SUI - Earnings call transcript Q3 2024

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Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Sun Communities Third Quarter 2024 Earnings Conference Call.

At this time, management would like me to inform you that certain statements made during this call, which are not historical facts, may be deemed forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995.

Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. Factors and risks that could cause actual results to differ materially from expectations are detailed in today's press release and from time to time in the company's periodic filings with the SEC. obligation events or date or release. no statements any of undertakes reflect to circumstances company to update advise forward-looking this The after the

said of Fernando President. Castro-Caratini, management Financial Officer; John to Shiffman, Having McLaren, Executive [Operator and and Chief would Vice Business Weiss, today: and President Chairman Officer; us Strategy Gary introduce Executive Chief Aaron I that, Corporate Instructions] with like Development;

over to to call this being I turn is Chief the like Officer. may call Shiffman, As Shiffman, a reminder, Executive Gary would recorded. and Chairman you now Mr. begin.

Gary Shiffman

for Good afternoon, and and us our thank strategic are you third the quarter announcing updates XXXX. we joining results, discuss for guidance our to

outlook disappointment year. to I my for the emphasize remainder revised First, in of the we are results want the reporting our and

will acting address swiftly As we are to I our discuss, underperformance.

have to initiatives to we growth business our we positioned priorities, strong, portfolio our assets. communicated, sustained position long-term strategic execute the remain Sun our been for fundamentals long be focused company executing earnings by value to the demonstrating continuing term. confident The the that thereby deliver our of over on strategic growth, will on As of are Communities and

include as streams. contribution recycling These in increasing assets, executed articulated and priorities from reducing debt and nonstrategic income XXXX the annual

parcels each proceeds land million year-to-date. We for housing $XXX approximately communities housing these from continue along quarter, areas. X asset make of progress manufactured X manufactured of million, we to $XXX to $XX in In disposed bringing sales the third with for million, total

reduction XX% ago. million approximately currently the fixed of our X%, our rate at total debt mix $XXX end As down floating at from and stood billion, XX, from years of a to $X.XX X September of stands XXXX, approximately

challenges disappointed guidance said, below very past our acknowledge for and addressing and restructuring with both is the are XXXX and earnings organization our third adjusted demonstrated the we value to our market's are decades. and of our Sun entire the our potential the Directors, unlock results Board by X performance. expectations, committed That and quarter we of to our proactively Sun our Starting we as that portfolio

investigation, Before recent update report. issued Committee Upon that of Audit the of Audit report acceleration have the plans, matters on provide the After being a an third-party thorough on review, independent firm the I Board I the our tasked an The short made to the to Sun. wanted to address aware strategic investigate the raised. Committee engaged report, law Audit of address the to and been transparent practices and The our that and its and compliance disclosure changes obligations. corporate maintaining internal rules to timely reiterates as complied regulations. and the governance high well reporting standards with firm as has controls have there concluded in with its no company its commitment financial applicable the law disclosure Committee strong determined company

results of proactively our the in transient pressures. cost volatility to which of impact working continuing the reduce well is have been our as Evident as business, we in components

a undertook performance infrastructure to satisfied growth. To effectively earnings we organization more deliver align concurrent company's today's with throughout and and our are with great are we with that bottom-up the a comprehensive We expense urgency. are earnings acting end, and effort repositioning announcing review G&A operating broad not the release, to

are these and We initiatives expansion. year, now implementation considering to cost-saving throughout of many studying their this have we accelerate and ready been and

Operating execution President and and Officer years on XXXX. John XX McLaren basis that pleased XX John I this has years, accelerated to been of President X for Sun company repositioning was to is the as am years to with was initiatives. these full-time oversee for for the announce returning a Chief through

a manufactured Chief as operation housing approach performance-driven and a XXX integration with John operational bottom results. and almost of brought line the time oversaw on focus communities Operating Officer, his and During RV

cost to initiatives, systems, It primarily company's identified and to savings optimizing efficiencies reduction and implementing efficiencies, other our and our operational will management more implementation expense technology cost-cutting asset measures. be including of base. reorganizing and streamlining better achieved include is management cost through operating maximize expected structure, the the revenue measures The that these effective drive

XXXX. As to and of should as XXXX, continue million strong approximately in rental seek savings that identified to our today, efficiencies we annualized anticipate attractive this per a emphasize share to structure and million this is sustainable enhancement and We between expect line operating we or point, to realize efficient our to and cost will translate cost of $X.XX starting $XX $XX we establishing $X.XX have expense I for top want G&A earnings just rebase structure. a into restructuring allow and opportunities. increases growth rate additional and growth revenue and by

as led intention announced my of XX I've approximately RV Additionally, in MH a the million operator with manufactured IPO its as And with through $XX has and the this market retire communities. with billion. XX a owner into housing Sun years evolved manufactured marinas the and leading evening, XXXX housing to small I following REIT Board and more informed of company the company. XXXX, capitalization $XXX than in of

led the the Blau, a and is process I believe of we in to a of members, CEO to by a am new of has and hire President search Board identify Directors comprehensive Tonya independent proud McKnight companies; and CEO Jeff place Foundation, role. search committee The the Allen, conduct time transition what Board CEO it accomplished of CEO. have to related

Helene to Hurricanes Turning and Milton.

their injured or for to members of gratitude compassion our extend our and residents and We and are Cleanup worked own to supporting in deepest that while team happy resources. We our residents personal and our immediately of share team were to all managing food in crews their the guests, necessary our aftermath events. teams storms. supplies, swiftly challenges provide were deployed lead-up and the care exceptional members, during these guests none

storms. and carports, buildings to largely unaffected. skirting fencing, remained common overall continues our utility was to infrastructure while assess Most the company limited the and The impact trees, of damage the of

will We sustained some have or partially relocation Similarly, requiring efficiently. and one reopen property only and Overall, we our in anticipate storms early the bulkheads optimistic we docks with are portfolio fully it in that our to and damage XXXX. minimal process replacement. assets recovery the well, marina small RV is our weathered closed, ability manage

supplemental report Our details. provides additional

quarter, annual While we this housing, guidance fell segments. short key of manufactured growth across and year-over-year still our we RV marina achieved

next year, forward. believe growth now As the strategic initiatives moving place, already enable along we we the to reliable look taking will steps with in we are

nearly at the an notices XXXX end increase our manufactured our of housing October of with XX% of increase In segment, received average residents X.X%. rent for

the For approximately have of our all rate sites, also reflecting of been XX% portfolio, an marina a rental informed X.X% been members rent rates our RV have annual increase. received growth a notice X.X%. established In average and of residents have U.K., of increase for X.X% for XX% of XXXX,

we sectors NOI for Importantly, with driver affordable demand attainable a of The and continues growth. positioned are be organic our in to key dynamics. platform's housing compelling vacationing real property supply-demand fueling ongoing success,

sustainable tool leveraging We reflects results, available and we it our time. and assets, delivers earnings so reliable are value over and of platform are satisfied growth the underlying not our that with the every

and discuss Fernando over call the to results turn now will financial our to Fernando? guidance. I

Fernando Castro-Caratini

Gary. you, Thank

increase FFO share X.X% by increased For Southeast America revenues, higher in X.X% business North per of same-property X.X%, $X.XX. impacting the NOI by September relative and Total quarter This offset further expenses. headwinds by RV, hurricane expectations compounded ended reported transient our driven Sun the a by September driven was and increase core in Florida in underperformance to XX, XXXX, primarily sales. expenses, transient home continued a by

a look Here's by closer segment.

America Our core increasing manufactured continued housing with to NOI deliver North same-property X.X% by business year-over-year. growth,

to supply pressures, was and our strong expenses, repair primarily faced the growth long-term due at fundamentals growth X.X%, revenue higher year-to-date these costs. our we the Although of reaffirming remains elevated strong, Despite segment.

a expense and same-property line decline reduction this in top to challenges attributed X.X% to faced revenue. segment RV in XX.X% quarter, largely a transient NOI, leading The

of RV resultant we strong total business XXX first X for September. gains revenue accounting from with quarter, converted for quarter, year-to-date. nearly remains in this Despite in revenue-producing underperformed XX% transient site with this, to guidance the While tracking were annual the annual our transient generally months line NOI sites and of

this stability. conversions, further by repair in X,XXX increasing quarter, the long-term year, and revenue underperformance transient-to-annual headwinds. were transient have our stream, driving income Supply supported occupancy almost the and beyond So recurring far revenue completed elevated and we utility costs

performance the quarter. and Mediterranean including operating In our quarter due our occupancy. marina in delay from impacting experienced storms, for segment, large segment Also, same-property we segments, NOI the increased X% to of year-to-date. to by lower pressures marina expense and returns similar further vessel MH RV higher-than-expected from overall the pressures, and Helene faced NOI X.X% the The

funded $XX additions our the in acquisition bolt-on We strategically X through have of including and approximately OP of capabilities the experience. expand common networks in primarily marina our the for These units. X marinas, our and enhance issuance customer and quarter invested third member million,

and the broader growth the the of to increased was segment decline $XXX,XXX leaving expense remains stemming from positive rates wage NOI of year-over-year new minimum owners A revenue and to rates. a uncertainty driving approximately basis momentum overall encouraged rental points rental the with while this, by this XX% a related from in factors of vacation and higher payroll macroeconomic outlook, occupancy moving In increase timing U.K. There NOI but prior fiscal are or same-property key year. costs driver higher our year, same-property around residents by by momentum driven XXX quarter. national U.K., increased some positive policy Despite shows approximately X.X% year-to-date U.K. led this we X.X%.

X.X% margins. last with Additionally, home year rose sales revenue compared stable to

demand prior home linked lower and Core which NOI internal FFO of quarter, July was primarily segments. impact in came from expectations to for and expectations, Florida, to contribution we the in were expected North primarily below August. the due in the to ahead American marina of Helene transient in RV Hurricane than softer sales SRD&E

and we North anticipate are million and a have adequate insurance with in in time, assets Carolina, and flood Georgia. X, for do estimates and marinas Impairment coverage, the responded and cleanup $X.X MH the Helene, located some recognized significant on assets condition. Hurricane adjust quarter, believe charges on company's Florida, continue. During South to adverse are of impacted this efforts at information we October at financial assessments may operating We X at of not $X.X and as Hurricane based property, Florida. restoration Carolina including On communities in properties results million X properties relation company interruption business for impact and impacted RV or Milton current The underway. and casualty, promptly impairment

advance million million. $XXX and communities approximately balance strategy, X selling X we to land for As our for housing capital recycling to it MH relates $XX our continue sheet, parcels manufactured

XXXX, versus September also a year-over-year We through reflecting expenditures, capital $XXX reduced down approximately nearly nonrecurring XX% million decrease.

Additionally, proceeds in days and X.X we September common agreements million sales shares proceeds secured and strengthening credit, of approximately during $XXX at-the-market growth million. revolving under to our our the respect forward forward. program. from of net of were sheet stock sustainable and took the ATM first used of sales resulted program This debt to balance for and settled activity pay with going line August all our place down Combined asset

approximately debt year-end, today. million As have balance on sheet our compared we XXXX less to of $XXX

a As SUN's rate X.X at $X.XX with weighted years. balance of of of average weighted a maturity X.X% September and stood average XX, interest debt billion

trailing ratio Xx. to debt net Our EBITDA is recurring XX-month

path. core opportunities portfolio and our continuing are focus evaluate and to recycling to parcel land capital noncore to We deleveraging on asset our continue

to Turning XXXX guidance. updated

continuation We to in expectations. are quarter. quarter $X.XX, transient impact the midpoint revenue inclusive of FFO of a a higher for of expenses at third year RV underperformance share range business, adjusting per the reflects of to of $X.XX from prior X.X% reduction the This fourth the the full guidance our and headwinds and our core

the range We same-property a NOI by X.X% X.X%. of at guidance basis reducing to are points American XXX North to midpoint

by negative by headwinds range NOI repair the transient are same-property range continued changes expectations expectations to of is NOI segment. The to primarily to by and RV X.X% a RV housing revenues on part in X.X%, our expectations and XX.X% primarily Summarizing and in of the driven by expenses to revenue Southeast negative reduced are an RV Full and impact assets primarily higher Milton versus across change utilities. X.X%. decline and supply is midpoint from RV and expense due to the a decline repair at broader XX.X% Florida July Helene now to of utilities. in year transient expectations, and driven supply a X.X% Manufactured same-property reduced higher portfolio. expected

the the higher Marina in delayed season by part range and U.S. expectations same-property reduced weather vessels from NOI including due fall Expenses X.X%. are is patterns. to expected, of than Europe, returns originally to a The are large to the running X.X% to boating declines, of primarily payroll. occupancy change in in driven summer mainly

continued North refunds. also home a due For to hurricane our entertainment timing in payroll. portfolio, move of new reducing income lower, higher FFO partially and anticipated higher-than-expected American due growth range headwinds sales we by be are transient marina, in and to into in linked Florida offset to are dining expectations NOI fourth U.K. in repair contribution the and and owners X.X% Service, and expectations to Southeast expected quarter. RV expenses are from primarily experience to same-property reflecting is headwinds tax to of to NOI, sales fewer expected the activity. and X.X%, demand primarily supply retail, These the U.K.

specific headwinds the remainder year. updated in some this reflected for As guidance, of anticipating are we our

stability our and and we impact of see core business the outlook to constructive beyond continue initiatives. as are our accelerated we in XXXX our realize However, on expanded

the marina Importantly, segments. expect next rate that RV supported to X.X% and in manufactured in year X.X% is annual U.K. this see by increases and rental strong housing, X.X% the in of we

run operating or from approximately anticipate versus year-end $XX as interest million a between to $X.XX $X.XX expected current of rate well and G&A and savings expense annualized share also savings $XX balances expense per as million basis, We debt XXXX. lower to on

for to and property reliable exposure assets while reducing Finally, as debt focus reducing income our capital paydown. nonrecurring on discussed, we expenditures and further we recycling materially have our transient selectively continue real

regarding year guidance, details see full our please disclosures. updated supplemental additional our For

As activities, be markets included not guidance markets X, estimates. includes it capital through and research our of dispositions a which activity impact in does and but prospective acquisitions, reminder, the acquisitions or November analyst include may capital dispositions

concludes This our prepared remarks.

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

Operator

Evercore Samir ISI. We'll with [Operator go Instructions] Khanal first to

Samir Khanal

Maybe of how and $XX and about identifying On 'XX much that the potentially cost the to in I that identified, is about that million, million think And more. you 'XX. savings talked maybe on OpEx comment we as you G&A? $XX know into expand

Gary Shiffman

Gary. it's Samir,

and we closely to opportunities what as board, group McLaren there that evaluate us. cost on with Most focuses additional savings. remarks starting John forward. Park he's for think is going opportunities of to into Holidays MH, point the coming we look with Harbor savings the shared cost that regard RV business Safe are side I continue the the as on a identify in to that, additional that on With other side working platforms the working to with and

OpEx So savings. it is a combined amount of G&A and both

Samir Khanal

ask pool said point? done in then big if you And that think about assets can one question. you've I that any more pipeline of you -- million. -- can about I the dispositions in how about here currently? terms is at year-to-date, the I further I ask for guess Can noncore this pool $XXX for talk

Fernando Castro-Caratini

Samir, this is Fernando.

non-income-producing We to potential asset, portfolio single and small for are continuing evaluate capital recycling. dispositions land

potential for this that million the near in evening, term. there's over presentation an out million to we $XXX outlined additional the put As investor $XXX

Operator

Baird. Golladay next to We'll Wes with go

Wesley Golladay

comment you some guidance? were just last you you mean had the maybe on quarter. I up segments taking Can

I down. resilient, related. on of Now I'm coming hard that lot having to around why those bouncing it's sticky just how seems they're expense mean It a business business. line much pretty like so hard a we're items understanding is time a are forecast? But

Gary Shiffman

Yes.

September with in our Wes, had related quarter, on volatile results. were think more comfortable challenges the the extremely primary we which as where I RV with said MH felt not as this in RV notably are, but as our the businesses perform reflecting were, in fourth August, core discussed, identified well. the we did Especially business, July September really more we we've underperformed. we going into annual Fernando disappointed than to quarter much results and transient quarter, marinas, business The and and

of areas those better having providers business. A on So goals We to these did that need the of those. sales of on flexing into us not and if accomplish quarter, and we in you thought disappointing due identified the alongside in quarter was fall transient lack to flex during against to the the September. the early this and some full reduced the of revenue in expenses achieve under the Florida. internal ahead home was weather time behind lot guidance where will, scope the fourth third-party marinas effects objectives of third to headwinds, of occupancy the transient well that from during flex we expense The adverse in decline and the side we in September would most weather ability in needed quarter adverse for moved and the rapid this effects them revenue our in to the

what going all experience, and the line, So on in track be to continue there being forward. having if on you with and in focused ability efforts concentrating And we've that's record, will, our focus position growth been to is leadership regard focused and the reorganizing bottom John's we're 'XX. where the for under on to the

John McLaren

this Wes, Yes, is John.

you I the And Let over best portfolio just XX can what I me have think in -- team in the for I've continue is we to past this: the managed confidently business. years. tell know this you

We not efficiency look taking and on We already about have we'll not We're it. We're I know because around creep last everybody. They I I the go communities of The Our know closer execute our is opportunities them. over opportunity portfolio years, demand. performance it's still communities strong. areas. and high-quality instead, strong there. reinventing look do. have even already not a may properties. around are certain The X But it, in the reinventing but how fundamentals at excellent. that

But as operations methodologies long-term targeted is change that is needed we've originally We This teams out are I place. where just as have ensure we frankly also carried constantly success. This to already the the adjustments do. put is what's reevaluating in making what done. what we're to working well enhance

that exciting. going be plugged being And so to back is into

Wesley Golladay

back, quick John. look search. there I question candidate? forward be Would welcome And potential internal again. a with A to on the you working CEO

Gary Shiffman

and always that Board Blau the committee has to in very, will what use all co-chairs is on run they search I externally. think oversee X will have great I a think will Tonya would it Allen expected that's both and They planning a And been be they they would firm, very process. focused I Jeff the suggest internally succession Certainly, at strong levels. and appointed. look

Operator

with Eric next We'll Citi. go Wolfe to

Nicholas Joseph

It's Joseph Obviously, a as are about Eric. everything the in terms selling announced within? maximizing you with selling company Nick Board or thinks on to here trying lot is maximize the But tonight. large shareholder Or the table more committed to value, portfolios? of value

Gary Shiffman

[ Eric ], it's (sic) Nick Gary.

our goal public value. to company general, maximize in think I always as is a

So it's not all and any one the to look of business. at we specific opportunities, part

company, So look as we operators as up, those of everything. come opportunities public at a responsible

Nicholas Joseph

And of went then the just in up G&A, nonrecurring G&A significantly. terms the

you well wondering through can driving the that Just if we recurring what's saw. G&A as walk increase as that

Fernando Castro-Caratini

the a an from in Sure, largest of written settlement legal receivable the in quarter piece nonrecurring is prior off driver was The insurance period. that to this Nick. G&A in --

had in quarter. and million The costs of severance $X.X the expenses other components we of additional the an nonrecurring, deal

related. driver is of On recurring the the side, payroll the main increase

Operator

next with go Michael We'll to UBS. Goldsmith

Michael Goldsmith

back, Welcome John. Gary. Congratulations,

the with outlook, were? for back next moved kind expenses how to expenses? restructuring follow of on kind nonrecurring of outlook come way we because be up guidance up expenses Or Is right thinking Just you the get where G&A of kind the And for that. out the year? on for the starting think ex to about it the to the point nonrecurring is G&A. should then of the like new Is the expected question to about restructuring the that new

Fernando Castro-Caratini

a basis. So detailed that so on And be Michael, rate G&A. XXXX the recurring savings expense will we've that -- piece the of it would run be from

Operator

go to Markets. John We'll next BMO Kim with Capital

John Kim

personal much if you from including Blue ask that loans decision? on Orca CEO some I the some from your the came taken Gary, members. Board was influenced of of retire those what that drove And from commentary report can out? the findings, have position, that How decision any to

Gary Shiffman

Yes.

At a because objectives been I last deeply my with And John, the certainly, and of I grandchildren, experience. lot asking, a and want success, other for put value a am steps, just life strategic big decision in to building company, life. I've business we place, especially X I we're last my with this is children over public XX thanks contemplating excited next couple the years in making. my lots things -- it think stage this and of with progress of love years. the of in confident XX are I of this business After while really I'm its there continued the as

that and fact is a key continue to of be for here of So was but it forward net like about having factor it XXXX, for will that. It decision a contributor report this or time related me, to help couldn't drive the initiatives company a be anything also the back bittersweet process just lies to my and certainly I our any in John It's starting worth. not ahead my single Sun. move is in period for the with more largest what to that I co-founded excited transition,

excited the for I about you very if very, So Sun. growth remain positive, opportunity very and will,

the handful and search process. we you of transition a to will, about and Board as and But the look it talked a I from ago moment for bittersweet with working is today. communities me, a as it company, forward watched grow, company this on XX-plus the runs to if years I've its what is So committee earlier,

accomplished, CEO So and time do step I'm to and we've new in pleased just I a over. take at think for it's what

John Kim

the be far what REIT someone experience? finding be think could new you will And such someone as do you it far think a CEO? the business Anything as as as Will public with turnaround company given complex the experience, is share today, what are. you do a priorities priorities with

Gary Shiffman

even bad, quarter take company, the for I've and running it. company. Well, the that's said, a as been opportunity to to great the back to the want was the I we're about private just question, XXXX Unfortunately, complexity I as company. of and a responsible talk

report an So it's these to of results. never kinds time ideal

said, after we're a just positive, said, transition moment what just of want I about and what is these portfolio the business. and very say for outlook accomplishing part the I we've to the of all That to as of take years, properties accomplished. my the I reason am And

from really the revenue by the and The annual back budgetable the And removing of we're the reorganization that we repositioning Set to will, Aside simplifying push for Fernando in, talked been a complexity things there. our if overseeing ownership as comfortable, as get results improving step JVs for sheet. of this have to is can the where sustainable especially feel step the balance step. be looking we're that and CEO. with lot sharing we're John that of, we've continuing the in a revenue, the that progress with dependable good talked the much about, I profitability, the while we CEO Australia, we've hands to market up making business, of you about and here out towards in that some to new removed removing great what to -- stock away company accomplishing from new more transient

ability assets control and increase job. to of every quality we've which into really now always So we portfolio need to year the has a the important, continued and be we ability, said, tie expenses, of really I rental will set that think know single as has great rents the it do better a skill the occupancy, but will

within the that So CEO we does. think to there's a I of the wide complexity. And opportunities piece a what will think be range. portfolio examine new I continue remove think to I And

Operator

Wells with We'll go Jamie next Feldman to Fargo.

James Feldman

little Or comment if was And suggestions mean, on on on independent more their report. the their the perspective made, law of I Audit just give it checking of more also, Board then the third-party items were guess changes Committee the I or pretty in whether there bit result good. detail was much could management, from just saying review? as any you things hoping you can review any a of the short off, or any a I firm. maybe all kind

Gary Shiffman

Yes.

investigation I my on on compound there I clear based will. based motives through and the the firm as took Audit Board. remarks engaged in third-party Committee really And the motives, the provided either think, report a short independent Committee seller, an to conduct those if and Audit and seriously as earlier, the today, question But matter investigation the the concluded. and or very an Jamie, the thorough you law Board said to the read complex heard of you

with the is complied financial disclosures all facts that And There disclosure all matters, call been not any proper of we reporting say, understanding, of Board to would our practices. changes The what determined I that obligations. have I and has proper would the we've with correct obligations. well feels the I very complied Board, my I on the advised. as said, it's

today. really we're and impact that's ongoing that report or anything it to you So any sharing that's work out to done nothing being came on its really we where on with

James Feldman

its how Harbor, of a think Like terms Okay. G&A an stand-alone is into opportunity How potential this as in that kind in more And then guess, about gets cut got structure, to G&A management cut think you it platform I you've and current do full savings, entity the you G&A think of do and own process? Safe about which Or the savings? stands. folded like as you you team. that even

Gary Shiffman

great No, it's question. a

the of sector. opportunities the the in and long-term the We strength in continue to platform marina believe

job. to over level and expect will a more doing sustain previously we've said, continue at. a grow the more outstanding the a a discussed, growth But we there. normalized X will growth we of management level great It it need last had greater years from X, As at as -- team we is think we than we

talked Baxter, strategically contribute we're the share changes to together I've do recently as will go we're forward we effects. cost-savings as able and to project and can And as they how to those as working So yesterday, so. that discussing we be on

Operator

David to Street. next go Segall We'll with Green

David Segall

talk RV could in whether you you're there's if was about I any annual curious seeing business. the attrition

Fernando Castro-Caratini

this is Fernando. David,

On to continue the side, occupancy. gain we annual

year. nearly We this X,XXX have converted sites

So conversions third the annum. with in or would It more with be per it quarter. be expectations would the X,XXX third year year the running fourth

Our renewals are strong within annual the segment.

we're so side. on seeing annual the And actually increase tenure

David Segall

more business on you across can segments? the And growth in Great. assumptions changed color the provide what some revenue

Fernando Castro-Caratini

Sure. that as RV the to connected the driver, of transient are The side primary be marina. David, business, or detailed, in

close -- as on where the we larger of Similar that's to expectations return year. transient RV as demand the from vessels have expecting to the for less down for transient far impact delayed XX% being the side revenue to the we down So lowered were being Mediterranean. performance, close marina given XX% now

Other are less sales, sales fourth seeing fewer saw to And quarter, as due impacts the well we is, less forecasting are in side, home home impact entertainment the September largely storms Southeast. Florida for from revenue -- to we in and flow-through and sales having in service, is its the transient retail, dining linking NOI. revenue, and the the which that again, to home

Operator

Bank next to of We'll America. Dennerlein go Josh with

Joshua Dennerlein

long governance. a And maybe call, are on stepping a Board Board? of Board? think you any about Board come like bit? you there the CEO like in the if like remain where on I people of a are, Has Gary, Would do a then consider just some think, where time. going can So focused have you going of a the been questions discussion you're lot lot down? about to I are it's of still members And refreshing kind been the Chairman new on just like guess little like there this thinking and really

Gary Shiffman

everybody members qualified a Okay. over very that refreshed we new, I time, years. think, added Well, taking at Board that one X remind the and last X I'd Josh. have

refreshing takes Board governance and been Board. the seriously So its has the very

that Board We year. next definitely of step chapter a for position are this to to the And the company if Board long-tenured at you continued members of growth, be on will member able will. have this very especially down we the end refresh, examining

continues work So on. that

as committee smooth my in I share to we'll with a that, With having with myself, be you. regard to retire announced as to near the those just answers working Board the will have on I And to conversations I'd with them intention transition, and glad be be future. the

Joshua Dennerlein

Okay. Appreciate that.

member's it, missed the which of end did stepping if the I say down at you Sorry, Board year?

Gary Shiffman

they'll and works all Committee and as soon share of Nominating The determine that it. as through that, Governance they No.

Joshua Dennerlein

we Okay. know When will that?

Gary Shiffman

that... made they've as soon As

Joshua Dennerlein

there be And will more?

Gary Shiffman

what? Sorry,

Joshua Dennerlein

be I have No, like I'm the lineup, in member it's you Board years. XX one? just guess would at -- no, it looking When Board X there

Gary Shiffman

that What replacing is that stepping know Board long-tenured at I we members is look just ago additional a down we a refresh and there stated so can forward. is going while that that deep little one

Operator

Bank. We'll go Okusanya Deutsche with next to Omotayo

Omotayo Okusanya

a down to the drill operating expenses. on to flex bit wanted of ability little kind I

whatever where breakdown as kind resulted as was happened and quickly a you in of in of little detail some had could that third-party there those a maybe did you not You what more would flex you like mentioned it or us time. give just in bit vendors there have process Hoping expenses you that were liked probably that, particular things like or was reacting not kind about to.

Fernando Castro-Caratini

the can other year. incremental landscaping, and with The XXX repair, trimming from than achieve property were over originally properties, add overages and items the small in but and a forecasted. housing supply of are impacting primary payroll did of targets repairs. -- results Sure. expenses tree these our second over across expected We higher stemmed half parts is and course pool amount, to the significant manufactured up which of each our quickly RV

Operator

We'll go next with Truist Securities. Anthony to Hau

Anthony Hau

color in noticed I more other on a you property provide this? that Can was expenses the XX% portfolio. bit same little up

Fernando Castro-Caratini

was are to expenses not the right, for looking see the advertising Other did declines. mainly related spent mitigate Anthony. portfolio. to We at There convert that Sure, and to transient properties. stays revenue certainly, advertising the spend

Anthony Hau

revenue like to you. happen what needs for do think bounce back? to transient RV you And Got

Fernando Castro-Caratini

is a Anthony, say, transient would I feeder business. side annual great right, for the our of

to continue business by the the that convert. We transient can reduce have to continuing on impact

will we to We been predict. the from laser-focused over over expenses underperformed annual X during the look to nearly has mitigate which have X,XXX but time. as has by on almost that side Transient continue being by original course has years, sites line revenue converted increased top expectations, XX% of sites impact harder the that to

Gary Shiffman

it transient Yes, infrastructure I believe COVID, building we that strong just long-term for fundamentals. invested business. has RV add in We would during our

most we we challenging in growth to more the really to leading the near COVID. of we've conditions than have we as talked However, much been back as medium give term, the anticipated, experienced about outsized that declines revenue market through continued

and managing the we properties. we're the that in are before, decline, especially have revenues expenses the as get RV related we this, probably, flexing with gotten So rapid by should flexed would to September suggest this the did question was down. transient And that we expenses not

annual income because, said, forward, value feeder transient perform But portfolio that looking see do Fernando is grow which, to as said, and it the our for well. RV growth, continues we stream in strategic we really as

strengthens but So total grows we of our reducing transient annual that that remain exposure, of RV part and piece. focused the that kind maintaining on

Operator

next go Wolfe Research. to Carl We'll Keegan with

Keegan Carl

salary I as just for both contemplate does on I'm new more And color the year. as guess for reduction salary looking next the well the G&A CEO this Chairman?

Gary Shiffman

right think looked to able regard to controllable McLaren our at shared back expectation decreases. thinking And rate And John we're rental board, we with I that especially on the increases. it, share how is being expenses. stand forward have historically OpEx now, we we where actionable about expense now and guidance G&A and with and

walk I we're the you that G&A, And share help we look pages presentation to of making now. forward through growth where to when of about the assumptions able you we the get top about expense G&A And we're help growth, we focused how So our guidance. being applying if strategic out sent and other share and provide progress of XXXX, OpEx if will, couple as assuming, rental how to a that bridgeable thinking on will you think, right can expenses we've on new will, today, which growth we're steps, then we in thinking is rate made.

Keegan Carl

mean guess past decline. curious the heard about clear, answer assuming we've Is I I lists guys no. And drove occupancy still I vast business. we'll a it. the the I'm at know pivot marina that having Got But true? waiting to is, to just I'm what so I guess the you majority. just the be lot in

Gary Shiffman

the for of vessels marinas. to of piece which storms, those boat waiting the superyachts miss The is at There returning prevent the majority largest a list vast from related and the size large to Mediterranean. is the some

of departure large the year, Atlantic. return we are what in for back over when storms the other then place the they was or that Atlantic coming the than tropical left earlier are superyacht the and summer bay to budgeted them familiar these we Med And were the and the take formed tend named we're and back later, because of the now earlier we Because there. predominantly vessels budgeted there. shared the that those Atlantic for what keep earlier storms, with we in experiencing over the they that season storms Mediterranean across kind As don't storms cross near boats than generally to travel

impact. been that's So largest the

Operator

This does call the conclude or Gary today's additional any I Shiffman remarks. question-and-answer will back hand for period. to over now closing

Gary Shiffman

doing of of our you outlook a with to Thanks, and our I remain confident entire us I quarter John shared and in stakeholders opportunity operator. disappointing all myself, so, follow-up it management to remarks all at ability I available of few tonight. as team the And all portfolio, value up this is before, would company, really for a of make to do questions. demonstrate take the wrap and and what core any in Despite for

our to this management that has this portfolio type deliver. initiatives team growth of taken in a of lot is strategic the XXXX positive can and There in to return that place

the never what which I ideal 'XX. I bad. further within in follow-up time of turn you it it's our goals We said any to own Nevertheless, to speaking look we urgency operator. understand it, that around. earlier, that And on the sharing just these results. we a for As accomplished forward strategic on, quarter an was and we're or Thank as focused we results you, to And call. set forth is

Operator

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

You may disconnect at time. any

Sun Communities (SUI) 6 Nov 242024 Q3 Earnings call transcript