor North Kingstown RI 180 140
Cove Haven Barrington RI 340 340
Cowesett(3)
Warwick RI 1,190 1,190
Greenwich Bay Warwick RI 550 550
Island Park(4)
Portsmouth RI - -
Jamestown Boatyard Jamestown RI 110 110
New England Boatworks Portsmouth RI 230 230
Newport Shipyard Newport RI 70 70
Sakonnet(4)
Portsmouth RI 420 420
Silver Spring Wakefield RI 110 110
Wickford(5)
Wickford RI - -
Wickford Cove(5)
Wickford RI 260 260
Rhode Island Total 3,460 3,420
New York
Capri Port Washington NY 370 370
Gaines Rouses Point NY 290 290
Glen Cove Glen Cove NY 540 540
Greenport(6)
Greenport NY 420 420
Haverstraw West Haverstraw NY 900 900
Montauk Yacht Club Montauk NY 230 230
Post Road Mamaroneck NY 50 50
Stirling(6)
Greenport NY - -
Willsboro Bay Willsboro NY 220 220
New York Total 3,020 3,020
Massachusetts
Edgartown Edgartown MA 120 120
Fiddler's Cove North Falmouth MA 200 200
Green Harbor Marshfield MA 200 200
Hawthorne Cove Salem MA 450 450
Marina Bay Quincy MA 700 700
Onset Bay Buzzards Bay MA 230 230
SUN COMMUNITIES, INC.
Marina Property Name City State / Municipal Wet Slips and Dry Storage Spaces
as of 12/31/2023
Wet Slips and Dry Storage Spaces
as of 12/31/2022
Plymouth Plymouth MA 200 200
Sunset Bay Hull MA 240 240
Vineyard Haven Vineyard Haven MA 180 180
Massachusetts Total 2,520 2,520
Maryland
Annapolis Annapolis MD 290 290
Bohemia Vista Chesapeake Bay MD 130 120
Carroll Island Baltimore MD 460 460
Great Oak Landing Chestertown MD 390 400
Hacks Point Chesapeake Bay MD 70 70
Narrows Point(7)
Grasonville MD 390 540
Oxford Oxford MD 140 140
Podickory Point Annapolis MD 310 310
Zahnisers Solomons MD 300 300
Maryland Total 2,480 2,630
New Jersey
Crystal Point Point Pleasant NJ 170 170
Manasquan River Brick Township NJ 240 240
New Jersey Total 410 410
Maine
Great Island Harpswell ME 140 140
Kittery Point Kittery ME 60 60
Rockland Rockland ME 50 50
Maine Total 250 250
New Hampshire
Wentworth by the Sea New Castle NH 220 220
New Hampshire Total 220 220
Vermont
Shelburne Shipyard Shelburne VT 210 210
Vermont Total 210 210
SOUTH
Georgia
Aqualand Flowery Branch GA 1,570 1,570
Bahia Bleu Thunderbolt GA 260 260
Hideaway Bay Flowery Branch GA 690 690
Savannah Yacht Center(8)
Savannah GA 20 N/A
Trade Winds Appling GA 320 320
Georgia Total 2,860 2,840
Kentucky
Beaver Creek Monticello KY 280 280
Burnside Somerset KY 350 350
Grider Hill Albany KY 710 710
Jamestown Jamestown KY 740 740
Wisdom Dock Albany KY 290 290
SUN COMMUNITIES, INC.
Marina Property Name City State / Municipal Wet Slips and Dry Storage Spaces
as of 12/31/2023
Wet Slips and Dry Storage Spaces
as of 12/31/2022
Kentucky Total 2,370 2,370
Texas
Emerald Point Austin TX 590 590
Pier 121 Lewisville TX 1,080 1,080
Walden Montgomery TX 390 390
Texas Total 2,060 2,060
Arkansas
Brady Mountain Royal AR 580 580
Arkansas Total 580 580
Tennessee
Eagle Cove Byrdstown TN 80 80
Holly Creek Celina TN 310 310
Tennessee Total 390 390
Mississippi
Aqua Yacht Iuka MS 590 590
Mississippi Total 590 590
Alabama
Sportsman Orange Beach AL 760 720
Alabama Total 760 720
Oklahoma
Harbors View Afton OK 160 160
Oklahoma Total 160 160
SOUTHEAST
Florida
Angler House Islamorada FL 20 20
Burnt Store Punta Gorda FL 910 760
Calusa Island Goodland FL 620 620
Cape Harbour Cape Coral FL 260 260
Emerald Coast Niceville FL 350 350
Harborage Yacht Club Stuart FL 310 310
Harbortown Fort Pierce FL 350 350
Islamorada Islamorada FL 260 260
Lauderdale Marine Center(9)
Fort Lauderdale FL 130 130
Marathon Marathon FL 160 160
New Port Cove Riviera Beach FL 360 360
North Palm Beach North Palm Beach FL 120 120
Old Port Cove North Palm Beach FL 210 210
Pier 77 Bradenton FL 200 200
Pineland Bokeelia FL 260 260
Port Phoenix(10)
North Fort Myers FL - -
Regatta Pointe Palmetto FL 370 370
Riviera Beach Riviera Beach FL 20 20
Siesta Key Sarasota FL 230 230
South Fork(9)
Fort Lauderdale FL - -
West Palm Beach West Palm Beach FL 60 60
SUN COMMUNITIES, INC.
Marina Property Name City State / Municipal Wet Slips and Dry Storage Spaces
as of 12/31/2023
Wet Slips and Dry Storage Spaces
as of 12/31/2022
Florida Total 5,200 5,050
South Carolina
Beaufort Beaufort SC 130 130
Bristol Charleston SC 190 190
Charleston City(11)
Charleston SC 450 450
City Boatyard Charleston SC 220 220
Port Royal Port Royal SC 250 250
Port Royal Landing Port Royal SC 160 160
Reserve Harbor Pawleys Island SC 230 230
Skull Creek Hilton Head SC 190 190
South Carolina Total 1,820 1,820
North Carolina
Jarrett Bay Boatworks Beaufort NC 40 40
Kings Point Cornelius NC 780 780
Outer Banks Wanchese NC 210 210
Peninsula Yacht Club Cornelius NC 480 480
Skippers Landing Troutman NC 390 390
South Harbour Village Southport NC 140 140
Westport Denver NC 620 620
North Carolina Total 2,660 2,660
Puerto Rico
Puerto del Rey Fajardo PR 1,610 1,610
Puerto Rico Total 1,610 1,610
Virginia
Bluewater Hampton VA 200 200
Stingray Point Deltaville VA 220 220
Virginia Total 420 420
MIDWEST
Michigan
Belle Maer Harrison Township MI 550 550
Detroit River Detroit MI 470 470
Grand Isle Grand Haven MI 450 450
Great Lakes Muskegon MI 470 470
Jefferson Beach St. Clair Shores MI 900 900
Toledo Beach La Salle MI 580 470
Tower Marine Douglas MI 480 480
Michigan Total 3,900 3,790
Ohio
Lakefront Port Clinton OH 490 490
Sandusky Sandusky OH 550 550
Ohio Total 1,040 1,040
WEST
California
Anacapa Isle Oxnard CA 540 540
Ballena Isle Alameda CA 420 420
SUN COMMUNITIES, INC.
Marina Property Name City State / Municipal Wet Slips and Dry Storage Spaces
as of 12/31/2023
Wet Slips and Dry Storage Spaces
as of 12/31/2022
Bayfront Chula Vista CA 620 620
Cabrillo Isle San Diego CA 540 540
Emeryville Emeryville CA 460 460
Loch Lomond San Rafael CA 530 530
Marina Bay Yacht Harbor Richmond CA 800 800
Shelter Island San Diego CA 60 60
South Bay Chula Vista CA 560 560
Sunroad San Diego CA 650 650
Ventura Isle Ventura CA 530 530
California Total 5,710 5,710
COMPANY TOTAL 48,030 47,820
(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 Apponaug Harbor are grouped into Cowesett.
(4)Wet slips and dry storage spaces from Island Park are grouped into Sakonnet.
(5)Wet slips and dry storage spaces from Wickford are grouped into Wickford Cove.
(6)Wet slips and dry storage spaces from Stirling are grouped into Greenport.
(7)Wet slips and dry storage spaces from Harrison Yacht Yard are grouped into Narrows Point.
(8)Property acquired during year ended December 31, 2023.
(9)Wet slips and dry storage spaces from South Fork are grouped into Lauderdale Marine Center.
(10)Property is temporarily used to store hurricane-affected vessels, which will be converted to a development site.
(11)Wet slips and dry storage spaces from Ashley Fuels are grouped into Charleston City.
SUN COMMUNITIES, INC.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
Legal Proceedings
We are involved in various legal proceedings. Refer to Note 17, "Commitments and Contingencies," in our accompanying Notes to the Consolidated Financial Statements.
Environmental Matters
Item 103 of Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will exceed an applied threshold not to exceed $1.0 million. Applying this threshold, there are no environmental matters to disclose for the year ended December 31, 2023.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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 SHAREHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock has been listed on the New York Stock Exchange ("NYSE") since December 8, 1993, and trades under the symbol "SUI." On February 20, 2024, the closing share price of our common stock was $130.85 per share on the NYSE, and there were 659 holders of record of 124,412,183 outstanding shares of common stock.
On February 20, 2024, the following OP units of the Operating Partnership were outstanding:
OP Units OP Units
Issued and Outstanding Exchangeable
Shares of Common Stock
Series A-1 preferred OP units 192,112 468,566
Series A-3 preferred OP units 40,268 74,917
Series C preferred OP units 305,748 339,380
Series D preferred OP units 488,958 391,166
Series E preferred OP units 80,000 55,172
Series F preferred OP units 90,000 56,250
Series G preferred OP units 205,812 132,782
Series H preferred OP units 581,229 354,408
Series J preferred OP units 238,000 144,242
Series K preferred OP units 1,000,000 588,235
Series L preferred OP units 20,000 12,500
Common OP units 2,694,232 2,694,232
Total 5,936,359 5,311,850
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 each series of our 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, 2023:
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 shareholders - $ - 2,955,866
Total
- $ - 2,955,866
SUN COMMUNITIES, INC.
Recent Sales of Unregistered Securities
From time to time, we may issue shares of common stock or common OP units in exchange for OP units 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 three months and year ended December 31, 2023:
Three Months Ended Year Ended
December 31, 2023 December 31, 2023
Series Conversion Rate Units / Shares Converted Common Stock(1)
Common OP Units(1)
Units / Shares Converted Common Stock(1)
Common OP Units(1)
Aspen preferred OP units Various(2)
314,934 - 102,615 1,258,819 113,972 293,838
Common OP units 1.0000 - - - 8,848 8,848 -
Series A-1 preferred OP units 2.4390 - - - 5,404 13,177 -
Series C preferred OP units 1.1100 - - - 165 183 -
Series G preferred OP units 0.6452 - - - 30,000 19,353 -
Series H preferred OP units 0.6098 - - - 129 78 -
Series J preferred OP units 0.6061 - - - 2,000 1,212 -
(1) Calculation may yield minor differences due to rounding incorporated in the above numbers.
(2) Refer to Note 9, "Debt and Line of Credit," for additional detail on Aspen preferred OP unit conversions.
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. No underwriters were used in connection with any of such issuances.
Purchases of Equity Securities
The following table summarizes our common stock repurchases during the three months ended December 31, 2023:
Total number of
shares purchased Average price paid
per share Total number of
shares purchased as part of publicly announced plans or programs Maximum number
(or approximate
dollar value) of shares that may yet be purchased under the plans or programs
Period (a) (b) (c) (d)
October 1, 2023 - October 31, 2023 6,212 $ 109.24 - $ -
November 1, 2023 - November 30, 2023 - $ - - $ -
December 1, 2023 - December 31, 2023 - $ - - $ -
Total 6,212 $ 109.24 - $ -
During the three months ended December 31, 2023, we withheld 6,212 shares from employees to satisfy estimated statutory income tax obligations related to vesting of restricted stock awards. The value of the common stock withheld was based on the closing price of our common stock on the applicable vesting date.
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 20 publicly traded REITs, for the five year period ending on December 31, 2023. This line graph assumes a $100.00 investment on December 31, 2018, a reinvestment of distributions and actual increase of the market value of our common stock relative to an initial investment of $100.00. 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.
SUN COMMUNITIES, INC.
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.
Year Ended
Index December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023
Sun Communities, Inc. $ 100.00 $ 150.91 $ 156.32 $ 220.08 $ 153.35 $ 147.52
Dow Jones U.S. Real Estate Residential Index $ 100.00 $ 130.83 $ 117.40 $ 185.93 $ 127.48 $ 137.08
NYSE Composite Index $ 100.00 $ 125.51 $ 134.28 $ 162.04 $ 146.89 $ 167.12
SUI Peer Group(1)
$ 100.00 $ 124.90 $ 110.87 $ 177.26 $ 123.58 $ 136.72
(1)SUI Peer Group includes: AvalonBay Communities, Inc., Camden Property Trust, CubeSmart, Equity Lifestyle Properties, Inc., Equity Residential, Essex Property Trust, Inc., Extra Space Storage Inc., Federal Realty Investment Trust, Invitation Homes Inc., Mid-America Apartment Communities, Inc., UDR, Inc. and Ventas, 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. [Reserved]
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 information as supplemental performance measures. Refer to Non-GAAP Financial Measures in this Item 7 for additional information.
OVERVIEW
We are a fully integrated REIT. As of December 31, 2023, we owned and operated, directly or indirectly, or had an interest in, a portfolio of 667 developed properties located in the U.S., the UK, and Canada, including 353 MH communities, 179 RV communities and 135 marinas. We have been in the business of acquiring, operating, developing and expanding MH and RV communities since 1975 and marinas since 2020. We lease individual sites with utilities access for placement of manufactured homes, RVs or boats to our customers. We are also engaged in the marketing, selling and leasing of new and pre-owned homes to current and future residents in our MH communities in the U.S. and in the sale of holiday home and associated site license activities to holiday homeowners in our MH communities in the UK. The Rental Program operations within our MH communities support and enhance our occupancy levels, property performance and cash flows.
Catastrophic Event-Related Charges - Hurricane Ian
In September 2022, Hurricane Ian made landfall on Florida's western coast. The storm primarily affected three RV properties in the Fort Myers area, comprising approximately 2,500 sites. These properties sustained significant flooding and wind damage from the hurricane. At other affected MH and RV properties, most of the damage was limited to trees, roofs, fences, skirting and carports. At affected marina properties, docks, buildings, and landscaping sustained wind and water damage.
We maintain property, casualty, flood and business interruption insurance for our community portfolio, subject to customary deductibles and limits. As of December 31, 2023, estimated insurance recoveries, excluding business interruption recoveries, of $56.7 million related to Hurricane Ian were recorded in Notes and other receivables, net on the Consolidated Balance Sheets.
Changes in estimated insurance recoveries related to Hurricane Ian during the year ended December 31, 2023 were primarily the result of $51.5 million of incremental costs that exceeded the applicable deductible, net of a $4.8 million reduction due to a decrease in estimated property losses. The foregoing estimates are based on current information available, and we continue to assess these estimates. Actual charges and insurance recoveries could vary significantly from these estimates. Any changes to these estimates will be recognized in the period(s) in which they are determined.
We are actively working with our insurance providers on claims for business interruption recoveries. During the year ended December 31, 2023, we recognized $20.2 million, net of deductibles, for the lost earnings covering the date of the hurricane event through August 31, 2023. These recoveries were included in Brokerage commissions and other, net on our Consolidated Statements of Operations during the year ended December 31, 2023. The related communities are under redevelopment. As such, we currently cannot estimate a date when operating results will be restored to pre-hurricane levels. Our business interruption insurance policy provides for up to 60 months of coverage from the date of restoration.
SUN COMMUNITIES, INC.
EXECUTIVE SUMMARY
2023 General Overview
•Total revenues for 2023 increased 8.6% to $3.2 billion.
•Achieved annual Core FFO of $7.10 per diluted share and OP unit.
•Achieved Real property Same Property NOI growth of 6.8% for MH, 4.8% for RV and 11.7% for Marina over 2022.
•Increased Same Property adjusted blended occupancy for MH and RV by 230 basis points to 98.9% as compared to 96.6% in 2022.
•Achieved 10-year total shareholder return of 323.1%, outperforming the MSCI US REIT, Russell 1000, U.S. REIT Residential and S&P 500 indexes.
•Completed the construction of over 800 total sites at five ground-up developments and 14 expansion and re-development properties.
•Completed acquisition investments of $368.7 million which represents the purchase price paid for operating properties and land parcels for future ground-up development and expansion activities, plus any capital improvements identified during due diligence needed to bring acquired properties up to the Company's operating standards.
•Closed $836.9 million of debt transactions, including an offering of underwritten senior unsecured notes of $400.0 million for net proceeds of $395.3 million which was used to pay down amounts drawn under our senior credit facility (the "Senior Credit Facility").
•Entered into derivative instruments with an aggregate notional value of $582.3 million to hedge interest rate risk associated with borrowings under our Senior Credit Facility and future debt issuance.
•Completed the sale of our 41.8 million share position in Ingenia Communities Group, generating $102.5 million of net proceeds, which was used to pay down amounts drawn under our Senior Credit Facility.
•Completed the transfer of an installment note receivable portfolio to an unrelated entity, generating net proceeds of $53.4 million that were used to pay down borrowings under our Senior Credit Facility.
•Simplified the structure of certain of our consolidated variable interest entities in a transaction with our joint venture partner.
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 Property communities continue to achieve revenue and occupancy increases which drive continued NOI growth. Our Same Property marinas achieved revenue increases which contributed to our NOI growth.
Year Ended
Portfolio Information: December 31, 2023 December 31, 2022 December 31, 2021
Occupancy % - Total Portfolio - MH and Annual RV Occupancy(1)
96.4 % 96.0 % 97.4 %
Occupancy % - Same Property - Adjusted MH and Annual RV Occupancy(1)(2)(3)
98.9 % 96.6 % 96.8 %
Core FFO per share $ 7.10 $ 7.35 $ 6.51
Real property NOI - Total Portfolio (in millions)
$ 1,251.9 $ 1,167.0 $ 1,002.6
Real property NOI - Same Property (in millions) - MH, RV and Marina(3)
$ 1,139.1 $ 1,061.9 $ 928.0
Home sales volume - North America 2,565 3,212 4,088
Home sales volume - United Kingdom(4)
2,857 2,343 N/A
(1) Occupancy percent includes annual RV sites and excludes transient RV sites.
(2) Occupancy percent excludes recently completed but vacant expansion sites.
(3) Same Property is based on the reported year end Same Property count for each respective year.
(4) UK amounts for the year ended December 31, 2022 cover the period from April 8, 2022 (date of acquisition) through December 31, 2022.
SUN COMMUNITIES, INC.
Acquisition Activity
During the year ended December 31, 2023, we acquired one MH community with 68 sites and 72 development sites, and one marina with 24 wet slips and dry storage spaces, for a total purchase price of approximately $107.0 million. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for details of our acquisition activities.
Disposition Activity
Management continually evaluates properties within the portfolio for potential disposition opportunities. When a given property no longer fits our desired growth profile, we seek to redeploy capital to properties and geographies fit to provide greater future returns. From time to time, strategic reductions to the portfolio are necessary to reduce exposure to less desirable locations and support long-term positioning of the Company.
During the year ended December 31, 2023, we sold one MH community located in Maine, with 155 sites for $6.8 million. In addition, we sold two parcels of land in the UK for total consideration of $111.5 million, which primarily consisted of $108.8 million in the form of an operator note receivable and subsequently reacquired these two parcels of land at fair value as part of the settlement of the related note receivable, with no remeasurement gain or loss recognized. Also, as part of a broader transaction with our joint venture partners in Sun NG, we disposed of our majority equity interest in three consolidated joint venture properties. The three RV communities had 955 developed sites. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for details on the disposition activities, Note 4, "Notes and Other Receivables," for additional information on the settlement of the notes receivable, and Note 8, "Consolidated Variable Interest Entities," for more information on the Sun NG transaction.
Real Estate Held For Sale - Changes to a Plan of Sale
We periodically classify real estate as held for sale after an active program to sell an asset has commenced and when the sale is probable. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded.
In February 2023, the criteria was met to classify Sandy Bay, an operating MH community in the UK, with 730 developed sites, as held for sale. Previously, this property had been under contract. At December 31, 2023, the sale contract was no longer in effect, and due to an unexpected change in circumstance related to the counterparty, we reclassified the property as held for use and recorded the related depreciation and amortization expense in accordance with ASC Topic 360, "Property, Plant, and Equipment" during the three months ended December 31, 2023. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.
Development and Expansion Activities
We have been focused selectively on property ground-up developments and expansion opportunities adjacent to our existing properties.
Ground-up Developments - During the year ended December 31, 2023, we delivered 360 total sites at five ground-up development properties located in Florida, Michigan and Colorado. We have developed over 2,230 sites within the past three years.
Expansions - During the year ended December 31, 2023, we expanded over 440 total sites at 14 properties. We have developed over 2,170 expansion sites within the past three years.
We continue to expand our properties utilizing our inventory of owned and entitled land. We have approximately 17,980 MH and RV sites suitable for future development.
SUN COMMUNITIES, INC.
Markets
Our MH and RV properties are largely concentrated in the U.S. in Florida, Michigan, Texas and California, and in the UK, which collectively contain 66.3% of our total MH and RV sites. 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.
The age demographic of RV communities is attractive, as the population of retirement age adults in the U.S. is growing. RV communities 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, 2023 December 31, 2022
Major Market Number of Properties Total Sites % of Total Sites Number of Properties Total Sites % of Total Sites
Florida 129 44,410 24.8 % 129 44,280 24.7 %
Michigan 85 33,500 18.7 % 84 33,220 18.5 %
Texas 29 10,820 6.0 % 31 11,340 6.3 %
California 37 8,800 4.9 % 37 8,800 4.9 %
Arizona 13 5,510 3.1 % 13 5,520 3.1 %
Ontario, Canada 16 5,180 2.9 % 16 5,240 2.9 %
Indiana 12 4,180 2.3 % 12 4,180 2.3 %
New Jersey 11 4,040 2.3 % 11 4,040 2.3 %
Colorado 11 3,890 2.2 % 11 3,790 2.1 %
Maine 15 3,540 2.0 % 16 3,660 2.0 %
Virginia 10 3,450 1.9 % 10 3,450 1.9 %
Ohio 9 2,980 1.7 % 9 2,930 1.6 %
New York 10 2,940 1.6 % 10 2,940 1.6 %
South Carolina 6 2,620 1.5 % 6 2,620 1.5 %
Illinois 5 2,240 1.2 % 5 2,230 1.2 %
New Hampshire 9 2,170 1.2 % 10 2,380 1.3 %
Connecticut 16 2,000 1.1 % 16 2,010 1.1 %
Delaware 5 1,980 1.1 % 5 1,980 1.1 %
Maryland 6 1,860 1.0 % 6 1,860 1.0 %
Pennsylvania 5 1,540 0.9 % 5 1,540 0.9 %
Georgia 4 1,420 0.8 % 4 1,420 0.8 %
Oregon 6 1,380 0.8 % 6 1,380 0.8 %
North Carolina 5 1,180 0.7 % 5 1,180 0.7 %
Utah 6 930 0.5 % 6 930 0.5 %
Massachusetts 3 920 0.5 % 3 920 0.5 %
Washington 2 780 0.4 % 2 780 0.4 %
Wisconsin 2 590 0.3 % 2 590 0.3 %
Tennessee 2 550 0.3 % 2 540 0.3 %
Alabama 1 500 0.3 % 1 500 0.3 %
Minnesota 1 470 0.3 % 1 480 0.3 %
Iowa 1 410 0.2 % 1 410 0.2 %
Kentucky 1 330 0.2 % 1 330 0.2 %
Louisiana 1 330 0.2 % 1 330 0.2 %
Nevada 1 320 0.2 % 1 320 0.2 %
Mississippi 1 160 0.1 % 1 150 0.1 %
Montana 1 80 - % 1 80 - %
North American Total 477 158,000 88.1 % 480 158,350 88.2 %
United Kingdom 55 21,310 11.9 % 55 21,180 11.8 %
Total 532 179,310 100.0 % 535 179,530 100.0 %
SUN COMMUNITIES, INC.
The following table identifies our marina markets by total wet slips and dry storage spaces:
December 31, 2023 December 31, 2022
Major Market Number of Properties Wet Slips and Dry Storage Spaces
% Wet Slips and Dry Storage Spaces
Number of Properties Wet Slips and Dry Storage Spaces
% Wet Slips and Dry Storage Spaces
California 11 5,710 11.9 % 11 5,710 11.9 %
Florida 21 5,200 10.8 % 21 5,050 10.6 %
Michigan 7 3,900 8.1 % 7 3,790 7.9 %
Rhode Island 12 3,460 7.2 % 12 3,420 7.2 %
Connecticut 11 3,330 6.9 % 11 3,330 7.0 %
New York 9 3,020 6.3 % 9 3,020 6.3 %
Georgia 5 2,860 6.0 % 4 2,840 5.9 %
North Carolina 7 2,660 5.5 % 7 2,660 5.6 %
Massachusetts 9 2,520 5.2 % 9 2,520 5.3 %
Maryland 9 2,480 5.2 % 9 2,630 5.5 %
Kentucky 5 2,370 4.9 % 5 2,370 5.0 %
Texas 3 2,060 4.3 % 3 2,060 4.3 %
South Carolina 8 1,820 3.8 % 8 1,820 3.8 %
Puerto Rico 1 1,610 3.4 % 1 1,610 3.4 %
Ohio 2 1,040 2.2 % 2 1,040 2.2 %
Alabama 1 760 1.6 % 1 720 1.5 %
Mississippi 1 590 1.2 % 1 590 1.2 %
Arkansas 1 580 1.2 % 1 580 1.2 %
Virginia 2 420 0.9 % 2 420 0.9 %
New Jersey 2 410 0.9 % 2 410 0.9 %
Tennessee 2 390 0.8 % 2 390 0.8 %
Maine 3 250 0.5 % 3 250 0.5 %
New Hampshire 1 220 0.5 % 1 220 0.5 %
Vermont 1 210 0.4 % 1 210 0.4 %
Oklahoma 1 160 0.3 % 1 160 0.3 %
135 48,030 134 47,820
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
Total Portfolio NOI - NOI is derived from property operating revenues minus property operating expenses and real estate taxes. NOI is a non-GAAP financial measure that we believe is helpful to investors as a supplemental measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. We use NOI as a key measure when evaluating performance and growth of particular properties and / or groups of properties. The principal limitation of NOI is that it excludes depreciation, amortization, interest expense and non-property specific expenses such as general and administrative expenses, all of which are significant costs. Therefore, NOI is a measure of the operating performance of our properties rather than of the Company overall. We believe that NOI provides enhanced comparability for investor evaluation of properties' performance and growth over time.
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.
Same Property NOI - This is a management tool used when evaluating the performance and growth of our Same Property portfolio. We define same properties as those we have owned and operated continuously since January 1, 2022. Same properties exclude ground-up development properties, acquired properties and properties sold after December 31, 2021. The Same Property data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions or unique situations. Same Property NOI does not include the revenues and expenses related to home sales, and service, retail, dining and entertainment activities at the properties. We believe that Same Property NOI is helpful to investors as a supplemental comparative performance measure of the income generated from the Same Property portfolio from one period to the next.
FFO
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, real estate related to impairment and real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO provides a performance measure that, when compared period-over-period, reflects the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not readily apparent from GAAP net income (loss). Management believes the use of FFO has been beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful.
Core FFO - In addition, we use FFO excluding certain gain and loss items that management considers unrelated to the operational and financial performance of our core business ("Core FFO").
SUN COMMUNITIES, INC.
We believe that FFO and Core FFO provide enhanced comparability for investor evaluations of period-over-period results. We believe that GAAP net income (loss) is the most directly comparable measure to FFO. The principal limitation of FFO is that it does not replace GAAP net income (loss) as a financial performance measure or GAAP cash flow from operating activities as a measure of our liquidity. Because FFO excludes significant economic components of GAAP net income (loss) including depreciation and amortization, FFO should be used as a supplement to GAAP net income (loss) and not as an alternative to it. Furthermore, FFO is not intended as a measure of a REIT's ability to meet debt principal repayments and other cash requirements, nor as a measure of working capital. FFO is calculated in accordance with 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
Summary Statements of Operations
The following tables reconcile the Net Income / (Loss) attributable to Sun Communities, Inc. common shareholders to NOI and summarize our consolidated financial results for the years ended December 31, 2023, 2022 and 2021 (in millions):
Year Ended
December 31, 2023 December 31, 2022 December 31, 2021
Net income / (loss) attributable to SUI common shareholders $ (213.3) $ 242.0 $ 380.2
Interest income (45.4) (35.2) (12.2)
Brokerage commissions and other revenues, net (60.6) (34.9) (30.2)
General and administrative 270.2 256.8 181.3
Catastrophic event-related charges, net 3.8 17.5 2.2
Business combinations 3.0 24.7 1.4
Depreciation and amortization 660.0 601.8 522.7
Asset impairments 10.1 3.0 -
Goodwill impairment 369.9 - -
Loss on extinguishment of debt (see Note 9)
- 4.4 8.1
Interest expense 325.8 229.8 158.6
Interest on mandatorily redeemable preferred OP units / equity 3.3 4.2 4.2
(Gain) / loss on remeasurement of marketable securities (see Note 15)
16.0 53.4 (33.5)
(Gain) / loss on foreign currency exchanges 0.3 (5.4) 3.7
Gain on disposition of properties (11.0) (12.2) (108.1)
Other expense, net 7.5 2.1 12.1
(Gain) / loss on remeasurement of notes receivable (see Note 4)
106.7 0.8 (0.7)
Income from nonconsolidated affiliates (see Note 7)
(16.0) (2.9) (4.0)
Loss on remeasurement of investment in nonconsolidated affiliates (see Note 7)
4.2 2.7 0.2
Current tax expense (see Note 13)
14.5 10.3 1.2
Deferred tax (benefit) / expense (see Note 13)
(22.9) (4.2) 0.1
Add: Preferred return to preferred OP units / equity interests 12.3 11.0 12.1
Add: Income / (loss) attributable to noncontrolling interests (8.1) 10.8 21.5
NOI $ 1,430.3 $ 1,380.5 $ 1,120.9
Year Ended
December 31, 2023 December 31, 2022 December 31, 2021
Real property NOI $ 1,251.9 $ 1,167.0 $ 1,002.6
Home sales NOI 124.5 154.6 74.4
Service, retail, dining and entertainment NOI 53.9 58.9 43.9
NOI $ 1,430.3 $ 1,380.5 $ 1,120.9
SUN COMMUNITIES, INC.
Seasonality of Revenue
The RV and marina industries are seasonal in nature, and the results of operations in any one period may not be indicative of results in future periods.
In the RV segment, certain properties maintain higher occupancy during the summer months, while other properties maintain higher occupancy during the winter months. Based on the location of our properties with transient RV sites, our portfolio generally produces higher revenues between April and September than between October and March. The following table presents the seasonality of real property-transient revenue for the years ended December 31, 2023, 2022 and 2021:
Real property - transient revenue
(in millions) For the Three Months Ended
Year March 31 June 30 September 30 December 31 Total
2023 $ 321.4 12.4 % 27.8 % 47.3 % 12.5 % 100.0 %
2022 $ 334.5 12.7 % 27.8 % 45.8 % 13.7 % 100.0 %
2021 $ 266.6 11.9 % 27.3 % 44.9 % 15.9 % 100.0 %
In the marina market, the majority of our wet slip and dry storage space leases have annual terms that are billed seasonally. Wet slip storage increases during the summer months for the boating season, whereas dry storage increases during the winter season as weather patterns require boat owners to store their vessels on dry docks or within covered racks. The following table presents the seasonality of Marina real property revenue for the years ended December 31, 2023, 2022 and 2021:
Seasonal real property revenue
(in millions)
For the Three Months Ended
Year March 31 June 30 September 30 December 31 Total
2023 $ 348.7 20.8 % 25.9 % 28.6 % 24.7 % 100.0 %
2022 $ 310.2 20.1 % 25.6 % 29.0 % 25.3 % 100.0 %
2021 $ 246.6 17.7 % 25.0 % 29.9 % 27.4 % 100.0 %
SUN COMMUNITIES, INC.
Real Property Operations - Total Portfolio
The following tables reflect certain financial and other information for our real estate operations by segment as of and for the years ended December 31, 2023 and 2022 (in millions, except for statistical information):
Year Ended December 31, 2023 Year Ended December 31, 2022
MH MH
Financial Information North America UK Total RV Marinas Total North America UK(a)
Total RV Marinas Total
Revenues
Real property (excluding transient) $ 906.1 $ 114.2 $ 1,020.3 $ 287.1 $ 406.8 $ 1,714.2 $ 844.0 $ 70.1 $ 914.1 $ 268.9 $ 365.9 $ 1,548.9
Real property - transient 1.9 42.1 44.0 276.8 24.8 345.6 1.6 38.5 40.1 294.4 18.8 353.3
Total operating revenues 908.0 156.3 1,064.3 563.9 431.6 2,059.8 845.6 108.6 954.2 563.3 384.7 1,902.2
Expenses
Property operating expenses 297.5 89.6 387.1 262.1 158.7 807.9 274.6 57.6 332.2 261.4 141.6 735.2
Real Property NOI $ 610.5 $ 66.7 $ 677.2 $ 301.8 $ 272.9 $ 1,251.9 $ 571.0 $ 51.0 $ 622.0 $ 301.9 $ 243.1 $ 1,167.0
As of December 31, 2023
As of December 31, 2022
MH MH
Other information North America UK Total RV Marinas Total North America UK(a)
Total RV Marinas Total
Number of properties 298 55 353 179 135 667 298 55 353 182 134 669
Sites, wet slips and dry storage spaces
Sites, wet slips and dry storage spaces(b)
100,320 18,110 118,430 32,390 48,030 198,850 99,980 18,040 118,020 30,330 47,820 196,170
Transient sites N/M 3,200 3,200 25,290 N/A 28,490 N/M 3,140 3,140 28,040 N/A 31,180
Total 100,320 21,310 121,630 57,680 48,030 227,340 99,980 21,180 121,160 58,370 47,820 227,350
MH and Annual RV Occupancy 96.6 % 89.5 % 95.5 % 100.0 % N/A 96.4 % 95.9 % 89.0 % 95.0 % 100.0 % N/A 96.0 %
N/M = Not meaningful.
N/A = Not applicable.
(a) UK amounts for the year ended December 31, 2022 cover April 8, 2022 (date of acquisition) to December 31, 2022.
(b) MH annual sites included 10,237 and 9,334 rental homes in our Rental Program at December 31, 2023 and 2022, respectively. Our investment in occupied rental homes at December 31, 2023 was $697.1 million, an increase of 21.8% from $572.3 million at December 31, 2022.
For the year ended December 31, 2023, the $84.9 million, or 7.3% increase in Real Property NOI as compared to the same period in 2022, consists of $39.0 million from Same Property MH and $13.5 million from Same Property RV from the North America operations, $24.7 million from Same Property Marina, and $7.7 million, net from the UK operations and other recently acquired or developed properties.
SUN COMMUNITIES, INC.
Real Property Operations - Same Property Portfolio
Same Property refers to properties that we have owned for at least the preceding year, exclusive of properties recently completed or under construction, and other properties as determined by management. The Same Property data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions or unique situations.
In order to evaluate the growth of the Same Property portfolio, management has classified certain items differently than our GAAP statements. The reclassification difference between our GAAP statements and our Same Property portfolio is the reclassification of utility revenues from real property revenue to operating expenses. A significant portion of our utility charges are re-billed to our residents. Additionally, for the MH and RV segments, the amounts in the tables below reflect constant currency for comparative purposes. Additionally, prior period Canadian currency figures have been translated at 2023 and 2022 average exchange rates for constant currency comparability.
SUN COMMUNITIES, INC.
Real Property Operations - Same Property - MH, RV and Marina
The following tables reflect certain financial and other information for our Same Property MH, RV and Marina portfolios as of and for the years ended December 31, 2023 and 2022 (in millions, except for statistical information).
Year Ended
December 31, 2023 December 31, 2022 Total Change % Change(c)
MH(a)
RV(a)
Marina Total MH(a)
RV(a)
Marina Total MH RV Marina Total(d)
Financial information
Same Property Revenues
Real property (excluding transient) $ 830.4 $ 263.8 $ 326.0 $ 1,420.2 $ 776.2 $ 228.1 $ 302.4 $ 1,306.7 $ 113.5 7.0 % 15.6 % 7.8 % 8.7 %
Real property - transient 1.6 256.2 21.7 279.5 1.2 275.4 16.4 293.0 (13.5) 25.9 % (7.0) % 32.6 % (4.6) %
Total Same Property operating revenues 832.0 520.0 347.7 1,699.7 777.4 503.5 318.8 1,599.7 100.0 7.0 % 3.3 % 9.1 % 6.2 %
Same Property Expenses
Same Property operating expenses(b)(d)
223.8 224.7 112.1 560.6 208.2 221.7 107.9 537.8 22.8 7.5 % 1.4 % 3.9 % 4.2 %
Real Property NOI(d)
$ 608.2 $ 295.3 $ 235.6 $ 1,139.1 $ 569.2 $ 281.8 $ 210.9 $ 1,061.9 $ 77.2 6.8 % 4.8 % 11.7 % 7.3 %
Other information
Number of properties
288 160 119 567 288 160 119 567
Sites, wet slips and dry storage spaces 98,620 54,370 40,890 193,880 98,340 54,400 41,000 193,740
Year Ended
December 31, 2022 December 31, 2021 Total Change % Change(c)
MH(a)
RV(a)
Marina Total MH(a)
RV(a)
Marina Total MH RV Marina Total(d)
Financial information
Same Property Revenues
Real property (excluding transient) $ 759.7 $ 213.1 $ 233.7 $ 1,206.5 $ 726.4 $ 188.4 $ 217.0 $ 1,131.8 $ 74.7 4.6 % 13.1 % 7.8 % 6.6 %
Real property - transient 1.2 243.8 12.4 257.4 1.5 236.1 13.0 250.6 6.8 (14.8) % 3.3 % (5.1) % 2.7 %
Total Same Property operating revenues 760.9 456.9 246.1 1,463.9 727.9 424.5 230.0 1,382.4 81.5 4.5 % 7.6 % 7.0 % 5.9 %
Same Property Expenses
Same Property operating expenses(b)(d)
202.7 195.4 84.1 482.2 187.5 187.4 79.5 454.4 27.8 8.1 % 4.2 % 5.8 % 6.1 %
Real Property NOI(d)
$ 558.2 $ 261.5 $ 162.0 $ 981.7 $ 540.4 $ 237.1 $ 150.5 $ 928.0 $ 53.7 3.3 % 10.3 % 7.7 % 5.8 %
Other information
Number of properties
276 145 101 522 276 145 101 522
Sites, wet slips and dry storage spaces 94,930 48,770 35,550 179,250 94,400 48,720 35,740 178,860
(a) Same Property results for our MH and RV properties reflect constant currency for comparative purposes. Canadian currency figures in the prior comparative period have been translated at the average exchange rate during the years ended December 31, 2023 and 2022 of $0.7418 and $0.7689 USD per Canadian dollar, respectively.
SUN COMMUNITIES, INC.
Real Property Operations - Same Property Portfolio (Continued)
(b) We net certain utilities revenues (which include utility reimbursement revenues from residents) against related utility expenses in property operating expenses as follows (in millions):
Year Ended December 31, 2023 Year Ended December 31, 2022
MH RV Marina Total MH RV Marina Total
Utility revenue netted against related utility expense
$ 68.3 $ 19.3 $ 22.7 $ 110.3 $ 63.8 $ 18.1 $ 19.2 $ 101.1
Year Ended December 31, 2022 Year Ended December 31, 2021
MH RV Marina Total MH RV Marina Total
Utility revenue netted against related utility expense
$ 61.9 $ 17.1 $ 11.4 $ 90.4 $ 57.3 $ 14.1 $ 11.1 $ 82.5
(c) Percentages are calculated based on unrounded numbers.
(d) Total Same Property operating expenses consist of the following components for the periods shown (in millions), and exclude amounts invested into recently acquired properties to bring them up to our standards.
Year Ended Year Ended
December 31, 2023 December 31, 2022 Change % Change December 31, 2022 December 31, 2021 Change % Change
Payroll and benefits $ 190.6 $ 181.6 $ 9.0 5.0 % $ 161.8 $ 151.2 $ 10.6 7.0 %
Real estate taxes 107.2 103.1 4.1 4.0 % 94.1 88.4 5.7 6.5 %
Supplies and repairs 75.2 78.9 (3.7) (4.7) % 73.0 68.2 4.8 6.9 %
Utilities 64.7 67.0 (2.3) (3.4) % 63.3 57.3 6.0 10.4 %
Legal, state / local taxes, and insurance 55.8 39.2 16.6 42.3 % 35.7 32.4 3.3 10.1 %
Other 67.1 68.0 (0.9) (1.4) % 54.3 56.9 (2.6) (4.6) %
Total Same Property Operating Expenses $ 560.6 $ 537.8 $ 22.8 4.2 % $ 482.2 $ 454.4 $ 27.8 6.1 %
SUN COMMUNITIES, INC.
Same Property Summary (in whole units)
As of As of
December 31, 2023 December 31, 2022 December 31, 2022 December 31, 2021
MH RV MH RV MH RV MH RV
Other Information
Number of properties 288 160 288 160 276 145 276 145
Sites
MH and Annual RV sites 98,620 32,090 98,340 30,030 94,930 28,420 94,400 26,660
Transient RV sites N/M 22,280 N/M 24,370 N/M 20,350 N/M 22,060
Total 98,620 54,370 98,340 54,400 94,930 48,770 94,400 48,720
MH & Annual RV Occupancy
Occupancy(a)
97.3 % 100.0 % 96.6 % 100.0 % 97.1 % 100.0 % 97.2 % 100.0 %
Monthly base rent per site $ 670 $ 593 $ 630 $ 546 $ 635 $ 555 $ 607 $ 516
% change in monthly base rent(b)
6.4 % 8.7 % N/A N/A 4.6 % 7.6 % N/A N/A
Rental Program Statistics included in MH:
Number of occupied sites, end of period(c)
10,010 N/A 9,310 N/A 8,930 N/A 9,570 N/A
Monthly rent per site - MH Rental Program $ 1,292 N/A $ 1,221 N/A $ 1,225 N/A $ 1,117 N/A
% change(c)
5.8 % N/A N/A N/A 9.7 % N/A N/A N/A
N/M = Not meaningful. N/A = Not applicable.
(a) Same Property adjusted blended occupancy for MH and RV increased to 98.9% at December 31, 2023, from 96.6% at December 31, 2022. The 230 basis point increase was driven by MH expansion fills and the conversion of transient RV sites to annual sites. Same Property blended occupancy for MH and RV was 97.9% at December 31, 2023, from 97.4% at December 31, 2022. Same Property adjusted blended occupancy for MH and RV increased to 98.6% at December 31, 2022, from 96.8% at December 31, 2021. The 180 basis point increase was driven by MH expansion fills and the conversion of transient RV sites to annual sites. Same Property blended occupancy for MH and RV was 97.8% at December 31, 2022 and 2021.
(b) Calculated using actual results without rounding.
(c) Occupied rental program sites in Same Property are included in total sites.
For the years ended December 31, 2023 and 2022:
•The Same Property data includes all properties that we have owned and operated continuously since January 1, 2022 exclusive of ground-up development and redevelopment properties recently completed or under construction, and other properties as determined by management.
•The MH segment's increase in NOI of $39.0 million, or 6.8% when compared to the same period in 2022, is primarily due to an increase in Real property (excluding transient) revenue of $54.2 million, or 7.0%. Real property (excluding transient and other) revenue increased primarily due to a 6.4% increase in monthly base rent.
•The RV segment's increase in NOI of $13.5 million, or 4.8% when compared to the same period in 2022, is primarily due to an increase in Real property (excluding transient) revenue of $35.7 million, or 15.6%, primarily due to an 8.7% increase in monthly base rent and conversions of transient RV sites to annual RV sites.
•The Marina segment increase in NOI of $24.7 million, or 11.7% when compared to the same period in 2022, is primarily due to a $23.6 million, or 7.8% increase in Real property (excluding transient) revenue.
For the years ended December 31, 2022 and 2021:
•The Same Property data includes all properties that we owned and operated continuously since January 1, 2021, exclusive of ground-up development and redevelopment properties recently completed or under construction, and other properties as determined by management.
•The MH segment's increase in NOI of $17.8 million, or 3.3% when compared to the same period in 2021, is primarily due to an increase in Real property (excluding transient) revenue of $33.3 million, or 4.6%. Real property (excluding transient and other) revenue increased due to a 4.6% increase in monthly base rent.
•The RV segment's increase in NOI of $24.4 million, or 10.3% when compared to the same period in 2021, is primarily due to an increase in Real property - transient revenue of $24.7 million, or 13.1%, due to a 7.6% increase in monthly base rent and conversions of transient RV sites to annual RV sites.
•The Marina segment increase in NOI of $11.5 million, or 7.7% when compared to the same period in 2021, is primarily due to a $16.7 million, or 7.8% increase in Real property (excluding transient) revenue.
SUN COMMUNITIES, INC.
Home Sales Summary
We sell new and pre-owned homes to current and prospective residents and customers in our communities. This inventory is purchased from manufacturers, lenders, dealers, former residents or customers.
The following table reflects certain financial and statistical information for our Home Sales Program for the years ended December 31, 2023 and 2022 (in millions, except for average selling prices and other information):
Year Ended
December 31, 2023 December 31, 2022 Change % Change
North America
Home sales $ 233.8 $ 275.4 $ (41.6) (15.1) %
Home cost and selling expenses 178.7 203.3 (24.6) (12.1) %
NOI $ 55.1 $ 72.1 $ (17.0) (23.6) %
NOI margin % 23.6 % 26.2 % (2.6) %
UK(a)
Home sales $ 186.1 $ 190.4 $ (4.3) (2.3) %
Home cost and selling expenses 116.7 107.9 8.8 8.2 %
NOI $ 69.4 $ 82.5 $ (13.1) (15.9) %
NOI margin % 37.3 % 43.3 % (6.0) %
Total
Home sales $ 419.9 $ 465.8 $ (45.9) (9.9) %
Home cost and selling expenses 295.4 311.2 (15.8) (5.1) %
NOI $ 124.5 $ 154.6 $ (30.1) (19.5) %
NOI margin % 29.6 % 33.2 % (3.5) %
Units Sold:*
North America 2,565 3,212 (647) (20.1) %
UK(a)
2,857 2,343 514 21.9 %
Total home sales 5,422 5,555 (133) (2.4) %
Average Selling Price:*
North America $ 91,150 $ 85,741 $ 5,409 6.3 %
UK(a)
$ 65,138 $ 81,263 $ (16,125) (19.8) %
(a) UK amounts for the year ended December 31, 2022 cover the period from April 8, 2022 (date of acquisition) through December 31, 2022.
NOI - North America
For the year ended December 31, 2023, the 23.6% decrease in NOI is primarily driven by a 20.1% decrease in total home sales volume as compared to the same period in 2022.
NOI - UK
For the year ended December 31, 2023, the 15.9% decrease in NOI is primarily driven by a 19.8% decrease in average selling price, partially offset by a full period of activity related to our properties in the UK during the current period as compared to a shorter period of activity from the date of acquisition of Park Holidays on April 8, 2022 through December 31, 2022.
SUN COMMUNITIES, INC.
Other Items - Statements of Operations(1)
The following table summarizes other income and expenses for the years ended December 31, 2023 and 2022 (amounts in millions):
Year Ended
December 31, 2023 December 31, 2022 Change % Change
Service, retail, dining and entertainment, net $ 53.9 $ 58.9 $ (5.0) (8.5) %
Interest income $ 45.4 $ 35.2 $ 10.2 29.0 %
Brokerage commissions and other, net $ 60.6 $ 34.9 $ 25.7 73.6 %
General and administrative expense $ 270.2 $ 256.8 $ 13.4 5.2 %
Catastrophic event-related charges, net $ 3.8 $ 17.5 $ (13.7) (78.3) %
Business combinations $ 3.0 $ 24.7 $ (21.7) (87.9) %
Depreciation and amortization $ 660.0 $ 601.8 $ 58.2 9.7 %
Asset impairments $ 10.1 $ 3.0 $ 7.1 236.7 %
Goodwill impairment $ 369.9 $ - $ 369.9 N/A
Loss on extinguishment of debt
$ - $ 4.4 $ (4.4) (100.0) %
Interest expense $ 325.8 $ 229.8 $ 96.0 41.8 %
Interest on mandatorily redeemable preferred OP units / equity $ 3.3 $ 4.2 $ (0.9) (21.4) %
Loss on remeasurement of marketable securities
$ (16.0) $ (53.4) $ 37.4 (70.0) %
Gain / (loss) on foreign currency exchanges $ (0.3) $ 5.4 $ (5.7) N/M
Gain on dispositions of properties $ 11.0 $ 12.2 $ (1.2) (9.8) %
Other expense, net $ (7.5) $ (2.1) $ (5.4) 257.1 %
Loss on remeasurement of notes receivable
$ (106.7) $ (0.8) $ (105.9) N/M
Income from nonconsolidated affiliates
$ 16.0 $ 2.9 $ 13.1 N/M
Loss on remeasurement of investment in nonconsolidated affiliates
$ (4.2) $ (2.7) $ (1.5) (55.6) %
Current tax expense
$ (14.5) $ (10.3) $ (4.2) 40.8 %
Deferred tax benefit
$ 22.9 $ 4.2 $ 18.7 N/M
Preferred return to preferred OP units / equity interests $ 12.3 $ 11.0 $ 1.3 11.8 %
Income / (loss) attributable to noncontrolling interests $ (8.1) $ 10.8 $ (18.9) (175.0) %
(1) Only items determined by management to be material, of interest, or unique to the periods disclosed above are explained below.
N/M = Not meaningful.
Interest income - for the year ended December 31, 2023, increased primarily due to a larger loan balance provided to Royale Holdings Group HoldCo Limited, a real estate operator, to fund investing and financing activities in the current period as compared to the same periods in 2022.
Brokerage commissions and other, net - for the year ended December 31, 2023, increased primarily due to the receipt of business interruption insurance recoveries of $20.2 million, net of deductibles, in connection with Hurricane Ian. Refer to Note 17, "Commitments and Contingencies," in our accompanying Consolidated Financial statements for additional information.
Catastrophic event-related charges, net - for the year ended December 31, 2023, was an expense of $3.8 million, compared to an expense of $17.5 million in 2022. The expense in 2023 was primarily due to an asset impairment charge of $7.0 million driven by flooding at an RV community in New Hampshire, partially offset by the receipt of insurance recoveries related to Hurricane Irma, compared to impairment charges in 2022 related to damaged property from Hurricane Ian. Refer to Note 17, "Commitments and Contingencies," in our accompanying Consolidated Financial Statements for additional information.
Business combinations - for the year ended December 31, 2023, decreased primarily as a result of no new acquisitions accounted for as business combinations during 2023 as compared to the same period in 2022. Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for additional information.
Goodwill impairment - for the year ended December 31, 2023, was due to goodwill impairment charges driven by a decline in the fair value of our United Kingdom reporting unit within the MH segment. Refer to Note 6, "Goodwill and Other Intangible Assets," and Note 22, "Quarterly Financial Data (Unaudited and Restated)," in our accompanying Consolidated Financial Statements for additional information.
SUN COMMUNITIES, INC.
Interest expense - for the year ended December 31, 2023, increased due to the higher carrying balance of debt and increased interest rates as compared to the same period in 2022. Refer to Note 9, "Debt and Line of Credit," in our accompanying Consolidated Financial Statements for additional information.
Loss on remeasurement of marketable securities - for the year ended December 31, 2023, was a loss of $16.0 million, as compared to a loss of $53.4 million during the same period in 2022 due to the fluctuation in the price of publicly traded marketable securities we owned. During the year ended December 31, 2023, we sold all of these marketable securities. Refer to Note 16, "Fair Value of Financial Instruments," in our accompanying Consolidated Financial Statements for additional information.
Loss on remeasurement of notes receivable - for the year ended December 31, 2023, was a loss of $106.7 million, as compared to a loss of $0.8 million during the same period in 2022 due to an impairment charge of $102.9 million recorded in 2023 related to our note receivable from the Royale Holdings Group HoldCo Limited. Refer to Note 4, "Notes and Other Receivables," in our accompanying Consolidated Financial Statements for additional information.
Income from nonconsolidated affiliates - for the year ended December 31, 2023, increased as compared to 2022, primarily due to the gain recognized on the disposition of our investment in Rezplot of $15.3 million in 2023. Refer to Note 7, "Investments in Nonconsolidated Affiliates," in our accompanying Consolidated Financial Statements for additional information.
Deferred tax benefit - for the year ended December 31, 2023, increased primarily due to additional deferred interest deductions at our UK operations compared to the same period in 2022. Refer to Note 13, "Income Taxes," in our accompanying Consolidated Financial Statements for additional information.
SUN COMMUNITIES, INC.
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO SUI COMMON SHAREHOLDERS TO FFO
The following table reconciles Net income / (loss) attributable to SUI common shareholders to FFO for the years ended December 31, 2023, 2022 and 2021 (in millions, except for per share amounts):
Year Ended
December 31, 2023 December 31, 2022 December 31, 2021
Net Income / (Loss) Attributable to SUI Common Shareholders $ (213.3) $ 242.0 $ 380.2
Adjustments
Depreciation and amortization 657.2 599.6 521.9
Depreciation on nonconsolidated affiliates 0.2 0.1 0.1
Asset impairments 10.1 3.0 -
Goodwill impairment 369.9 - -
(Gain) / loss on remeasurement of marketable securities
16.0 53.4 (33.5)
Loss on remeasurement of investment in nonconsolidated affiliates 4.2 2.7 0.2
(Gain) / loss on remeasurement of notes receivable 106.7 0.8 (0.7)
Loss on remeasurement of collateralized receivables and secured borrowings, net 0.4 - -
Gain on dispositions of properties, including tax effect (8.9) (12.2) (108.1)
Add: Returns on preferred OP units 11.8 9.5 4.0
Add: Income attributable to noncontrolling interests (8.1) 10.4 14.7
Gain on dispositions of assets, net (38.0) (54.9) (60.5)
FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities(1)
$ 908.2 $ 854.4 $ 718.3
Adjustments
Business combination expense
3.0 24.7 1.3
Acquisition and other transaction costs(2)
25.3 22.7 8.7
Loss on extinguishment of debt - 4.4 8.1
Catastrophic event-related charges, net 3.8 17.5 2.2
Loss of earnings - catastrophic event-related charges, net(3)
2.1 4.8 0.2
(Gain) / loss on foreign currency exchanges 0.3 (5.4) 3.7
Other adjustments, net(4)
(27.4) 0.4 16.2
Core FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities(1)
$ 915.3 $ 923.5 $ 758.7
Weighted Average Common Shares Outstanding - Diluted 128.9 125.6 116.5
FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities Per Share $ 7.05 $ 6.80 $ 6.16
Core FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities Per Share $ 7.10 $ 7.35 $ 6.51
(1)Excludes the effect of certain anti-dilutive convertible securities.
(2)These costs represent (i) nonrecurring integration expenses associated with acquisitions during the years ended December 31, 2023, and 2022, (ii) costs associated with potential acquisitions that will not close, (iii) costs associated with the termination of the bridge loan commitment during the three months ended March 31, 2022 related to the acquisition of Park Holidays, (iv) expenses 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, and (v) other non-recurring transaction costs.
(3)Loss of earnings - catastrophic event-related charges, net for the year ended December 2023 included the following:
Year Ended
December 31, 2023
Hurricane Ian - Three Fort Myers, Florida RV communities impaired
Estimated loss of earnings in excess of the applicable business interruption deductible
$ 21.9
Insurance recoveries received for previously estimated loss of earnings through August 31, 2023
(19.7)
Hurricane Irma - Three Florida Keys communities impaired
Estimated loss of earnings in excess of the applicable business interruption deductible
0.5
Reversal of unpaid previously estimated loss of earnings that we do not expect to recover
(0.6)
Loss of earnings - catastrophic event-related charges, net
$ 2.1
(4)Other adjustments, net relates primarily to (i) deferred tax expense / (benefit) and long term lease termination expense / (benefit) during the years ended December 31, 2023, 2022 and 2021, (ii) accelerated deferred compensation amortization and gain on sale of investment in nonconsolidated affiliate during the years ended December 31, 2023 and 2022, (iii) non-recurring management fees, severance costs, and ERP implementation costs during the year ended December 31, 2023, (iv) change in estimated contingent consideration during the years ended December 31, 2023 and December 31, 2021, (v) gain from legal settlement during the year ended December 31, 2022 and (vi) RV rebranding non-recurring costs for the years ended December 31, 2022 and 2021.
SUN COMMUNITIES, INC.
LIQUIDITY AND CAPITAL RESOURCES
Short-term Liquidity
Our principal short-term liquidity demands historically have been, and are expected to continue to be, distributions to our shareholders and the unit holders of the Operating Partnership, property acquisitions, development and expansion of our properties, capital improvement of our properties, the purchase of new and pre-owned homes, and debt repayment. We intend to meet our short-term liquidity requirements through available cash balances, cash flow generated from operations, draws on our Senior Credit Facility, and the use of debt and equity offerings under our shelf registration statement. Refer to Note 9, "Debt and Line of Credit" and Note 10, "Equity and Temporary Equity" and Note 21, "Subsequent Events," in our accompanying Consolidated Financial Statements for additional information and related activity subsequent to December 31, 2023.
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 take a disciplined approach to selecting the optimal mix of financing sources to meet our liquidity demands and minimize our overall cost of capital. Our investment grade credit ratings of BBB and Baa3 from S&P Global and Moody's, respectively, remain unchanged from the initial rating. We plan to continue to capitalize on our unsecured bond market access to optimize our cost of capital and increase our financial flexibility.
Current market and economic conditions, including relating to, among other things, interest rates, currency fluctuations, equity valuations and inflation, may adversely affect our ability to obtain debt and equity capital in the short term on attractive terms.
Throughout our history, we have demonstrated operational reliability and cash flow strength throughout economic cycles. Our current objectives include streamlining our operations with an emphasis on our reliable real property income. We recognize the headwinds we are facing from a challenging macroeconomic environment and are re-aligning our strategy to focus on our proven, durable income streams. We are positioned for ongoing organic growth with expected rental rate increases, occupancy gains and expense management. Looking ahead to 2024, we expect rental rate growth that exceeds headline inflation with ongoing focus on expense management to continue generating strong organic cash flow growth.
Given a macroeconomic backdrop of sustained higher interest rates, we intend to prioritize variable rate debt reduction as our primary use of free cash flow from our operations and selective capital recycling. In addition, we are pulling back on our development activity and capital spending considering the more challenging macroeconomic and capital market environment. Capital spending besides projects that are underway, will be solely focused on the most strategic opportunities. We also attempt to manage interest rate risks by using interest rate hedging instruments and by monitoring our overall leverage levels. We engage in certain hedging transactions to limit our exposure from the adverse effects of changes in interest rates on borrowing costs of our loans.
Acquisition, development and expansion activities
Subject to market conditions, we intend to selectively identify opportunities to expand our development pipeline and acquire existing properties. We finance acquisitions through available cash, secured financing, draws on our Senior Credit Facility, the assumption of existing debt on properties and the issuance of debt and equity securities. The current higher interest rate environment may make it more expensive to finance acquisitions and fund developments and expansion. We will continue very selectively to evaluate acquisition and development opportunities that meet our underwriting criteria.
During the year ended December 31, 2023, we acquired one MH community with 68 sites and 72 development sites, and one marina with 24 wet slips and dry storage spaces, for an aggregate purchase price of approximately $107.0 million. Total acquisition investments were $368.7 million during the year ended December 31, 2023, and represents the purchase price paid for operating properties and land parcels for future ground-up development and expansions activities, plus any capital improvements identified during due diligence needed to bring acquired properties up to our operating standards.
We have been focused on property ground-up development and expansion opportunities adjacent to our existing properties. During the year ended December 31, 2023, we acquired four land parcels located in the U.S. and the UK for the potential development of over 1,350 sites, expanded 14 of our existing communities by over 440 sites and delivered 360 sites at five ground-up development properties.
SUN COMMUNITIES, INC.
We continue to selectively expand our properties utilizing our inventory of owned and entitled land. We have over 17,980 MH and RV sites suitable for future development.
Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for additional detail on acquisitions completed to date.
Capital Expenditures (excluding Acquisition costs)
Our capital expenditures include lot modifications, growth projects, rebranding, acquisition-related capital expenditures, expansion and development construction costs, rental home purchases and recurring capital expenditures.
Our capital expenditure activity is summarized as follows (in millions):
Year Ended
December 31, 2023 December 31, 2022
Recurring Capital Expenditures $ 87.3 $ 73.8
Non-Recurring Capital Expenditures and Related Activities
Lot Modifications 54.9 39.1
Growth Projects 104.5 99.5
Rebranding 4.7 15.0
Capital improvements to recent acquisitions 215.3 280.3
Expansion and Development 276.3 261.8
Rental Program 260.9 151.1
Other (0.9) 0.4
Total Non-Recurring Capital Expenditure and Related Activities 915.7 847.2
Total Capital Expenditure and Related Activities $ 1,003.0 $ 921.0
Recurring capital expenditures
Property recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing items used to operate the communities and marinas. Recurring capital expenditures at our MH and RV properties include major road, driveway and pool improvements; clubhouse renovations; adding or replacing streetlights; playground equipment; signage; maintenance facilities; manager housing and property vehicles. Recurring capital expenditures at our marinas include dredging, dock repairs and improvements, and equipment maintenance and upgrades. The minimum capitalized amount is five hundred dollars.
Non-Recurring Capital Expenditures and Related Activities
Lot modifications - lot modification capital expenditures are incurred to modify the foundational structures required to set a new home after a previous home has been removed. These expenditures are necessary to create a revenue stream from a new site renter and often improve the quality of the community. Other lot modification expenditures include land improvements added to annual RV sites to aid in the conversion of transient RV guests to annual contracts.
Growth projects - growth projects consist of revenue generating or expense reducing activities at the properties. These include, but are not limited to, utility efficiency and renewable energy projects, site, slip or amenity upgrades such as the addition of a garage, shed or boat lift, and other special capital projects that substantiate an incremental rental increase.
Rebranding - rebranding includes new signage at our RV communities and the costs of building an RV mobile application and updated website.
Capital improvements subsequent to acquisition often require 24 to 36 months to complete after closing and include upgrading clubhouses; landscaping; new street light systems; new mail delivery systems; pool renovations including larger decks, heaters and furniture; new maintenance facilities; lot modifications; and new signage including main signs and internal road signs.
SUN COMMUNITIES, INC.
Expansion and development expenditures - consist primarily of construction costs such as roads, activities, and amenities, and costs necessary to complete site improvements, such as driveways, sidewalks and landscaping at our MH and RV communities. Expenditures also include costs to rebuild after damage has been incurred at MH, RV or marina properties, and research and development.
Rental program - consists of investment in the acquisition of homes intended for the Rental Program and the purchase of vacation rental homes at our RV communities. Expenditures for these investments depend upon the condition of the markets for repossessions and new home sales, rental homes and vacation rental homes.
Cash Flow Activities
Our cash flow activities are summarized as follows (in millions):
Year Ended
December 31, 2023 December 31, 2022 December 31, 2021
Net Cash Provided by Operating Activities $ 790.5 $ 734.9 $ 753.6
Net Cash Used for Investing Activities $ (919.5) $ (3,062.6) $ (2,338.2)
Net Cash Provided by Financing Activities $ 80.3 $ 2,348.6 $ 1,570.4
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash $ 1.0 $ (8.7) $ (0.2)
Cash, cash equivalents and restricted cash decreased by $47.7 million from $90.4 million as of December 31, 2022, to $42.7 million as of December 31, 2023.
Operating activities - Net cash provided by operating activities increased by $55.6 million to $790.5 million for the year ended December 31, 2023, compared to $734.9 million for the year ended December 31, 2022. The increase in operating cash flow was primarily due to improved Same Property operating performance at our MH and RV communities and marinas, partially offset by an increase in interest expense during the year ended December 31, 2023 as compared to the corresponding period in 2022.
Our net cash flows provided by operating activities from continuing operations may be adversely impacted by, among other things:
•the market and economic conditions in our current markets generally, and specifically in the metropolitan areas of our current markets;
•lower occupancy and rental rates of our properties;
•substantial increases in insurance premiums;
•increases in other operating costs, such as wage and benefit costs, real estate taxes and utilities;
•decreased sales of manufactured homes;
•current volatility in economic conditions and the financial markets; and
•the effects of outbreaks of disease and related restrictions on business operations. Refer to "Risk Factors" in Part I, Item 1A in this Annual Report on Form 10-K.
Investing activities - Net cash used for investing activities decreased by $2.1 billion to $919.5 million for the year ended December 31, 2023, compared to $3.1 billion for the year ended December 31, 2022. The decrease in Net cash used for investing activities was primarily driven by a decrease in cash deployed to acquire properties during the year ended December 31, 2023 as compared to the corresponding period in 2022. Refer to the Consolidated Statements of Cash Flows for detail on the net cash used for investing activities during the years ended December 31, 2023 and 2022. Refer to Note 3, "Real Estate Acquisitions and Dispositions" and Note 21, "Subsequent Events," in our accompanying Consolidated Financial Statements for additional information on acquisitions and investment activity subsequent to December 31, 2023.
Financing activities - Net cash provided by financing activities decreased by $2.3 billion to $80.3 million for the year ended December 31, 2023, compared to $2.3 billion for the year ended December 31, 2022. The decrease in Net cash provided by financing activities was primarily driven by a decrease in borrowings on our Senior Credit Facility, net of repayments, a decrease in issuance of common stock, OP units and preferred OP units, net, during the year ended December 31, 2023 as compared to the corresponding period in 2022. Refer to the Consolidated Statements of Cash Flows for detail on the net cash provided by financing activities during the years ended December 31, 2023 and 2022. Refer to Note 8, "Consolidated Variable Interest Entities," Note 9, "Debt and Line of Credit" and Note 10, "Equity and Temporary Equity," in our accompanying Consolidated Financial Statements for additional information.
SUN COMMUNITIES, INC.
We are exposed to interest rate variability associated with our outstanding floating rate debt and any maturing debt that has to be refinanced. Interest rate movements impact our borrowing costs and, while as of December 31, 2023, over 84% of our total debt was fixed rate financing, including the impact of hedge activity, increases in interest costs are likely to adversely affect our financial results.
Equity and Debt Activity
Public Equity Offerings
In November 2021, we entered into forward sale agreements in connection with an underwritten registered public offering of 4,025,000 shares of our common stock at a public offering price of $185.00 per share. In April 2022, we completed the physical settlement of the 4,025,000 shares of common stock and received aggregate net proceeds of $705.4 million. We used the net proceeds to repay borrowings outstanding under our Senior Credit Facility, and for working capital and general corporate purposes.
At the Market Offering Sales Agreement
In December 2021, we entered into an At the Market Offering Sales Agreement (the "Sales Agreement"), with certain sales agents and forward sellers pursuant to which we may sell, from time to time, up to an aggregate gross sales price of $1.25 billion of our common stock through the sales agents, acting as our sales agents or, if applicable, as forward sellers, or directly to the sales agents as principals for their own accounts. We simultaneously terminated our prior sales agreement upon entering into the Sales Agreement. Through December 31, 2023, we had entered into forward sales agreements under our Sales Agreement for an aggregate gross sales price of $160.6 million.
During the three months ended September 30, 2022, we entered into forward sale agreements with respect to 15,000 shares of common stock under our Sales Agreement for $2.6 million. Additionally, we settled all of our outstanding forward sale agreements with respect to 1,526,212 shares of common stock which includes 620,109; 600,503; 290,600; and 15,000 shares of common stock from the three months ended December 31, 2021, March 31, June 30 and September 30, 2022 forward sale agreements, respectively. The net proceeds of $275.5 million from the settlement of these forward sale agreements were used to repay borrowings outstanding under our Senior Credit Facility.
During the three months ended June 30, 2022, we completed the physical settlement of 1,200,000 shares of common stock under our prior at the market offering program and received net proceeds of $229.5 million. Additionally, we entered into forward sales agreements with respect to 290,600 shares of common stock for $50.1 million, under our Sales Agreement. These forward sale agreements were settled during the three months ended September 30, 2022.
During the three months ended March 31, 2022, we entered into forward sales agreements with respect to 600,503 shares of common stock for $107.9 million, under our Sales Agreement. These forward sale agreements were settled during the three months ended September 30, 2022.
During the year ended December 31, 2021, we entered into forward sale agreements with respect to 1,820,109 shares of common stock under our prior at the market offering program for $356.5 million. We completed the physical settlement of 1,200,000 and 620,109 shares of common stock during the three months ended June 30, 2022 and September 30, 2022, respectively.
Marketable Securities
In October 2023, we sold our 41.8 million share position in Ingenia Communities Group (ASX: INA), generating $102.5 million of proceeds, net of underwriting and other fees, with a realized loss of $8.0 million. The proceeds were used to pay down amounts drawn under our Senior Credit Facility.
Secured Debt
During the three months ended December 31, 2023, we entered into new mortgage term loans for $252.8 million that mature in November 1, 2030 and bear interest at a fixed rate of 6.49%. As a result of the new mortgage term loans, two additional properties were encumbered. We used the proceeds to repay $117.8 million of mortgage term loans that matured on November 30, 2023 and pay down amounts drawn under our Senior Credit Facility. The effective interest rate on the new secured loans is 6.251% inclusive of the impact of the aforementioned terminated swap of $50.0 million.
SUN COMMUNITIES, INC.
During the three months ended March 31, 2023, we entered into mortgage term loans totaling $184.1 million related to 27 properties which mature between February 13, 2026 and April 1, 2033, and have a weighted average fixed interest rate of 5.39%. We used the net proceeds to repay borrowings outstanding under our Senior Credit Facility.
During the year ended December 31, 2022, we entered into a new $20.6 million construction loan, which was undrawn as of December 31, 2023, and a $3.4 million mortgage term loan that are jointly secured by one property. Both loans mature on August 10, 2047 and have a fixed interest rate of 3.65%. Additionally, we entered into a mortgage term loan of $226.0 million related to 18 existing encumbered properties, which mature between June 15, 2026 and December 15, 2029, and have a fixed interest rate of 4.5%.
During the three months ended September 30, 2022, we repaid $318.0 million of term loans collateralized by 35 properties. These loans had a weighted average interest rate of 4.81% and were set to mature from December 6, 2022 through September 6, 2024.
Senior Unsecured Notes
Subsequent to the three months ended December 31, 2023, the Operating Partnership issued $500.0 million of senior unsecured notes with an interest rate of 5.5% and a five-year term, due January 15, 2029. The net proceeds from the offering were $495.4 million, after deducting underwriters' discounts and estimated offering expenses. We used the majority of the net proceeds to repay borrowings outstanding under our Senior Credit Facility, reducing our floating-rate debt to total debt to approximately 10%. In connection with the note issuance, we settled seven forward swap contracts totaling $255.0 million and paid a net settlement payment of $2.3 million to several counterparties. Refer to Note 21, "Subsequent Events," in our accompanying Consolidated Financial Statements for additional information.
The following table sets forth certain information regarding our outstanding senior unsecured notes (in millions). All senior unsecured notes include interest payments on a semi-annual basis in arrears.
Carrying Amount
Principal Amount December 31, 2023 December 31, 2022
5.7% notes, issued in January 2023 and due in January 2033(1)
$ 400.0 $ 395.7 $ -
4.2% notes, issued in April 2022 and due in April 2032
600.0 592.6 591.8
2.3% notes, issued in October 2021 and due in November 2028
450.0 446.8 446.2
2.7% notes, issued in June 2021 and October 2021, and due in July 2031
750.0 742.4 741.6
Total $ 2,200.0 $ 2,177.5 $ 1,779.6
(1) In January 2023, the Operating Partnership issued $400.0 million of senior unsecured notes with an interest rate of 5.7% and a 10-year term, due January 15, 2033 (the "2033 Notes"). Interest on the notes is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2023. The net proceeds from the offering were $395.3 million, after deducting underwriters' discounts and estimated offering expenses. We used the net proceeds from the offering to repay borrowings outstanding under our Senior Credit Facility.
The obligations of the Operating Partnership to pay principal, premiums, if any, and interest on our senior unsecured notes are guaranteed on a senior basis by Sun Communities, Inc. The guarantee is full and unconditional, and the Operating Partnership is a consolidated subsidiary of the Company. Under Rule 3-10 of Regulation S-X, as amended, subsidiary issuers of obligations guaranteed by its parent company are not required to provide separate financial statements, provided that the subsidiary obligor is consolidated into the parent company's consolidated financial statements, the parent guarantee is "full and unconditional" and, subject to certain exceptions, the alternative disclosure required by Rule 13-01 is provided, which includes narrative disclosure and summarized financial information. Accordingly, separate consolidated financial statements of the Operating Partnership have not been presented. Furthermore, as permitted under Rule 13-01(a)(4)(vi), we have excluded the summarized financial information for the Operating Partnership as the assets, liabilities and results of operations of the Operating Partnership are not materially different from the corresponding amounts presented in our consolidated financial statements and management believes such summarized financial information would be repetitive and not provide incremental value to investors.
Line of Credit
In April 2022, the Operating Partnership as borrower, SUI as guarantor, and certain lenders entered into the Credit Facility Amendment, which amended our Senior Credit Facility.
SUN COMMUNITIES, INC.
The Credit Facility Amendment increased the aggregate amount of our Senior Credit Facility to $4.2 billion with the ability to upsize the total borrowings by an additional $800.0 million, subject to certain conditions. The increased aggregate amount under the Senior Credit Facility consists of the following: (a) a revolving loan in an amount up to $3.05 billion and (b) a term loan facility of $1.15 billion, with the ability to draw funds from the combined facilities in U.S. dollars, Pound sterling, Euros, Canadian dollars and Australian dollars, subject to certain limitations. The Credit Facility Amendment extended the maturity date of the revolving loan facility to April 7, 2026. At our option that maturity date may be extended two additional six-month periods. In addition, the Credit Facility Amendment established the maturity date of the term loan facility under the Credit Facility Amendment as April 7, 2025, which may not be further extended.
The Senior Credit Facility bears interest at a floating rate based on the Adjusted Term Secured Overnight Financing Rate ("SOFR"), the Adjusted Eurocurrency Rate, the Australian Bank Bill Swap Bid Rate ("BBSY"), the Daily Sterling Overnight Index Average ("SONIA") Rate or the Canadian Dollar Offered Rate, as applicable, plus a margin, in all cases, which can range from 0.725% to 1.6%, subject to certain adjustments. As of December 31, 2023, the margins based on our credit ratings were 0.85% on the revolving loan facility and 0.95% on the term loan facility.
At the lenders' option, the Senior Credit Facility will become immediately due and payable upon an event of default under the Credit Facility Agreement. We had $944.1 million and $1.1 billion of borrowings outstanding under the revolving loan as of December 31, 2023 and 2022, respectively. We also had $1.1 billion of borrowings outstanding under the term loan on the Senior Credit Facility as of December 31, 2023 and 2022, respectively. These balances are recorded in Unsecured debt on the Consolidated Balance Sheets.
The Senior Credit Facility provides us with the ability to issue letters of credit. Our issuance of letters of credit does not increase our borrowings outstanding under the Senior Credit Facility, but does reduce the borrowing amount available. We had $26.2 million and $2.6 million of outstanding letters of credit at December 31, 2023 and 2022, respectively.
Financial Covenants
Pursuant to the terms of the Senior Credit Facility, we are subject to various financial and other covenants. The most restrictive financial covenants for the Senior Credit Facility are as follows:
Covenant Requirement As of December 31, 2023
Maximum leverage ratio <65.0% 35.9%
Minimum fixed charge coverage ratio >1.40 3.02
Maximum secured leverage ratio <40.0% 13.8%
In addition, we are required to maintain the following covenants with respect to the senior unsecured notes payable:
Covenant Requirement As of December 31, 2023
Total debt to total assets ≤60.0% 41.7%
Secured debt to total assets ≤40.0% 18.9%
Consolidated income available for debt service to debt service ≥1.50 3.97
Unencumbered total asset value to total unsecured debt ≥150.0% 335.2%
As of December 31, 2023, we were in compliance with the above covenants and do not anticipate that we will be unable to meet these covenants in the near term.
SUN COMMUNITIES, INC.
Derivative Transactions
We enter into treasury rate lock contracts, interest rate swaps, and forward swaps for interest rate risk management purposes. We do not enter into derivative instruments for speculative purposes. The risks being hedged are the interest rate risk related to outstanding floating rate debt and forecasted debt issuance transactions, and the benchmark interest rates used are the SOFR and the SONIA Rate.
Subsequent to the three months ended December 31, 2023, in connection with the issuance of $500.0 million of senior unsecured notes with an interest rate of 5.5% and a five-year term, due January 15, 2029, we settled seven forward swap contracts totaling $255.0 million and paid a net settlement payment of $2.3 million to several counterparties. Refer to Note 21, "Subsequent Events," in our accompanying Consolidated Financial Statements for additional information.
During the year ended December 31, 2023, we entered into derivative contracts with aggregate notional amounts of $582.3 million and terminated derivative contracts with aggregate notional amounts of $300.0 million and received an aggregate cash settlement of $13.4 million.
During the year ended December 31, 2022, we entered into derivative contracts with aggregate notional amounts of $733.6 million, and terminated derivative contracts with aggregate notional amounts of $600.0 million and received an aggregate cash settlement of $35.3 million.
Long-term Financing and Capital Requirements
Long-term Financing
We anticipate meeting our long-term liquidity requirements, such as scheduled debt maturities, large property acquisitions, expansion and development of properties, other nonrecurring capital improvements and Operating Partnership unit redemptions through the long-term unsecured and secured debt and the issuance of certain debt or equity securities subject to market conditions. If current market and economic conditions, including relating to, among other things, interest rates, currency fluctuations, equity valuations and inflation, continue or worsen, our ability to obtain debt and equity capital in the long term on attractive terms may be adversely affected.
As of December 31, 2023, we had unrestricted cash on hand of $29.2 million, $2.0 billion of remaining capacity on the Senior Credit Facility, and a total of 511 unencumbered MH, RV and marina properties.
From time to time, we may also issue shares of our capital stock, issue equity units in our Operating Partnership, issue unsecured notes, obtain other 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 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. In the event our current credit ratings are downgraded, it may become difficult or more expensive to obtain additional financing or refinance existing unsecured debt as maturities become due. Refer to "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, 2023, our net debt to enterprise value was 30.9% (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, Series J preferred OP units, Series K preferred OP units and Series L preferred OP units to shares of common stock). Our debt has a weighted average interest rate of 4.23% and a weighted average years to maturity of 6.8.
SUN COMMUNITIES, INC.
Capital Requirements
Our capital requirements as of December 31, 2023 include both short and long term obligations:
Our primary long-term liquidity needs are principal payments on outstanding debt as summarized in the table below:
Payments Due By Period (in millions)
Outstanding Debt(1)
Total Due Short-term Obligation ≤1 Year Long-term Obligation After 1 Year Refer to
Principal payments on long-term debt $ 7,816.4 $ 195.4 $ 7,621.0 Note 9. Debt and Line of Credit
Interest expense(2)
1,712.9 229.3 1,483.6
Operating leases 296.2 13.9 282.3 Note 18. Leases
Finance lease 28.1 4.6 23.5 Note 18. Leases
Total Outstanding Debt $ 9,853.6 $ 443.2 $ 9,410.4
(1)Our outstanding debt in this table excludes debt premiums, discounts, deferred financing costs and fair value adjustment, as applicable.
(2)Our obligations related to interest expense are calculated based on the current debt levels, rates and maturities as of December 31, 2023 (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 for payment due after five years.
Certain of our nonconsolidated affiliates, which are accounted for under the equity-method of accounting, have incurred debt. We have not guaranteed the debt of our nonconsolidated affiliates in the arrangements referenced below, nor do we have any obligations to fund this debt should the nonconsolidated affiliates be unable to do so. Refer to Note 7, "Investments in Nonconsolidated Affiliates," in the accompanying Consolidated Financial Statements for additional information about these entities.
GTSC - During September 2019, GTSC entered into a warehouse line of credit with a maximum loan amount of $125.0 million. The line of credit was subsequently amended, with the maximum amount increased to $325.0 million as of December 31, 2022, with an option to increase to $375.0 million subject to the lender's consent. As of December 31, 2023 and 2022, the aggregate carrying amount of debt, including both our and our partner's share, incurred by GTSC was $261.3 million (of which our proportionate share is $104.5 million), and $275.0 million (of which our proportionate share is $110.0 million), respectively. The debt bears interest at a variable rate based on a Commercial Paper or adjusted SOFR plus a margin ranging from 1.65% to 2.5% per annum and matures on December 15, 2026.
Sungenia JV - During May 2020, Sungenia JV, entered into a debt facility agreement with a maximum loan amount of $27.0 million Australian dollars, or $18.4 million converted at the December 31, 2023 exchange rate. During July 2022, the maximum amount was increased to $50.0 million Australian dollars, or $34.1 million converted at the December 31, 2023 exchange rate. As of December 31, 2023 and 2022, the aggregate carrying amount of the debt, including both our and our partners' share, incurred by Sungenia JV was $25.2 million (of which our proportionate share is approximately $12.6 million), and $7.9 million (of which our proportionate share is $4.0 million), respectively. The debt bears interest at a variable rate based on the BBSY rate plus a margin ranging from 1.35% to 1.4%, subject to adjustment for additional future commitments, per annum and matures on June 30, 2027.
SUN COMMUNITIES, INC.
SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES
Critical Accounting Estimates
Our Consolidated Financial Statements are prepared in accordance with United States of America generally accepted accounting principles, 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 of investment properties, impairments of long-lived assets, and impairments of goodwill. 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 certain situations, we discuss the likelihood that materially different amounts could be reported under varied conditions and assumptions.
Goodwill Impairment
In performing goodwill impairment testing, we utilize a third-party valuation specialist to assist management in determining the fair value of our reporting units. The fair value of each reporting unit is estimated based on a combination of discounted cash flows (income approach) and the use of pricing multiples derived from an analysis of comparable public companies multiplied against historical and / or anticipated financial metrics (market approach) for each reporting unit. These calculations contain uncertainties as they require management to make assumptions including, but not limited to, market comparables, future cash flows of the reporting units, and appropriate weighted average cost of capital and long-term growth rates. A decline in the actual cash flows of our reporting units in future periods, as compared to the projected cash flows used in our valuations, could result in the carrying value of the reporting units exceeding their respective fair values. Further, a change in market comparables, discount rate or long-term growth rates, as a result of a change in economic conditions or otherwise, could result in the carrying values of the reporting units exceeding their respective fair values. Refer to Note 6, "Goodwill and Other Intangible Assets," in our accompanying Consolidated Financial Statements for additional information regarding goodwill.
During the year ended December 31, 2023, we performed qualitative and quantitative assessments of our goodwill balance for potential impairment in accordance with ASC 350-20, "Goodwill and Other." As a result of our impairment testing, we determined that the fair value of the UK reporting unit was below its carrying value during the first, second and third quarters, and recorded aggregate non-cash impairment charges of $369.9 million. The decline in the fair value of the UK reporting unit was primarily driven by a higher weighted average cost of capital due to changes in the macroeconomic environment, as well as inflationary pressures in the UK causing a decline in projected future cash flows in the region. Refer to Note 22, "Quarterly Financial Data (Unaudited and Restated)," in our accompanying Consolidated Financial Statements for additional information regarding amounts reported for interim periods.
We performed a sensitivity analysis for the significant assumptions in the goodwill impairment testing analysis for our UK reporting unit. As of December 31, 2023, holding all other assumptions constant and as determined by the income approach:
•A hypothetical increase of approximately 70 basis points to the discount rate would result in goodwill impairment of approximately $32.0 million;
•A hypothetical decrease in the expected average annual revenue growth rate of approximately 40 basis points over the entire forecast period would result in goodwill impairment of approximately $32.0 million;
•A hypothetical decrease of approximately 280 basis points in the expected EBITDA margins in each year over the entire forecast period would result in goodwill impairment of approximately $32.0 million.
Our other reporting units are less sensitive to changes in macroeconomic factors and forecast assumptions than our UK reporting unit due to greater excess of fair value over carrying value. For the Marina reporting unit, we concluded that the fair value exceeded its carrying value by over 19% as of October 31, 2023. We did not identify a triggering event in any other reporting unit.
Impact of New Accounting Standards
Refer to Note 20, "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 $1.3 billion and $1.7 billion as of December 31, 2023 and 2022, respectively, after adjusting for the impact of hedging in place through the use of interest rate swaps. As of December 31, 2023 and 2022, our variable debt bore interest at the Adjusted Term SOFR, the Adjusted Eurocurrency Rate, the Australian BBSY rate, the Daily SONIA Rate or the Canadian Dollar Offered Rate, and the Eurodollar rate or Prime rate plus a margin. If the above rates increased or decreased by 1.0%, our interest expense would have increased or decreased by $13.8 million and $14.2 million for the years ended December 31, 2023 and 2022, respectively, based on the $1.4 billion average balances outstanding under our variable rate debt facilities for the years ended December 31, 2023 and 2022, respectively. Our variable rate debt, interest expense and average balance outstanding under our variable rate debt facility includes the impact of hedge activity.
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 properties in the UK and Canada, and our joint venture in Australia, 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, 2023 and 2022, our shareholder's equity included $893.9 million and $1.2 billion from our investments and operations in the UK, Canada, and Australia, which collectively represented 12.5% and 14.9% of total shareholder's equity, respectively. Based on our sensitivity analysis, a 10.0% strengthening of the U.S. dollar against the Pound sterling, Canadian dollar and Australian dollar would have caused a reduction of $89.4 million and $117.9 million to our total shareholder's equity at December 31, 2023 and 2022, respectively.
Capital Market Risk
We are exposed to risks related to the equity capital markets, and our related ability to raise capital through the issuance of our common stock or other equity instruments. We are also exposed to risks related to the debt capital markets, and our related ability to finance our business through borrowings under other financing arrangements. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing and terms of capital we raise.
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
Evaluation of disclosure controls and procedures
We maintain disclosure controls and procedures designed to ensure 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. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report was made under the supervision and with the participation of our management, including our principal executive officer and principal financial officer.
Based upon this evaluation, our principal executive officer and principal financial officer have concluded that, as of December 31, 2023, our disclosure controls and procedures were not effective as of such date due to a material weakness in internal control over financial reporting, as described below.
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 as of December 31, 2023, 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 as of December 31, 2023. Based on management's assessment, we have concluded that our internal control over financial reporting was ineffective as of December 31, 2023, due to the material weakness described below.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
As of December 31, 2023, there was a material weakness relating to the design of management's review controls and failure to identify triggering events including reduced financial projections and increased interest rates, relevant to the evaluation of goodwill impairment relating to our Park Holidays business within the MH segment.
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 included herein. This report contains an adverse opinion on the effectiveness of our internal control over financial reporting.
SUN COMMUNITIES, INC.
Plan for remediation of the material weakness
The Company and its Board of Directors are committed to maintaining a strong internal control environment. Management, with oversight from the Audit Committee of the Board of Directors, has begun developing a comprehensive plan to remediate the material weakness. Remediation efforts are focused on more rigorous policies and procedures and sufficiency of reviews for the Company's evaluation of goodwill for impairment. These efforts will include enhanced education and training from third party specialists, development of a continuous process for monitoring, assessment and communication, as well as involvement of additional key stakeholders in reviews.
We will not be able to conclude whether these efforts will fully remediate the material weakness until the updated controls have operated for a sufficient period of time and management has concluded, through testing, that such controls are operating effectively.
Changes in internal control over financial reporting
Except as discussed above, there were no changes in internal control over financial reporting during the quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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 2024 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 - Board of Directors - Board Structure - Committees of the Board of Directors," "Security Ownership Information - Security Ownership of Directors and Executive Officers," and "Information About Executive Officers - Executive Officers Biographies."

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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 "Corporate Governance - Board of Directors - Board Structure - Compensation Committee Interlocks and Insider Participation," "Director Compensation," and "Compensation Discussion and Analysis." The information in the section captioned "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
SHAREHOLDER 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 - Board of Directors - Board Structure - Committees of the Board of Directors," "Corporate Governance - Board of Directors - Board Structure - Leadership Structure and Independence of Non-Employee Directors," and "Corporate Governance - Board of Directors - Other Board Policies and Processes - 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 Statement Schedules
The financial statement schedules 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.