Sun Communities (SUI) Citi’s 30th Annual Global Property CEO Conference 2025 summary

Strategic repositioning and asset sales

• Announced sale of Safe Harbor Marinas to Blackstone Infrastructure for $5.65 billion all-cash, marking a major step in simplifying the business and focusing on core manufactured housing and RV communities.

• Over the past year, completed nearly $500 million in non-core asset dispositions, exceeding initial targets and using proceeds to pay down debt and reduce CapEx by about 50%.

• The board and management are evaluating all options for the use of proceeds, with debt paydown as a priority, while also considering distributions and reinvestment opportunities.

• Expected leverage at closing is guided to 2.5-3x net debt to EBITDA, reflecting pre-tax proceeds and potential distributions.

• The transaction is expected to close in Q2, with up to 10% of proceeds pending regulatory approvals.

Operational initiatives and growth outlook

• Focused on maximizing revenue and operational efficiency through enhanced sales funnel management, data-driven performance reporting, and procurement standardization.

• Early returns from new ERP and operational changes are improving conversion metrics and expense management, with $4 million in Q4 savings and an additional $3-5 million embedded in 2025 guidance.

• CapEx for the retained portfolio is expected to decrease by another 10-12% in 2024, following a 50% reduction in 2023.

• EBITDA margins are projected to increase significantly post-sale, with 2.5% core FFO growth forecasted for 2024 and a strong base for 2026 and beyond.

• Same-store NOI growth for MH and RV is projected at 4-5% for 2026.

Leadership and strategic direction

• CEO plans to retire by end of 2025; a board-appointed search committee is actively seeking a successor.

• The company remains open to strategic acquisitions and 1031 exchanges but is primarily focused on optimizing its current portfolio.

• Board governance updates and executive indemnification agreements were made to align with market standards.

• The company is committed to reducing volatility, increasing modeling ability, and maintaining high occupancy and resident tenure.

• Management expresses strong confidence in the business fundamentals, demand, and long-term growth prospects.