EDGAR 10-K Filing

Company CIK: 912593
Filing Year: 2023
Filename: 912593_10-K_2023_0000912593-23-000080.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS
GENERAL OVERVIEW
Sun Communities, Inc., a Maryland corporation, and all wholly-owned or majority-owned and controlled subsidiaries, including Sun Communities Operating Limited Partnership, a Michigan limited partnership (the "Operating Partnership"), Sun Home Services, Inc., a Michigan corporation ("SHS"), Safe Harbor Marinas, LLC ("Safe Harbor") and Sun UK Holding LLC (together with its subsidiaries, "Park Holidays") are referred to herein as the "Company," "we," "us," "or," and "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 United Kingdom ("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 operating, acquiring, 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, 2022, we owned and operated, directly or indirectly, or had an interest in, a portfolio of 669 properties located in the U.S., the UK and Canada, including 353 MH communities, 182 RV communities, and 134 marinas. As of December 31, 2022, the properties contained an aggregate of 227,541 developed sites comprised of 118,204 developed MH sites, 30,333 annual RV sites (inclusive of both annual and seasonal usage rights), 31,181 transient RV sites, and 47,823 wet slips and dry storage spaces. Additionally, we own or control land to support developing and expanding nearly 16,200 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 7,594 full and part time employees as of December 31, 2022.
Our website address is www.suncommunities.com and we make available, free of charge, on or through our website all of our periodic reports, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and current reports on Form 8-K, as soon as reasonably practicable after we file such reports with the Securities and Exchange Commission (the "SEC"). Additionally, the SEC maintains a website at https://www.sec.gov, that contains reports, proxy information statements and other information about 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.
We own 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, 2022;
•The relative ranking of the various series of OP units with respect to rights to the payment of distributions and the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Operating Partnership;
•The number of shares of our common stock issuable upon the exchange of each OP unit of the applicable series;
•The annual distribution rate on each series of OP units; and
•Information regarding the terms of redemption rights for each series of OP units, as applicable.
Ranking Description OP Units Outstanding at December 31, 2022
Exchange Rate(1)
Annual Distribution Rate(2)
Cash Redemption(3)
Redemption Period
1 Preferred OP units (or "Aspen preferred OP units") 1,258,819(4)
Variable(5)
Variable(6)
Mandatory Variable(7)
1 Series A-1 preferred OP units 207,548 2.439 6.0 % N/A N/A
2 Series C preferred OP units 306,013 1.11 5.0 % N/A N/A
3 Series D preferred OP units 488,958 0.8 4.0 % Holder's Option Any time after earlier of January 31, 2024 or death of holder
4 Series E preferred OP units 80,000 0.6897 5.5 % N/A N/A
5 Series F preferred OP units 90,000 0.625 3.0 % Holder's Option Any time after earlier of May 14, 2025 or death of holder
6 Series G preferred OP units 240,710 0.6452 3.2 % Holder's Option Any time after earlier of September 30, 2025 or death of holder
7 Series H preferred OP units 581,367 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 240,000 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 A-3 preferred OP units 40,268 1.8605 4.5 % N/A N/A
10 Common OP units 126,463,507(8)
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.
(2) Except for common OP units, distributions are payable on the issue price of each OP unit, which is $27.00 per unit for all Aspen preferred OP units and $100.00 per unit for all other preferred OP units.
(3) The redemption price for each OP unit redeemed will be equal to its issue price plus all accrued but unpaid distributions.
(4) Of the outstanding Aspen preferred OP units, 270,000 are designated as "Aspen 2034 Units."
(5) At any time prior to January 1, 2024 (or prior to January 1, 2034 with respect to the Aspen 2034 Units), at the holder's option, each Aspen preferred OP unit may be exchanged into: (a) if the average closing price of our common stock for the preceding ten trading days is $68.00 per share or less, 0.397 common OP units, or (b) if the 10-day average closing price of our common stock is greater than $68.00 per share, the number of common OP units is determined by dividing (i) the sum of (A) $27.00 plus (B) 25.0% of the amount by which the 10-day average closing price exceeds $68.00 per share, by (ii) the 10-day average closing price.
(6) The annual distribution rate for Aspen 2034 Units is 3.8%. The annual distribution rate on all other Aspen preferred OP units is equal to the 10-year U.S. Treasury bond yield plus 239 basis points; provided, however, that such aggregate distribution rate shall not be less than 6.5% nor more than 9.0%.
(7) We are required to redeem all outstanding Aspen preferred OP units other than the Aspen 2034 Units on January 2, 2024. We are required to redeem all outstanding Aspen 2034 Units on January 2, 2034. In addition, we are required to redeem the Aspen preferred OP units (including Aspen 2034 Units) of any holder thereof within five days after receipt of a written demand during the existence of certain uncured Aspen preferred OP unit defaults, including our failure to pay distributions on the Aspen preferred OP units when due and our failure to provide certain security for the payment of distributions on the Aspen preferred OP units.
(8) Of the 126,463,507 Common OP units 124,044,803, or 98.1% were held by us, and 2,418,704, or 1.9% 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.
In 2021, we began to rebrand select RV communities under the "Sun Outdoors" umbrella. Sun Outdoors offers tent camping, RV sites and vacation rentals with world-class amenities in the U.S. and Canada. We believe the Sun Outdoors brand supports our competitive advantage in the outdoor market. Implementation of the Sun Outdoors brand at select RV communities is expected to be completed by the end of March 2023. Implementation consists of the conversion of the communities's digital presence (website, Facebook, reservation software and other internal systems) and the replacement of signage at the communities.
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, 2022, of our 7,594 employees, 610 were located on-site as property managers, and of those, 94.8% 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 and Executive Vice President, four Senior Vice Presidents of Operations and Sales, 11 Divisional Vice Presidents and 45 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, a Commercial Director, and two Regional Operations Directors who are responsible for oversight of operations.
Our marina business is overseen by a Chief Executive Officer of Safe Harbor, three Executive Vice Presidents of Operations and 18 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 residents in our 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, 2022, SHS's portfolio consists of 9,334 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 2022, we received over 55,400 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 over 47,800 members throughout our marina network as of December 31, 2022.
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, 2022, on average less than 1.0% of the homes in our MH communities have been removed by their owners and 6.4% 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 14 years. Sites license fees for MH sites in the UK are for a term of 20 and 30 years depending on the product originally purchased. The holiday home owner must pay an annual site fee for their holiday home to remain on the property. On average, Park Holidays home owners remain in the communities for over seven years.
SUN COMMUNITIES, INC.
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 7.5 years.
ACQUISITIONS
During the year ended December 31, 2022, we acquired 61 MH and RV communities, totaling 21,795 sites and 2,655 development sites, and eight marinas totaling 2,552 wet slips and dry storage spaces, for a total purchase price of approximately $2.2 billion. This includes our acquisition of Park Holidays at an enterprise value of £950.0 million, or approximately $1.2 billion.
EXPANSION / DEVELOPMENT
During the year ended December 31, 2022, we completed the construction of over 2,000 sites at six ground-up developments and 11 expansion 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
Our management believes that the properties are covered by adequate fire, property, business interruption, general liability, and (where appropriate) flood and earthquake insurance provided by reputable companies with commercially reasonable deductibles and limits. We maintain a blanket policy that covers all of our properties. We have obtained title insurance insuring fee title to the properties in an aggregate amount which we believe to be adequate. Claims made to our insurance carriers that are determined to be recoverable are classified in other receivables as incurred.
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 are taking deliberate actions to 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.
SUN COMMUNITIES, INC.
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 120 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 2022, team members logged over 71,500 hours of training.
•We hold mandatory ongoing training sessions for all property management personnel to ensure that policies and procedures are executed effectively, professionally and consistently.
•New team members are required to complete information security training, and safety and compliance-related training, with routine refreshers at least annually on critical topics.
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, 2022, 11% 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.
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, 2022, 41% of our employees were female, 22% 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 22% 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.
SUN COMMUNITIES, INC.
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.
•In 2022, in compliance with UK regulations, Park Holidays conducted a gender pay gap analysis and published its 2021-2022 Gender Pay Gap Report in March 2022. Through its annual pay review process, Park Holidays conducts an analysis to ensure that equity is a key consideration and make adjustments to address any identified issues or risks. As a result of its February 2022 pay review, a total of 571 Park Holidays team members or 55% of its team members received some level of pay increase in 2022.
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 opportunities to minimize health, safety and environmental risks to our team members, residents, and guests we serve in our communities by utilizing safe operating procedures and practices:
•As part of our commitment to safety, we oversee annual safety training programs for all 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.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG"): OUR COMMITMENT TO A SUSTAINABLE FUTURE
We embrace a company-wide commitment to ESG goals through various programs and everyday business practices. We are fully committed to reducing our environmental impact across the scope of our operations and through the services we deliver to our residents and guests. We continue to identify opportunities to invest in energy-efficient technology, water efficiency and waste reduction strategies throughout our communities and corporate headquarters. By conserving natural resources, reducing our carbon footprint and participating in efforts to protect the environment through our Sun Unity program in the U.S., having a number of locally based initiatives on our properties in the UK, such as beach cleaning, and actively participating in locally organized volunteer and sponsorship activities across our marina network in the U.S., we strive to achieve our environmental sustainability goals. In 2022, our team members reported over 9,400 volunteer hours, an increase of nearly 67% compared to the prior year.
We recognize the important opportunity of providing access to affordable and sustainable housing. Our business contributes to a vitally important function in our economy by providing high-quality, affordable housing that accommodates all-age and age-restricted communities. Manufactured homes cost approximately 51% less per square foot than conventional site-built homes, expanding the opportunity for residents to own their home, despite an ever-increasing housing affordability gap. Our homes provide more space at less cost per square foot compared to other options.
SUN COMMUNITIES, INC.
Climate Change Goals
Climate change is the challenge of our lifetime and poses a clear threat and challenge to the real estate sector, as buildings contribute up to 30% of global annual greenhouse gas ("GHG") emissions. Climate change impacts are material to our overall value as well as our ability to serve our residents, guests, team members, investors and other stakeholders. We are committed to reducing our GHG emissions and working to improve upon the environmental performance of the communities and properties within our portfolio.
In 2022, we adopted goals to achieve Carbon Neutrality by 2035 and Net Zero Emissions by 2045. These commitments are part of a concerted effort to significantly reduce our greenhouse gas emissions and ultimately reach net-zero emissions to limit global warming and prevent the adverse effects of climate change.
•Our Carbon Neutrality goal is inclusive of direct and indirect emissions from our operations, development and maintenance activities;
•Our Net Zero Emissions goal expands the Carbon Neutrality commitment to our supply chain and franchisees; and
•The scope of our commitment will be seen across all our properties as we work toward achieving our climate change goals through various means, including:
i.Renewable Energy - Expanding the use of renewable energy throughout our portfolio through additional on-site energy generation, the purchase of off-site generated energy, and Renewable Energy Certificates (RECs);
ii.Green Building - Increasing the use of certified energy efficient manufactured homes, including ENERGY STAR®, in its communities as well as energy-efficient lighting and building control systems;
iii.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
iv.Material Procurement - Partnering with our supply chain and consultants to collect emissions data on products and services.
We set the key milestones listed below to help track our progress toward achieving carbon neutrality by 2035:
•2025: Baseline Year to establish data sources for emissions categories;
•2030: 50% absolute reduction from 2025 baseline; and
•2032: 80% absolute reduction from 2025 baseline.
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, 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:
•Outbreaks of disease and related restrictions on business operations;
•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;
•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;
•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;
•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.
SUN COMMUNITIES, INC.

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
Our prospects are subject to certain uncertainties and risks. Our future results could differ materially from current results, and our actual results could differ materially from those projected in forward-looking statements as a result of certain risk factors. These risk factors include, but are not limited to, those set forth below, other one-time events, and important factors disclosed previously and from time to time in our other filings with the SEC.
MATERIAL RISKS RELATING TO OUR MH, RV AND MARINA BUSINESSES
General economic conditions and the concentration of our MH, RV and Marina properties in certain geographic areas may affect our ability to generate sufficient revenue.
The market and economic conditions in our current markets generally, and specifically in metropolitan areas of our current markets, may significantly affect occupancy or rental rates. Occupancy and rental rates, in turn, may significantly affect our revenues, and if our properties do not generate revenues sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and ability to pay or refinance our debt obligations could be adversely affected.
As of December 31, 2022, 150 of our MH and RV communities and marinas, representing 21.7% of developed sites, are located in Florida; 91 communities, representing 16.3% 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 34 communities, representing 5.9% of developed sites, are located in Texas. As of December 31, 2022, we have revenue concentrations of marinas in Florida, Rhode Island and New York of approximately 34.3%, 9.9% and 6.7%, 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 New York, we are exposed to the risks of downturns in local economies or other local real estate market conditions which could adversely affect occupancy rates, rental rates and property values in these markets.
Our revenue would also be adversely affected if tenants were unable to pay rent or if sites were unable to be rented on favorable terms. If we were unable to promptly relet or renew the leases for a significant number of the sites, or if the rental rates upon such renewal or reletting were significantly lower than expected rates, then our business and results of operations could be adversely affected. In addition, certain expenditures associated with each property (such as real estate taxes and maintenance costs) generally are not reduced when circumstances cause a reduction in income from the property. Furthermore, real estate investments are relatively illiquid and, therefore, will tend to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions.
The following factors, among others, may adversely affect the revenues generated by our properties:
•Outbreaks of disease such as Covid-19 and related restrictions on business operations;
•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;
•A decrease in the number of people interested in the RV lifestyle or boating;
•Changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, the 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;
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•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;
•Our ability to effectively manage, maintain and insure our properties;
•Increased operating costs, including insurance premiums, real estate taxes and utilities; and
•The enactment of rent control laws or laws taxing the owners of manufactured homes.
We may not be able to integrate or finance our expansion and development activities.
We build and develop new MH 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;
•We may be unable to obtain, or face delays in obtaining, necessary zoning, building and other governmental permits and authorizations, which could result in increased costs and delays, and even require us to abandon development of the property entirely if we are unable to obtain such permits or authorizations;
•We may abandon development opportunities that we have already begun to explore and as a result we may not recover expenses already incurred in connection with exploring such development opportunities;
•We may be unable to complete construction and lease-up of a property on schedule resulting in increased debt service expense and construction costs;
•We may incur construction and development costs for a property which exceed our original estimates due to increased materials, labor or other costs, which could make completing the development uneconomical and we may not be able to increase rents to compensate for the increase in development costs which may impact our profitability;
•We may be unable to secure long-term financing on completion of development resulting in increased debt service and lower profitability;
•Occupancy rates and rents at a newly developed property may fluctuate depending on several factors, including market and economic conditions, which may result in the property not being profitable; and
•Climate change may cause new marina developments to be paused or restricted.
If any of the above risks occur, our business and results of operations could be adversely affected.
Competition affects occupancy levels and rents, which could adversely affect our revenues.
The MH, RV and marina industries are highly-fragmented. There is competition within the MH, RV and marina markets we currently serve and in new markets that we may enter. We have international, national and regional competitors in the MH, RV and marina markets. 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 market, certain properties maintain higher occupancy during the summer months, while other properties maintain higher occupancy during the winter months. The RV market typically shows a decline in demand over the winter months, yet usually produces higher growth in the spring and summer months due to higher use by vacationers. In the marina market, demand for wet slip storage increases during the summer months as customers contract for the summer boating season, which also drives non-storage revenue streams such as service, fuel and on-premise restaurants or convenience storage. Demand for dry storage increases during the winter season as seasonal weather patterns require boat owners to store their vessels on dry docks and within covered racks. Our results on a quarterly basis can fluctuate due to this cyclicality and seasonality.
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We may not be able to integrate or finance our acquisitions and our acquisitions may not perform as expected.
We have acquired and intend to continue to selectively acquire MH, RV and marina properties. Our acquisition activities and their success are subject to the following risks:
•We may be unable to acquire a desired property because of competition from other well-capitalized real estate investors, including both publicly traded REITs and institutional investment funds;
•Even if we enter into an acquisition agreement for a property, it is usually subject to customary conditions to closing, including completion of due diligence investigations to our satisfaction, which may not be satisfied;
•Even if we are able to acquire a desired property, competition from other real estate investors may significantly increase the purchase price;
•We may be unable to finance acquisitions on favorable terms;
•Acquired properties may fail to perform as expected;
•Acquired properties may be located in new markets where we face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area, and unfamiliarity with local governmental and permitting procedures; and
•We may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations.
If any of the above risks occur, our business and results of operations could be adversely affected.
In addition, we may acquire properties subject to liabilities and we may be left with no, or limited, recourse, with respect to unknown liabilities. As a result, we may have to pay substantial sums to settle any liabilities asserted against us based upon ownership of newly acquired properties, which could adversely affect our cash flow.
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, 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.
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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.
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.
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We subject our properties to a Phase I or similar environmental assessment as well as limited compliance evaluations (which involve general inspections without soil sampling or ground water analysis) completed by independent environmental and engineering consultants. In some cases, where these evaluations have recommended further, invasive investigations, those have also been conducted. These environmental evaluations have not revealed any significant environmental liability that would have a material adverse effect on our business. These audits cannot reflect conditions arising after the studies were completed, and no assurances can be given that existing environmental studies reveal all environmental liabilities, that any prior owner or operator of a property or neighboring owner or operator did not create any material environmental condition not known to us, or that a material environmental condition does not otherwise exist as to any one or more properties.
Moreover, we cannot be sure that: (a) future laws, ordinances or regulations will not impose any material environmental liability; or (b) the current environmental condition of our properties will not be affected by tenants and occupants of the properties, by the condition of land or operations in the vicinity of our properties (such as the presence of underground storage tanks), or by unrelated third parties. Environmental liabilities that we may incur could have an adverse effect on our financial condition, results of operations and cash flows.
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 during and after the COVID-19 pandemic; 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.
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Public health crises, such as the COVID-19 pandemic, could materially and adversely affect our financial condition, operating results and cash flows.
A public health crisis, such as the one experienced during 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, including the COVID-19 pandemic, are highly uncertain and we cannot predict with confidence the impact a public health crisis would have on our operations and financial condition.
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, 2022, we had approximately $7.2 billion of total debt outstanding, consisting of approximately $3.2 billion in debt that is secured by mortgage liens on 154 of our properties, $1.8 billion of senior unsecured notes, $2.1 billion on our line of credit and other debt, $35.2 million of mandatorily redeemable preferred equity and $34.0 million of mandatorily redeemable preferred OP units. Including the impact of hedge activity, as of December 31, 2022, approximately 77% of our total debt was fixed rate financing and approximately 23% 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 flow may be insufficient to meet required debt payments, or we may need to dedicate a substantial portion of our cash flow to pay our debt rather than to other areas of our business;
•Our existing indebtedness may limit our operating flexibility due to financial and other restrictive covenants, including restrictions on incurring additional debt;
•It may be more difficult for us to obtain additional financing for our operations, working capital requirements, capital expenditures, debt service or other general requirements;
•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 indebtedness levels, we may incur substantially more debt in the future. If new debt is added to our current debt levels, an even greater portion of our cash flow will be needed to satisfy our debt service obligations. As a result, the related risks that we now face could intensify and increase the risk of a default on our indebtedness.
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 indebtedness 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 indebtedness 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 indebtedness. 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
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default. If our properties were foreclosed upon, or if we are unable to refinance our indebtedness 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 indebtedness which could have a material adverse effect on us.
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 flow 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 (some on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations and involves the determination of various factual matters and circumstances not entirely within our control. In addition, frequent changes occur in the area of REIT taxation, which require us to monitor our tax status continually.
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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.
Federal, state and foreign income tax laws governing REITs and related interpretations may change at any time, and any such legislative or other actions affecting REITs could have a negative effect on us.
Federal, state and foreign income tax laws governing REITs, or the administrative interpretations of those laws may be amended at any time. Federal, state and foreign tax laws are under constant review by persons involved in the legislative process, at the Internal Revenue Service and the U.S. Department of the Treasury, and at various state and foreign tax authorities. Changes to tax laws, regulations or administrative interpretations, which may be applied retroactively, could adversely affect us. We cannot predict whether, when, in what forms, or with what effective dates, the tax laws, regulations and administrative interpretations applicable to us may be changed. Accordingly, we cannot assert that any such change will not significantly affect either our ability to qualify for taxation as a REIT or the income tax consequences to us.
We intend for the Operating Partnership to be taxed as a partnership, but we cannot guarantee that it will qualify.
We believe that the Operating Partnership has been organized as a partnership and will qualify for treatment as such under the Code. However, if the Operating Partnership is deemed to be a "publicly traded partnership," it will be treated as a corporation instead of a partnership for federal income tax purposes unless at least 90% 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, distributions 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.
The Bipartisan Budget Act of 2015 changed the rules applicable to U.S. federal income tax audits of partnerships. Under the rules, among other changes and subject to certain exceptions, any audit adjustment to items of income, gain, loss, deduction or credit of a partnership (and a partner's allocable share thereof) is determined, and taxes, interest, and penalties attributable thereto are assessed and collected, at the partnership level. Unless the partnership makes an election or takes certain steps to require the partners to pay their tax on their allocable shares of the adjustment, it is possible that partnerships in which we directly or indirectly invest, including the Operating Partnership, would be required to pay additional taxes, interest and penalties as a result of an audit adjustment. We, as a direct or indirect partner of the Operating Partnership and other partnerships, could be required to bear the economic burden of those taxes, interest and penalties even though the Company, as a REIT, may not otherwise have been required to pay additional corporate-level tax. The changes created by these rules are significant for collecting tax in partnership audits and, accordingly, there can be no assurance that these rules will not have a material adverse effect on us.
Our ability to accumulate cash may be restricted due to certain REIT distribution requirements.
In order to qualify as a REIT, we must distribute to our 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.
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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.
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 RELATED PARTY TRANSACTIONS AND OUR STRUCTURE
Some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests.
Lease of Executive Offices - Gary A. Shiffman, together with certain of his family members, indirectly owns an equity interest of approximately 28.1% in American Center LLC, the entity from which we lease office space for our principal executive offices. Each of Brian M. Hermelin, Ronald A. Klein and Arthur A. Weiss indirectly owns less than one percent interest in American Center LLC. Mr. Shiffman is our Chief Executive Officer and Chairman of the Board. Each of Mr. Hermelin, Mr. Klein and Mr. Weiss is a director of the Company. Under this agreement, we lease approximately 60,261 rentable square feet of permanent space. The lease agreement includes annual graduated rent increases through the initial end date of October 31, 2026. As of December 31, 2022, the average gross base rent was $20.45 per square foot. Each of Mr. Shiffman, Mr. Hermelin, Mr. Klein and Mr. Weiss may have a conflict of interest with respect to his obligations as our officer and / or director and his ownership interest in American Center LLC.
Use of Airplane - Gary A. Shiffman is the beneficial owner of an airplane that we use from time to time for business purposes. During the years ended December 31, 2022, 2021 and 2020, we paid $0.7 million, $0.7 million and $0.3 million for the use of the airplane, respectively. Mr. Shiffman may have a conflict of interest with respect to his obligations as our officer and director and his ownership interest in the airplane.
Telephone Services - Brian M. Hermelin is a principal and a beneficial owner of an entity that installs and maintains emergency telephone systems at our properties. During the years ended December 31, 2022, 2021 and 2020, we paid $0.2 million for these services, respectively. Mr. Hermelin may have a conflict of interest with respect to his obligations as our director and his position with and ownership interest in the provider of these services.
Legal Counsel - Arthur A. Weiss is a partner at Taft Stettinius & Hollister LLP (formerly Jaffe, Raitt, Heuer, & Weiss, Professional Corporation) which acts as our general counsel and represents us in various matters. We incurred legal fees and expenses owed to this law firm of approximately $9.7 million, $10.3 million and $13.3 million in the years ended December 31, 2022, 2021, and 2020, respectively.
Tax Consequences Upon Sale of Properties - Gary A. Shiffman holds limited partnership interests in the Operating Partnership which were received in connection with the contribution of properties from partnerships previously affiliated with him. Prior to any redemption of these limited partnership interests for our common stock, Mr. Shiffman will have tax consequences different from those on us and our public shareholders upon the sale of any of these partnerships. Therefore, we and Mr. Shiffman may have different objectives regarding the appropriate pricing and timing of any sale of those properties.
SUN COMMUNITIES, INC.
Transactions with Immediate Family Members - Adam Shiffman, the son of Gary A. Shiffman, the Company's Chairman, President and Chief Executive Officer, was appointed as the Company's Regional Vice President of Operations and Sales in September 2021. Adam Shiffman's aggregate annual compensation was approximately $135,000 for the fiscal year ended December 31, 2022.
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 stockholder has been restricted, with certain exceptions, for the purpose of maintaining our qualification as a REIT under the Code. Such restrictions in our charter do not apply to Milton M. Shiffman, Gary A. Shiffman and Robert B. Bayer; trustees, personal representatives and agents to the extent acting for them or their respective estates; or certain of their respective relatives.
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 stockholders; and (b) limit the opportunity for stockholders to receive a premium for their common stock that might otherwise exist if an investor were attempting to assemble a block of common stock in excess of 9.8% of our outstanding shares or otherwise effect a change of control of the Company.
Preferred Stock. Our charter authorizes the Board of Directors to issue up to 20,000,000 shares of preferred stock, none of which is currently outstanding, and to establish the preferences and rights (including the right to vote and the right to convert into shares of common stock) of any shares issued. The power to issue preferred stock could have the effect of delaying or preventing a change in control of the Company even if a change in control were in the stockholders' interest.
Certain provisions of Maryland law could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest.
Certain provisions of the Maryland General Corporation Law ("MGCL") may have the effect of inhibiting a third-party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of shares of our capital stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including:
•"Business combination" provisions that, subject to limitations, prohibit certain business combinations between us and an "interested stockholder" (defined generally as any person who beneficially owns 10% 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 stockholder becomes an interested stockholder, and thereafter impose fair price and / or supermajority and stockholder voting requirements on these combinations; and
•"Control share" provisions that provide that "control shares" of our company (defined as shares that, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a "control share acquisition" (defined as the direct or indirect acquisition of ownership or control of issued and outstanding "control shares") have no voting rights except to the extent approved by our stockholder by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
The provisions of the MGCL relating to business combinations do not apply, however, to business combinations that are approved or exempted by our Board of Directors prior to the time that the interested stockholder becomes an interested stockholder. As permitted by the statute, our Board of Directors has by resolution exempted Milton M. Shiffman, Robert B. Bayer and Gary A. Shiffman, their affiliates and all persons acting in concert or as a group with the foregoing, from the business combination provisions of the MGCL and, consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations between us and these persons. As a result, these persons may be able to enter into business combinations with us that may not be in the best interests of our stockholder without compliance by our company with the supermajority vote requirements and the other provisions of the statute.
Also, pursuant to a provision in our bylaws, we have exempted any acquisition of our stock from the control share provisions of the MGCL. However, our Board of Directors may by amendment to our bylaws opt into the control share provisions of the MGCL at any time in the future.
SUN COMMUNITIES, INC.
Additionally, Subtitle 8 of Title 3 of the MGCL permits our Board of Directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to elect to be subject to certain provisions relating to corporate governance that may have the effect of delaying, deferring or preventing a transaction or a change of control of our company that might involve a premium to the market price of our common stock or otherwise be in our stockholders' best interests. These provisions include a classified board; two-thirds vote to remove a director; that the number of directors may only be fixed by the Board of Directors; that vacancies on the board as a result of an increase in the size of the board or due to death, resignation or removal can only be filled by the board, and the director appointed to fill the vacancy serves for the remainder of the full term of the class of director in which the vacancy occurred; and a majority requirement for the calling by stockholders of special meetings. Other than a classified board, the filling of vacancies as a result of the removal of a director and a majority requirement for the calling by stockholders of special meetings, we are already subject to these provisions, either by provisions of our charter and bylaws unrelated to Subtitle 8 or by reason of an election to be subject to certain provisions of Subtitle 8. In the future, our Board of Directors may elect, without stockholder approval, to make us subject to the provisions of Subtitle 8 to which we are not currently subject.
Our Board of Directors has power to adopt, alter or repeal any provision of our bylaws or make new bylaws, provided, however, that our stockholders may alter or repeal any provision of our bylaws and adopt new bylaws if any such alteration, repeal or adoption is approved by the affirmative vote of a majority of all votes entitled to be cast on the matter.
GENERAL RISK FACTORS
Our share price could be volatile and could decline, resulting in a substantial or complete loss on our shareholders' investment.
The stock markets, including the New York Stock Exchange ("NYSE"), on which we list our common stock, have experienced significant price and volume fluctuations. As a result, the market price of our common stock and preferred stock could be similarly volatile, and investors in our common stock and preferred stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. The price of our common stock and preferred stock could be subject to wide fluctuations in response to a number of factors, including:
•Outbreaks of disease, including the COVID-19 pandemic, and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operations;
•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 senior 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, the Australian dollar and Pound sterling;
•Changes in market valuations of similar companies;
•Adverse market reaction to the amount of our debt outstanding at any time, the amount of our debt maturing in the near-term and medium-term and our ability to refinance our debt, or our plans to incur additional debt in the future;
•Additions or departures of key management personnel;
•Speculation in the press or investment community;
•Equity issuances by us, or share resales by our shareholders or the perception that such issuances or resales may occur;
•Actions by institutional shareholders; and
•General market and economic conditions.
SUN COMMUNITIES, INC.
Many of the factors listed above are beyond our control. Those factors may cause the market price of our common stock or preferred stock to decline significantly, regardless of our financial condition, results of operations and prospects. It is impossible to provide any assurance that the market price of our common stock or preferred stock will not fall in the future, and it may be difficult for holders to resell shares of our common stock or preferred stock at prices they find attractive, or at all. In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management's attention and resources.
Substantial sales or issuances of our common or preferred stock could cause our stock price to fall.
The sale or issuance of substantial amounts of our common stock or preferred stock, whether directly by us or in the secondary market, the perception that such sales could occur or the availability of future issuances of shares of our common stock, preferred stock, OP units or other securities convertible into or exchangeable or exercisable for our common stock or preferred stock, could materially and adversely affect the market price of our common stock or preferred stock and our ability to raise capital through future offerings of equity or equity-related securities. In addition, we may issue capital stock that is senior to our common stock in the future for a number of reasons, including to finance our operations and business strategy, to adjust our ratio of debt to equity or for other reasons.
Based on the applicable conversion ratios then in effect, as of February 16, 2023, in the future we may issue to the limited partners of the Operating Partnership, up to approximately 4.8 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 16, 2023, there were no outstanding options to purchase shares of our common stock under our equity incentive plans, and we currently have the authority to issue restricted stock awards or options to purchase up to an additional 3,284,191 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, 2022, 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 indebtedness, and we may adjust our common stock distribution policy.
Our ability to make distributions on our common stock and preferred stock, and payments on our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to make distributions on our common stock or preferred stock, to pay our indebtedness or to fund our other liquidity needs.
The decision to declare and pay distributions on shares of our common stock in the future, as well as the timing, amount and composition of any such future distributions, will be at the sole discretion of our Board of Directors in light of conditions then existing, including our earnings, financial condition, capital requirements, debt maturities, the availability of debt and equity capital, applicable REIT and legal restrictions, general overall economic conditions and other factors. Any change in our distribution policy could have a material adverse effect on the market price of our common stock.
We rely on key management.
We depend on the efforts of our executive officers, including Gary A. Shiffman, Bruce Thelen, Fernando Castro-Caratini, Aaron Weiss, Marc Farrugia 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.
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 be successful in continuing to maintain adequate control over our financial reporting and disclosure controls and procedures. 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, as our business continues to grow, and as we continue to make 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. Moreover, the existence of any material weakness or significant deficiency in our internal controls and procedures 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.
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.
SUN COMMUNITIES, INC.
We depend on continuous access to the internet to use our cloud-based applications. Damage to, or failure of our information technology systems, including as a result of any of the reasons described above, could adversely affect our results of operations as we may incur significant costs or data loss. We continually assess new and enhanced information technology solutions to manage the risk of system failure or interruption.
Losses in excess of our insurance coverage or uninsured losses could adversely affect our operating results and cash flow.
We have a significant concentration of MH and RV properties and marinas on coastlines and in other areas where natural disasters or other catastrophic events such as hurricanes, flash floods, sea-level rise, tornadoes, wildfires and earthquakes could negatively impact our operating results and cash flows. We maintain comprehensive liability, fire, property, business interruption, general liability and (where appropriate) flood and earthquake insurance, and other lines of insurance we have determined to be appropriate for our business, provided by reputable companies with commercially reasonable deductibles and limits. We believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss, the cost of the coverage and industry practice. However, certain types of losses including, but not limited to, riots or acts of war, may be either uninsurable or not economically insurable. In the event an uninsured loss occurs, we could lose both our investment in and anticipated profits and cash flow from the affected property. We would also continue to be obligated to repay any mortgage indebtedness or other obligations related to the community. If an uninsured liability to a third party were to occur, we would incur the cost of defense and settlement with, or court ordered damages to, that third party. A significant uninsured property or liability loss could have a material adverse effect on our business and our financial condition and results of operations.
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, rising interest rates, availability of capital markets, energy availability and costs, the negative impacts caused by pandemics and public health crises, negative impacts resulting from the military conflict between Russia and the Ukraine, 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.
SUN COMMUNITIES, INC.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
As of December 31, 2022, our properties were located in the U.S., the UK and Canada, and consisted of 353 MH communities, 182 RV communities and 134 marinas.
As of December 31, 2022, our properties contained an aggregate of 227,541 developed sites comprised of 118,204 developed MH sites, 30,333 annual RV sites (inclusive of both annual and seasonal usage rights), 31,181 transient RV sites and 47,823 wet slips and dry storage spaces. There are 16,195 additional MH and RV sites suitable for development. Most of our properties include amenities oriented toward family and retirement living. Of our 669 properties, 319 each have 300 or more developed sites, with the largest having 2,341 developed MH and RV sites. See "Real Estate and Accumulated Depreciation, Schedule III," included in our Consolidated Financial Statements, for detail on properties that are encumbered.
As of December 31, 2022, our MH and RV properties had an occupancy rate of 95.9% excluding transient RV sites. Since January 1, 2018, 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 2.8% 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 7.2%. The average renewal rate for residents in our Rental Program was 69.7% for the year ended December 31, 2022.
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, 2022. 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 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
NORTH AMERICA
UNITED STATES
MIDWEST
Michigan
Academy / West Point MH Canton MI 441 - 98.0 % 98.4 %
Allendale Meadows MH Allendale MI 352 - 97.4 % 99.4 %
Alpine Meadows MH Grand Rapids MI 403 - 98.5 % 98.5 %
Andover MH Grass Lake MI 125 - 100.0 % 100.0 %
Apple Carr Village MH Muskegon MI 713 - 97.5 % (1)
92.8 % (1)
Arbor Woods MH Ypsilanti MI 458 - 98.0 % 98.9 %
Brentwood Village MH Kentwood MI 195 - 98.5 % 97.9 %
Broadview Estates MH Davison MI 474 - 97.9 % 88.2 %
Brookside Village MH Kentwood MI 196 - 99.5 % 98.5 %
Byron Center MH Byron Center MI 143 - 97.2 % 99.3 %
Camelot Villa MH Macomb MI 712 - 98.2 % 99.0 %
Charlevoix Estates MH Charlevoix MI 182 - 98.9 % 98.9 %
Cider Mill Crossings MH Fenton MI 621 - 97.6 % (1)
94.8 % (1)
Cider Mill Village MH Middleville MI 258 - 98.4 % 98.4 %
Country Acres MH Cadillac MI 182 - 95.1 % 98.9 %
Country Hills Village MH Hudsonville MI 239 - 100.0 % 99.2 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Country Meadows MH Flat Rock MI 577 - 98.4 % 99.7 %
Country Meadows Village MH Caledonia MI 395 - 100.0 % 99.7 %
Creek Wood MH Burton MI 336 - 98.5 % 97.6 %
Cutler Estates MH Grand Rapids MI 259 - 99.2 % 97.7 %
Dutton Mill Village MH Caledonia MI 307 - 98.0 % 99.7 %
East Village Estates MH Washington Twp. MI 708 - 98.6 % 98.4 %
Egelcraft MH Muskegon MI 458 - 98.9 % 98.9 %
Fisherman's Cove MH Flint Twp. MI 162 - 96.3 % 98.8 %
Frenchtown Villa / Elizabeth Woods MH Newport MI 1,140 - 98.9 % 99.3 %
Grand Village MH Grand Rapids MI 219 - 97.7 % 99.1 %
Hamlin MH Webberville MI 230 - 97.0 % 98.3 %
Hickory Hills Village MH Battle Creek MI 283 - 98.2 % 98.9 %
Highland Greens Estates MH Highland MI 879 - 67.5 % 64.6 %
Holiday West Village MH Holland MI 341 - 100.0 % 99.4 %
Holly Village / Hawaiian Gardens MH Holly MI 425 - 97.9 % 98.4 %
Hunters Crossing MH Capac MI 114 - 98.2 % 100.0 %
Hunters Glen MH Wayland MI 396 - 99.7 % 98.0 %
Huntington Run MH Kalamazoo MI 175 - 100.0 % 98.9 %
Jellystone Park™ Petoskey(2)
RV Petoskey MI 49 238 100.0 % 100.0 %
Kensington Meadows MH Lansing MI 290 - 95.5 % 97.9 %
Kimberly Estates MH Newport MI 387 - 98.4 % 98.2 %
King's Court MH Traverse City MI 802 - 99.0 % 99.5 %
Knollwood Estates MH Allendale MI 161 - 96.9 % 96.3 %
Lafayette Place MH Warren MI 254 - 95.3 % 96.9 %
Lakeview MH Ypsilanti MI 392 - 97.4 % 97.7 %
Leisure Village MH Belmont MI 256 - 99.2 % 99.6 %
Lincoln Estates MH Holland MI 191 - 99.5 % 98.4 %
Meadow Lake Estates MH White Lake MI 425 - 97.9 % 98.8 %
Meadowbrook Estates MH Monroe MI 453 - 95.8 % 98.7 %
Meadowlands of Gibraltar MH Gibraltar MI 320 - 99.4 % 99.7 %
Meadowstone MH Hastings MI 231 - 97.0 % 94.4 %
Northville Crossing MH Northville MI 756 - 99.5 % 99.7 %
Oak Island Village MH East Lansing MI 250 - 97.2 % 97.6 %
Pinebrook Village MH Kentwood MI 185 - 96.2 % 98.9 %
Pineview Estates MH Flint MI 1,011 - 86.9 % 71.1 %
Presidential Estates MH Hudsonville MI 364 - 99.7 % 97.3 %
Richmond Place MH Richmond MI 117 - 94.9 % 98.3 %
River Haven Village MH Grand Haven MI 721 - 99.0 % 99.2 %
River Ridge MH Saline MI 288 - 99.7 % 100.0 %
Rudgate Clinton MH Clinton Township MI 667 - 99.1 % 98.7 %
Rudgate Manor MH Sterling Heights MI 931 - 98.0 % 98.0 %
Scio Farms MH Ann Arbor MI 913 - 99.3 % 98.8 %
Sheffield Estates MH Auburn Hills MI 228 - 98.2 % 100.0 %
Shelby Forest MH Shelby Twp. MI 664 - 98.5 % 98.9 %
Shelby West MH Shelby Twp. MI 644 - 98.8 % 99.4 %
Silver Springs MH Clinton Township MI 547 - 98.9 % 99.3 %
Southwood Village MH Grand Rapids MI 394 - 99.0 % 99.0 %
St. Clair Place MH St. Clair MI 100 - 98.0 % 97.0 %
Stonebridge MH Richfield Twp. MI - - N/A N/A (1)
Sun Outdoors Kensington Valley(2)
RV New Hudson MI 254 239 100.0 % 100.0 %
Sun Outdoors Petoskey Bay Harbor(2)
RV Petoskey MI 9 144 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Sun Retreats Gun Lake(2)
RV Hopkins MI 281 54 100.0 % 100.0 %
Sun Retreats Silver Lake(2)
RV Mears MI 192 72 100.0 % 100.0 %
Sunset Ridge MH Portland MI 388 - 98.7 % 95.1 %
Sycamore Village MH Mason MI 396 - 98.5 % 98.7 %
Sylvan Crossing MH Chelsea MI 281 - 49.1 % (1)
74.6 % (1)
Sylvan Glen Estates MH Brighton MI 476 - 98.5 % 94.7 %
Tamarac Village MH Ludington MI 302 - 98.3 % 98.7 %
Tamarac Village RV Resort(2)
RV Ludington MI 111 2 100.0 % 100.0 %
Tanglewood Village MH Brownstown MI 247 - 100.0 % 98.8 %
Timberline Estates MH Coopersville MI 296 - 97.3 % 98.6 %
Town & Country MH Traverse City MI 192 - 99.0 % 97.9 %
Troy Villa MH Troy MI 282 - 85.1 % 85.8 %
Warren Dunes Village MH Bridgman MI 314 - 99.7 % 99.7 %
Waverly Shores Village MH Holland MI 415 - 100.0 % 100.0 %
West Village Estates MH Romulus MI 628 - 99.5 % 100.0 %
White Lake MH White Lake MI 315 - 95.9 % 96.8 %
Windham Hills MH Jackson MI 469 - 96.8 % 98.7 %
Windsor Woods Village MH Wayland MI 314 - 98.7 % 99.7 %
Woodhaven Place MH Woodhaven MI 220 - 94.5 % 95.5 %
Michigan Total 32,471 749 96.7 % 96.3 %
Indiana
Brookside Manor MH Goshen IN 570 - 97.5 % 97.5 %
Carrington Pointe MH Fort Wayne IN 468 - 97.9 % 90.2 % (1)
Clear Water MH South Bend IN 227 - 98.7 % 98.2 %
Cobus Green MH Osceola IN 386 - 99.7 % 98.4 %
Four Seasons MH Elkhart IN 218 - 95.9 % 99.5 %
Jellystone Park™ at Barton Lake(2)
RV Fremont IN 68 489 100.0 % 100.0 %
Liberty Farm MH Valparaiso IN 220 - 95.5 % 96.8 %
Pebble Creek MH Greenwood IN 296 - 99.0 % 99.0 %
Pine Hills MH Middlebury IN 130 - 99.2 % 98.5 %
Roxbury Park MH Goshen IN 398 - 93.2 % 96.2 %
Sun Outdoors Lake Rudolph(2)
RV Santa Claus IN - 534 N/A N/A
The Willows MH Goshen IN 174 - 82.8 % (1)
83.3 % (1)
Indiana Total 3,155 1,023 96.6 % 96.0 %
SOUTH
Texas
Austin Lone Star RV Resort(2)
RV Austin TX 60 97 100.0 % 100.0 %
Bluebonnet Lake MH Austin TX - - N/A N/A
Boulder Ridge MH Pflugerville TX 1,220 - 98.6 % 98.5 %
Branch Creek Estates MH Austin TX 400 - 99.5 % 99.8 %
Camp Fimfo(2)
RV New Braunfels TX - 492 N/A N/A
Chisholm Point MH Pflugerville TX 427 - 99.3 % 98.6 %
Comal Farms MH New Braunfels TX 367 - 98.9 % 99.5 %
Coyote Ranch Resort(2)
RV Wichita Falls TX - 163 N/A N/A
Creeks Crossing MH Kyle TX 196 - 56.6 % (1)
94.3 % (1)
Jellystone Park™ at Guadalupe River(2)
RV Kerrville TX - 253 N/A N/A
Jellystone Park™ at Hill Country(2)
RV Canyon Lake TX - 167 N/A N/A
Jellystone Park™ at Whispering Pines(2)
RV Tyler TX - 134 N/A N/A
Jetstream RV Resort at NASA(2)
RV Houston TX 76 126 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Lantana Ranch South MH Brookshire TX - - N/A (1)
N/A (4)
Lone Star Jellystone Park(2)
RV Waller TX - 344 N/A N/A
Oak Crest MH Austin TX 654 - 98.2 % 97.6 %
Pearwood RV Resort(2)
RV Pearland TX 127 17 100.0 % 100.0 %
Pecan Branch MH Georgetown TX 229 - 99.1 % 96.1 %
Pine Acre Trails MH Conroe TX 251 - 6.0 % (1)
N/A (4)
Pine Trace MH Houston TX 680 - 97.6 % 97.8 %
River Ranch MH Austin TX 848 - 98.9 % 98.5 %
River Ridge Estates MH Austin TX 515 - 98.4 % 99.2 %
Saddlebrook MH San Marcos TX 561 - 99.1 % 99.1 %
Sandy Lake MH Carrollton TX 54 - 100.0 % 100.0 %
Sandy Lake RV Resort(2)
RV Carrollton TX 187 33 100.0 % 100.0 %
Stonebridge MH San Antonio TX 335 - 100.0 % 99.7 %
Summit Ridge MH Converse TX 446 - 99.3 % 99.1 %
Sun Outdoors Lake Travis(2)
RV Austin TX 69 175 100.0 % 100.0 %
Sun Outdoors San Antonio West(2)
RV San Antonio TX 109 153 100.0 % 100.0 %
Sun Outdoors Texas Hill Country(2)
RV New Braunfels TX 130 239 100.0 % 100.0 %
Sunset Ridge MH Kyle TX 357 - 76.8 % (1)
75.9 % (1)
Travelers World MH San Antonio TX 8 - 100.0 % 100.0 %
Travelers World RV Resort(2)
RV San Antonio TX 26 129 100.0 % 100.0 %
Treetops RV Resort(2)
RV Arlington TX 130 44 100.0 % 100.0 %
Woodlake Trails MH San Antonio TX 316 - 94.3 % (1)
93.7 % (1)
Texas Total 8,778 2,566 94.3 % 97.7 %
SOUTHEAST
Florida
Arbor Terrace RV Park(2)
RV Bradenton FL 304 69 100.0 % 100.0 %
Ariana Village MH Lakeland FL 207 - 99.0 % 99.0 %
Bahia Vista Estates MH Sarasota FL 251 - 100.0 % 99.6 %
Baker Acres RV Resort(2)
RV Zephyrhills FL 291 61 100.0 % 100.0 %
Big Tree RV Resort(2)
RV Arcadia FL 372 39 100.0 % 100.0 %
Blue Heron Pines MH Punta Gorda FL 408 - 99.8 % 99.5 %
Blue Jay MH Dade City FL 207 - 99.5 % 99.5 %
Blue Jay RV Resort(2)
RV Dade City FL 50 2 100.0 % 100.0 %
Blueberry Hill(2)
RV Bushnell FL 349 56 100.0 % 100.0 %
Brentwood Estates MH Hudson FL 191 - 99.5 % 99.5 %
Buttonwood Bay MH Sebring FL 407 - 99.5 % 99.3 %
Buttonwood Bay RV Resort(2)
RV Sebring FL 384 148 100.0 % 100.0 %
Candlelight Manor MH South Daytona FL 128 - 99.2 % 100.0 %
Carriage Cove MH Sanford FL 467 - 99.4 % 99.6 %
Central Park MH Haines City FL 114 - 89.5 % 90.4 %
Central Park Resort RV Resort(2)
RV Haines City FL 261 103 100.0 % 100.0 %
Citrus Hill RV Resort(2)
RV Dade City FL 155 27 100.0 % 100.0 %
Club Naples(2)
RV Naples FL 260 45 100.0 % 100.0 %
Club Wildwood MH Hudson FL 478 - 99.8 % 100.0 %
Colony in the Wood MH Port Orange FL 383 - 97.1 % 100.0 %
Cypress Greens MH Lake Alfred FL 259 - 98.5 % 98.5 %
Deerwood MH Orlando FL 569 - 99.3 % 99.5 %
Ellenton Gardens RV Resort(2)
RV Ellenton FL 158 36 100.0 % 100.0 %
Fairfield Village MH Ocala FL 293 - 100.0 % 100.0 %
Flamingo Lake RV Resort(2)
RV Jacksonville FL 127 295 100.0% 100.0%
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Forest View MH Homosassa FL 300 - 98.7 % 98.7 %
Glen Haven MH Zephyrhills FL 52 - 100.0 % 100.0 %
Glen Haven RV Resort(2)
RV Zephyrhills FL 178 40 100.0 % 100.0 %
Goldcoaster MH Homestead FL 531 - 99.4 % 99.2 %
Goldcoaster RV Resort(2)
RV Homestead FL 7 7 100.0 % 100.0 %
Grand Bay MH Dunedin FL 134 - 100.0 % 99.3 %
Grand Lake RV & Golf Resort(2)
RV Citra FL 325 83 100.0 % 100.0 %
Grove Ridge RV Resort(2)
RV Dade City FL 181 65 100.0 % 100.0 %
Groves RV Resort RV Ft. Myers FL - - - % (5)
100.0 %
Gulfstream Harbor MH Orlando FL 974 - 99.8 % 99.9 %
Hacienda Del Rio MH Edgewater FL 800 - 91.0 % (1)
99.5 %
Hidden River RV Resort(2)
RV Riverview FL 238 63 100.0 % 100.0 %
Holly Forest MH Holly Hill FL 402 - 100.0 % 100.0 %
Homosassa River RV Resort(2)
RV Homosassa Springs FL 145 79 100.0 % 100.0 %
Horseshoe Cove RV Resort(2)
RV Bradenton FL 353 123 100.0 % 100.0 %
Indian Creek Park MH Ft. Myers Beach FL - - - % (5)
100.0 %
Indian Creek RV Park RV Ft. Myers Beach FL - - - % (5)
100.0 %
Island Lakes MH Merritt Island FL 301 - 100.0 % 100.0 %
King's Lake MH DeBary FL 245 - 100.0 % 100.0 %
Kings Manor MH Lakeland FL 239 - 96.2 % 97.1 %
Kings Pointe MH Lake Alfred FL 226 - 100.0 % 99.1 %
Kissimmee Gardens MH Kissimmee FL 240 - 99.2 % 99.6 %
Kissimmee South MH Davenport FL 142 - 96.5 % 91.5 %
Kissimmee South RV Resort(2)
RV Davenport FL 153 48 100.0 % 100.0 %
La Costa Village MH Port Orange FL 658 - 100.0 % 100.0 %
Lake Josephine RV Resort(2)
RV Sebring FL 157 21 100.0 % 100.0 %
Lake Juliana Landings MH Auburndale FL 274 - 98.5 % 98.2 %
Lake Pointe Village MH Mulberry FL 362 - 99.2 % 99.4 %
Lake San Marino RV Park(2)
RV Naples FL 308 99 100.0 % 100.0 %
Lakeland RV Resort(2)
RV Lakeland FL 218 13 100.0 % 100.0 %
Lakeshore Landings MH Orlando FL 307 - 98.7 % 99.3 %
Lakeshore Villas MH Tampa FL 280 - 98.9 % 98.2 %
Lamplighter MH Port Orange FL 259 - 99.6 % 99.6 %
Majestic Oaks RV Resort(2)
RV Zephyrhills FL 230 24 100.0 % 100.0 %
Marco Naples RV Resort(2)
RV Naples FL 242 59 100.0 % 100.0 %
Meadowbrook Village MH Tampa FL 257 - 100.0 % 100.0 %
Mill Creek MH Kissimmee FL 34 - 91.2 % 94.1 %
Mill Creek RV Resort(2)
RV Kissimmee FL 132 24 100.0 % 100.0 %
Naples RV Resort(2)
RV Naples FL 141 26 100.0 % 100.0 %
North Lake Estates(2)
RV Moore Haven FL 205 67 100.0 % 100.0 %
Oakview Estates MH Arcadia FL 119 - 95.8 % 100.0 %
Ocean Breeze - Jensen Beach MH Jensen Beach FL 325 - 79.7 % (1)
77.3 % (1)
Ocean Breeze - Jensen Beach RV Resort(2)
RV Jensen Beach FL 86 76 100.0 % 100.0 %
Ocean Breeze - Marathon MH Marathon FL 46 - 100.0 % (6)
74.5 % (1)(6)
Ocean Breeze - Marathon RV Resort RV Marathon FL - - - % (6)
- % (6)
Ocean View MH Jensen Beach FL 71 - N/A (1)
N/A (1)
Orange City MH Orange City FL 4 - 100.0 % 100.0 %
Orange City RV Resort(2)
RV Orange City FL 444 77 100.0 % 100.0 %
Orange Tree Village MH Orange City FL 246 - 100.0 % 100.0 %
Paddock Park South MH Ocala FL 188 - 80.9 % 80.3 %
Palm Key Village MH Davenport FL 204 - 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Palm Village MH Bradenton FL 146 - 100.0 % 100.0 %
Park Place MH Sebastian FL 476 - 97.7 % 96.8 %
Park Royale MH Pinellas Park FL 309 - 100.0 % 99.0 %
Pecan Park RV Resort(2)
RV Jacksonville FL 116 225 100.0 % 100.0 %
Pelican Bay MH Micco FL 216 - 99.1 % 99.5 %
Pleasant Lake RV Resort(2)
RV Bradenton FL 317 24 100.0 % 100.0 %
Rainbow MH Frostproof FL 37 - 100.0 % 100.0 %
Rainbow RV Resort(2)
RV Frostproof FL 440 22 100.0 % 100.0 %
Rainbow Village of Largo(2)
RV Largo FL 276 33 100.0 % 100.0 %
Rainbow Village of Zephyrhills(2)
RV Zephyrhills FL 350 32 100.0 % 100.0 %
Red Oaks MH Bushnell FL 103 - 93.2 % 93.2 % (1)
Red Oaks RV Resort(2)
RV Bushnell FL 548 369 100.0 % 100.0 %
Regency Heights MH Clearwater FL 391 - 99.2 % 98.7 %
Riverside Club MH Ruskin FL 728 - 94.2 % (1)
89.8 %
Rock Crusher Canyon RV Resort(2)
RV Crystal River FL 275 120 100.0 % 100.0 %
Royal Country MH Miami FL 864 - 99.9 % 99.8 %
Royal Palm Village MH Haines City FL 395 - 87.3 % 87.3 %
Saddle Oak Club MH Ocala FL 376 - 99.5 % 99.7 %
Saralake Estates MH Sarasota FL 202 - 99.5 % 99.5 %
Savanna Club MH Port St. Lucie FL 1,069 - 98.9 % 98.5 %
Serendipity MH North Fort Myers FL 338 - 92.9 % 97.3 %
Settler's Rest RV Resort(2)
RV Zephyrhills FL 313 65 100.0 % 100.0 %
Shadow Wood Village MH Hudson FL 260 - 85.4 % (1)
78.8 % (1)
Shady Road Villas MH Ocala FL 129 - 93.8 % 87.6 %
Shell Creek Marina MH Punta Gorda FL 54 - 98.1 % 98.1 %
Shell Creek RV Resort & Marina(2)
RV Punta Gorda FL 154 31 100.0 % 100.0 %
Siesta Bay RV Park RV Ft. Myers FL - - - % (5)
100.0 %
Southern Charm MH Zephyrhills FL 1 - 100.0 % 100.0 %
Southern Charm RV Resort(2)
RV Zephyrhills FL 414 82 100.0 % 100.0 %
Southern Leisure RV Resort(2)
RV Chiefland FL 280 217 100.0 % 100.0 %
Southport Springs Golf & Country Club MH Zephyrhills FL 547 - 99.5 % 99.1 %
Spanish Main MH Thonotosassa FL 56 - 96.4 % 91.1 %
Spanish Main RV Resort(2)
RV Thonotosassa FL 256 23 100.0 % 100.0 %
Stonebrook MH Homosassa FL 215 - 93.5 % (1)
94.0 % (1)
Sun Outdoors Islamorada MH Islamorada FL 20 - 5.0 % (6)
- % (6)
Sun Outdoors Islamorada RV Resort RV Islamorada FL - - - % (6)
- % (6)
Sun Outdoors Key Largo(2)
RV Key Largo FL 14 24 100.0 % 100.0 %
Sun Outdoors Marathon(2)
RV Marathon FL 17 68 100.0 % 100.0 %
Sun Outdoors Orlando ChampionsGate MH Davenport FL 44 - 68.2 % 75.0 %
Sun Outdoors Orlando ChampionsGate RV Resort(2)
RV Davenport FL 48 212 100.0 % 100.0 %
Sun Outdoors Panama City Beach MH Panama City Beach FL 42 - 97.6 % 97.6 %
Sun Outdoors Panama City Beach RV Resort(2)
RV Panama City Beach FL - 167 N/A N/A
Sun Outdoors Sarasota(2)
RV Sarasota FL 1,111 408 100.0 % 100.0 %
Sun Outdoors St. Augustine(2)
RV St. Augustine FL - 175 N/A N/A
Sun Outdoors Sugarloaf Key(2)
RV Summerland Key FL - 99 N/A N/A
Sun Retreats Daytona Beach(2)
RV Port Orange FL 166 67 100.0 % 100.0 %
Sun Retreats Dunedin(2)
RV Dunedin FL 198 41 100.0 % 100.0 %
Suncoast Gateway MH Port Richey FL 173 - 98.8 % 98.8 %
Sundance MH Zephyrhills FL 332 - 100.0 % 100.0 %
Sunlake Estates MH Grand Island FL 411 - 96.8 % 97.1 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Sunset Harbor at Cow Key Marina MH Key West FL 77 - 98.7 % 98.7 %
Sweetwater RV Resort(2)
RV Zephyrhills FL 221 70 100.0 % 100.0 %
Tallowwood Isle MH Coconut Creek FL 274 - 97.1 % 97.1 %
Tampa East MH Dover FL 31 - 100.0 % 100.0 %
Tampa East RV Resort(2)
RV Dover FL 598 71 100.0 % 100.0 %
The Hamptons Golf & Country Club MH Auburndale FL 829 - 99.9 % 99.5 %
The Hideaway MH Key West FL 13 - 100.0 % 100.0 %
The Hills MH Apopka FL 97 - 99.0 % 99.0 %
The Landings at Lake Henry MH Haines City FL 394 - 99.2 % 99.2 %
The Ridge MH Davenport FL 481 - 99.8 % 99.4 %
The Valley MH Apopka FL 148 - 100.0 % 100.0 %
ThemeWorld RV Resort(2)
RV Davenport FL 127 17 100.0 % 100.0 %
Three Lakes(2)
RV Hudson FL 266 41 100.0 % 100.0 %
Tranquility MHC MH Bushnell FL 26 - 30.8 % 23.1 %
Vista del Lago MH Bradenton FL 136 - 100.0 % 100.0 %
Vista del Lago RV Resort(2)
RV Bradenton FL 36 4 100.0 % 100.0 %
Vizcaya Lakes MH Port Charlotte FL 109 - 95.4 % 96.3 %
Walden Woods I MH Homosassa FL 213 - 100.0 % 100.0 %
Walden Woods II MH Homosassa FL 213 - 100.0 % 100.0 %
Water Oak Country Club Estates MH Lady Lake FL 1,608 - 79.3 % (1)
93.2 %
Waters Edge RV Resort(2)
RV Zephyrhills FL 171 46 100.0 % 100.0 %
Westside Ridge MH Auburndale FL 219 - 99.1 % 99.5 %
Windmill Village MH Davenport FL 509 - 99.8 % 99.8 %
Woodlands at Church Lake MH Groveland FL 291 - 86.9 % 85.2 %
Woodsmoke Camping Resort(2)
RV Fort Myers FL 268 32 100.0 % 100.0 %
Florida Total 39,618 4,660 97.4 % 98.1 %
Virginia
Jellystone Park™ Chincoteague Island(3)
RV Chincoteague VA - 346 N/A N/A
Jellystone Park™ at Luray(2)
RV East Luray VA - 254 N/A N/A
Jellystone Park™ at Natural Bridge(3)
RV Natural Bridge Station VA 69 230 100.0 % 100.0 %
Pine Ridge MH Prince George VA 376 - 99.5 % 99.5 %
Sun Outdoors Cape Charles(3)
RV Cape Charles VA - 663 N/A N/A
Sun Outdoors Chesapeake Bay(2)
RV Temperanceville VA - 246 N/A N/A
Sun Outdoors Chincoteague Bay RV Chincoteague VA - - N/A N/A (1)
Sun Retreats Gwynn's Island(2)
RV Gwynn VA 121 8 100.0 % 100.0 %
Sun Retreats New Point(2)
RV New Point VA 316 8 100.0 % 100.0 %
Sun Retreats Shenandoah Valley(2)
RV Stuarts Draft
VA 404 105 100.0 % 100.0 %
Sunset Beach RV Resort(3)
RV Cape Charles VA - 303 N/A N/A
Virginia Total 1,286 2,163 99.8 % 99.8 %
SOUTHWEST
California
49'er Village RV Resort(2)
RV Plymouth CA 93 234 100.0 % 100.0 %
Alta Laguna MH Rancho Cucamonga CA 296 - 100.0 % 99.7 %
Bel Air Estates MH Menifee CA 198 - 88.9 % N/A (4)
Caliente Sands MH Cathedral City CA 118 - 98.3 % 98.3 %
Cisco Grove Campground & RV RV Emigrant Gap CA 18 - 100.0 % 100.0 %
El Capitan Canyon(2)
RV Goleta CA - 163 N/A N/A
Forest Springs MH Grass Valley CA 373 - 92.0 % (1)
89.5 % (1)
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Friendly Village of La Habra MH La Habra CA 330 - 99.1 % 100.0 %
Friendly Village of Modesto MH Modesto CA 289 - 98.6 % 99.7 %
Friendly Village of Simi MH Simi Valley CA 222 - 99.5 % 100.0 %
Friendly Village of West Covina MH West Covina CA 157 - 98.7 % 100.0 %
Heritage MH Temecula CA 196 - 100.0 % 99.5 %
Indian Wells RV Resort(2)
RV Indio CA 173 165 100.0 % 100.0 %
Jellystone Park™ at Tower Park(2)
RV Lodi CA - 359 N/A N/A
Lakefront MH Lakeside CA 295 - 99.7 % 99.0 %
Lakeview Mobile Estates MH Yucaipa CA 297 - 99.7 % 100.0 %
Lazy J Ranch MH Arcata CA 220 - 98.6 % 99.1 %
Lemon Wood MH Ventura CA 231 - 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 257 - 100.0 % 100.0 %
Oak Creek MH Coarsegold CA 198 - 99.0 % 99.5 %
Ocean West MH McKinleyville CA 130 - 99.2 % 99.2 %
Palos Verdes Shores MH & Golf Community MH San Pedro CA 242 - 100.0 % 99.6 %
Pembroke Downs MH Chino CA 163 - 100.0 % 99.4 %
Pismo Dunes RV Resort(2)
RV Pismo Beach CA 330 1 100.0 % 100.0 %
Rancho Alipaz MH San Juan Capistrano CA 132 - 100.0 % 100.0 %
Rancho Caballero MH Riverside CA 303 - 99.7 % 100.0 %
Royal Palms MH Cathedral City CA 438 - 98.4 % 97.7 %
Royal Palms RV Resort RV Cathedral City CA 39 - 100.0 % 100.0 %
Sun Outdoors Central Coast Wine Country(2)
RV Paso Robles CA - 203 N/A N/A
Sun Outdoors Paso Robles(2)
RV Paso Robles CA - 332 N/A N/A
Sun Outdoors San Diego Bay MH San Diego CA - - N/A N/A (1)
Sun Outdoors San Diego Bay RV Resort(2)
RV San Diego CA - 246 N/A N/A (1)
Sun Outdoors Santa Barbara(2)
RV Goleta CA - 103 N/A N/A
Sunrise Estates MH Banning CA 181 - 90.6 % (1)
N/A (4)
The Colony MH Oxnard CA 150 - 100.0 % 100.0 %
Vallecito MH Newbury Park CA 303 - 100.0 % 100.0 %
Victor Villa MH Victorville CA 287 - 99.3 % 99.7 %
Vines RV Resort(2)
RV Paso Robles CA - 130 N/A N/A
Vista del Lago MH Scotts Valley CA 202 - 100.0 % 99.0 %
California Total 6,861 1,936 98.6 % 98.3 %
Arizona
Blue Star MH Apache Junction AZ 3 - 100.0 % 100.0 %
Blue Star(2)
RV Apache Junction AZ 138 9 100.0 % 100.0 %
Brentwood West MH Mesa AZ 350 - 99.7 % 99.7 %
Buena Vista MH Buckeye AZ 400 - 92.0 % 89.8 %
Desert Harbor MH Apache Junction AZ 205 - 100.0 % 100.0 %
La Casa Blanca MH Apache Junction AZ 198 - 99.0 % 100.0 %
Leaf Verde RV Resort(2)
RV Buckeye AZ 155 222 100.0 % 100.0 %
Lost Dutchman MH Apache Junction AZ 226 - 87.2 % (1)
96.4 %
Lost Dutchman RV Resort(2)
RV Apache Junction AZ - 1 N/A 100.0 %
Mountain View MH Mesa AZ 170 - 97.6 % 97.6 %
Palm Creek Golf MH Casa Grande AZ 506 - 78.7 % (1)
71.1 % (1)
Palm Creek Golf & RV Resort(2)
RV Casa Grande AZ 1,081 754 100.0 % 100.0 %
Rancho Mirage MH Apache Junction AZ 312 - 99.7 % 100.0 %
Reserve at Fox Creek MH Bullhead City AZ 311 - 99.7 % 99.7 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Spanish Trails West MH Casa Grande AZ 214 - 0.5% (1)
N/A (4)
Spanish Trails West RV Resort RV Casa Grande AZ - - N/A (1)
N/A (4)
Sun Valley MH Apache Junction AZ 268 - 98.1 % 97.8 %
Arizona Total 4,537 986 91.3 % 95.0 %
Colorado
Cave Creek MH Evans CO 447 - 100.0 % 99.6 %
Eagle Crest MH Firestone CO 441 - 99.8 % 99.8 %
Jellystone Park™ at Larkspur(2)
RV Larkspur CO - 536 N/A N/A
North Point Estates MH Pueblo CO 108 - 95.4 % 99.1 %
Skyline MH Fort Collins CO 170 - 100.0 % 99.4 %
Smith Creek Crossing MH Granby CO 310 - 34.8 % (1)
44.5 % (1)
Sun Outdoors Rocky Mountains MH Granby CO 36 - 100.0 % 100.0 %
Sun Outdoors Rocky Mountains RV Resort(2)
RV Granby CO - 451 N/A N/A
Swan Meadow Village MH Dillon CO 174 - 100.0 % 100.0 %
The Foothills MH Fort Collins CO - - N/A N/A
The Grove at Alta Ridge MH Thornton CO 409 - 100.0 % 100.0 %
Timber Ridge MH Ft. Collins CO 585 - 99.3 % 99.3 %
Willow Bend MH Fort Lupton CO 119 - - % (1)
N/A
Colorado Total 2,799 987 88.2 % 95.7 %
NORTHEAST
Connecticut
Beechwood MH Killingworth CT 297 - 98.3 % 98.7 %
Cedar Springs MH Southington CT 190 - 97.4 % 96.8 %
Forest Hill MH Southington CT 188 - 97.9 % 97.9 %
Grove Beach MH Westbrook CT 136 - 100.0 % 98.5 %
Hillcrest MH Uncasville CT 208 - 99.5 % 99.5 %
Lakeside MH Terryville CT 76 - 96.1 % 100.0 %
Lakeview CT MH Danbury CT 179 - 95.0 % 93.3 %
Laurel Heights MH Uncasville CT 49 - 89.8 % 95.9 %
Marina Cove MH Uncasville CT 25 - 92.0 % 76.0 %
Millwood MH Uncasville CT 45 - 13.3 % (1)
4.4 % (1)
New England Village MH Westbrook CT 60 - 100.0 % 100.0 %
Oak Grove MH Plainville CT 45 - 93.3 % 97.8 %
Rolling Hills MH Storrs CT 200 - 78.0 % 78.5 %
Sun Outdoors Mystic(2)
RV Old Mystic CT 51 98 100.0 % 100.0 %
Three Gardens MH Southington CT 135 - 96.3 % 90.4 %
Yankee Village MH Old Saybrook CT 23 - 100.0 % 100.0 %
Connecticut Total 1,907 98 93.4 % 92.8 %
Maine
Augusta Village MH Augusta ME 59 - 94.9 % 91.5 %
Birch Hill Estates MH Bangor ME 377 - 96.6 % 98.9 %
Cedar Haven MH Holden ME 155 - 91.6 % 89.7 %
Hancock Heights Estates MH Hancock ME 113 - 97.3 % 99.1 %
Holiday Park Estates MH Bangor ME 218 - 92.7 % 89.0 %
Jellystone Park™ Androscoggin Lake(2)
RV North Monmouth ME 40 163 100.0 % 100.0 %
Maplewood Manor MH Brunswick ME 296 - 99.3 % 99.0 %
Merrymeeting MH Brunswick ME 43 - 97.7 % 97.7 %
Norway Commons MH Norway ME 231 - 83.1 % (1)
N/A (4)
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Riverside Drive Park MH Augusta ME 163 - 81.0 % 82.2 %
Sun Outdoors Old Orchard Beach Downtown(2)
RV Old Orchard Beach ME 83 238 100.0 % 100.0 %
Sun Outdoors Saco Old Orchard Beach(2)
RV Saco ME - 191 N/A N/A
Sun Outdoors Wells Beach(2)
RV Wells ME - 231 N/A N/A
Sun Retreats at Wild Acres(2)
RV Old Orchard Beach ME 369 261 100.0 % 100.0 %
Sun Retreats Old Orchard Beach(2)
RV Old Orchard Beach ME 257 24 100.0 % 100.0 %
Town & Country Village MH Lisbon ME 144 - 97.9 % 98.6 %
Maine Total 2,548 1,108 95.1 % 96.5 %
New Hampshire
Brook Ridge MH Hooksett NH 91 - 100.0 % 100.0 %
Crestwood MH Concord NH 320 - 100.0 % 99.4 %
Farmwood Village MH Dover NH 159 - 100.0 % 99.4 %
Glen Ellis Family Campground(2)
RV Glen NH - 289 N/A 100.0 %
Hannah Village MH Lebanon NH 81 - 100.0 % 97.5 %
Hemlocks MH Tilton NH 103 - 100.0 % 100.0 %
Mi-Te-Jo Campground(2)
RV Milton NH 66 149 100.0 % 100.0 %
River Pines MH Nashua NH 480 - 100.0 % 99.4 %
Strafford / Lake Winnipesaukee South KOA(3)
RV Strafford NH - 144 N/A N/A
Westward Shores Cottages & RV Resort(2)
RV West Ossipee NH 428 70 100.0 % 100.0 %
New Hampshire Total 1,728 652 100.0 % 99.5 %
New Jersey
Cape May Crossing MH Cape May NJ 28 - 100.0 % 100.0 %
Deep Run MH Cream Ridge NJ 243 - 100.0 % 100.0 %
Hospitality Creek Campground(2)
RV Williamstown NJ 111 122 100.0% N/A
Shady Pines MH Galloway Township NJ 39 - 100.0 % 100.0 %
Shady Pines RV Resort(2)
RV Galloway Township NJ 67 28 100.0 % 100.0 %
Sun Outdoors Cape May(3)
RV Cape May NJ - 358 N/A N/A
Sun Retreats Avalon(2)
RV Cape May Court House NJ 417 111 100.0 % 100.0 %
Sun Retreats Cape May Wildwood(2)
RV Cape May NJ 466 164 100.0 % 100.0 %
Sun Retreats Long Beach Island(2)
RV Barnegat NJ 183 31 100.0 % 100.0 %
Sun Retreats Pleasant Acres Farm(2)
RV Sussex NJ 161 131 100.0 % 100.0 %
Sun Retreats Sea Isle(2)
RV Clermont NJ 665 42 100.0 % 100.0 %
Sun Retreats Seashore(2)
RV Cape May NJ 437 238 100.0 % 100.0 %
New Jersey Total 2,817 1,225 100.0 % 100.0 %
New York
Cherrywood MH Clinton NY 176 - 93.8 % (1)
88.6 % (1)
Jellystone Park™ at Birchwood Acres(3)
MH Greenfield Park NY 1 - 100.0 % 100.0 %
Jellystone Park™ at Birchwood Acres RV Resort(3)
RV Greenfield Park NY 122 182 100.0 % 100.0 %
Jellystone Park™ at Gardiner(2)
RV Gardiner NY 26 312 100.0 % 100.0 %
Jellystone Park™ of Western New York(2)
RV North Java NY 22 337 100.0 % 100.0 %
Kittatinny Campground & RV Resort(2)
RV Barryville NY - 326 N/A N/A
Parkside Village MH Cheektowaga NY 156 - 100.0 % 100.0 %
Sky Harbor MH Cheektowaga NY 522 - 97.7 % 98.7 %
Sun Outdoors Association Island(2)
RV Henderson NY 24 276 100.0 % 100.0 %
Sun Retreats Adirondack Gateway(2)
RV Gansevoort NY 332 10 100.0 % 100.0 %
The Villas at Calla Pointe MH Cheektowaga NY 116 - 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
New York Total 1,497 1,443 98.5 % 98.2 %
OTHER
Sun Outdoors Orange Beach(2)
RV Orange Beach AL - 497 N/A N/A
Fort Dupont RV Delaware City DE - - N/A N/A
High Point Park MH Frederica DE 409 - 97.8 % 97.6 %
Jellystone Lincoln(2)
RV Delaware City DE - 263 N/A N/A (4)
Sea Air Village MH Rehoboth Beach DE 379 - 99.2 % 98.9 %
Sea Air Village RV Resort(2)
RV Rehoboth Beach DE 124 10 100.0 % 100.0 %
Sun Outdoors Rehoboth Bay(3)
RV Millsboro DE - 291 N/A N/A
Sun Retreats Rehoboth Bay MH Millsboro DE 202 - 95.0 % 94.1 %
Sun Retreats Rehoboth Bay RV Resort(2)
RV Millsboro DE 299 2 100.0 % 100.0 %
Countryside Village of Atlanta MH Lawrenceville GA 261 - 99.2 % 100.0 %
Countryside Village of Gwinnett MH Buford GA 331 - 98.2 % 99.1 %
Countryside Village of Lake Lanier MH Buford GA 548 - 99.1 % 98.7 %
Wymberly MH Martinez GA 277 - 78.3 % (1)
78.1 % (1)
Autumn Ridge MH Ankeny IA 413 - 97.6 % 98.8 %
Jellystone Park™ of Chicago(2)
RV Millbrook IL 159 235 100.0 % 100.0 %
Maple Brook MH Matteson IL 441 - 99.8 % 99.8 %
Oak Ridge MH Manteno IL 426 - 99.8 % 98.1 %
Sun Retreats Rock River(2)
RV Hillsdale IL 265 233 100.0 % 100.0 %
Wildwood Community MH Sandwich IL 476 - 99.2 % 98.9 %
Jellystone Park™ at Mammoth Cave(3)
RV Cave City KY - 330 N/A N/A
Sun Outdoors New Orleans North Shore(2)
RV Ponchatoula LA - 334 N/A N/A
Sun Retreats Cape Cod(2)
RV East Falmouth MA 62 193 100.0 % 100.0 %
Sun Retreats Dennis Port(2)
RV Dennisport MA 221 39 100.0 % 100.0 %
Sun Retreats Peters Pond(2)
RV Sandwich MA 350 56 100.0 % 100.0 %
Hyde Park MH Easton MD 240 - 100.0 % 99.2 %
Jellystone Park™ at Maryland(2)
RV Williamsport MD - 234 N/A N/A
Southside Landing MH Cambridge MD 96 - 100.0 % 93.8 %
Sun Outdoors Frontier Town(3)
RV Berlin MD - 685 N/A N/A
Sun Outdoors Ocean City(2)
RV Berlin MD 1 392 100.0 % 100.0 %
Sun Outdoors Ocean City Gateway(3)
RV Whaleyville MD - 215 N/A N/A
Southern Hills / Northridge Place MH Stewartville MN 475 - 97.5 % 97.5 %
Jellystone Park™ at Memphis(2)
RV Horn Lake MS - 155 N/A N/A
Sun Outdoors Yellowstone North(2)
RV Gardiner MT - 75 N/A N/A
Coastal Estates MH Hampstead NC 154 - 82.5 % (1)
72.1 % (1)
Glen Laurel MH Concord NC 260 - 98.8 % 98.8 %
Jellystone Park™ at Golden Valley(2)
RV Bostic NC - 357 N/A N/A
Meadowbrook MH Charlotte NC 321 - 100.0 % 99.7 %
Sun Retreats Nantahala(2)
RV Sylva NC 61 29 100.0 % 100.0 %
Stoneridge Villas MH Gardnerville NV - - N/A (1)
N/A (4)
Sun Villa Estates MH Reno NV 324 - 99.1 % 100.0 %
Apple Creek MH Amelia OH 176 - 98.3 % 96.6 %
East Fork Crossing MH Batavia OH 350 - 100.0 % 99.4 %
Oakwood Village MH Miamisburg OH 511 - 98.8 % 99.4 %
Orchard Lake MH Milford OH 147 - 98.0 % 99.3 %
Sun Retreats Geneva on the Lake(2)
RV Geneva on the Lake OH 465 115 100.0 % 100.0 %
Westbrook Senior Village MH Toledo OH 112 - 100.0 % 100.0 %
Westbrook Village MH Toledo OH 344 - 94.5 % 98.5 %
Willowbrook Place MH Toledo OH 266 - 95.1 % 97.4 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Woodside Terrace MH Holland OH 439 - 95.7 % 97.0 %
Country Village Estates MH Oregon City OR 518 - 100.0 % 100.0 %
Forest Meadows MH Philomath OR 129 - 58.1 % (1)
100.0 %
Sun Outdoors Bend(2)
RV Bend OR - 123 N/A N/A
Sun Outdoors Coos Bay(2)
RV Coos Bay OR - 86 N/A N/A
Sun Outdoors Portland South(2)
RV Wilsonville OR - 130 N/A N/A
Woodland Park Estates MH Eugene OR 398 - 99.7 % 100.0 %
Countryside Estates MH Mckean PA 304 - 98.7 % 97.0 %
Jellystone Park™ at Quarryville(2)
RV Quarryville PA - 256 N/A N/A
Pheasant Ridge MH Lancaster PA 553 - 99.8 % 100.0 %
River Beach Campsites & RV RV Milford PA - - N/A N/A (1)
Sun Retreats Lancaster County(2)
RV Narvon PA 270 152 100.0 % 100.0 %
Carolina Pines RV Resort(2)
RV Conway SC 164 670 100.0 % 100.0 %
Country Lakes MH Little River SC 136 - 100.0 % 100.0 %
Crossroads MH Aiken SC 168 - 92.3 % (1)
73.2 % (1)
Crossroads RV Resort RV Aiken SC 22 - 100.0 % 100.0 %
Lakeside Crossing MH Conway SC 691 - 94.8 % (1)
88.4 % (1)
Ocean Pines MH Garden City SC 579 - 99.8 % 99.8 %
Southern Palms MH Ladson SC 194 - 100.0 %
100.0 %
Bell Crossing MH Clarksville TN 237 - 99.6 % 99.2 %
Sun Outdoors Pigeon Forge(2)
RV Sevierville TN 70 238 100.0 % 100.0 %
Bear Lake Development Land RV Garden City UT - - N/A (1)
N/A (4)
Sun Outdoors Arches Gateway(2)
RV Moab UT - 131 N/A N/A
Sun Outdoors Canyonlands Gateway(2)
RV Moab UT - 113 N/A N/A
Sun Outdoors Garden City Utah(2)
RV Garden City UT - 177 N/A N/A
Sun Outdoors Moab Downtown(2)
RV Moab UT - 131 N/A N/A
Sun Outdoors North Moab(2)
RV Moab UT - 190 N/A N/A
Sun Outdoors Salt Lake City(2)
RV North Salt Lake UT - 185 N/A N/A
47 North MH Cle Elum WA - - N/A (1)
N/A (1)
Sun Outdoors Gig Harbor(2)
RV Gig Harbor WA - 108 N/A N/A
Sun Retreats Birch Bay(2)
RV Blaine WA 372 300 100.0 % 100.0 %
Fond du Lac East / Kettle Moraine KOA(2)
RV Glenbeulah WI 241 84 100.0 % 100.0 %
Thunderhill Estates MH Sturgeon Bay WI 266 - 98.1 % 96.6 %
Other Total 15,697 7,814 97.9 % 97.7 %
US TOTAL / AVERAGE 125,699 27,410 96.7 % 97.3 %
CANADA
Pleasant Beach Campground(2)
RV Sherkston ON 90 12 100.0 % 100.0 %
Sun Retreats Amherstburg(2)
RV Amherstburg ON 193 134 100.0 % 100.0 %
Sun Retreats Arran Lake(2)
RV Allenford ON 187 4 100.0 % 100.0 %
Sun Retreats Blue Mountains(2)
RV Clarksburg ON 94 17 100.0 % 100.0 %
Sun Retreats Cayuga(2)
RV Cayuga ON 253 35 100.0 % 100.0 %
Sun Retreats Flamborough RV Millgrove ON 198 - 100.0 % 100.0 %
Sun Retreats Georgian Bay(2)
RV Seguin ON 225 12 100.0 % 100.0 %
Sun Retreats Hay Bay(2)
RV Napanee ON 196 14 100.0 % 100.0 %
Sun Retreats Huntsville(2)
RV Huntsville ON 229 12 100.0 % 100.0 %
Sun Retreats Ipperwash(2)
RV Lambton Shores ON 141 21 100.0 % 100.0 %
Sun Retreats Penetanguishene(2)
RV Tiny ON 224 39 100.0 % 100.0 %
Sun Retreats Sandbanks RV Cherry Valley ON 136 - 100.0 % 100.0 %
Sun Retreats Sherkston Shores(2)
RV Sherkston ON 1,655 280 100.0 % 100.0 %
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Sun Retreats Stratford(2)
RV Bornholm ON 213 7 100.0 % 100.0 %
Sun Retreats Turkey Point(2)
RV Normandale ON 210 35 100.0 % 100.0 %
Sun Retreats Willow Lake(2)
RV Scotland ON 367 6 100.0 % 100.0 %
CANADA TOTAL / AVERAGE 4,611 628 100.0 % 100.0 %
NORTH AMERICA TOTAL 130,310 28,038 96.8 % 97.4 %
UNITED KINGDOM
England
Alberta(2)
MH Whitstable, Kent England 327 7 93.6 % N/A (4)
Amble Links MH Amble, Northumberland England 671 - 93.6 % N/A (4)
Ashbourne Heights(2)
MH Ashbourne, Derbyshire England 102 135 90.2 % N/A (4)
Beauport MH Hastings, Sussex England 819 - 95.1 % N/A (4)
Birchington Vale(2)
MH Birchington, Kent England 488 1 96.7 % N/A (4)
Bodmin Holiday Park (formerly Cornwall)(2)
MH Bodmin, Cornwall England 14 56 64.3 % N/A (4)
Bowland Fell(2)
MH Skipton, Yorkshire England 273 34 83.5 % N/A (4)
Broadland Sands(2)
MH Lowestoft, Suffolk England 422 196 91.0 % N/A (4)
Carlton Meres(2)
MH Saxmundham, Suffolk England 380 152 79.2 % N/A (4)
Chantry MH West Witton, Yorkshire England 149 - 77.9 % N/A (4)
Chichester Lakeside(2)
MH Chichester, Sussex England 489 117 93.0 % N/A (4)
Coghurst Hall(2)
MH Hastings, Sussex England 497 25 92.8 % N/A (4)
Dawlish Sands MH Dawlish, Devon England 167 - 94.6 % N/A (4)
Dovercourt(2)
MH Harwich, Essex England 511 129 92.8 % N/A (4)
Felixstowe Beach(2)
MH Felixstowe, Suffolk England 304 15 95.4 % N/A (4)
Glendale MH Wigton, Cumbria England 381 - 93.2 % N/A (4)
Golden Sands(2)
MH Dawlish, Devon England 310 120 80.6 % N/A (4)
Harts(2)
MH Isle of Sheppey, Kent England 485 148 87.6 % N/A (4)
Hedley Wood(2)
MH Holsworthy, Devon England 89 152 48.3 % N/A (4)
Henfold MH Dorking, Surrey England - - N/A N/A (1)
Hengar Manor(2)
MH Bodmin, Cornwall England 111 70 80.2 % N/A (4)
Littondale(2)
MH Skipton, Yorkshire England 94 23 88.3 % N/A (4)
Malvern View(2)
MH Stanford Bishop, Worcester England 333 16 83.8 % N/A (4)
Marlie(2)
MH Romney, Kent England 376 132 91.8 % N/A (4)
Martello Beach(2)
MH Clacton on Sea, Essex England 474 90 81.9 % N/A (4)
New Beach(2)
MH Dymchurch, Kent England 513 88 93.0 % N/A (4)
Newhaven(2)
MH Buxton, Derbyshire England 75 118 90.7 % N/A (4)
Oaklands MH Clacton on Sea, Essex England 294 - 93.2 % N/A (4)
Oyster Bay MH Truro, Cornwall England 135 - 87.4 % N/A (4)
Pakefield(2)
MH Pakefield, Suffolk England 310 29 88.4 % N/A (4)
Par Sands(2)
MH Par, Cornwall England 288 20 94.4 % N/A (4)
Pentire(2)
MH Bude, Cornwall England 103 32 93.2 % N/A (4)
Pevensey Bay(2)
MH Pevensey Bay, Sussex England 376 79 79.8 % N/A (4)
Polperro(2)
MH Looe, Cornwall England 61 102 54.1 % N/A (4)
Ribble Valley MH Clitheroe, Lancashire England 314 - 85.4 % N/A (4)
Rye Harbour MH Rye, Sussex England 241 - 88.8 % N/A (4)
SUN COMMUNITIES, INC.
Property Name MH / RV City /
County (UK Only) State / Country MH and Annual RV Sites as of 12/31/2022
Transient RV Sites as of 12/31/2022
Occupancy as of 12/31/2022
Occupancy as of 12/31/2021
Sand le Mere(2)
MH Hull, Yorkshire England 734 191 77.8 % N/A (4)
Sandhills(2)
MH Christchurch, Dorset England 134 8 92.5 % N/A (4)
Sandy Bay MH Canvey Island, Essex England 730 - 80.0 % N/A (1)
Seaview(2)
MH Whitstable, Kent England 591 54 97.5 % N/A (4)
Seawick(2)
MH Clacton on Sea, Essex England 585 82 90.3 % N/A (4)
Solent Breezes(2)
MH Fareham, Hampshire England 239 20 87.9 % N/A (4)
St. Osyth Beach(2)
MH Clacton on Sea, Essex England 476 32 96.8 % N/A (4)
Steeple Bay(2)
MH Sothminster, Essex England 461 66 89.2 % N/A (4)
Suffolk Sands(2)
MH Felixstowe, Suffolk England 334 13 94.6 % N/A (4)
Tarka(2)
MH Barnstaple, Devon England 107 21 93.5 % N/A (4)
Trevella(2)
MH Newquay, Cornwall England 179 188 91.6 % N/A (4)
Vernon Dene MH North Ripley, Bransgore England - - N/A N/A (1)
Waterside(2)
MH Paignton, Devon England 196 25 91.3 % N/A (4)
West Mersea(2)
MH West Mersea, Essex England 400 39 97.5 % N/A (4)
Winchelsea Sands(2)
MH Winchelsea, Sussex England 287 9 82.9 % N/A (4)
Wood Farm(2)
MH Charmouth, Dorset England 115 121 90.4 % N/A (4)
Yorkshire Dales MH Leyburn, Yorkshire England 131 - 79.4 % N/A (4)
England Total 16,675 2,955 89.1 % N/A (4)
Scotland
Burghead(2)
MH Burghead, Moray Scotland 83 15 67.5 % N/A (4)
Lossiemouth(2)
MH Lossiemouth, Moray Scotland 129 3 76.0 % N/A (4)
Silver Sands(2)
MH Lossiemouth, Moray Scotland 451 125 86.7 % N/A (4)
Turnberry(2)
MH Girvan, Ayrshire Scotland 267 13 83.5 % N/A (4)
Scotland Total 930 156 82.6 % N/A (4)
Wales
Brynteg(2)
MH Llanryg, Caernafon Wales 296 32 94.9 % N/A (4)
Plas Coch MH Llanedwen, Anglesey Wales 326 - 95.1 % N/A (4)
Wales Total 622 32 95.0 % N/A (4)
UNITED KINGDOM TOTAL 18,227 3,143 89.0 % N/A (4)
COMPANY TOTAL / AVERAGE 148,537 31,181 95.9 % 97.4 %
(1)Occupancy in these properties reflects the fact that these properties are in a lease-up phase following an expansion, redevelopment or initial construction.
(2)Occupancy percentage excludes transient RV sites. Percentage calculated by dividing revenue producing sites by developed sites. A revenue producing site is defined as a site that is occupied by a paying resident or reserved by a customer with annual or seasonal usage rights. A developed site is defined as an adequately sized parcel of land that has road and utility access which is zoned and licensed (if required) for use as a home site.
(3)We have an ownership interest in these properties, but do not maintain and operate these properties.
(4)No occupancy in these properties for the year ended December 31, 2021 as properties were acquired during the year ended December 31, 2022.
(5)Occupancy in these properties at December 31, 2022 reflects the redevelopment following asset impairments resulting from Hurricane Ian in October 2022.
(6)Occupancy in these properties at December 31, 2022 and 2021 reflects the redevelopment following asset impairments resulting from Hurricane Irma in September 2017.
SUN COMMUNITIES, INC.
The following tables set forth certain information relating to our Safe Harbor branded marinas as of December 31, 2022.
Marina Property Name City State / Municipal Wet Slips and Dry Storage Spaces
as of 12/31/2022
Wet Slips and Dry Storage Spaces
as of 12/31/2021
UNITED STATES
NORTHEAST
Connecticut
Bruce & Johnsons Branford CT 664 664
Dauntless(1)
Essex CT 335 332
Dauntless Shipyard(1)
Essex CT - -
Deep River Deep River CT 310 310
Essex Island(1)
Essex CT - -
Ferry Point Old Saybrook CT 138 138
Harbor House(2)
Stamford CT - -
Mystic Mystic CT 263 253
Pilots Point Westbrook CT 880 879
Stratford Stratford CT 212 210
Yacht Haven(2)
Stamford CT 523 513
Connecticut Total 3,325 3,299
Rhode Island
Allen Harbor North Kingstown RI 135 183
Cove Haven Barrington RI 341 346
Cowesett(3)
Warwick RI 1,190 1,178
Greenwich Bay Warwick RI 547 545
Island Park(4)
Portsmouth RI - -
Jamestown Boatyard Jamestown RI 114 132
New England Boatworks Portsmouth RI 231 229
Newport Shipyard Newport RI 75 75
Sakonnet(4)
Portsmouth RI 423 445
Silver Spring Wakefield RI 106 100
Wickford(5)
Wickford RI - -
Wickford Cove(5)
Wickford RI 259 252
Rhode Island Total 3,421 3,485
New York
Capri Port Washington NY 373 369
Gaines Rouses Point NY 287 272
Glen Cove Glen Cove NY 540 540
Greenport(6)
Greenport NY 415 414
Haverstraw West Haverstraw NY 900 921
Montauk Yacht Club(7)
Montauk NY 232 N/A
Post Road Mamaroneck NY 50 46
Stirling(6)
Greenport NY - -
Willsboro Bay Willsboro NY 221 221
New York Total 3,018 2,783
Massachusetts
Edgartown Edgartown MA 117 161
Fiddler's Cove North Falmouth MA 201 229
Green Harbor Marshfield MA 203 203
Hawthorne Cove Salem MA 451 425
Marina Bay Quincy MA 700 710
Onset Bay Buzzards Bay MA 231 231
SUN COMMUNITIES, INC.
Marina Property Name City State / Municipal Wet Slips and Dry Storage Spaces
as of 12/31/2022
Wet Slips and Dry Storage Spaces
as of 12/31/2021
Plymouth Plymouth MA 197 197
Sunset Bay Hull MA 241 241
Vineyard Haven Vineyard Haven MA 179 149
Massachusetts Total 2,520 2,546
Maryland
Annapolis Annapolis MD 291 391
Bohemia Vista Chesapeake Bay MD 125 125
Carroll Island Baltimore MD 457 479
Great Oak Landing Chestertown MD 395 391
Hacks Point Chesapeake Bay MD 73 72
Narrows Point(8)
Grasonville MD 538 569
Oxford Oxford MD 137 135
Podickory Point Annapolis MD 312 236
Zahnisers Solomons MD 304 247
Maryland Total 2,632 2,645
New Jersey
Crystal Point Point Pleasant NJ 172 284
Manasquan River Brick Township NJ 239 234
New Jersey Total 411 518
Maine
Great Island Harpswell ME 137 157
Kittery Point(7)
Kittery ME 62 N/A
Rockland Rockland ME 51 13
Maine Total 250 170
New Hampshire
Wentworth by the Sea New Castle NH 221 231
New Hampshire Total 221 231
Vermont
Shelburne Shipyard Shelburne VT 210 174
Vermont Total 210 174
SOUTH
Georgia
Aqualand Flowery Branch GA 1,570 1,625
Bahia Bleu Thunderbolt GA 258 259
Hideaway Bay Flowery Branch GA 688 635
Trade Winds Appling GA 323 314
Georgia Total 2,839 2,833
Kentucky
Beaver Creek Monticello KY 284 356
Burnside Somerset KY 347 347
Grider Hill Albany KY 711 704
Jamestown Jamestown KY 736 707
Wisdom Dock Albany KY 294 291
Kentucky Total 2,372 2,405
SUN COMMUNITIES, INC.
Marina Property Name City State / Municipal Wet Slips and Dry Storage Spaces
as of 12/31/2022
Wet Slips and Dry Storage Spaces
as of 12/31/2021
Texas
Emerald Point Austin TX 591 651
Pier 121 Lewisville TX 1,082 1,082
Walden Montgomery TX 391 391
Texas Total 2,064 2,124
Arkansas
Brady Mountain Royal AR 582 582
Arkansas Total 582 582
Tennessee
Eagle Cove Byrdstown TN 78 78
Holly Creek Celina TN 307 306
Tennessee Total 385 384
Mississippi
Aqua Yacht Iuka MS 586 587
Mississippi Total 586 587
Alabama
Sportsman Orange Beach AL 723 729
Alabama Total 723 729
Oklahoma
Harbors View Afton OK 162 172
Oklahoma Total 162 172
SOUTHEAST
Florida
Angler House Islamorada FL 23 22
Burnt Store Punta Gorda FL 765 975
Calusa Island Goodland FL 620 620
Cape Harbour Cape Coral FL 256 256
Emerald Coast Niceville FL 352 408
Harborage Yacht Club Stuart FL 311 297
Harbortown Fort Pierce FL 350 350
Islamorada Islamorada FL 258 267
Lauderdale Marine Center Fort Lauderdale FL 127 101
Marathon Marathon FL 157 153
New Port Cove Riviera Beach FL 366 362
North Palm Beach North Palm Beach FL 117 110
Old Port Cove North Palm Beach FL 211 208
Pier 77 Bradenton FL 199 199
Pineland Bokeelia FL 259 259
Port Phoenix(7)(9)
North Fort Myers FL - N/A
Regatta Pointe Palmetto FL 367 367
Riviera Beach Riviera Beach FL 20 20
Siesta Key Sarasota FL 234 198
South Fork(10)
Fort Lauderdale FL - -
West Palm Beach West Palm Beach FL 62 61
Florida Total 5,054 5,233
SUN COMMUNITIES, INC.
Marina Property Name City State / Municipal Wet Slips and Dry Storage Spaces
as of 12/31/2022
Wet Slips and Dry Storage Spaces
as of 12/31/2021
South Carolina
Beaufort Beaufort SC 127 124
Bristol Charleston SC 192 249
Charleston City(11)
Charleston SC 450 450
City Boatyard Charleston SC 215 213
Port Royal Port Royal SC 252 252
Port Royal Landing Port Royal SC 161 161
Reserve Harbor Pawleys Island SC 233 239
Skull Creek Hilton Head SC 186 186
South Carolina Total 1,816 1,874
North Carolina
Jarrett Bay Boatworks(7)
Beaufort NC 37 N/A
Kings Point Cornelius NC 784 784
Outer Banks(7)
Wanchese NC 206 N/A
Peninsula Yacht Club Cornelius NC 476 476
Skippers Landing Troutman NC 392 389
South Harbour Village Southport NC 144 146
Westport Denver NC 622 587
North Carolina Total 2,661 2,382
Puerto Rico
Puerto del Rey Fajardo PR 1,606 1,612
Puerto Rico Total 1,606 1,612
Virginia
Bluewater(7)
Hampton VA 200 N/A
Stingray Point Deltaville VA 224 228
Virginia Total 424 228
MIDWEST
Michigan
Belle Maer Harrison Township MI 545 542
Detroit River Detroit MI 473 473
Grand Isle Grand Haven MI 454 450
Great Lakes Muskegon MI 466 466
Jefferson Beach St. Clair Shores MI 898 898
Toledo Beach La Salle MI 474 363
Tower Marine(7)
Douglas MI 483 N/A
Michigan Total 3,793 3,192
Ohio
Lakefront Port Clinton OH 493 477
Sandusky Sandusky OH 550 550
Ohio Total 1,043 1,027
WEST
California
Anacapa Isle Oxnard CA 540 450
Ballena Isle Alameda CA 414 414
Bayfront(7)
Chula Vista CA 622 N/A
Cabrillo Isle San Diego CA 541 527
SUN COMMUNITIES, INC.
Marina Property Name City State / Municipal Wet Slips and Dry Storage Spaces
as of 12/31/2022
Wet Slips and Dry Storage Spaces
as of 12/31/2021
Emeryville Emeryville CA 460 460
Loch Lomond San Rafael CA 529 529
Marina Bay Yacht Harbor(7)
Richmond CA 800 N/A
Shelter Island San Diego CA 60 60
South Bay Chula Vista CA 563 413
Sunroad San Diego CA 645 643
Ventura Isle Ventura CA 531 444
California Total 5,705 3,940
COMPANY TOTAL 47,823 45,155
(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)Property acquired during year ended December 31, 2022.
(8)Wet slips and dry storage spaces from Harrison Yacht Yard are grouped into Narrows Point.
(9)Property acquired that is temporarily used for Hurricane Ian relief, which will become a development site for a dry storage facility.
(10)Property currently under development.
(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 Arising in the Ordinary Course of Business
We are involved in various legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material adverse impact on our results of operations or financial condition.
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, 2022.

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

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock has been listed on the NYSE since December 8, 1993, and trades under the symbol "SUI." On February 16, 2023, the closing share price of our common stock was $157.88 per share on the NYSE, and there were 594 holders of record of 124,099,219 outstanding shares of common stock.
On February 16, 2023, the following OP units of the Operating Partnership were outstanding:
OP Units OP Units
Issued and Outstanding Exchangeable
Shares of Common Stock
Aspen preferred OP units 988,819 309,388
Series A-1 preferred OP units 207,548 506,215
Series A-3 preferred OP units 40,268 74,917
Series C preferred OP units 306,013 339,674
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 240,710 155,297
Series H preferred OP units 581,367 354,492
Series J preferred OP units 239,000 144,848
Common OP units 2,448,083 2,448,083
Total 5,710,766 4,835,502
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, 2022:
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 - $ - 3,282,526
Total
- $ - 3,282,526
SUN COMMUNITIES, INC.
Recent Sales of Unregistered Securities
From time to time, we may issue shares of common stock in exchange for OP units that may be tendered to the Operating Partnership for redemption in accordance with the terms and provisions of the limited partnership agreement of the Operating Partnership. Such shares are issued based on the exchange ratios and formulas described in "Structure of the Company" under Part I, Item 1 of this Annual Report on Form 10-K. Below is the activity of conversions for the three months and year ended December 31, 2022:
Three Months Ended Year Ended
December 31, 2022 December 31, 2022
Series Conversion Rate Units / Shares Converted Common Stock Units / Shares Converted Common Stock
Aspen preferred OP units Various(1)
25,000 8,007 25,000 8,007
Common OP units 1.0000 10,552 10,552 150,393 150,393
Series A-1 preferred OP units 2.4390 62,781 153,122 67,476 164,566
Series C preferred OP units 1.1100 - - 150 166
Series E preferred OP units 0.6897 - - 10,000 6,896
Series H preferred OP units 0.6098 40 24 40 24
Series I preferred OP units 0.6098 - - 922,000 562,195
(1) Refer to Note 8, "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, 2022:
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, 2022 - October 31, 2022 5,820 $ 133.36 - $ -
November 1, 2022 - November 30, 2022 935 $ 134.27 - $ -
December 1, 2022 - December 31, 2022 - $ - - $ -
Total 6,755 $ 133.49 - $ -
During the three months ended December 31, 2022, we withheld 6,755 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, 2022. This line graph assumes a $100.00 investment on December 31, 2017, 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. During 2022, we updated our peer group, as shown in the "SUI New Peer Group" caption in the table below.
Year Ended
Index December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022
Sun Communities, Inc. $ 100.00 $ 112.89 $ 170.37 $ 176.47 $ 248.46 $ 173.12
Dow Jones U.S. Real Estate Residential Index $ 100.00 $ 103.29 $ 135.13 $ 121.26 $ 192.04 $ 131.67
NYSE Composite Index $ 100.00 $ 91.05 $ 114.28 $ 122.26 $ 147.54 $ 133.75
SUI New Peer Group(1)
$ 100.00 $ 102.10 $ 127.52 $ 113.19 $ 180.97 $ 126.17
SUI Old Peer Group(2)
$ 100.00 $ 98.84 $ 123.70 $ 111.67 $ 185.81 $ 129.67
(1)SUI New 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.
(2)SUI Old Peer Group includes: American Campus Communities, Inc., Apartment Investment and Management Company, AvalonBay Communities, Inc., Camden Property Trust, CubeSmart, Equity Lifestyle Properties, Inc., Essex Property Trust, Inc., Extra Space Storage Inc., Federal Realty Investment Trust, Invitation Homes Inc., Mid-America Apartment Communities, Inc., The Macerich Company and UDR, Inc.
The information included under the heading "Performance Graph" is not to be treated as "soliciting material" or as "filed" with the SEC, and is not incorporated by reference into any filing by the Company under the Securities Act or the Exchange Act that is made on, before or after the date of filing of this Annual Report on Form 10-K.
SUN COMMUNITIES, INC.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. [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, 2022, we owned and operated, directly or indirectly, or had an interest in, a portfolio of 669 developed properties located in the U.S., the UK, and Canada, including 353 MH communities, 182 RV communities and 134 marinas. We have been in the business of acquiring, operating, developing and expanding MH and RV communities since 1975 and marinas since 2020. We lease individual sites with utilities access for placement of manufactured homes, RVs or boats to our customers. We are also engaged in the marketing, selling and leasing of new and pre-owned homes to current and future residents in our MH communities. The Rental Program operations within our MH communities support and enhance our occupancy levels, property performance and cash flows.
SUN COMMUNITIES, INC.
EXECUTIVE SUMMARY
2022 General Overview
•Total revenues for 2022 increased 30.7% to $3.0 billion.
•In April 2022, we completed our previously announced acquisition of Park Holidays, the second largest owner and operator of holiday parks in the UK, at an enterprise value of £950.0 million (or approximately $1.2 billion). At the initial acquisition date, the Park Holidays portfolio was comprised of 40 owned and two managed properties located in the UK with over 15,900 sites and 600 development sites.
•Including Park Holidays, we acquired 69 properties, totaling over 27,000 sites, wet slips and dry storage spaces, and sites for expansion for a total purchase price of $2.2 billion.
•Achieved Constant Currency Core FFO and Core FFO of $7.44 and $7.35 per diluted share and OP unit, respectively, representing increases of 14.3% and 12.9% compared to 2021.
•Achieved Real property Same Property NOI growth of 5.4% for MH and RV and 7.7% for Marina over 2021.
•Increased MH and RV Same Property occupancy by 180 basis points to 98.6% as compared to 96.8% in 2021.
•Achieved 5-year and 10-year total shareholder return of 73.1% and 396.9%, respectively, outperforming the MSCI US REIT, Russell 1000, U.S. REIT Residential and S&P 500 indexes.
•Completed the construction of over 2,000 total sites at six ground-up developments and 11 expansion and re-development properties.
•Settled forward sale agreements related to an underwritten registered public offering of 4,025,000 shares of our common stock and 2,726,212 shares of our common stock sold under our at-the-market offering program for aggregate net proceeds of $1.2 billion.
•Obtained a $4.2 billion multi-currency revolving credit facility, a 110% increase from the prior credit facility.
•Closed $850.0 million of debt transactions, including an offering of underwritten senior unsecured notes of $600.0 million for net proceeds of $592.3 million.
•Completed a timely execution of our disaster preparedness plan that helped us successfully manage Hurricane Ian.
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, 2022 December 31, 2021 December 31, 2020
Occupancy % - Total Portfolio - MH and Annual RV blended(1)
95.9 % 97.4 % 97.3 %
Occupancy % - Same Property - Adjusted MH and Annual RV blended(1)(2)(3)
98.6 % 96.8 % 97.5 %
Core FFO per share $ 7.35 $ 6.51 $ 5.09
Constant Currency Core FFO per share $ 7.44 $ 6.51 $ 5.09
Real property NOI - Total Portfolio (in millions)
$ 1,167.0 $ 1,002.6 $ 721.3
Real property NOI - Same Property (in millions) - MH and RV(3)
$ 819.7 $ 777.5 $ 686.6
Real property NOI - Same Property (in millions) - Marina(3)
$ 162.0 $ 150.5 N/A
Homes sales volume (excluding UK home sales) 3,212 4,088 2,866
UK home sales 2,177 N/A 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 as reported year end Same Property count for each respective year.
SUN COMMUNITIES, INC.
Acquisition Activity
During the year ended December 31, 2022, we acquired 61 MH and RV communities and eight marinas, with 24,347 sites, wet slips and dry storage spaces and 2,655 development sites. 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, 2022, we sold an RV community containing 514 sites located in California for $15.0 million and two MH communities and one community containing MH and RV sites, each located in Florida, with a total of 323 sites for $29.5 million. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for details on the disposition activities.
Development and Expansion Activities
We have been focused on property ground-up developments and expansion opportunities adjacent to our existing properties.
Ground-up Developments - During the year ended December 31, 2022, we delivered over 840 total sites at six ground-up development properties located in Arizona, Texas, North Carolina and Colorado. We have developed nearly 2,900 sites within the past three years.
Expansions - During the year ended December 31, 2022, we expanded nearly 1,160 total sites at 11 properties. We have developed over 2,050 sites within the past three years.
We continue to expand our properties utilizing our inventory of owned and entitled land. We have 16,195 MH and RV sites suitable for future development.
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 66.2% 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.
We have also experienced strong revenue growth through recent acquisitions of RV communities. 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.
SUN COMMUNITIES, INC.
The following table identifies our MH and RV markets by total sites:
December 31, 2022 December 31, 2021
Major Market Number of Properties Total Sites % of Total Sites Number of Properties Total Sites % of Total Sites
Florida 129 44,278 24.6 % 132 46,733 29.4 %
Michigan 84 33,220 18.5 % 84 33,126 20.8 %
Texas 31 11,344 6.3 % 30 10,768 6.8 %
California 37 8,797 4.9 % 36 8,934 5.6 %
Arizona 13 5,523 3.1 % 12 5,308 3.3 %
Ontario, Canada 16 5,239 2.9 % 16 5,237 3.3 %
Indiana 12 4,178 2.3 % 12 4,176 2.6 %
New Jersey 11 4,042 2.2 % 11 3,990 2.5 %
Colorado 11 3,786 2.1 % 10 3,539 2.2 %
Virginia 10 3,449 1.9 % 10 3,435 2.2 %
Maine 16 3,656 2.0 % 15 3,431 2.2 %
New York 10 2,940 1.6 % 10 3,141 2.0 %
Ohio 9 2,925 1.6 % 9 2,925 1.8 %
South Carolina 6 2,624 1.5 % 6 2,624 1.7 %
New Hampshire 10 2,380 1.3 % 10 2,398 1.5 %
Illinois 5 2,235 1.2 % 5 2,235 1.4 %
Connecticut 16 2,005 1.1 % 16 2,005 1.3 %
Maryland 6 1,863 1.0 % 6 1,852 1.2 %
Delaware 5 1,979 1.1 % 4 1,716 1.1 %
Pennsylvania 5 1,535 0.9 % 5 1,536 1.0 %
Georgia 4 1,417 0.8 % 4 1,414 0.9 %
Oregon 6 1,384 0.8 % 6 1,330 0.8 %
North Carolina 5 1,182 0.7 % 5 1,123 0.7 %
Massachusetts 3 921 0.5 % 3 927 0.6 %
Utah 6 927 0.5 % 6 927 0.6 %
Washington 2 780 0.4 % 2 784 0.5 %
Wisconsin 2 591 0.3 % 2 591 0.4 %
Tennessee 2 545 0.3 % 2 545 0.3 %
Minnesota 1 475 0.3 % 1 475 0.3 %
Iowa 1 413 0.2 % 1 413 0.3 %
Louisiana 1 334 0.2 % 1 334 0.2 %
Nevada 1 324 0.2 % 1 324 0.2 %
Kentucky 1 330 0.2 % 1 315 0.2 %
Alabama 1 497 0.3 % 1 167 0.1 %
Mississippi 1 155 0.1 % 1 155 0.1 %
Montana 1 75 - % 1 75 - %
North American Total 480 158,348 88.1 % 477 159,008 100.0 %
United Kingdom 55 21,370 11.9 % N/A N/A N/A
Total 535 179,718 100.0 % 477 159,008 100.0 %
SUN COMMUNITIES, INC.
The following table identifies our marina markets by total wet slips and dry storage spaces:
December 31, 2022 December 31, 2021
Major Market Number of Properties Wet Slips Dry Storage Spaces
Total Wet Slips / Dry Storage Spaces
% Wet Slips / Dry Storage Spaces
Number of Properties Wet Slips Dry Storage Spaces
Total Wet Slips / Dry Storage Spaces
% Wet Slips / Dry Storage Spaces
Florida 21 2,551 2,503 5,054 10.6 % 20 2,701 2,532 5,233 11.6 %
California 11 5,360 345 5,705 11.9 % 9 3,884 56 3,940 8.7 %
Rhode Island 12 3,291 130 3,421 7.2 % 12 3,308 177 3,485 7.7 %
Connecticut 11 3,325 - 3,325 7.0 % 11 3,299 - 3,299 7.3 %
Michigan 7 3,120 673 3,793 7.9 % 6 2,637 555 3,192 7.1 %
Georgia 4 2,593 246 2,839 5.9 % 4 2,587 246 2,833 6.3 %
New York 9 3,018 - 3,018 6.3 % 8 2,783 - 2,783 6.2 %
Maryland 9 2,071 561 2,632 5.5 % 9 2,156 489 2,645 5.9 %
Massachusetts 9 2,070 450 2,520 5.3 % 9 2,045 501 2,546 5.6 %
Kentucky 5 2,332 40 2,372 5.0 % 5 2,365 40 2,405 5.3 %
North Carolina 7 1,169 1,492 2,661 5.6 % 5 1,081 1,301 2,382 5.3 %
Texas 3 1,841 223 2,064 4.3 % 3 1,841 283 2,124 4.6 %
South Carolina 8 1,206 610 1,816 3.8 % 8 1,261 613 1,874 4.1 %
Puerto Rico 1 981 625 1,606 3.4 % 1 987 625 1,612 3.6 %
Ohio 2 888 155 1,043 2.2 % 2 888 139 1,027 2.3 %
Alabama 1 81 642 723 1.5 % 1 81 648 729 1.6 %
Mississippi 1 451 135 586 1.2 % 1 453 134 587 1.3 %
Arkansas 1 582 - 582 1.2 % 1 582 - 582 1.3 %
New Jersey 2 376 35 411 0.9 % 2 488 30 518 1.1 %
Tennessee 2 385 - 385 0.8 % 2 384 - 384 0.9 %
New Hampshire 1 221 - 221 0.5 % 1 231 - 231 0.5 %
Virginia 2 424 - 424 0.9 % 1 228 - 228 0.5 %
Vermont 1 127 83 210 0.4 % 1 102 72 174 0.4 %
Oklahoma 1 162 - 162 0.3 % 1 172 - 172 0.4 %
Maine 3 240 10 250 0.5 % 2 170 - 170 0.4 %
134 38,865 8,958 47,823 125 36,714 8,441 45,155
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
NOI is derived from operating revenues minus property operating expenses and real estate taxes. NOI is a non-GAAP financial measure that we believe is helpful to investors as a supplemental measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. We use NOI as a key measure when evaluating performance and growth of particular properties and / or groups of properties. The principal limitation of NOI is that it excludes depreciation, amortization, interest expense and non-property specific expenses such as general and administrative expenses, all of which are significant costs. Therefore, NOI is a measure of the operating performance of our properties rather than of the Company overall. In addition, we calculate Constant Currency NOI for our UK Operations by translating the operating results from the UK at the foreign currency exchange rate used for guidance. We believe that NOI and Constant Currency NOI provide enhanced comparability for investor evaluation of 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 - A management tool used when evaluating performance and growth of our properties is a comparison of the Same Property portfolio. We define same properties as those we have owned and operated continuously since January 1, 2021. Same properties exclude ground-up development properties, acquired properties and properties sold after December 31, 2020. 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. 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, service, retail, dining and entertainment activities at the properties.
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 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. We also use FFO excluding certain gain and loss items that management considers unrelated to the operational and financial performance of our core business ("Core FFO"). In addition, we calculate Constant Currency Core FFO by translating the operating results from the UK, Canada and Australia at the foreign currency exchange rates used for guidance. We believe that Core FFO and Constant Currency Core FFO provide enhanced comparability for investor evaluations of period-over-period results.
SUN COMMUNITIES, INC.
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 attributable to Sun Communities, Inc. common shareholders to NOI and summarize our consolidated financial results for the years ended December 31, 2022, 2021 and 2020 (in millions):
Year Ended
December 31, 2022 December 31, 2021 December 31, 2020
Net income attributable to SUI common shareholders $ 242.0 $ 380.2 $ 131.6
Interest income (35.2) (12.2) (10.1)
Brokerage commissions and other revenues, net (34.9) (30.2) (17.2)
General and administrative 256.8 181.3 109.5
Catastrophic event-related charges, net 17.5 2.2 0.9
Business combinations 24.7 1.4 23.0
Depreciation and amortization 604.8 522.7 376.9
Loss on extinguishment of debt (see Note 8)
4.4 8.1 5.2
Interest expense 229.8 158.6 129.1
Interest on mandatorily redeemable preferred OP units / equity 4.2 4.2 4.2
(Gain) / loss on remeasurement of marketable securities (see Note 14)
53.4 (33.5) (6.1)
(Gain) / loss on foreign currency exchanges (5.4) 3.7 (7.7)
Gain on disposition of properties (12.2) (108.1) (5.6)
Other expense, net 2.1 12.1 5.2
(Gain) / loss on remeasurement of notes receivable (see Note 4)
0.8 (0.7) 3.3
Income from nonconsolidated affiliates (see Note 6)
(2.9) (4.0) (1.7)
Loss on remeasurement of investment in nonconsolidated affiliates (see Note 6)
2.7 0.2 1.6
Current tax expense (see Note 12)
10.3 1.2 0.8
Deferred tax expense / (benefit) (see Note 12)
(4.2) 0.1 (1.6)
Preferred return to preferred OP units / equity interests 11.0 12.1 6.9
Add: Income attributable to noncontrolling interests 10.8 21.5 8.9
NOI $ 1,380.5 $ 1,120.9 $ 757.1
Year Ended
December 31, 2022 December 31, 2021 December 31, 2020
Real property NOI $ 1,167.0 $ 1,002.6 $ 721.3
Home sales NOI 154.6 74.4 28.6
Service, retail, dining and entertainment NOI 58.9 43.9 7.2
NOI $ 1,380.5 $ 1,120.9 $ 757.1
SUN COMMUNITIES, INC.
Seasonality of Revenue
The RV and marina industries are seasonal in nature, and the results of operations in any one period may not be indicative of results in future periods.
In the RV segment, certain properties maintain higher occupancy during the summer months, while other properties maintain higher occupancy during the winter months. Based on the location of our properties with transient RV sites, our portfolio generally produces higher revenues between April and September than between October and March. Real property - transient revenue is included in RV segment revenue. The following table presents the seasonality of real property-transient revenue for the years ended December 31, 2022, 2021 and 2020:
Real property - transient revenue
(in millions) For the Three Months Ended
Year March 31 June 30 September 30 December 31 Total
2022 $ 335.0 12.7 % 27.8 % 45.8 % 13.7 % 100.0 %
2021 $ 266.6 11.9 % 27.3 % 44.9 % 15.9 % 100.0 %
2020 $ 134.7 18.8 % 15.6 % 44.9 % 20.7 % 100.0 %
In the marina market, demand for wet slip storage increases during the summer months as customers contract for the summer boating season, which also drives non-storage revenue streams such as service, fuel and on-premises restaurants or convenience stores. Demand for dry storage increases during the winter season as seasonal weather patterns require boat owners to store their vessels on dry docks and within covered racks. The following table presents the seasonality of Marina real property revenue for the years ended December 31, 2022, 2021 and 2020:
Seasonal real property revenue
(in millions)
For the Three Months Ended
Year March 31 June 30 September 30 December 31 Total
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 %
2020 $ 24.4 N/A N/A N/A 100.0 % 100.0 %
In 2020, Seasonal real property revenue was recognized 100% in the fourth quarter, given that the Safe Harbor acquisition closed during the fourth quarter.
SUN COMMUNITIES, INC.
Comparison of the Years Ended December 31, 2022 and 2021
Real Property Operations - Total Portfolio
The following tables reflect certain financial and other information for our Total Portfolio as of and for the years ended December 31, 2022 and 2021 (in millions, except for statistical information):
Year Ended
Financial Information December 31, 2022 December 31, 2021
Change % Change
Revenue
Real property (excluding transient and other) $ 1,356.3 $ 1,165.0 $ 191.3 16.4 %
Real property - transient 353.4 281.4 72.0 25.6 %
Other 192.5 151.8 40.7 26.8 %
Total Operating 1,902.2 1,598.2 304.0 19.0 %
Expense
Property Operating 735.2 595.6 139.6 23.4 %
Real Property NOI $ 1,167.0 $ 1,002.6 $ 164.4 16.4 %
As of
Other Information December 31, 2022 December 31, 2021 Change
Number of properties(1)
669 602 67
MH occupancy 94.8 %
RV occupancy(2)
100.0 %
MH & RV blended occupancy(3)
95.9 % 97.4 % (1.5) %
Sites available for MH & RV development 16,195 10,672 5,523
Monthly base rent per site - MH $ 630 $ 603 (5)
$ 27
Monthly base rent per site - RV(4)
$ 544 $ 523 (5)
$ 21
Monthly base rent per site - Total $ 609 $ 584 (5)
$ 25
Weighted average monthly rental rate - MH Rental Program $ 1,221 $ 1,112 $ 109
(1) Includes MH and RV communities and marinas.
(2) Occupancy percentages include annual RV sites and exclude transient RV sites.
(3) Occupancy percentages include MH and annual RV sites, and exclude transient RV sites.
(4) Monthly base rent pertains to annual RV sites and excludes transient RV sites.
(5) Canadian currency figures included within the year ended December 31, 2021 have been translated at 2022 average exchange rates, respectively.
The $164.4 million increase in Real Property NOI as compared to the same period in 2021, consists of $42.2 million from Same Property MH and RV, $11.5 million from Same Property Marina, $51.0 million from the UK operations and $59.7 million from other recently acquired or developed properties in the year ended December 31, 2022 as compared to 2021.
SUN COMMUNITIES, INC.
Real Property Operations - Same Property Portfolio
A key management tool used when evaluating performance and growth of our properties is a comparison of the Same Property portfolio. Same Property refers to properties that we have owned for at least the preceding year, exclusive of properties recently completed or under construction, and other properties as determined by management. The Same Property data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions or unique situations.
In order to evaluate the growth of the Same Property portfolio, management has classified certain items differently than our GAAP 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, the amounts in the tables below reflect constant currency for comparative purposes. For the years ended December 31, 2022 and 2021, Canadian currency figures included within the year ended December 31, 2021 have been translated at 2022 average exchange rates. For the years ended December 31, 2021 and 2020, Canadian currency figures included within the year ended December 31, 2020 have been translated at 2021 average exchange rates.
SUN COMMUNITIES, INC.
Real Property Operations - Same Property - MH and RV United States and Canada
The following tables reflect certain financial and other information for our Same Property MH and RV portfolio as of and for the years ended December 31, 2022 and 2021.
(in millions, except for statistical information).
Total Same Property MH RV
Year Ended Year Ended Year Ended
Financial Information December 31, 2022 December 31, 2021 Change % Change(1)
December 31, 2022 December 31, 2021 Change % Change(1)
December 31, 2022 December 31, 2021 Change % Change(1)
Revenue
Real property (excluding transient and other) $ 929.3 $ 873.0 $ 56.3 6.4 % $ 739.9 $ 707.4 $ 32.5 4.6 % $ 189.4 $ 165.6 $ 23.8 14.4 %
Real property - transient 245.0 237.5 7.5 3.1 % 1.2 1.5 (0.3) (14.8) % 243.8 236.1 7.7 3.3 %
Other 43.5 41.9 1.6 3.9 % 19.8 19.0 0.8 3.7 % 23.7 22.8 0.9 4.0 %
Total Operating 1,217.8 1,152.4 65.4 5.7 % 760.9 727.9 33.0 4.5 % 456.9 424.5 32.4 7.6 %
Expense
Property Operating 398.1 374.9 23.2 6.2 % 202.7 187.5 15.2 8.1 % 195.4 187.4 8.0 4.2 %
Real Property NOI $ 819.7 $ 777.5 $ 42.2 5.4 % $ 558.2 $ 540.4 $ 17.8 3.3 % $ 261.5 $ 237.1 $ 24.4 10.3 %
(1) Percentages are calculated based on unrounded numbers.
Total Same Property MH RV
Year Ended Year Ended Year Ended
Financial Information December 31, 2021 December 31, 2020 Change % Change(1)
December 31, 2021 December 31, 2020 Change % Change(1)
December 31, 2021 December 31, 2020 Change % Change(1)
Revenue
Real property (excluding transient and other) $ 875.3 $ 824.7 $ 50.6 6.1 % $ 693.4 $ 663.6 $ 29.8 4.5 % $ 182.0 $ 161.1 $ 20.9 13.0 %
Real property - transient 194.8 144.1 50.7 35.2 % 1.4 1.7 (0.3) (15.2) % 193.3 142.4 50.9 35.8 %
Other 39.0 23.4 15.6 67.0 % 19.3 10.3 9.0 87.1 % 19.7 13.0 6.7 51.1 %
Total Operating 1,109.1 992.2 116.9 11.8 % 714.1 675.6 38.5 5.7 % 395.0 316.5 78.5 24.8 %
Expense
Property Operating 345.7 305.6 40.1 13.1 % 182.8 169.1 13.7 8.1 % 163.0 136.5 26.5 19.4 %
Real Property NOI $ 763.4 $ 686.6 $ 76.8 11.2 % $ 531.3 $ 506.5 $ 24.8 4.9 % $ 232.0 $ 180.0 $ 52.0 28.9 %
(1) Percentages are calculated based on unrounded numbers.
SUN COMMUNITIES, INC.
As of As of
Other Information December 31, 2022 December 31, 2021 Change December 31, 2021 December 31, 2020 Change
Number of properties(1)
421 421 - 403 403 -
MH occupancy 97.1 % 97.6 %
RV occupancy(2)
100.0 % 100.0 %
MH & RV blended occupancy(3)
97.8 % 98.2 %
Adjusted MH occupancy(4)
98.2 % 98.6 %
Adjusted RV occupancy(5)
100.0 % 100.0 %
Adjusted MH & RV blended occupancy(6)
98.6 % 96.8 % (7)
1.8 % 98.9 % 97.5 % (7)
1.4 %
Sites available for development 7,092 7,670 (578) 6,866 7,332 (466)
Monthly base rent per site - MH $ 635 $ 607 (9)
$ 28 $ 611 $ 591 (9)
$ 20
Monthly base rent per site - RV(8)
$ 555 $ 516 (9)
$ 39 $ 537 $ 512 (9)
$ 25
Monthly base rent per site - Total $ 617 $ 587 (9)
$ 30 $ 593 $ 573 (9)
$ 20
Monthly base rent per site - MH Rental Program $ 1,225 $ 1,117 $ 108
(1) Financial results from properties disposed of during the year have been removed from Same Property reporting.
(2) Occupancy percentages include annual RV sites and exclude transient RV sites.
(3) Occupancy percentages include MH and annual RV sites, and exclude transient RV sites.
(4) Adjusted occupancy percentages include MH sites and exclude recently completed but vacant MH expansion sites.
(5) Adjusted occupancy percentages include annual RV sites, and exclude transient RV sites.
(6) Adjusted occupancy percentages include MH and annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.
(7) The occupancy percentages for 2021 of the years ended December 31, 2022 and 2021 and 2020 of the years ended December 31, 2021 and 2020 have been adjusted to reflect incremental growth period-over-period from newly rented MH expansion sites and the conversion of transient RV sites to annual RV sites.
(8) Monthly base rent pertains to annual RV sites and excludes transient RV sites.
(9) Canadian currency figures included within the year ended December 31, 2021 and 2020 have been translated at 2022 and 2021 average exchange rates, respectively.
For the years ended December 31, 2022 and 2021:
•The Same Property data includes all properties that we have 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. We have reclassified utilities revenues of $79.0 million and $71.4 million for the years ended December 31, 2022 and 2021, respectively, to reflect the utility expenses associated with our Same Property net of recovery.
•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 and other) revenue of $32.5 million, or 4.6% partially offset by increased property operating expenses. Real property (excluding transient and other) revenue increased primarily 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 (excluding transient and other) revenue of $23.8 million, or 14.4%, primarily due to 7.6% increase in monthly base rent.
For the years ended December 31, 2021 and 2020:
•The Same Property data includes all properties that we owned and operated continuously since January 1, 2020, exclusive of ground-up development and redevelopment properties recently completed or under construction, and other properties as determined by management. We have reclassified utilities revenues of $69.0 million and $63.1 million rebilled to residents and owners for the years ended December 31, 2021 and 2020, respectively, to reflect the utility expenses associated with our Same Property net of recovery.
SUN COMMUNITIES, INC.
•The MH segment's increase in NOI of $24.8 million, or 4.9%, when compared to the same period in 2020 is primarily due to an increase in Real property (excluding transient and other) revenue of $29.8 million, or 4.5%. Real property (excluding transient and other) revenue increased due to a 3.4% increase in monthly base rent per MH site and a 1.4% increase in occupancy.
•The RV segment's increase in NOI of $52.0 million, or 28.9%, when compared to the same period in 2020 is primarily due to an increase in Real property - transient revenue of $50.9 million, or 35.8%, due to increased transient and vacation rental stays at our resorts. The results of the comparative 2020 period were impacted by the required closure, or delayed opening, of over 40 of our RV resorts due to the COVID-19 pandemic.
Real Property Operations - Same Property - Marina
The following tables reflect certain financial and other information for our Same Property Marina portfolio as of and for the years ended December 31, 2022 and 2021 (in millions, except for statistical information).
Year Ended
Financial Information December 31, 2022 December 31, 2021 Change % Change(1)
Revenue
Real property (excluding transient and other) $ 221.4 $ 205.6 $ 15.8 7.7 %
Real property - transient 12.4 13.0 (0.6) (5.1) %
Other 12.3 11.4 0.9 8.7 %
Total Operating 246.1 230.0 16.1 7.0 %
Expense
Property Operating 84.1 79.5 4.6 5.8 %
Real Property NOI $ 162.0 $ 150.5 $ 11.5 7.7 %
(1) Percentages are calculated based on unrounded numbers.
As of
December 31, 2022 December 31, 2021 Change % Change
Other Information
Number of properties 101 101 - - %
Wet slip and dry storage spaces 35,546 35,744 (198) (0.6) %
The Same Property data includes all marinas that we have owned and operated continuously since January 1, 2021 exclusive of certain properties as determined by management. We have reclassified utility revenues of $11.4 million and $11.1 million for the year ended December 31, 2022 and 2021, respectively, to reflect the utility expenses associated with our Same Property Marina portfolio net of recovery.
For the years ended December 31, 2022 and 2021, the $11.5 million, or 7.7%, increase in Marina Real Property NOI is primarily due to the $15.8 million, or 7.7%, increase in Real property (excluding transient and other) revenue, partially offset by increased property operating expenses.
SUN COMMUNITIES, INC.
UK Operations Summary
The following table reflects certain financial and other information for our UK operations as of and for the period from date of acquisition to December 31, 2022 (in millions, except for statistical information):
YTD Since Acquisition
December 31, 2022
Financial Information
Revenues
Real property (excluding transient and other) $ 60.0
Real property - transient 38.5
Other 1.2
Total Operating 99.7
Expenses
Property Operating 48.7
Real Property NOI 51.0
Home Sales
Revenue 190.4
Cost of home sales 102.4
Home selling expenses 5.5
NOI 82.5
Retail, dining and entertainment
Revenue 32.8
Expense 38.0
Net Operating Loss (5.2)
UK Operations NOI $ 128.3
Adjustment
Foreign currency translation impact 15.6
UK Operations NOI - Constant Currency
$ 143.9
Other information
Number of properties 55
Developed sites 18,227
Occupied sites 16,223
Occupancy 89.0 %
Transient sites 3,143
Sites available for development 1,888
Home Sales
New home sales volume 1,158
Pre-owned home sales volume 1,019
Total home sales volume 2,177
UK Operations NOI, a component of our MH segment, is separately reviewed to assess the overall growth and performance of the UK Operations portfolio and its financial impact on our operations.
We have reclassified utility revenue of $8.9 million for the period from date of acquisition through December 31, 2022, to reflect the utility expenses associated with our UK Operations portfolio net of recovery.
SUN COMMUNITIES, INC.
Home Sales Summary (excluding UK home sales)
We purchase new homes and acquire pre-owned and repossessed manufactured homes, generally located within our communities, from lenders, dealers and former residents to lease or sell to current and prospective residents.
The following table reflects certain financial and statistical information for our Home Sales Program for the years ended December 31, 2022 and 2021 (in millions, except for average selling prices and other information):
Year Ended
December 31, 2022 December 31, 2021 Change % Change
Financial Information
New homes
New home sales $ 126.0 $ 114.9 $ 11.1 9.7%
New home cost of sales 103.3 94.1 9.2 9.8%
Gross profit - new homes 22.7 20.8 1.9 9.1%
Gross margin % - new homes 18.0 % 18.1 % (0.1) %
Average selling price - new homes $ 179,232 $ 156,902 $ 22,330 14.2%
Pre-owned homes
Pre-owned home sales $ 149.4 $ 165.3 $ (15.9) (9.6)%
Pre-owned home cost of sales 81.6 93.0 (11.4) (12.3)%
Gross profit - pre-owned homes 67.8 72.3 (4.5) (6.2)%
Gross margin % - pre-owned homes 45.4 % 43.7 % 1.7 %
Average selling price - pre-owned homes $ 59,546 $ 49,255 $ 10,291 20.9%
Total home sales
Revenue from home sales $ 275.4 $ 280.2 $ (4.8) (1.7)%
Cost of home sales 184.9 187.1 (2.2) (1.2)%
Home selling expenses 18.4 18.7 (0.3) (1.6)%
Home Sales NOI $ 72.1 $ 74.4 $ (2.3) (3.1)%
Other Information
New home sales volume 703 732 (29) (4.0)%
Pre-owned home sales volume 2,509 3,356 (847) (25.2)%
Total home sales volume 3,212 4,088 (876) (21.4)%
Gross Profit - New Homes
For the year ended December 31, 2022, the $1.9 million, or 9.1%, increase in gross profit is primarily the result of a 14.2% increase in new home average selling price, partially offset by a 4.0% decrease in new home sales volume, as compared to the same period in 2021.
Gross Profit - Pre-owned Homes
For the year ended December 31, 2022, the $4.5 million, or 6.2%, decrease in gross profit is driven by a 25.2% decrease in pre-owned home sales volume, partially offset by a 20.9% increase in the pre-owned home average selling price, as compared to the same period in 2021.
Refer to the UK Operations summary above for financial information related to our home sales in the UK.
SUN COMMUNITIES, INC.
Rental Program Summary
The following table reflects certain financial and other information for our Rental Program for the years ended December 31, 2022 and 2021 (in millions, except for other information):
Year Ended
December 31, 2022 December 31, 2021 Change % Change
Financial Information
Revenues $ 127.6 $ 138.1 $ (10.5) (7.6) %
Expenses 23.9 19.7 4.2 21.3 %
Rental Program NOI $ 103.7 $ 118.4 $ (14.7) (12.4) %
Other Information
Number of sold rental homes 640 1,071 (431) (40.2) %
Number of occupied rentals, end of period 9,334 9,870 (536) (5.4) %
Investment in occupied rental homes, end of period $ 572.3 $ 556.3 $ 16.0 2.9 %
Weighted average monthly rental rate, end of period $ 1,221 $ 1,112 $ 109 9.8 %
The Rental Program NOI is included in Real Property NOI. The Rental Program NOI is separately reviewed to assess the overall growth and performance of the Rental Program and its financial impact on our operations.
For the year ended December 31, 2022, Rental Program NOI decreased $14.7 million, or 12.4% as compared to the same period in 2021. The decrease is primarily due to a $10.5 million, or 7.6%, decrease in revenue, driven by a 5.4% decrease in the number of occupied rental homes and a 21.3% increase in expenses as compared to the same period in 2021.
SUN COMMUNITIES, INC.
Marina Segment Summary
The following table reflects certain financial and other information for our marinas for the years ended December 31, 2022 and 2021 (in millions, except for other information):
Year Ended
December 31, 2022 December 31, 2021
Change % Change
Financial Information
Revenues
Real property (excluding transient and other) $ 321.8 $ 251.0 $ 70.8 28.2%
Real property - transient 18.9 14.8 4.1 27.7%
Other 23.8 12.4 11.4 91.9%
Total Operating 364.5 278.2 86.3 31.0%
Expenses
Property Operating
121.4 95.6 25.8 27.0%
Real Property NOI 243.1 182.6 60.5 33.1%
Service, retail, dining and entertainment
Revenue 402.3 270.8 131.5 48.6%
Expense 356.9 241.1 115.8 48.0%
NOI 45.4 29.7 15.7 52.9%
Marina NOI $ 288.5 $ 212.3 $ 76.2 35.9%
Other Information
Number of properties 134 125 9 7.2%
Total wet slips and dry storage 47,823 45,155 2,668 5.9%
The Marina NOI is separately reviewed to assess the overall growth and performance of the Marina segment and its financial impact on our results of operations.
We have reclassified utility revenues of $20.2 million and $15.0 million for the years ended December 31, 2022 and 2021, respectively, to reflect the utility expenses associated with our Marina portfolio net of recovery.
For the years ended December 31, 2022 and 2021:
•The $76.2 million, or 35.9% increase in Marina NOI is due to a $60.5 million, or 33.1%, increase in Marina Real Property NOI and a $15.7 million, or 52.9% increase, in Service, Retail, Dining and Entertainment NOI.
•The $60.5 million, or 33.1%, increase in Marina Real Property NOI is due primarily to an increase in the number of owned Marina properties compared to the same period in 2021.
•The $15.7 million, or 52.9%, increase in Service, Retail, Dining and Entertainment NOI is due primarily to increased service rates at our marinas and the addition of service revenue from the acquisition of additional marinas as compared to the same period in 2021.
SUN COMMUNITIES, INC.
Other Items - Statements of Operations(1)
The following table summarizes other income and expenses for the years ended December 31, 2022 and 2021 (amounts in millions):
Year Ended
December 31, 2022 December 31, 2021 Change % Change
Service, retail, dining and entertainment, net $ 58.9 $ 43.9 $ 15.0 34.2 %
Interest income $ 35.2 $ 12.2 $ 23.0 188.5 %
Brokerage commissions and other, net $ 34.9 $ 30.2 $ 4.7 15.6 %
General and administrative expense $ 256.8 $ 181.3 $ 75.5 41.6 %
Catastrophic event-related charges, net $ 17.5 $ 2.2 $ 15.3 695.5 %
Business combinations $ 24.7 $ 1.4 $ 23.3 N/M
Depreciation and amortization $ 604.8 $ 522.7 $ 82.1 15.7 %
Loss on extinguishment of debt (see Note 8)
$ 4.4 $ 8.1 $ (3.7) (45.7) %
Interest expense $ 229.8 $ 158.6 $ 71.2 44.9 %
Interest on mandatorily redeemable preferred OP units / equity $ 4.2 $ 4.2 $ - - %
Gain / (loss) on remeasurement of marketable securities (see Note 14)
$ (53.4) $ 33.5 $ (86.9) N/M
Gain / (loss) on foreign currency exchanges $ 5.4 $ (3.7) $ 9.1 N/M
Gain on dispositions of properties $ 12.2 $ 108.1 $ (95.9) (88.7) %
Other expense, net $ (2.1) $ (12.1) $ 10.0 (82.6) %
Gain / (loss) on remeasurement of notes receivable (see Note 4)
$ (0.8) $ 0.7 $ (1.5) N/M
Income from nonconsolidated affiliates (see Note 6)
$ 2.9 $ 4.0 $ (1.1) (27.5) %
Loss on remeasurement of investment in nonconsolidated affiliates (see Note 6)
$ (2.7) $ (0.2) $ (2.5) N/M
Current tax expense (see Note 12)
$ (10.3) $ (1.2) $ (9.1) 758.3 %
Deferred tax benefit / (expense) (see Note 12)
$ 4.2 $ (0.1) $ 4.3 N/M
Preferred return to preferred OP units / equity interests $ 11.0 $ 12.1 $ (1.1) (9.1) %
Income attributable to noncontrolling interests $ 10.8 $ 21.5 $ (10.7) (49.8) %
(1) Only items determined by management to be material, of interest, or unique to the periods disclosed above are explained below.
N/M = Percentage change is not meaningful.
Service, retail, dining and entertainment, net - for the year ended December 31, 2022, increased primarily due to increased service rates at our marinas and acquisitions.
Interest income - for the year ended December 31, 2022, increased primarily due to interest income on a loan provided to a real estate operator to finance its acquisition and development costs in the current period as compared to the same period in 2021.
General and administrative expense - for the year ended December 31, 2022, increased primarily due to the acquisition of Park Holidays, and an increase in wages and incentives driven by growth in strategic initiatives as compared to the same period in 2021.
Catastrophic event-related charges, net - for the year ended December 31, 2022, increased primarily due to charges for impairment, cleanup, debris removal and repairs, partially offset by expected insurance recoveries, at our properties in Fort Myers, Florida, which sustained significant damage from Hurricane Ian. Refer to Note 16, "Commitments and Contingencies," in our accompanying Consolidated Financial Statements for additional information.
Business combinations - for the year ended December 31, 2022, increased primarily as a result of the acquisition of Park Holidays. Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for additional information.
Depreciation and amortization - for the year ended December 31, 2022, increased as a result of property acquisitions during 2021 and 2022. Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for additional information.
SUN COMMUNITIES, INC.
Interest expense - for the year ended December 31, 2022, increased due to the higher carrying balance of debt and increased interest rates as compared to the same period in 2021. Refer to Note 8, "Debt and Line of Credit," in our accompanying Consolidated Financial Statements for additional information.
Gain / (loss) on remeasurement of marketable securities - for the year ended December 31, 2022, was a loss of $53.4 million, as compared to a gain of $33.5 million during the same period in 2021 due to the fluctuation in the price of our publicly traded marketable securities. Refer to Note 15, "Fair Value of Financial Instruments," in our accompanying Consolidated Financial Statements for additional information.
Gain / (loss) on foreign currency exchanges - for the year ended December 31, 2022, was a gain of $5.4 million, primarily due to the impact of the U.S. dollar strengthening against the Pound sterling on our line of credit. There was a loss of $3.7 million in the same period in 2021, primarily due to the fluctuation of exchange rates on Canadian and Australian denominated currencies.
Gain on dispositions of properties - for the year ended December 31, 2022, decreased due to a lower net gain on the sale of four properties as compared to a gain on the sale of six properties during the same period in 2021. Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for additional information.
Other expense, net - for the year ended December 31, 2022, was an expense of $2.1 million, compared to an expense of $12.1 million, for the year ended December 31, 2021, primarily due to a gain from a litigation settlement in 2022 and contingent consideration expense in 2021.
Current tax expense - for the year ended December 31, 2022, increased due to incremental taxable income from the acquisition of Park Holidays in the UK. Refer to Note 12, "Income Taxes," in our accompanying Consolidated Financial Statements for additional information.
Income attributable to noncontrolling interests - for the year ended December 31, 2022, decreased due to a decrease in Net Income as compared to the same period in 2021.
SUN COMMUNITIES, INC.
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO SUI COMMON SHAREHOLDERS TO FFO
The following table reconciles Net income attributable to SUI common shareholders to FFO for the years ended December 31, 2022, 2021 and 2020 (in millions, except for per share amounts):
Year Ended
December 31, 2022 December 31, 2021 December 31, 2020
Net Income Attributable to SUI Common Shareholders $ 242.0 $ 380.2 $ 131.6
Adjustments
Depreciation and amortization 602.6 521.9 376.9
Depreciation on nonconsolidated affiliates 0.1 0.1 0.1
(Gain) / loss on remeasurement of marketable securities
53.4 (33.5) (6.1)
Loss on remeasurement of investment in nonconsolidated affiliates 2.7 0.2 1.6
(Gain) / loss on remeasurement of notes receivable 0.8 (0.7) 3.3
Gain on dispositions of properties (12.2) (108.1) (5.6)
Add: Returns on preferred OP units 9.5 4.0 2.2
Add: Income attributable to noncontrolling interests 10.4 14.7 7.9
Gain on dispositions of assets, net (54.9) (60.5) (22.2)
FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities(1)
$ 854.4 $ 718.3 $ 489.7
Adjustments
Business combination expense and other acquisition related costs(2)
47.4 10.0 25.3
Loss on extinguishment of debt 4.4 8.1 5.2
Catastrophic event-related charges, net 17.5 2.2 0.9
Loss of earnings - catastrophic event-related charges, net(3)
4.8 0.2 -
(Gain) / loss on foreign currency exchanges (5.4) 3.7 (7.7)
Other adjustments, net(4)
0.4 16.2 2.2
Core FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities(1)
$ 923.5 $ 758.7 $ 515.6
Adjustment
Foreign currency translation impact(5)
11.0 - -
Constant Currency Core FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities $ 934.5 $ 758.7 $ 515.6
Weighted Average Common Shares Outstanding - Basic 120.2 112.6 97.5
Add
Common shares dilutive effect from forward equity sale 0.2 - -
Restricted stock 0.4 0.2 0.4
Common OP units 2.5 2.5 2.5
Common stock issuable upon conversion of certain preferred OP units 2.3 1.2 0.9
Weighted Average Common Shares Outstanding - Diluted 125.6 116.5 101.3
FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities Per Share $ 6.80 $ 6.16 $ 4.83
Core FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities Per Share $ 7.35 $ 6.51 $ 5.09
Constant Currency Core FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities per Share $ 7.44 $ 6.51 $ 5.09
(1)The effect of certain anti-dilutive convertible securities is excluded from these items.
(2)These costs represent (i) nonrecurring integration expenses associated with new acquisitions and first year acquisition deferred costs, (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 and (iv) business combination expenses and 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.
(3)Adjustment related to estimated loss of earnings in excess of the applicable business interruption deductible in relation to our three Fort Myers Florida RV communities that were impaired by Hurricane Ian and our three Florida Keys communities that were impaired by Hurricane Irma, which had not yet been received from our insurer.
(4)Other adjustments, net include (i) deferred tax (benefit) / expense and long-term lease termination (benefit) / expense for the years ended December 31, 2022, 2021 and 2020 (ii) accelerated deferred compensation amortization, gain from litigation settlement and gain on sale of investment in nonconsolidated affiliate for the year ended December 31, 2022, (iii) RV rebranding non-recurring cost for the years ended December 31, 2022 and 2021, and (iv) change in estimated contingent consideration for the years ended December 31, 2021 and 2020.
SUN COMMUNITIES, INC.
(5)We calculated the foreign currency translation impact by comparing the actual weighted average foreign currency rates with the weighted average foreign currency rates used for guidance, as follows:
Year Ended
December 31, 2022
Actual Guidance
U.S. Dollars per Pounds Sterling $ 1.2041 $ 1.330
U.S. Dollars per Canadian Dollars $ 0.7692 $ 0.770
U.S. Dollars per Australian Dollars $ 0.7282 $ 0.756
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 flows 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 8, "Debt and Line of Credit," and Note 9, "Equity and Temporary Equity," in our accompanying Consolidated Financial Statements for additional information.
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. In June 2021, we received investment grade ratings of BBB and Baa3 from S&P Global and Moody's, respectively, both with stable outlooks. Our ratings remain unchanged from original receipt. 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.
Acquisition, development and expansion activities
Subject to market conditions, we intend to continue to identify opportunities to expand our development pipeline and acquire existing properties. We finance acquisitions through available cash, secured financing, draws on our 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 expansions We will continue to evaluate acquisition and development opportunities that meet our underwriting criteria.
During the year ended December 31, 2022, we acquired 61 MH and RV communities, totaling 21,795 sites and 2,655 development sites, and eight marinas totaling 2,552 wet slips and dry storage spaces, for a total purchase price of approximately $2.2 billion. This includes our acquisition of Park Holidays at an enterprise value of £950.0 million, or approximately $1.2 billion.
We have been focused on property ground-up development and expansion opportunities adjacent to our existing properties. During the year ended December 31, 2022, we constructed over 840 total sites at six ground-up developments and expanded nearly 1,160 total sites at 11 properties.
We continue to expand our properties utilizing our inventory of owned and entitled land. We have 16,195 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 in 2022.
SUN COMMUNITIES, INC.
Capital Expenditures
Our capital expenditures include expansion sites and development construction costs, recurring capital expenditures, lot modifications, growth projects, acquisition-related capital expenditures, rental home purchases and rebranding costs.
Our capital expenditure activity is summarized as follows (in millions):
Year Ended
December 31, 2022 December 31, 2021
Non-Recurring Capital Expenditures
Lot Modifications $ 39.1 $ 28.8
Growth Projects 99.5 77.0
Rebranding 15.0 6.1
Acquisition-related Capital Expenditures 280.3 176.5
Expansion and Development 261.8 201.7
Rental Program 151.1 117.4
Other 0.4 0.5
Total Non-Recurring Capital Expenditures 847.2 608.0
Recurring Capital Expenditures 73.8 64.6
Total Capital Expenditure Activities $ 921.0 $ 672.6
Recurring capital expenditures - property recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing assets used to operate the communities and marinas. Recurring capital expenditures at our MH and RV properties include items such as: major road and driveway repairs and improvements; 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 items such as: dredging, dock repairs and improvements, and equipment maintenance and upgrades. The minimum capitalized amount is five hundred dollars.
Non-Recurring Capital Expenditures
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 MH, RV and marina properties. This includes, but is 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 costs of building an RV mobile application and updated website.
Acquisition-related capital expenditures - consist of capital improvements identified during due diligence that are necessary to bring our communities and marinas up to our operating standards. These include items such as: upgrading clubhouses; landscaping; new street light systems; new mail delivery systems; pool renovation including larger decks, heaters and furniture; new maintenance facilities; lot modifications; and new signage including main signs and internal road signs.
Expansion and development expenditures - consist primarily of construction costs such as roads, activities and amenities, and costs necessary to complete home and RV site improvements, such as driveways, sidewalks and landscaping at 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.
SUN COMMUNITIES, INC.
Cash Flow Activities
Our cash flow activities are summarized as follows (in millions):
Year Ended
December 31, 2022 December 31, 2021 December 31, 2020
Net Cash Provided by Operating Activities $ 734.9 $ 753.6 $ 543.3
Net Cash Used for Investing Activities $ (3,062.6) $ (2,338.2) $ (2,486.5)
Net Cash Provided by Financing Activities $ 2,348.6 $ 1,570.4 $ 2,000.8
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash $ (8.7) $ (0.2) $ 0.2
Cash, cash equivalents and restricted cash increased by $12.2 million from $78.2 million as of December 31, 2021, to $90.4 million as of December 31, 2022.
Operating activities - Net cash provided by operating activities decreased by $18.7 million, to $734.9 million for the year ended December 31, 2022, compared to $753.6 million for the year ended December 31, 2021. The decrease in operating cash flow was primarily due to changes in inventory, other assets, and other receivables, including an increase in insurance reimbursement receivables related to Hurricane Ian, partially offset by improved operating performance at our existing MH and RV communities and marinas.
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 premium;
•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 the COVID-19 pandemic. 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 increased by $0.8 billion, to $3.1 billion for the year ended December 31, 2022, compared to $2.3 billion for the year ended December 31, 2021. The increase in Net cash used for investing activities was primarily driven by an increase in cash deployed to acquire Park Holidays and other new properties during the year ended December 31, 2022 as compared to the corresponding period in 2021. Refer to the Consolidated Statements of Cash Flow for detail on the net cash used for investing activities during the years ended December 31, 2022 and 2021. Refer to Note 3, "Real Estate Acquisitions and Dispositions," and Note 4, "Notes and Other Receivables," in our accompanying Consolidated Financial Statements for additional information on acquisitions and issuance of notes and other receivables.
Financing activities - Net cash provided by financing activities increased by $0.7 billion, to $2.3 billion for the year ended December 31, 2022, compared to $1.6 billion for the year ended December 31, 2021. The increase in Net cash provided by financing activities was primarily driven by an increase in borrowings on our Senior Credit Facility, net of repayments, during the year ended December 31, 2022 as compared to the corresponding period in 2021. Refer to the Consolidated Statements of Cash Flow for detail on the net cash provided by financing activities during the years ended December 31, 2022 and 2021. Refer to Note 8, "Debt and Line of Credit," and Note 9, "Equity and Temporary Equity," in our accompanying Consolidated Financial Statements for additional information.
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, 2022, over 77% 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.
SUN COMMUNITIES, INC.
Equity and Debt Activity
Public Equity Offerings
In November 2021, we entered into the November 2021 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.
In March 2021, we priced a $1.1 billion underwritten public offering of an aggregate of 8,050,000 shares at a public offering price of $140.00 per share, before underwriting discounts and commissions. The offering consisted of 4,000,000 shares offered directly by us and 4,050,000 shares offered under a forward equity sales agreement. We sold the 4,000,000 shares on March 9, 2021 and received net proceeds of $537.6 million after deducting expenses related to the offering. In May and June 2021, we completed the physical settlement of the remaining 4,050,000 shares and received net proceeds of $539.7 million after deducting expenses related to the offering. Proceeds from the offering were used to acquire assets and pay down borrowings under our revolving line of credit.
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 2022, 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 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.
Secured Debt
During the year ended December 31, 2022, we entered into a new $20.6 million construction loan, which was undrawn as of December 31, 2022 and a $3.4 million mortgage term loan that are jointly secured by one property. Both loans mature August 10, 2047 and have a fixed interest rate of 3.65%. Additionally, during and subsequent to the quarter ended December 31, 2022, we entered into mortgage term loans of (a) $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% and (b) $85.0 million related to five properties which mature on February 13, 2026, and have a fixed interest rate of 5.0%. We used the net proceeds to repay borrowings outstanding under our Senior Credit Facility.
SUN COMMUNITIES, INC.
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 2022 through September 2024.
Senior Unsecured Notes
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 offering expenses. In connection with the 2033 Notes issuance, we settled two 10-year treasury rate lock contracts and a forward swap totaling $250.0 million and received a net settlement payment of $7.4 million. This lowered the effective interest rate on the 2033 Notes from 5.7% to 5.5%.
In April 2022, the Operating Partnership issued $600.0 million of senior unsecured 2032 Notes with an interest rate of 4.2% and a 10-year term, due April 15, 2032. The net proceeds from the offering were $592.3 million after deducting underwriters' discounts and estimated offering expenses. In connection with the 2032 Notes issuance, we settled four 10-year treasury rate lock contracts totaling $600.0 million and received a settlement payment of $35.3 million. The balance will be amortized as a reduction of interest expense on a straight-line basis over the 10-year term of the hedged transaction. This lowers the effective interest rate on the 2032 Notes from 4.2% to 3.6%.
In October 2021, the Operating Partnership issued $450.0 million of senior unsecured 2028 Notes with an interest rate of 2.3% and a seven-year term, due November 1, 2028. The Operating Partnership also issued an additional $150.0 million of its 2031 Notes (as defined below). The net proceeds from both offerings were approximately $595.5 million after deducting underwriters' discounts and estimated offering expenses.
In June 2021, the Operating Partnership issued $600.0 million of senior unsecured 2031 Notes with an interest rate of 2.7% and a 10-year term, due July 15, 2031. The net proceeds from the offering were approximately $592.4 million, after deducting underwriters' discounts and estimated offering expenses.
The proceeds from the 2028 Notes, the 2031 Notes, the 2032 Notes and the 2033 Notes, were used to pay down borrowings under our Senior Credit Facility. The total outstanding principal balance of senior unsecured notes was $1.8 billion at December 31, 2022.
The obligations of the Operating Partnership to pay principal, premiums, if any, and interest on the 2028 Notes, the 2031 Notes, the 2032 Notes, and the 2033 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, in connection with the closing of the Park Holidays acquisition, the Operating Partnership as borrower, and SUI, as guarantor, and certain lenders entered into the Credit Facility Amendment, which amended our Senior Credit Facility.
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, Pounds 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.
SUN COMMUNITIES, INC.
Prior to the Credit Facility Amendment, the Senior Credit Facility permitted aggregate borrowings of up to $2.0 billion, with an accordion feature that allowed for additional commitments of up to $1.0 billion, subject to the satisfaction of certain conditions. Prior to the amendment, $500.0 million of available borrowings under the Senior Credit Facility were scheduled to mature on October 11, 2024, with the remainder scheduled to mature on June 14, 2025. We had no loss on extinguishment of debt during the year ended December 31, 2022. During the year ended December 31, 2021, we recognized losses on extinguishment of debt in our Consolidated Statements of Operations of $0.1 million related to the amendment of the Senior Credit Facility, and $0.2 million and $7.9 million, related to the termination of our $750.0 million credit facility and the $1.8 billion credit facility between Safe Harbor and certain lenders, respectively.
The Senior Credit Facility bears interest at a floating rate based on Adjusted Term SOFR, the Adjusted Eurocurrency Rate, the Daily RFR, the Australian BBSY, the Daily 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, 2022, the margins based on our credit ratings were 0.85% on the revolving loan facility and 0.95% on the term loan facility. During the year ended December 31, 2022, we achieved sustainability related requirements resulting in a favorable 0.01% adjustment to both margins.
At the lenders' option, the Senior Credit Facility will become immediately due and payable upon an event of default under the Credit Facility Amendment. We had $1.1 billion of borrowings outstanding under the revolving loan and $1.1 billion of borrowings outstanding under the term loan on the Senior Credit Facility as of December 31, 2022. We had $1.0 billion of revolving borrowings on our prior Senior Credit Facility as of December 31, 2021. 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 $2.3 million and $2.2 million of outstanding letters of credit at December 31, 2022 and 2021, 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, 2022
Maximum leverage ratio <65.0% 33.8%
Minimum fixed charge coverage ratio >1.40 3.82
Maximum secured leverage ratio <40.0% 12.6%
In addition, we are required to maintain the following covenants with respect to the senior unsecured notes payable:
Covenant Requirement As of December 31, 2022
Total debt to total assets ≤60.0% 40.3%
Secured debt to total assets ≤40.0% 18.0%
Consolidated income available for debt service to debt service ≥1.50 5.30
Unencumbered total asset value to total unsecured debt ≥150.0% 344.0%
As of December 31, 2022, 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.
Bridge Loan Termination
In March 2022, we terminated our commitment letter with Citigroup, pursuant to which, Citigroup (on behalf of its affiliates), previously committed to lend us up to £950.0 million in Pounds sterling, or approximately $1.2 billion converted at the March 31, 2022 exchange rate (the "Bridge Loan"). As of the date of termination, we did not have any borrowings outstanding under the Bridge Loan.
SUN COMMUNITIES, INC.
Derivative Transactions
Our objective and strategy in using interest rate derivatives is to manage exposure to interest rate movements, thereby minimizing the effect of interest rate changes and the effect they could have on future cash outflows (forecasted interest payments) on a forecasted issuance of long-term debt. We do not enter into derivative instruments for speculative purposes.
During the year ended December 31, 2022, we entered into two treasury rate lock contracts and one forward swap contract with an aggregate notional value of $250.0 million to hedge interest rate risk associated with the future issuance of long-term debt. We also entered into two interest rate swap agreements to hedge variable rate borrowings of £400.0 million (equivalent to $483.6 million as of December 31, 2022) under the term loan on our Senior Credit Facility. The interest rate swaps locked in a total fixed rate, inclusive of spread, of 3.66% through the term loan maturity date of April 7, 2025.
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 indebtedness 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.
We had unrestricted cash on hand as of December 31, 2022 of $72.8 million. As of December 31, 2022, there was $1.9 billion of remaining capacity on the Senior Credit Facility. At December 31, 2022 we had a total of 515 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 indebtedness 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, 2022, our net debt to enterprise value was 27.9% (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 and Series J preferred OP units to shares of common stock). Our debt has a weighted average interest rate of 3.75% and a weighted average years to maturity of 7.4.
SUN COMMUNITIES, INC.
Capital Requirements
Our capital requirements as of December 31, 2022 include both short and long term obligations:
Our primary long-term liquidity needs are principal payments on outstanding indebtedness as summarized in the table below:
Payments Due By Period (in millions)
Outstanding Indebtedness(1)
Total Due Short-term Obligation ≤1 Year
Long-term Obligation After 1 Year
Refer to
Principal payments on long-term debt $ 7,235.1 $ 183.4 $ 7,051.7 Note 8. Debt and Line of Credit
Interest expense(2)
1,510.5 187.5 1,323.0
Operating leases 299.2 13.6 285.6 Note 17. Leases
Finance lease 28.9 1.0 27.9 Note 17. Leases
Total Outstanding Indebtedness $ 9,073.7 $ 385.5 $ 8,688.2
(1)Our outstanding indebtedness in this table excludes debt premiums, discounts and deferred financing costs, as applicable.
(2)Our obligations related to interest expense are calculated based on the current debt levels, rates and maturities as of December 31, 2022 (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 indebtedness. 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 6, "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, 2022 and 2021, the aggregate carrying amount of debt, including both our and our partner's share, incurred by GTSC was $275.0 million (of which our proportionate share is $110.0 million), and $243.1 million (of which our proportionate share is $97.2 million), respectively. The debt bears interest at a variable rate based on a Commercial Paper or adjusted Secured Overnight Financing Rate 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, 2022 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, 2022 exchange rate. As of December 31, 2022 and 2021, the aggregate carrying amount of the debt, including both our and our partners' share, incurred by Sungenia JV was $7.9 million (of which our proportionate share is approximately $4.0 million), and $6.3 million (of which our proportionate share is $3.1 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 ("GAAP"), which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses in the periods presented. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable; however, due to inherent uncertainties in making estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods.
Our significant accounting estimates include acquisitions of investment properties and impairments of long-lived assets or properties, and right-of-use assets. Refer to Note 1, "Significant Accounting Policies," in our accompanying Consolidated Financial Statements for information regarding our critical accounting estimates that affect the Consolidated Financial Statements and that use judgments and assumptions. In addition, the likelihood that materially different amounts could be reported under varied conditions and assumptions is discussed.
Impact of New Accounting Standards
Refer to Note 19, "Recent Accounting Pronouncements," in our accompanying Consolidated Financial Statements for information regarding new accounting pronouncements.
SUN COMMUNITIES, INC.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the exposure to loss resulting from changes in market factors such as interest rates, foreign currency exchange rates, commodity prices and equity prices.
Interest Rate Risk
Our principal market risk exposure is interest rate risk. We mitigate this risk by maintaining prudent amounts of leverage, minimizing capital costs, and interest expense while continuously evaluating all available debt and equity resources and following established risk management policies and procedures, which include the periodic use of derivatives. Our primary strategy in entering into derivative contracts is to minimize the variability that interest rate changes could have on our future cash flows. From time to time, we employ derivative instruments that effectively convert a portion of our variable rate debt to fixed rate debt. We do not enter into derivative instruments for speculative purposes.
Our variable rate debt totaled $1.7 billion and $1.0 billion as of December 31, 2022 and 2021, respectively. As of December 31, 2022, our variable debt bore interest at the Adjusted Term Secured Overnight Financing Rate ("SOFR"), the Adjusted Eurocurrency Rate, the Daily Risk Free Rate ("RFR"), the Australian Bank Bill Swap Bid Rate ("BBSY") rate, the Daily Sterling Overnight Index Average ("SONIA") Rate or the Canadian Dollar Offered Rate, and the Eurodollar rate or Prime rate plus a margin. As of December 31, 2021, our variable debt bore interest at the Adjusted Eurocurrency Rate or the Australian BBSY rate, plus a margin, and the Eurodollar rate or Prime rate. If the above rates increased or decreased by 1.0%, our interest expense would have increased or decreased by $14.2 million and $8.2 million for the years ended December 31, 2022 and 2021, respectively, based on the $1.4 billion and $821.2 million average balances outstanding under our variable rate debt facilities, 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 equity investment and 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, 2022 and 2021, our shareholder's equity included $1.2 billion and $663.6 million from our investments and operations in the UK, Canada, and Australia, which collectively represented 14.9% and 9.9% 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 $117.9 million and $66.4 million to our total shareholder's equity at December 31, 2022 and 2021, 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 provide reasonable assurance that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures (pursuant to Rules 13a-15(e) or 15d-15(e) of the Exchange Act) at December 31, 2022. Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2022.
Management's report on internal control over financial reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, misstatements due to error or fraud may not be prevented or detected on a timely basis.
Our management performed an assessment of the effectiveness of our internal control over financial reporting at December 31, 2022, 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, 2022. Based on management's assessment, we have concluded that our internal control over financial reporting was effective as of December 31, 2022.
The effectiveness of our internal control over financial reporting has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in its report which is included herein.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting during the year ended December 31, 2022, 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 2023 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.