Sun Communities, Inc. Q4 FY2025 earnings call

• Charles Young noted strong fourth quarter and full-year 2025 results, core FFO per share above guidance ranges. Strength in sectors, high resident and guest engagement. Reduced leverage, returned over $1.5B to shareholders, Board approved 8% increase in quarterly distribution. 2026 focus on thoughtful capital allocation, optimizing operating platform, strategic investment in communities. • John McLaren detailed fourth quarter and full-year results by segment, focus on operational excellence, disciplined cost management, leveraging tech/data. • Fernando Castro-Caratini discussed financial results, simplification strategy, balance sheet transformation, capital return, 2026 guidance including core FFO per share range and North America/RV/UK same property NOI growth expectations.

Fourth quarter: Total North American same property NOI increased 7.9% y/y, driven by 5.9% revenue growth and 2% expense growth, blended occupancy over 99%. Manufactured housing same property NOI up 8.8%, revenue up 7.3%, operating expenses up 3.2%. RV same property NOI up 5%, revenue up 2.7%, operating expenses up 60 basis points. Full year: North American same property NOI up 5.7%, driven by 4.5% revenue growth and 2.2% expense increase. Manufactured housing same property NOI up 8.9%, RV same property NOI down 1.4%. UK fourth quarter same property NOI down ~$500,000, full year up 3.5%, revenue up 5%, operating expenses up 6.6%, home sales volumes down 4.9%.

• Full-year 2026 core FFO per share guidance midpoint $6.93, range $6.83 to $7.03; first quarter 2026 midpoint $1.28. • North America full-year same property NOI growth ~4.5%, manufactured housing ~5.9%, RV ~0.9%. • UK 2026 same property NOI growth ~2.2%, FFO from UK home sales ~$50M midpoint. • Guidance reflects completed acquisitions, dispositions, and capital markets activity through Feb 24, not assuming future acquisitions, share repurchases, etc.

Q: Steve Sakwa asked about data use and implementation.

A: Charles Young and John McLaren discussed unified digital backbone, NetSuite implementation, real-time data access, enhancing customer journey, sales/leasing funnel transparency, traffic source linking.

Q: Eric Wolfe asked about repurchases and capital allocation.

A: Charles Young said capital allocation aims for best long-term returns, balanced toolkit including investing in communities, external growth, share repurchases; Fernando Castro-Caratini said guidance doesn't assume capital markets deployment of cash.

Q: Brad Heffern asked about UK and portfolio.

A: Charles Young said UK has high-quality operation, near-term focus on maximizing value; John McLaren mentioned 4.1% rent increase, good home sales in 2025.

Q: Wes Golladay asked about RV conversions and transient.

A: John McLaren said annual RV conversions similar to last year, transient pacing well, some stabilization, added booking channels, digital booking enhancements.

Q: Jamie Feldman asked about settling in.

A: Charles Young said past listening/learning, settled in, but work remains on core pillars.

Q: Michael Goldsmith asked about RV guidance breakdown and Canadian customer.

A: Fernando Castro-Caratini and John McLaren broke down annual/transient, mentioned rental increase, transient conversion, Canadian impact, booking channel additions.

Q: Jana Galan asked about transaction market.

A: Aaron Weiss said cap rates in 4%-5% range, focused on operating leverage markets, transaction market picking up.

Q: Jason Wayne asked about home sales and G&A.

A: John McLaren said home sales volumes and margins similar to 2025, contribution not material to FFO.

Q: John Kim asked about MH same-store revenue building blocks.

A: Fernando Castro-Caratini said similar to 2025, rental increase, occupancy gains, rental program contribution.

Q: David Siegel asked about move-outs and UK expenses.

A: John McLaren said move-outs mainly in RV due to Canadian impact, retention efforts; UK expenses mainly due to national minimum wage.

Q: Linda Tsai asked about leverage target.

A: Fernando Castro-Caratini said long-term leverage target 3.5x-4.5x net debt to EBITDA, guidance doesn't include share buybacks/acquisitions.