SUI - Earnings call transcript Q4 2020

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Operator

Greetings. Thank you for joining us today for Sun Communities Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow after the formal presentation. [Operator Instructions]. is conference this note, being recorded. Please now your host, would like Chief to to over conference the Gary Officer. turn Executive I Shiffman, and Chairman you. Thank

may You begin.

Gary Shiffman

morning, and as continue challenges well as our XXXX as joining quarter Good we hope to full are as you of that in We our health you and results the discuss families the fourth us XXXX year guidance. thank and your navigate we pandemic. for good

housing portfolio stable pleased exhibits our Safe and growth our environment very We acquisition delivered manufactured It with strength humanity this of RV of meaningfully our in similar the commitment cycles. characteristics. the Marinas, of with economic the also rationale business are a stability the of team most resilience Harbor underscores and and that difficult growth the resorts during members demonstrates time. expanding and through further The we for our platform

and housing Over manufactured quarter communities XXXX. in year and Total marinas transaction. dry of resorts of nearly XXX took the storage Harbor Sun core and of the with slips $X achieved For sites XX XXXX. almost the and acquisitions RV a share occupancy of community total revenue-producing properties future after over NOI of XX place growth million $XXX our fourth Same in portfolio Safe X.X%. closing additional XX,XXX improvement we of growth, generated the added X,XXX sites spaces. X,XXX the To over point acquisitions growth included billion acquired XX.X%, wet year, X% with over basis FFO drive per for

RV $XX totaling manufactured community, housing including we year-end, marinas. through post the Additionally, X and X call, of this million, resorts have acquisitions closed over date X

pursuing opportunities in segments. We are each our of actively

helped facilitate Our to extensive MH industry transactions. RV record continue successful and relationships have track and experience,

West Palm Rybovich Harbor across the portfolio them we in team Beach expect have joining incremental Rybovich and marinas, operations. additional Beach, Florida. given to side, the On of world-class of the the closing of specialized Riviera superyacht the superyacht drive transaction, The inclusive marina marina the Safe we nature is since Harbor, entire marinas X added Safe and marina growth

all-time XXXX are we by to events optimistically the shelter-in-place restrictions high-quality, XXXX, various of the fundamentals on applications encouraged almost applications Sun XXXX a XX,XXX received homes. we the future, business. The for sold with into X,XXX we XXXX look in in of the and Even an strong to affordable nearly and as vacationing high and throughout As ever. as our reflect community demand remain is live as housing at and

there lines. time in we business there our first sustained short, of by number of in control will strong resorts almost Our We growth believe year-over-year RV each XX% increase as level XXXX. anticipate many marinas shipments a safety indicated We in years owners large population wanted with boat for first first an to became X% number that of numerous in According time customers repeat including of a our well. be shipments, as of ahead. industry increased of by wide a similarities to respect resort the December. performance first an boat We the for RV was buyers some across remains much-needed timers, In the timers a and who to attracted travelers XX% rest. that RV portion likely purchases in as sources, are RVing month demand expect increase those see chose of be the as

operational to Sun initiatives is we execute to continue positioned As core for investment strategies. XXXX, to on X look our

of to our the to high-quality properties sustained and maintain is ensure first The our reinvestment assets. in demand

pursuit of accretive communities, RV housing manufactured resorts Second and marinas. acquisitions is the operating of

a of been. continue managing is Sellers as execution, and that the pipeline transaction with improve certainty tax will the full deferment these the acquisition ever to knowledge and has it strategies Sun to given the as Sun assets Our benefits highest continue of standards. see possible

is of third strategy support of the long-term construction X Our sites. last the these industry-leading sustainability strategies greenfield And investment developments. Together, is the construction growth. of expansion delivering

As have of welcome forward to development a on Tonya sustainability will having economic our recently forward. has an be and her moving company fields to of our expert our of in Tonya experience the Board the expand social our Tonya to Board and size We tremendous initiative grown and and independent issues we look director. and significantly, a announced education as leadership asset of appointment and the part expertise brings decided Allen of team. perspective and wealth as

commitment Our to possible past year, thank highest positive like our of and have place and accomplish I discuss the tirelessly health to in team and results further without our the and the Through team heartfelt of be our to extend this not continually many who very call now we to to am success consistently on what will these the you turn residents to dedication occasion priority safety the the I to of over would Karen challenges results. guests. the worked able and proud I the a detail. produce as together. rose members, been entire would team John

John McLaren

Thank you, Gary.

our of the demand quarter and fourth resorts in full solid and RV resilience the year year resorts benefited steadiness the XXXX. manufactured our We demonstrate housing second all for through of marinas. half of Our housing, across RV the from for operations manufactured and performance of XXXX the heightened

challenges work of Our stability pandemic. same platform the through as reflect community results the we of the the

fourth increased the X.X%. quarter, For by community NOI same

were these fourth restrictions, transient that have would The RV beginning payroll, welcome restrictions costs resorts. have at in our same of predominantly in the in X.X%. XX%. the guests quarter to pandemic, our at already growth California X.X% for utilities starting in the we it expenses and been XXX point Canadian the at and manufactured RV quarter, resorts resorts X.X% by of by as NOI begun travel down community fourth been not extended it and our is the Breaking mandated grew results continued fourth grew with revenues revenues, X.X%, the same to If annual a in X.X% closures basis a would associated rent grew stronger. higher repairs quarter housing COVID-XX-related NOI further, and was December news to Expenses California were and along elevated February, were $XXX,XXX, RV reflecting even with by gain. driven good occupancy monthly of had lifted growth seasons. due the weighted a supply In in by average well community travel direct RV as transient Excluding increase almost our have

same the year, For full increased X%. community NOI

RV reflecting manufactured community The restrictions have was to a NOI were delayed revenues housing summer. driven revenues a increased Excluding early of the by revenue XX community in the X.X% opening down our the transient growth for and increase of primarily seasonal a of growth and same reflects million X.X% expenses, and This spring from by travel direct X.X% COVID-related year, late community due X% in revenues. X.X%. Same growth $X.X RV in same expenses. X% resorts revenue annual would COVID-related increase increase

quarter revenues by community rebound XXXX. transient periods Our as in and to same RV RV the transient of X% same saw business with compared growing a the quarter XX.X% third meaningful the fourth in

RV first through by order of that California property the performance part in Our quarter the early affected the February. be shelter-in-place will ran

to transient are continued of Combined estimated the guidance. for which Canadian these closure is of some million first returning the events XXXX and season. from revenues, border prevented RV our X Additionally, to has reflected $X to impact have our quarter million to guests in our Southern $XX annual resorts an

total XXX pacing second ahead books for with time Even revenues housing to current forward a on our a bringing XX%, above total as manufactured total our year XX.X% or last are portfolio Of the over fourth our year. we the quarter, the communities. persists, X,XXX. occupancy meaningfully X,XXX perspective, increased quarter year, gains sites to in for revenue-producing from portfolio were impact of addition the ago. XX% site these revenue-producing pandemic for The From expansion XX.X% this of bookings the our roughly for sites the gained year the

were XXXX, XXXX development ground-up driver These consistent expansion XXX to of recently us. and ground-up sites a growth completed transient stabilize. year, sites as expansion up we growth delivered The in expansion converted they will In sites sites. X,XXX ground-up over to the For annual for leases. is and development fill and and RV vacant contribute beyond

for and sites our entitled years. currently our when portfolio and which, XX,XXX in contribute to Additionally, developed, ground-up have should future growth developments, expansion in zoned we over

in driven of were XXXX. for Ontario. these for profit sold Moving home quarter expansion conversions by homes renters to saw strong of X.X% Colorado, on owners year. sales. margins year-over-year, the home We the and new Connecticut to sales in of home XXX gross and We X,XXX homes XXX

ongoing strong the sales home our annual total increase. RVs, given this annual live impact for prices housing Sun hardship both like the existing choosing average performance is our drive for Average ever. and XX, Through of RVs goes collected that over storage have reinvestment balances. both value October resale a contributed COVID-XX-related Brokered $XX.X respectively, and saw for we X-month was collections. wet Sun in and XX% is healthy into prepaid XX% and The the housing Gary XX% adjusting contribution our sales for XXXX. year, rates home December Florida Colorado as respect on properties. the with rental XX.X% XX% for the residents XXXX. success prices and our homes were ownership, resale our brokered on redevelopments manufactured level quarter and preowned With market The the discussed, consistent A collection Harbor, slip home revenue. Safe increased ground-up fourth and prior RV. after XXXX. boat see land Sun's COVID-related February as and closed to rent rent for in throughout important strong XX, in and home X.X%, surge which and as acquisition XX%, to new January by has tailwinds For strong communities and of solid winter NOI new sales a manufactured market throughout Total collections of respectively. communities and for XX, over were XX% quality which rent by a we the helped for ended very manufactured annual year portfolio increase housing million. new our sales rose collection over rates in our community to new was both and deferrals year-over-year communities of XXXX of quarter maintained with in

years. coming the self-control in the safe opportunities both enjoy be to important Sun. and In outdoors marinas XXXX to ability posed a closing, driver challenges anticipate the growth for and Given numerous we environment, an for

We organization have grown stronger are as an and ever. than

year. members' are We are guests our of grateful to a their will results. now challenging our proud discuss for and dedication our Karen? truly efforts Karen financial in team and residents

Karen Dearing

John. Thanks,

above fourth Safe Harbor of ahead quarter, results $X.XX and performance Marinas. of Sun and share the the better-than-expected range. our top For core $X.XX, ground-up the recently reflect guidance completed prior These year FFO developments from of reported including per our X.X% end acquisitions,

XX, XX the December ended $X.XX, share XXXX, core was For XXXX. from FFO up per X.X% months

results are and very positioning our our XXXX. with We for pleased

of for RV $XX had line balance $X.X $X.X ended billion our X.X and of adjacent capital portfolio. a average growth million. to acquisitions marinas year-end, X hand active in a the raising a for XX-month of approximately front, and with markets EBITDA billion ratio acquisitions, X cash contribution the to year, existing to strength almost a X billion which Pro Safe is million the year weighted the X.X acquired and resorts at had target. properties, flexibility During EBITDA, other estimated Harbor and our operating Safe on ensure Marinas recurring outstanding equity community to mid-to-high acquired sheet X.X% We support of combined of initiatives. average a unrestricted times. community, we the trailing redevelopment from debt $XX XXXX an with including We our rate EBITDA net maturity in We housing an is $X weighted debt long-term of years. and manufactured on Harbor to the Subsequent leverage and full times year forma including in we leverage,

Board we in Our confidence per to results our This distribution to performance for the $X.XX have continue our the XXXX increase. in industry-leading our from the share, XXXX generate and up provided last raise X.X% ability year. to consecutive fifth distribution incentive annual to is

Turning to guidance.

$X.XX FFO per of to $X.XX the core at year, increase an expect to midpoint. XX.X% share, be the we range For the in of

$X.XX in is of $X.XX FFO quarter be share. First expected per range to to the

drivers. growth Moving to internal

We growth rent of a which manufactured annual X.X% housing for are blended average range of same X.X%, and XXXX anticipating to community X.X% NOI monthly includes increase a weighted RV.

FFO and Canadian first guidance order, $XX transient contributions due million border quarter which same assumes approximately the $X Our RV core in of extension lower revenue closure. to and ended NOI in the early community February, shelter-in-place of California to million the the

We between X,XXX the to year be and expect revenue-producing site throughout gains X,XXX.

to On development the vacant deliver sites ground-up in expansion we front, to development plan X,XXX XXXX. and X,XXX

For range and to marinas G&A the capture marina we of to support our integration expect to large million. consolidation $XXX to $XX of million we of we $XXX that inclusive of $XXX in see NOI, operations to million. to before and year-over-year we contributions, business, guidance, our million us. opportunity With expect the attributed total $XXX million our XXXX of and is respect be ancillary the platform as scale service expense the increase G&A Approximately

marina as both transitions regulatory Safe supports growth a reporting the to future and operationally-intensive the additional seasonality It's for well of to on in Please our Harbor that note, reporting RV a ownership, business We company, over up marina-related seasonality value both several and the level time. over public an MH for private our support NOI, that our disclosures of portfolio's to marina obligations, portfolio for structure success its next team we've and refer XX the by financial business As potential. over wholly-owned total NOI just XX%. important from the around operating in the primarily ensure be nature of leveraged mode high-growth G&A infrastructure FFO. there is operator first days G&A to set the core expanded want anticipate expectation our and it portfolio. and are will of and marina This requires subsidiary expected marina to increased In years. supplemental to be for transaction as a

acquisitions the activities, or this through research be As date call, included of a includes include our capital analyst not acquisitions guidance impact markets does of estimates. which in reminder, the may prospective but

to release, our like disclosures that Finally, across our note earnings enhanced with RV to This completes we'd prepared intend starting reporting remarks. marinas. quarter we our in supplemental provide MH, first and

the up questions. Operator? We will now open for call

Operator

Instructions]. [Operator

Josh from Our first questions with Dennerlein America. come the of line Bank of

Unidentified Analyst

today. Asscherick] [Lou on actually for It's Congratulations great quarter. on Josh a

little marina hosting side. Newport portfolio Harbor events August. the events the there thought We Safe to other on your that hosting Are in is areas over jumping Just similar the that regattas this in Do marina time? envision different you any out on more across trying working mentioned figure marina's ancillary just it. of might your you is the side kind of drive I for traffic is portfolio? that NOI, to the team a bit what across part else know but on

Gary Shiffman

it's Gary. So

of to very visiting XX,XXX trying large membership Harbor understand to excited beginning that the in of think go that would they to what I is participate described. the Safe tie now members we're right marinas Safe in have consistency to close offer. the very event consisting these think of first one expectation Marinas And from I that it the ability you the the and how to run and to in marina services Harbor a the

staff Sun is really to And the to will what this really that think for future. I and the opportunity as the anyone sitting planned safe showcase the has that. really excited as harbor room this see be first management So in participate

types forward. the more, with able be So events that, to we'll in with what future holds to regard those regard going of to share

event. to today safe of for in participate first that and segmentation, this business one details our earnings marina first will the with to of everyone Sun quarter disclosure marinas, we regard to providing with harbor for inaugural what and be enhanced type disclosures, share kind specifically So wanted With release. step-outs of by we is

as manufactured provide business doing an so, on effort housing to our insight line of business well in disclosure line disclosure separate So business X on in as our each into begin separate lines. providing the RV really we'll

we'll a everyone -- segmentation apart MH for breaking to RV their well think the quarter, So will purposes understand first review and modeling well. and the be have into as little business more look helping as opportunity a and I marinas clearly bit it as

So to and be be that able will look better quarter, we'll each. coming the first segmentation of into

Unidentified Analyst

Okay. Great. is XQ are same we And this, think I for big discuss a you did the Just trying about going XQ year? the seeing acquisition to I might acquisitions from flow apologize don't I quarter. but may have this have you mentioned if know, that usually Or think missed I guys forward? guidance

figure to trying just So out?

Gary Shiffman

Yes.

You didn't it. miss

didn't RV usually new based the have spoke historical pipeline forward We million been. usually separately, acquisitions. that it. MH We in remarks we in acquisition as with typically manufactured share have give And didn't already years. Harbor few or But RV been Safe Obviously, marinas year on reference forward can then to previous generally, my it's portfolios, I or full as We as miss We basically numbers, absolutely guidance. about really I previous which it. consolidated. housing, don't large look $XXX excluding You acquisitions million ever the mentioned and Marinas $XXX that and give the acquisitions. of we to

our we So certainly work cut for have out us.

space. we're surprise increased competition in the marina in space. MH seeing increased see to We many And RV of it competition are and you that might starting not the

be and and do our will that highest to we're what So growth each we've of very And excited be the exactly acquire opportunity through to to be accomplished highest present selective quarter. will provide for work able anything pipeline shareholders. the very, that of we creation we value and quality

Operator

BMO the Kim of John Our with line next Capital Markets. come from questions

John Kim

questions. A couple of

Harbor. can in Safe in which this since you the acquisition potential rates you've as margins, is Any retention the largest first your events -- compare done portfolio, as you've marina? characteristics far that the you typical On some versus -- that of marina superyacht marina of Is the superyacht own? growth or Rybovich

Gary Shiffman

a really But requirements, again. that locations would vessels the get unique in with good in and first the staying defer similar, it, Gary into I investment when can in boats. which remain service to all draw sensitive pretty world's I'll boats the both into of the of look little Rybovich the the to services predictable marina marina cost the occupancy, to segments share largest It's you less that we you lead but very offerings, Yes. business, margins when deeper offers on quarter, of the the the ancillary specialties but because the provide towards basis. are revenue a bit returns and against

look a predictable, very occupancy, within of high so excess in growth is period you their of it's of feet. the revenue as boats Their accommodate can those high slips of long out are of So demand. consistency the it. comfortably characteristics over But just XXX it, time,

boats So ownership it the and of marina really is really with sail share of scale a I in culminate craft. can who yacht one can who's the as boats. world's it's the you, it's list yachts marinas of and and size And that largest that few

John Kim

Are acquisition? with on Looking a just at the rate for a that's really NOI, this the across on is about compression it of cap the lower portfolio at cap rate. year is marina midpoint your Rybovich guidance Or board you marinas? seeing X.X%

Gary Shiffman

understand have announcement, that doesn't describe of the guess sale there to it supply, and demand surprise growth of the us. in the fundamentals, we stability And a some research come as other after compression last study lack carefully I been ownership, and began boat couple our a months. would as Yes. it of the platforms rate we for supply did our flow, to expected over new cash versus them XX I the cap and

of I as in are bit think potential does fast come of what in, business. the other as a queuing many the how a little surprise marina awareness investors

the and to place. a taking rate basis Safe generate that private cap changing compression heard both than announced the marina lower on have hands rates. publicly at there rate of been higher is a ability we has Certainly, basis cap group a Harbor So cap

rate right spread describe basis a RV is the they're is view XXX that points trading our many XXX cap in. to seeing at is basis creeping that I above way points the and So at today. manufactured where And it now we're communities housing on trading marinas

X in cap spread. the good I'd a still that a the traded X.X% that X.X% So closed, were what including And to is share far. solid marinas range Rybovich, of thus rate

John Kim

information quarter, achieving if the variability the have third how seasonality given that on I being much travel any second appreciate on just there's in that restrictions Can of you that marina. risks I ask XX% the visibility what the just cases, NOIs And forward, and any NOI? provided Okay. you those contracts are signed? the to of going

Karen Dearing

I you that. last think associated performed terms in with We impact and as I don't of like far are of that? through year. risk things speaking portfolio COVID maybe very see as well -- much COVID mean, the

much happened really happen So year. impact on last I if were based don't see that to what

Gary Shiffman

John? bookings, Our second quarter

John McLaren

mean our I last ahead the quarter, pacing third year. Yes. bookings and second RV on quarter of side, are

as for whole I pent-up outdoors. asset is my serve wanting class, in demand RV mean, what has a -- it's the time the it's amount that get there marine asset people to remarks, of I class, -- along tremendous the that is Gary talked And just about shared really purpose. with So

pretty about really we're So we what going John. forward, see excited

Gary Shiffman

annual is MH contracts. Yes, all

John we've we the and very comfortable how in now closures on it on impact with borders the are February, Canadian are what just But performed how So should out covered based in in that seen the XXXX, XXXX. so. we XXXX saw California play for up feeling

John Kim

me. Okay. Last one for

in Page of year. breakdown percentage as supplement, of has When transient Just RV at turning X over over a the to RV total the look your increasing last sites RVs. RV I the site been

rate is ago. XX.X% Now due year that annual Or from recent this to from and slower expansions? partially conversion due a leasing? transient it's Is acquisitions a XX% to to

John McLaren

is we last over guests close basis. year, we on XXX Well, an which do pretty what transient to annual converted annual to leases

I been that's are think really we would that pleased we And I that say which, have to of our future so performance. of annual but sites -- that development with of part that, conversion to has in denominator And that bigger added transient transient the the John, opportunities portfolio, course, leases. we're have done

Gary Shiffman

conversion basis. an That revenue on annual increase site per XX% gets XX% to us a

So...

Karen Dearing

year. First

Gary Shiffman

First year.

very those us. our year transient housing; are benefit to it's So to conversions buy in when and buy that sites tremendous because to important as absolute our filled part a There's strategy get housing first of the we manufactured we manufactured the communities B, an seek just seeks vacancy when, A, convert transient. we and

you up stepping more So we transient the going inventory more conversion our us will as find forward. sites programs get of and

Operator

of questions next from the Citi. Joseph line Our come Nick with

Nicholas Joseph

appreciate But it an the RV. comments you've the done work and does differential and that on how differential marinas recently? for the rate cap between on acquisitions Gary, MH IRR

Gary Shiffman

and and think and part We're side, management have side, marina on marina by excited is if to demonstrate team excitement well-capitalized Harbor I the referencing the to the the that enhance you're the strong, partner a business. our operational grow of the market to to the shareholders Safe ability growth

cap to call it, I opportunity cap over a IRR of period rate, contraction which a to period which will the additional, will greater in over think of naturally with into increased enter time I X So of ahead us think, to X-year a generate X time. rate, of a, create

if strategy asset modeled more out. aggressive particular will I class be entry think proves the probably the rates this cap our in than exit

strong. are very IRRs the very, so And

Nicholas Joseph

or of seeing MH going that compare capital that uplift RV you're you're some to the pretty IRR incremental you similar, other now be should or that the where right given segments? the uplift, level on to marinas getting When is

Gary Shiffman

the would a that cap similarly can to rate faster the justify to IRRs grow a I due said, supposition, the the contraction. But as paper on that bit little at and cap the going on the strategy will return on rate Then side. least, the we marina we're there'll be and we to buy out say Yes. higher go capital it. where get ability at

Nicholas Joseph

wondering on marinas consolidate then the or But a synergies in wholly and And just some an it's of understand platform the owned And future? and for there. rest G&A if across for some some side the the end to opportunity obviously, that cost I'm savings there's there's back of the subsidiary.

Karen Dearing

I'd this say is mentioned, -- operating. marina is you Nick, the as independently what that, platform

expected And did about absorb office. it team is any platform. not It's synergies platform, not rapidly. scaling, or if back very It's efficiencies it's the of all with growing we So -- yet. you that think we that executive very, operations And did underwrite senior right? scaled

we So I but would that that expect would leverage G&A over near not I term. think time, will

Operator

Wes from is come Our next Baird. with the question of line Galladay

Wesley Golladay

I'd like to how the units? due much was you OP marina demand talk about pent-up pace the of to deals. think And for

Gary Shiffman

to Safe marinas create That's be not Wes. to management both and the to Certainly, of acquisition unlock that the opportunity able a a otherwise explored tax-deferred security management when available. Sun great be question, both the Harbor we the transaction, might were excited about

Baxter third the management marinas know Harbor of some and I are generation. our second Safe and As these on calls, many shared of have

us in ramifications I of to they tax So XXXX believe lot we generally lead a and the tax recapture have opportunity front of and fact the think, qualify exchanges, for that won't the us. that

example where -- I of Rybovich recall there of an percentage is do think securities? you the excellent exact XX?

Karen Dearing

X/X. A

John McLaren

A X/X of it.

Gary Shiffman

A team that experience their really remarks, superyacht as of to the Okay. protect was time, the team. the really as have But impacts. mentioned partnership preferred we're in at implications world And entire marina was a wanting our and Huizenga earlier the obviously combination partnership family X/X in I and operating aligned the operating of actually tax it the and excited with part of defer same units. units to Safe Harbor

important become do going management are this moving in acquired a harbor's securities the and to efforts industry enhance only just safe core case, tax but not the relationships we the competencies that So acquire in team, to forward. property,

having benefits from those securities. lot there's So a of

Wesley Golladay

and how RV maybe And sense this Do bigger a of active you right switching Great. have developments the a nationally? now year? to there you any for Do maybe picture are MH many development. industry. then have over for planned starts And

Gary Shiffman

the Yes. today, RV manufactured predevelopment, John. are X question. single us to housing and X,XXX questions in of we housing X here It's various RV me. development. sites X out get all to are communities, okay? a And I a have a great stages of are combination about coming manufactured That for hybrids communities, These operational in hybrids.

the saw coming So being the been on largest supply the at as housing better having began development, at cap a over years of developing communities at especially Sun could manufactured Communities as developer consolidator these we've We the so. acquiring on And to our communities ramp XX experience of we of that we we returns severe than up compressed new kind community initially. shared, we determined new efforts and cap new existing in start no or the communities compression communities rates, rates. -- last

today, the looks continue growth acquiring it. to justified stabilization, think continue where generate X think to rates we development RV and upon on as X existing be depending MH. see So single-digit which after we'll cap we if it's construction years returns But we communities the a you'll generally justify focus to can the begins, high or

Wesley Golladay

in a in type curious would there the your the And to topic implement? on markets is new of then much plans -- comes segment. impact of with And looking seeing in a their so, MH are business? follow-up they of then for that Great. what rent with your lot be it just one, anything that administration, maybe I will guess, of discussions And or restrictions more how if investors. up the last you're if And control

John McLaren

this Wes, John. is

our more we've to We within no, of we've of that, So do our -- have increase What as X% of as managed as increases fact shared, a a if even with least that doing it that are in XX and a no last rent simple range that fact state, in range. various for portfolio. but the control, between heard far mean, part some a X% is been, Sun that's concerned. communities there think would in dialogue, some frankly, it's we has And rent over a real really locations, impact It's what really do at be average, control the to I that smaller that anyway. I'm years, the always we on X% sort rent I've in seeing have X%. that rent pure we've always California I community lot single to particular of out

have really this at impact So us on it point. a doesn't tremendous

Wesley Golladay

And impact anything negative? Any new or administration? the on positively plans that Great. your image

Gary Shiffman

Really a agencies, lot too of we're discussion on continued and or the There's anything. commentary on HUD meaningful early to and the is. We're government towards it housing front there. obtainable discussion a see of but shift the to carefully affordable everyone yet Certainly, any out focus by lot to tell. watching

John McLaren

are other Wes, have the we that thing with developments I'd we because ground-up shared various over unique The X last add, like entitlement in just that stages terms think, I of what constructed of just is, now of of numbers position years. bit in you in a we on some Gary X development have a the

that what and commissions longer do. actually various with of what going no I'm and these can planning when municipalities so to done. I'm thing, we've sort showing I'm of we renderings showing And meetings

affordability, that which helping play and into dialogue with crisis. is Washington, important demonstrate -- able well well from And how attainability very so that we're into we with to about the so

Operator

question come Street line next Pawlowski the Our John with is Green of Advisors. from

John Pawlowski

understand John, of or bit I Gary platform scalability little Harbor's better. want to Safe the a

the to team yacht expertise. for have bring on you so Rybovich And

there curious, over step investment? changes the marinas, to your any grows, have it we takes Just different this the expertise marine we regions do going of in see scale big you all in-house or to years? are as now different are G&A of types Or to the coming -- country

Gary Shiffman

John, tried the of discuss and underwrite underwriting. to in we very Harbor transparent And to scalable. our We to guidance, be for should that question during for very approximately as acquisition budgeting that and great obviously, Safe a we question. very, is of... the prepared really even we be ask ourselves, a do This X% G&A,

Karen Dearing

Revenue.

Gary Shiffman

… revenue That practice Safe Harbor. has we for new been as G&A acquire marinas. of the the

and in But Baxter working Safe the methodology. a much a senior is of want with Gavin, have. senior addition It's the that in not closely of so have Rybovich have. Harbor, and back at management underwrite to continue staff to office We of

really that Marinas Safe is be opportunities. revenues Harbor will of and benefit ability the going call think And what Harbor example over other grow to levered take the and look take superyacht value Marinas to perfect be and we to skill spread from there is point and ancillary are strategic set forth, to be incrementally provide to will a now being able and existing existing will more opportunities, as in that's post-acquisition it back at where pipeline, able to skill to their we forward. to many I be deliver hard look growth to that so shift able we And be a Safe able create new to opportunities services services their set several that the that would could

So step. see think the don't I you'll

see and see we now. are the think from we're I you incremental you'll that where there, changes right

John Pawlowski

the in FFO. that costs in costs that? What XXXX? additional expenses excluded $XX business million core And in specific included Okay. combination are And expected are Karen, from are

Karen Dearing

No.

So the Marinas Harbor the a as impact acquisition. being asset really business an $XX million com of business combination treated of the are rather costs Safe than

So those you costs costs it. are the business of costs M&A legal typical capitalize things. are real Those types They you coms, asset the expense advisory them. transactions. cost closing with associated on And fees, acquisitions, estate just

I think on with this size in the they're and acquisitions transaction forward. see asset amount anticipated you'd M&A are acquisitions. considered an going line our of of not Most what

costs of capitalized. types be those would So

Gary Shiffman

attenuation from seawalls. business, waters, that, diligence the of the add I'd standpoint wave thing the water. the only the engineering an uplands marinas, We uplands, the they're the complexities to the utilities, did being that in of complexity evaluate to And the the extensive

One-time we or than size. be that doing costs. an transaction, So more even MH RV at would at

John Pawlowski

be the may. then Last would if NOI? Could their you for just Okay. one, if Rybovich, what it cap rate I load? And share you G&A include

Gary Shiffman

share from on X.X%. front that. in of I of the lower indicated the Rybovich be What range properties can would And end acquired, rate I for the me. I to X.X% And is was X what cap have

John Pawlowski

And Okay. then including be? G&A, what would the yield

Gary Shiffman

that. missed I sorry, I'm

Karen Dearing

yield Including the G&A, be? would

Gary Shiffman

have could in of me, Yes. definitely but with I don't that you follow-up Fernando. front

Operator

coming is with question next the from of Berenberg. line Carl Keegan Our

Keegan Carl

heard that going of either RV of just will damages properties? if the marina guys or your so, any on have So quarter? impact And to reported Texas, first, given happen an what's or how you MH do think material you in in

John McLaren

John. Hey. This is

and the So I -- and damage fortunate other really with we had a that in right within dealing -- really, pipes things that. as of things than of we now we mean, our we've outages have. haven't we power Texas been broken some like feel haven't more and They're than few like resorts communities that. But had

So we pretty seem shape in to now. right good be

Keegan Carl

at X.X% ticked sites? it how bit. you a That's to shifting of these Okay. we good do they the looks RV in If driver then to look the the was quickly resident space, MH What year. and little up hear. this? move-outs to And gears for fill expect And like

John McLaren

Well, latter I of the was the the it with earlier in gained more that our of we really think this And on of half to a conversions have year. RV do the lot that towards side, course back year.

which we've in mean, brokered the home houses particularly seen changing I considerably what side, and good, you healthy MH I our it's more grown the tell On more for community. on business can sales has hands, is -- homes our is

just in additional some standpoint, in happening. our it application from may activity new terms we're what to we of So as shared are overwhelmingly earlier seeing in well. activity seeing come people as lose for I we that's as well, think move back calls But the occupancy of I've an

Operator

is question the Todd of next of Wells comes from Stender Our Fargo. line

Todd Stender

how stay compare on Series preferred the to what the Series that Rybovich to Just new I deal, the terms the were OP H? units, and did on

Karen Dearing

dig that one I'm going to Well, have to up.

Todd Stender

there's to be OP a But similar got to unit, preferred a coupon, right?

John McLaren

Yes. Yes. Yes.

Karen Dearing

also. was Series X% The coupon. X% a H a It Yes.

Todd Stender

common some period of And hold or lockup that to point? at converts period there's some a type

John McLaren

don't I glad of it share is. we'd be There it, we with in you. to front have think but

Operator

next with of from Bank of Our come the America. question line is Josh Dennerlein

Joshua Dennerlein

industry follow-up. your appetite a global talked and think about side? for superyacht on made me the Just We marina about that a how it international What's expansion lot is.

Gary Shiffman

great a question. That's

of I spend both the think seasonality exists the where that year. different that times superyacht time their that world at of in

the in sister travel. understanding look discussion identified I that superyacht under I a and to with towards a experience couple think that be their marina and of it vast are that great Rybovich of team we getting of the will we're business. areas on the think logical And based along consideration have superyacht

traffic or running anywhere generally, Rybovich. matches Transatlantic jumping but against look we be that won't will that of the out and opportunity soon, think we selectively an exists X I So that at the --

Joshua Dennerlein

Okay. Interesting.

So more that Mediterranean like sounds expansion? a

Gary Shiffman

would Mediterranean be logical spot. Yes. the

Operator

I the further no call this to comments. management are time. There hand to you. over closing at like Thank back questions any would for

Gary Shiffman

quarter. for participating look safe, Well, We call. everybody on stays we'd thank Thank like forward hope you. to after to everybody that and speaking we this again first

Operator

Thank for your This participation. you conclude does today's teleconference.

your lines disconnect may day. a Have great this You at time.

Sun Communities (SUI) 18 Feb 212020 Q4 Earnings call transcript