Sun Communities third-quarter net income rises to $120.7 million from $8.5 million

Sun Communities, Inc. (SUI) said Monday it earned $120.7 million, or $1.00 per diluted share, in the third quarter, a regulatory filing showed.

That compares with net income of $8.5 million, or $0.07 per diluted share, in the same quarter a year earlier.

The figures include a net loss from discontinued operations tied to the company's former UK business. Net income from continuing operations was $137.1 million, or $1.07 per diluted share, compared with a loss of $53.1 million, or $0.45 per diluted share, a year earlier.

Here's how the company did:

• Net income attributable to common shareholders: $120.7 million vs. $8.5 million a year earlier
• Diluted EPS: $1.00 vs. $0.07 a year earlier
• Revenue: $558.2 million vs. $555.9 million a year earlier
• Core FFO per share: $2.35 vs. $2.28 a year earlier
• FFO per share: $2.27 vs. $2.18 a year earlier

FFO, or funds from operations, is a real estate measure that adds back depreciation and certain gains and losses. Core FFO removes further non-recurring items.

Total revenue rose 0.4% from a year earlier.

“We delivered another strong quarter of continued progress, with results exceeding our expectations, led by continued strength in manufactured housing,” CEO Charles Young said.

Same property net operating income, or NOI, rose $10.4 million, or 3.6%, in the quarter. NOI is property operating revenue less property operating expenses and real estate taxes. For the nine months, same property NOI rose 5.2%.

Same property adjusted blended occupancy for manufactured housing and RV sites was 98.8%, down 50 basis points from 99.3%.

Manufactured housing real property NOI was $187.0 million, up from $171.8 million a year earlier. Same property MH NOI rose 6.9%.

RV real property NOI was $115.6 million, compared with $115.5 million a year earlier. Same property RV NOI fell 1.3%.

Asset impairments were $17.2 million, against $165.9 million a year earlier. The filing says the quarter's charge mainly reduced the carrying value of one RV property in Texas.

The company said it completed the sale of its UK business, Park Holidays, on Sept. 22. Cash consideration was about £772.3 million, or about $1.05 billion, with net proceeds of about $1.03 billion after closing costs.

In September the company also sold three RV properties in Florida for $127.0 million.

The company repurchased about 2.4 million shares in the quarter at an average price of $119.24, for a total of $293.3 million. From quarter end through Oct. 23, it bought back about 0.7 million shares at an average of $113.24, for $79.8 million.

Young said the company has been “disciplined in putting the proceeds to work primarily repurchasing shares.”

The company had $3.8 billion of debt outstanding at Sept. 30, with a weighted average interest rate of 3.3% and a weighted average maturity of 7.1 years. Its net debt to trailing twelve-month Recurring EBITDAre, a measure of earnings before interest, taxes, depreciation and amortization for real estate, was 3.2 times.

The company repaid three mortgage term loans totaling $266.6 million during the quarter, which unencumbered 17 properties.

The company did not acquire any assets in the quarter. After quarter end it bought two manufactured housing properties in the Pacific Northwest for total consideration of $79.5 million, including $28.3 million of Series M preferred operating partnership units.

The company updated its 2026 guidance. Full-year Core FFO per share for the consolidated portfolio is now expected at $6.97 to $7.05, with a midpoint of $7.01.

Fourth-quarter Core FFO per share is expected at $1.38 to $1.46. Full-year diluted EPS is expected to be a loss of $6.65 to $6.57 per share, and fourth-quarter diluted EPS is expected at $0.36 to $0.44.

Full-year North America same property NOI growth is now guided at 4.9% to 5.3%, compared with a prior range of 4.5% to 5.3%. The fourth-quarter range is 4.0% to 5.9%.

The company expects average 2027 rental rate increases of 5.4% for manufactured housing and 4.4% for annual RV sites. The company describes these as preliminary.

“With 2027 expected rental rate increases coming in above 2026 levels, we enter next year with a solid foundation in our core business,” Young said.

General and administrative expenses were $48.9 million, up from $46.2 million a year earlier. Interest expense was $38.3 million, down from $39.5 million.

The company will hold an investor conference call and webcast on Tuesday, Oct. 27, at 11 a.m. ET to discuss the results.