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Sun Communities Reports Improving Q1 Results

April 26, 2012 by   - () Leave a Comment

Sun Communities Inc., a Southfield, Mich.-based real estate investment trust that owns RV parks and manufactured housing communities, today (April 26) reported its first quarter results.

The Sun news release follows:

Highlights: Three Months Ended March 31, 2012, vs. March 31, 2011

  • Funds From Operations (FFO) excluding transaction costs incurred in connection with acquisitions was $0.90 per diluted share and OP Unit  compared to $0.83 per share in the first quarter of 2011, an increase of $0.07 per share, or 8.4 percent.
  • Same site net operating income increased by 7.3 percent.
  • Revenue producing sites increased by 294 sites, compared to an increase of 143 sites during the first quarter of 2011.

“We are pleased to report another quarter of strong core portfolio results as all significant growth drivers continue to meet or exceed expectations,” said Gary A. Shiffman, chairman and CEO. “Our expansions and acquisitions, particularly our Kentland acquisition, are adding to overall performance and contributing to revenue and occupancy gains.”

Funds from Operations (FFO)

FFO increased to $25.7 million, or $0.89 per Share, in the first quarter of 2012 as compared to $18.8 million, or $0.82 per Share, in the first quarter of 2011. Excluding approximately $0.2 million in transaction costs incurred in connection with acquisitions during the three months ended March 31, 2012, FFO was $25.9 million and $19.0 million, or $0.90 and $0.83 per Share for the three months ended March 31, 2012 and 2011, respectively.

Net Income Attributable to Common Stockholders

Net income attributable to common stockholders for the first quarter of 2012 was $5.4 million, or $0.21 per diluted common share, compared with net income of $2.4 million, or $0.11 per diluted common share, for the first quarter of 2011.

Community Occupancy

During the first quarter of 2012, revenue producing sites increased by 294 sites, comprised of 147 sites from properties acquired in 2011 and 147 sites from same site communities. This compares to 143 revenue producing sites gained in the first quarter of 2011, all of which were from same site properties. Same site occupancy increased to 86.1 percent at March 31, 2012 from 84.8 percent at March 31, 2011.

The company rented an additional 302 homes during the three months ended March 31, 2012, bringing the total number of occupied rentals to 7,349.

Same Site Results

For 136 communities owned throughout 2012 and 2011, first quarter 2012 total revenues increased 5.3 percent and total expenses increased 0.3 percent, resulting in an increase in NOI of 7.3 percent over the first quarter of 2011.

Home Sales

During the first quarter of 2012, 401 homes were sold, an increase of 44 sales or 12.3 percent from the 357 homes sold during the first quarter of 2011. Rental home sales included in total home sales above totaled 218 and 216 for the first quarters of 2012 and 2011, respectively.

Acquisitions

Aerial view of Three Lakes RV Resort in Hudson, Fla.

In February 2012, we acquired three Florida recreational vehicle communities, Three Lakes RV resort, Blueberry Hill RV resort, and Grand Lake Estates, located in Hudson, Bushnell, and Orange Lake, respectively. The communities are comprised of 1,114 RV sites. The communities were purchased for $24.5 million cash. In March 2012, these communities were encumbered with a $19 million loan. We believe this portfolio provides for growth from both rental increases and through improved seasonal occupancy.

Properties acquired since June 2011 have added $8.2 million of revenue, $4.7 million of net operating income and are preforming at or above proforma expectations. Fifty percent of the revenue producing sites gained in the first quarter 2012 were in acquired communities.

Equity Offering

As previously announced, in January 2012, the company completed a follow-on offering of 4,600,000 shares of common stock at a price of $35.50 per share. Net proceeds from the offering were $156.0 million after deducting the underwriting discounts and expenses related to the offering. The company used $123.5 million of the net proceeds to repay outstanding debt and the remainder to fund the purchase of the three Florida RV communities in February 2012.

 

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