SUN COMMUNITIES INC
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
Commission file number 1-12616
(Exact Name of Registrant as Specified in its Charter)
| (State of Incorporation) | Commission file number | (I.R.S. Employer Identification No.) | ||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||||||||
(248 ) 208-2500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Accelerated filer | Non-accelerated filer | Smaller reporting company | Emerging growth company | |||||||||||
| ☒ | ☐ | ☐ | ||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June 30, 2021, the aggregate market value of the registrant’s stock held by non-affiliates was $19,529,836,028 (computed by reference to the closing sales price of the registrant’s common stock as of June 30, 2021). For this computation, the registrant has excluded the market value of all shares of common stock reported as beneficially owned by executive officers and directors of the registrant; such exclusion shall not be deemed to constitute an admission that any such person is an affiliate of the registrant.
Number of shares of Common Stock, $0.01 par value per share, outstanding as of February 15, 2022: 115,961,958
Documents Incorporated By Reference
SUN COMMUNITIES, INC.
Table of Contents
| Item | Description | Page | ||||||
Part I. | ||||||||
Item 1. | Business | |||||||
Item 1A. | Risk Factors | 14 | ||||||
Item 1B. | Unresolved Staff Comments | |||||||
Item 2. | Properties | |||||||
Item 3. | Legal Proceedings | |||||||
Item 4. | Mine Safety Disclosures | |||||||
Part II. | ||||||||
Item 5. | Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |||||||
Item 6. | [Reserved] | |||||||
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |||||||
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | |||||||
Item 8. | Financial Statements and Supplementary Data | |||||||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | |||||||
Item 9A. | Controls and Procedures | |||||||
Item 9B. | Other Information | |||||||
Part III. | ||||||||
Item 10. | Directors, Executive Officers and Corporate Governance | |||||||
Item 11. | Executive Compensation | |||||||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |||||||
Item 13. | Certain Relationships and Related Transactions, and Director Independence | |||||||
Item 14. | Principal Accountant Fees and Services | |||||||
Part IV. | ||||||||
Item 15. | Exhibits and Financial Statement Schedules | |||||||
Item 16. | Form 10-K Summary | |||||||
| Exhibits | ||||||||
| Signatures | ||||||||
| Index to the Consolidated Financial Statements and Financial Statement Schedule | F-1 | |||||||
SUN COMMUNITIES, INC.
PART I
ITEM 1. BUSINESS
GENERAL OVERVIEW
Sun Communities, Inc., a Maryland corporation, and all wholly-owned or majority-owned and controlled subsidiaries, including Sun Communities Operating Limited Partnership, a Michigan limited partnership (the "Operating Partnership"), Sun Home Services, Inc., a Michigan corporation ("SHS") and Safe Harbor Marinas, LLC ("Safe Harbor") are referred to herein as the "Company," "us," "we," and "our."
We are a fully integrated real estate investment trust ("REIT"). We own manufactured housing ("MH") communities and recreational vehicle ("RV") resorts throughout the United States and in Ontario, Canada. We self-administer, self-manage, and operate or hold an interest in, and develop the majority of our MH communities and RV resorts. A select number of our communities and resorts are operated by independent third party contractors on our behalf under a management agreement. Others are operated by a lessee under a ground lease arrangement. Through Safe Harbor, we own, operate, develop and manage marinas throughout the United States ("U.S.") and Puerto Rico, with the majority of such marinas concentrated in coastal regions and others located in various inland regions. We are a fully-integrated real estate company which, together with our affiliates and predecessors, has been in the business of acquiring, operating, developing and expanding MH communities and RV resorts since 1975 and marinas since 2020. We lease individual parcels of land, or sites, with utility access for the placement of manufactured homes and RVs to our MH and RV customers. Our MH communities are designed to offer affordable housing to individuals and families, while also providing certain amenities. Our RV resorts are designed to offer affordable vacation opportunities to individuals and families complemented by a diverse selection of high-quality amenities. Our marina offerings include wet slip and dry storage space leases, end-to-end service (such as routine maintenance, repair and winterization), fuel sales and other high-end amenities. These services and amenities offer convenience and resort-quality experiences.
As of December 31, 2021, we owned and operated, directly or indirectly, or had an interest in, a portfolio of 602 MH communities, RV resorts and marinas (collectively, the "properties") located in 39 states, Ontario, Canada and Puerto Rico, including 284 MH communities, 160 RV resorts, 33 properties containing both MH and RV sites, and 125 marinas. As of December 31, 2021, the properties contained an aggregate of 204,163 developed sites comprised of 98,621 developed MH sites, 30,540 annual RV sites (inclusive of both annual and seasonal usage rights), 29,847 transient RV sites, and 45,155 wet slips and dry storage spaces. Additionally, there are nearly 11,000 additional MH and RV sites suitable for development.
We are engaged through SHS, a taxable REIT subsidiary, in the marketing, selling, and leasing of new and pre-owned homes to current and future residents in our communities. The operations of SHS support and enhance our occupancy levels, property performance and cash flows.
Our executive and principal property management office is located at 27777 Franklin Road, Suite 200, Southfield, Michigan 48034 and our telephone number is (248) 208-2500. Our Safe Harbor marina segment principal office is located in Dallas, Texas. We have regional property management offices throughout the United States. We employed an aggregate of 5,961 full and part time employees as of December 31, 2021.
Our website address is www.suncommunities.com and we make available, free of charge, on or through our website all of our periodic reports, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and current reports on Form 8-K, as soon as reasonably practicable after we file such reports with the Securities and Exchange Commission (the "SEC"). Additionally, the SEC maintains a website at https://www.sec.gov, that contains reports, proxy information statements and other information about Sun.
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SUN COMMUNITIES, INC.
STRUCTURE OF THE COMPANY
The Operating Partnership is structured as an umbrella partnership REIT, or UPREIT. We conduct substantially all of our operations through the Operating Partnership. The Operating Partnership owns, either directly or indirectly through other subsidiaries, substantially all of our assets. This UPREIT structure enables us to comply with certain complex requirements under the federal tax rules and regulations applicable to REITs, and to acquire MH communities, RV resorts and marinas in transactions that defer some or all of the sellers' tax consequences. The financial results of the Operating Partnership and our other subsidiaries are consolidated in our Consolidated Financial Statements. The financial results include certain activities that do not necessarily qualify as REIT activities under the Internal Revenue Code of 1986, as amended (the "Code"). We have formed taxable REIT subsidiaries, as defined in the Code, to engage in such activities. We use taxable REIT subsidiaries to offer certain services to our residents and engage in activities that would not otherwise be permitted under the REIT rules if provided directly by us or by the Operating Partnership. The taxable REIT subsidiaries include our home sales business, SHS, which provides manufactured home sales, leasing, and other services to current and prospective tenants of our properties.
Under the partnership agreement, the Operating Partnership is structured to make distributions with respect to certain of the Operating Partnership units ("OP units") at the same time that distributions are made to our common stockholders. The Operating Partnership is structured to permit limited partners holding certain classes or series of OP units to exchange those OP units for shares of our common stock (in a taxable transaction) and achieve liquidity for their investment.
As the sole general partner of the Operating Partnership, we generally have the power to manage and have complete control over the conduct of the Operating Partnership's affairs and all decisions or actions made or taken by us as the general partner pursuant to the partnership agreement are generally binding upon all of the partners and the Operating Partnership.
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SUN COMMUNITIES, INC.
We do not own all of the OP units. The following table sets forth:
•The various series of OP units and the number of units of each series outstanding as of December 31, 2021;
•The relative ranking of the various series of OP units with respect to rights to the payment of distributions and the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Operating Partnership;
•The number of shares of our common stock issuable upon the exchange of each OP unit of the applicable series;
•The annual distribution rate on each series of OP Units; and
•Information regarding the terms of redemption rights for each series of OP units, as applicable.
| Ranking | Description | OP Units Outstanding at December 31, 2021 | Exchange Rate(1) | Annual Distribution Rate(2) | Cash Redemption(3) | Redemption Period | ||||||||||||||||||||||||||||||||
| 1 | Preferred OP units (or "Aspen preferred OP units") | 1,283,819(4) | Variable(5) | Variable(6) | Mandatory | Variable(7) | ||||||||||||||||||||||||||||||||
| 1 | Series A-1 preferred OP units | 275,024 | 2.439 | 6.0 | % | N/A | N/A | |||||||||||||||||||||||||||||||
| 2 | Series C preferred OP units | 306,163 | 1.11 | Variable(8) | N/A | N/A | ||||||||||||||||||||||||||||||||
| 3 | Series D preferred OP units | 488,958 | 0.8 | Variable(9) | Holder's Option | Any time after earlier of January 31, 2024 or death of holder | ||||||||||||||||||||||||||||||||
| 4 | Series E preferred OP units | 90,000 | 0.6897 | Variable(10) | N/A | N/A | ||||||||||||||||||||||||||||||||
| 5 | Series F preferred OP units | 90,000 | 0.625 | 3.0 | % | Holder's Option | Any time after earlier of May 14, 2025 or death of holder | |||||||||||||||||||||||||||||||
| 6 | Series G preferred OP units | 240,710 | 0.6452 | 3.2 | % | Holder's Option | Any time after earlier of September 30, 2025 or death of holder | |||||||||||||||||||||||||||||||
| 7 | Series H preferred OP units | 581,407 | 0.6098 | 3.0 | % | Holder's Option | Any time after earlier of October 30, 2025 or death of holder | |||||||||||||||||||||||||||||||
| 8 | Series I preferred OP units | 922,000 | 0.6098 | 3.0 | % | Holder's Option | Any time after earlier of December 31, 2025 or death of holder | |||||||||||||||||||||||||||||||
| 9 | Series J preferred OP units | 240,000 | 0.6061 | 2.85 | % | Holder's Option | During the 30-day period following a change of control of the Company or any time after April 21, 2026. | |||||||||||||||||||||||||||||||
| 10 | Series A-3 preferred OP units | 40,268 | 1.8605 | 4.5 | % | N/A | N/A | |||||||||||||||||||||||||||||||
| 11 | Common OP units | 118,514,363(11) | 1.0 | Same distribution rate for common stock and common OP units | N/A | N/A | ||||||||||||||||||||||||||||||||
(1) Exchange rates are subject to adjustment upon stock splits, recapitalizations and similar events. The exchange rates of certain series of OP units are approximated to four decimal places.
(2) Except for common OP units, distributions are payable on the issue price of each OP unit, which is $27.00 per unit for all Aspen preferred OP units and $100.00 per unit for all other preferred OP units.
(3) The redemption price for each OP unit redeemed will be equal to its issue price plus all accrued but unpaid distributions.
(4) Of the outstanding Aspen preferred OP units, 270,000 are designated as "Aspen 2034 Units."
(5) At any time prior to January 1, 2024 (or prior to January 1, 2034 with respect to the Aspen 2034 Units), at the holder's option, each Aspen preferred OP unit may be exchanged into: (a) if the average closing price of our common stock for the preceding ten trading days is $68.00 per share or less, 0.397 common OP units, or (b) if the average closing price of our common stock for the preceding ten trading days is greater than $68.00 per share, the number of common OP units determined by dividing (i) the sum of (A) $27.00 plus (B) 25 percent of the amount by which the average closing price of our common stock for the preceding ten trading days exceeds $68.00 per share, by (ii) the average closing price of our common stock for the preceding ten trading days.
(6) The annual distribution rate for Aspen 2034 Units is 3.8 percent. The annual distribution rate on all other Aspen preferred OP units is equal to the 10-year U.S. Treasury bond yield plus 239 basis points; provided, however, that such aggregate distribution rate shall not be less than 6.5 percent nor more than 9.0 percent.
(7) We are required to redeem all outstanding Aspen preferred OP units other than the Aspen 2034 Units on January 2, 2024. We are required to redeem all outstanding Aspen 2034 Units on January 2, 2034. In addition, we are required to redeem the Aspen preferred OP units (including Aspen 2034 Units) of any holder thereof within five days after receipt of a written demand during the existence of certain uncured Aspen preferred OP unit defaults, including our failure to pay distributions on the Aspen preferred OP units when due and our failure to provide certain security for the payment of distributions on the Aspen preferred OP units.
(8) 4.5 percent until April 1, 2020 and 5.0 percent thereafter.
(9) 3.75 percent until January 31, 2021 and 4.0 percent thereafter.
(10) 5.25 percent until January 9, 2022 and 5.5 percent thereafter.
(11) Of the 118,514,363 common OP units, 115,976,408, or 97.9 percent were held by us, and 2,537,955, or 2.1 percent were owned by the limited partners.
3
SUN COMMUNITIES, INC.
REAL PROPERTY OPERATIONS
MH communities and RV resorts
An MH community is a residential subdivision with sites for the placement of manufactured homes, related improvements and amenities. Manufactured homes are detached single‑family homes which are produced off‑site by manufacturers and installed on site within the community. Manufactured homes are available in a wide array of designs, providing owners with a level of customization generally unavailable in multi-family housing developments. Modern MH communities contain improvements similar to other garden‑style residential developments, including centralized entrances, paved streets, curbs, gutters and parkways. In addition, these communities also often provide a number of amenities, such as a clubhouse, a swimming pool, basketball courts, shuffleboard courts, tennis courts and laundry facilities.
An RV resort is a resort with sites for the placement of RVs for varied lengths of time. RV resorts may also provide vacation rental homes and may include a number of amenities such as restaurants, golf courses, swimming pools, water parks, tennis courts, fitness centers, planned activities and spacious social facilities.
Renters at our MH and RV properties lease the site on which a manufactured home, RV or vacation rental home is located. We typically own the underlying land, utility connections, streets, lighting, driveways, common area amenities, and other capital improvements and are responsible for enforcement of community guidelines and maintenance. In certain MH and RV properties, we do not own all of the underlying land and operate the communities pursuant to ground leases. Certain of the properties provide water and sewer service through public or private utilities companies, while others provide these services to residents from on-site facilities. Each owner of a home within our properties is responsible for the maintenance of the home and leased site. As a result, our capital expenditure needs tend to be less significant relative to multi-family rental apartment complexes.
In 2021, we began to rebrand certain of our RV resorts under the "Sun Outdoors" umbrella. Sun Outdoors offers tent camping, RV sites and vacation rentals with world-class amenities throughout the U.S. and in Ontario, Canada. We believe this rebranding under the Sun Outdoors umbrella will allow us to gain a competitive advantage in the outdoor recreation market. We are in the process of implementing the Sun Outdoors brand at certain of our RV resorts and expect implementation to be substantially completed by the end of 2022. Implementation consists of conversion of digital presence (Website, Facebook, Rezplot reservation software and other internal systems) and signage replacement at the resorts.
We compete with other available MH communities and RV resorts, and alternative forms of housing (such as on-site constructed homes, apartments, condominiums and townhouses) as they provide housing alternatives to potential tenants of MH communities and RV resorts.
Marina
A marina is a specially-designed harbor that can be located on oceans, lakes, bays or rivers and typically includes dry storage systems that provide storage solutions for the placement of vessels ranging in size from small boats to super yachts for varied lengths of time. Dry storage systems also allow for the required maintenance to the vessels that we store. Marinas also provide ancillary services, such as fuel stations, ship stores, restaurants, swimming pools, cabin and lodging rentals, boat rentals, tennis courts, fitness centers, shower and laundry facilities, planned activities and other services to create a robust member experience.
Renters at our marinas lease the wet slip or dry storage space on which the vessel is stored. We typically own the underlying land, building improvements, dock improvements, site improvements and other on-site amenity structures. Because we own the facilities and improvements on the land or submerged land at those marinas, we are responsible for the capital improvements and maintenance. In certain marinas, we do not own all of the underlying land and operate the marinas pursuant to ground leases.
We compete with other available marinas in the U.S. and Puerto Rico.
PROPERTY MANAGEMENT
Our property management strategy emphasizes intensive, detail-oriented, hands-on management by dedicated, on-site community, resort and marina managers. We believe our focus on creating an exceptional resident, guest and member experience creates a competitive advantage. It enables us to continually monitor and address concerns, the performance of competitive properties and local market conditions. As of December 31, 2021, of our 5,961 employees, 4,145 were located on-site as property managers, support staff or maintenance personnel, and of those, approximately 83.0 percent were full-time employees.
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SUN COMMUNITIES, INC.
Our MH and RV property managers are overseen by John B. McLaren, our President and Chief Operating Officer, who has been in the MH industry since 1995, Bruce Thelen, our Executive Vice President of Operations and Sales, who has led our manufactured home sales and leasing subsidiary, SHS, since January 2018, three Senior Vice Presidents of Operations and Sales, 11 Divisional Vice Presidents and 45 Regional Vice Presidents. Each Regional Vice President oversees one to 16 properties and is responsible for regular property inspections, oversight of property operations and sales functions, semi-annual market surveys of competitive communities and interaction with local manufactured home dealers.
Each property manager performs regular inspections in order to monitor the physical condition of properties and to effectively address tenant concerns. In addition to an on-site manager, each district or property has on-site maintenance personnel and management support staff. We hold mandatory training sessions for all new property management personnel to ensure that policies and procedures are executed effectively and professionally. All of our property management personnel participate in on-going training to ensure that changes to policies and procedures are implemented consistently. Our internal training program has led to increased knowledge and accountability for daily operations and policies and procedures.
Our marina business is overseen by Baxter Underwood, the Chief Executive Officer of Safe Harbor, who has been in the marina business since 2006, two Chief Operating Officers and 17 Regional Vice Presidents who are responsible for regular marina inspections and oversight of operations.
HOME SALES AND RENTALS
SHS is engaged in the marketing, selling and leasing of new and pre-owned homes to residents in our communities. Because tenants often purchase a home already on-site within a community, such services enhance occupancy and property performance. Additionally, because many of the homes on the properties are sold through SHS, better control of home quality in our communities can be maintained than if sales services were conducted solely through third-party brokers.
SHS also leases homes to prospective tenants. At December 31, 2021, SHS had 9,870 occupied leased homes in its portfolio. New and pre-owned homes are purchased for the Rental Program. Leases associated with the Rental Program generally have a term of one year. The Rental Program requires management of costs associated with repair and refurbishment of these homes as the tenants vacate and the homes are re-leased, similar to apartment rentals. We received approximately 55,500 applications during 2021 to live in our MH and RV properties, providing a significant "resident onboarding" system that allows us to market the purchase of a home to qualified applicants. Through the Rental Program we demonstrate our product and lifestyle to the renters, while monitoring their payment history and converting qualified renters to owners.
Our home sales and leasing operations compete with other local and national MH dealers and MH community owners.
MARINA MEMBER BASE
We are engaged in the marketing and leasing of wet slips and dry storage spaces and have approximately 45,000 members throughout our marina network as of December 31, 2021.
SITE LEASES OR USAGE RIGHTS
Typical tenant leases for MH sites are year-to-year or month-to-month, renewable upon the consent of both parties, or, in some instances, as provided by statute. Certain of our leases, mainly at our Florida and California properties, are tied to the consumer price index or other indices as they relate to rent increases. Generally, market rate adjustments are made on an annual basis. These leases are cancellable for non-payment of rent, violation of community rules and regulations or other specified defaults. During the five calendar years ended December 31, 2021, on average less than 1.0 percent of the homes in our MH communities have been removed by their owners and 6.5 percent of the homes have been sold by their owners to a new owner who then assumes rental obligations as a community resident. The average cost to move a home is approximately $7,000. On average, our residents remain in our communities for approximately 14 years.
Typical resident agreements for RV sites are year-to-year or from move-in date until the end of the current calendar year. Generally, increases and market rate adjustments are made on an annual basis. These agreements are cancellable for non-payment of rent, violation of resort rules and regulations or other specified defaults.
Leases for wet slips and dry storage spaces at our marinas are year-to-year, season-to-season, month-to-month, or transient by night, renewable upon the consent of both parties. On average, our members maintain leases in our marinas for approximately eight years.
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SUN COMMUNITIES, INC.
ACQUISITIONS
During the year ended December 31, 2021, we acquired 35 MH communities and RV resorts, totaling 9,277 sites and 19 marinas totaling 6,539 wet slips and dry storage spaces for a total purchase price of approximately $1.4 billion.
On November 13, 2021, we entered into an agreement to acquire Tiger Topco 1 Limited (together with its subsidiaries, "Park Holidays"), an owner and operator of holiday communities in the United Kingdom. The transaction values Park Holidays at an enterprise value of £950 million (or approximately $1.3 billion). We anticipate that the acquisition of Park Holidays will close within the three months ending March 31, 2022. However, the closing is subject to the approval of the UK Financial Conduct Authority, which regulates certain loan brokering activities of Park Holidays.
We are also currently pursuing additional significant acquisition opportunities outside the United States, including in the United Kingdom and Europe.
EXPANSION / DEVELOPMENT
During the year ended December 31, 2021, we completed the construction of over 1,030 sites in eight ground-up developments and re-developments, and nearly 580 expansion sites in six MH communities and five RV resorts.
REGULATIONS AND INSURANCE
General
MH, RV and marina properties are subject to various laws, ordinances and regulations, including regulations relating to recreational facilities such as swimming pools, clubhouses and other common areas. Each property has the necessary operating permits and approvals.
Insurance
Our management believes that the properties are covered by adequate fire, property, business interruption, general liability, and (where appropriate) flood and earthquake insurance provided by reputable companies with commercially reasonable deductibles and limits. We maintain a blanket policy that covers all of our properties. We have obtained title insurance insuring fee title to the properties in an aggregate amount which we believe to be adequate. Claims made to our insurance carriers that are determined to be recoverable are classified in other receivables as incurred.
HUMAN CAPITAL
Human capital management is key to our success and focuses on diversity, equity and inclusion, employee retention and talent development practices. We are committed to building an equitable and inclusive culture that inspires and supports the growth of our employees, serves our communities and shapes a more sustainable business. The most significant measures and objectives that we focus on in managing our business and our related human capital initiatives include the following:
CULTURE
We are taking deliberate actions to foster a growth culture that is grounded in our vision and culture statements: We are an inspired, engaged and collaborative team committed to providing extraordinary service to our residents, customers and team members. Together as one team, we embrace the following seven key behaviors that make our company a great place to work:
•Live the Golden Rule: Treat others the way you want to be treated;
•Do the right thing;
•We over me;
•Nothing changes if nothing changes;
•Mindset is everything;
•Keep it simple; and
•Be yourself and thrive.
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SUN COMMUNITIES, INC.
LEADERSHIP, TALENT, TRAINING AND DEVELOPMENT
We expect our leaders to be role models and lead in a way that enables our organization to achieve success. Our strategy is anchored in promoting the right internal talent and hiring the right external talent for career opportunities across our organization. We are focused on hiring and developing talent that mirrors the markets we serve, and investing in learning opportunities and capabilities that equip our workforce with the skills they need while improving engagement and retention.
•Our internal training program, Sun University, offers over 100 courses to our MH and RV team members on a range of topics, including leadership, communications, inclusion and diversity, software and operations. Our internal training program has led to increased knowledge and accountability for daily operations and policies and procedures. In 2021, team members logged 52,506 learning hours;
•We hold mandatory ongoing training sessions for all property management personnel to ensure that policies and procedures are executed effectively, professionally and consistently; and
•New team members are required to complete information security training, and safety and compliance-related training, with routine refreshers at least annually on critical topics.
We are dedicated to the attraction, development and retention of our talent, focusing our efforts on ensuring that the returning seasonal team member pipeline remains robust each year and our annual talent management processes focus on the professional development of salaried team members. As of December 31, 2021, nearly 10 percent of our employees had over 10 years tenure.
Our compensation philosophy, aimed to apply merit-based, equitable compensation practices, is designed to attract and retain top talent. For eligible team members, we offer competitive salary, health, welfare, retirement and pet insurance benefits, tuition reimbursement and rent / vacation discounts at our properties.
DIVERSITY, EQUITY AND INCLUSION ("DEI")
We make it a priority to recognize and appreciate the diverse characteristics that make individuals unique in an atmosphere that promotes and celebrates individual and collective achievement. We believe it's not just about gender or race, but about being diverse in thoughts, life and work experiences. Our inclusive environment challenges, inspires, rewards, and transforms our team to be the best. We do not tolerate harassing, discriminatory, or retaliatory conduct as such conduct is prohibited and inconsistent with our policies, practices and philosophy. We continue to put our resources and energy into strategies and initiatives to create a more equitable environment.
Workforce Diversity
We believe we are a stronger organization when our workforce represents a diversity of ideas and experiences. We value and embrace diversity in our employee recruiting, hiring and development practices. As of December 31, 2021, 41 percent of our employees were female, 21 percent of our employees were racially or ethnically diverse, and 47 percent of our employees were aged 50 years and older, with approximately 24 percent being aged 60 years and older.
Training and Resources
We offer trainings and resources on diversity, equity and inclusion to our employees. Diversity education and training programs for our team focus on unconscious bias, gender identity and transitions, generational differences, religion in the workplace, and self-awareness and self-assessments.
•We launched our formal initiative for Inclusion, Diversity, Equity and Accountability ("IDEA") focused on enhancing diversity through education, awareness and outreach throughout our company, communities and resorts;
•We engaged a third-party DEI consultant who conducted a company-wide training on DEI-related key foundational terms and helped develop an organization-wide IDEA strategy for Sun; and
•We set the foundation with senior leaders at our 2021 Elevate conference where we held break out sessions on allyship with inclusion and belonging, continuing the IDEA conversation, inclusive leadership, introduction to IDEA, and workplace microaggressions and unconscious bias.
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SUN COMMUNITIES, INC.
In order to implement and sustain this initiative, in 2021:
•We created our IDEA council to help implement Sun's IDEA Strategy;
•Our Chief Executive Officer signed a pledge for the CEO Action for Diversity & Inclusion, a commitment to advance diversity and inclusion within the workplace;
•We made Juneteenth an annual company holiday to celebrate the end of slavery in the United States;
•We launched an anti-racism resource center for employees inclusive of videos, podcasts, articles, books, films and television series; and
•We implemented "Job Analyzer" in our applicant tracking system to proactively identify and address gender bias in job postings.
EQUITY PAY
We are committed to providing a total compensation package that is market-based, performance driven, fair and internally equitable. Our goal is to be competitive both within the general employment market as well as with our competitors in the real estate industry, with our strongest performers being paid more.
•Compensation for each position is determined by utilizing reliable third-party compensation surveys to obtain current market data. Additionally, position descriptions and compensation are routinely reviewed for market competitiveness.
•On an annual basis, the performance of all team members is evaluated and merit increases are allocated based on performance. This process ensures equitable performance review and corresponding pay practices that attract, retain, and reward top talent.
•In 2021, we conducted an analysis on data related to open positions, retention, market compensation pay gaps, and internal equity, and remediated any identified pay gaps. A total of 3,300 team members received some level of pay increase apart from their normal merit-based increase.
BUSINESS INTEGRITY
Our Code of Conduct and Business Ethics is grounded in our commitment to do the right thing. It serves as the foundation of our approach to ethics and compliance, and our anti-corruption compliance program is focused on conducting business in a fair, ethical and legal manner.
WORKPLACE HEALTH AND SAFETY
Sun actively seeks opportunities to minimize health, safety and environmental risks to our team members, residents, and guests we serve in our communities and resorts by utilizing safe operating procedures and practices:
•As part of our commitment to safety, Sun oversees annual safety training programs for all employees to provide tools and safeguards for accident prevention. Our managers are responsible for ensuring that team members receive the appropriate training to perform their jobs safely;
•All team members participate in safety training during the onboarding process, and thereafter, team members in the field complete an annual safety training course;
•We work hard to uphold a safe workplace by complying with safety and health laws and regulations, maintaining internal requirements and remediating risks. Each community is regularly inspected to ensure safety standards are being met, with comprehensive safety inspections completed annually; and
•Our COVID-19 Response and Action Plan, described below, continues to serve as a guideline for the safe operation of our communities, resorts and main office.
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG")
We uphold a company-wide commitment to ESG goals through various programs and everyday business practices. We are fully committed to reducing our environmental impact across the scope of our operations and through the services we deliver to our residents and guests. We continue to identify opportunities to invest in energy-efficient technology, water efficiency and waste reduction strategies throughout our communities, resorts and corporate headquarters. By conserving natural resources, reducing our carbon footprint and participating in efforts to protect the environment through our Sun Unity program, we are striving to achieve our environmental sustainability goals.
We recognize the important opportunity of providing access to affordable and sustainable housing. Our business contributes to a vitally important function in our economy by providing high-quality, yet affordable, housing for both all-age and age-restricted needs. Manufactured homes cost approximately 52 percent less per square foot than conventional site-built homes, expanding the opportunity for residents to own their home, despite an ever-increasing housing affordability gap. Our homes provide more space at less cost per square foot compared to other options.
As a nationwide provider of affordable housing, and a leader in the marina business, we believe we have a responsibility not only to our residents, guests and team members, but also to the communities in which we live and work. These social responsibility efforts are initiated through our Sun Unity program, so we can join together as a team and give back to these communities to achieve goals like promotion, education and waste reduction.
COVID-19 RELIEF AND SUPPORT
The health and safety of our residents, guests and team members is our top priority. In 2020, at the height of the COVID-19 pandemic, we instituted our COVID-19 Response and Action Plan which established guidelines for safe operations of our communities, resorts and our main office. We continue to revise our guidelines to be in line with revised government and regulatory mandates. Content contained within this plan includes:
•Methods for preventing and reducing exposure and transmission of COVID-19 among individuals;
•Methods for identification and isolation of sick persons;
•Operational protocols for social distancing, including reduced occupancy requirements;
•Sanitation policies and procedures, including cleaning, disinfecting and decontamination;
•Communications and training for team members and leaders that are necessary to implement the plan; and
•Procedures to ensure effective ongoing implementation of the plan.
Temporary relief measures extended to residents and guests include:
•Enhanced cleaning procedures, as well as additional signage, and changes to policies and procedures further promoting social distancing.
•Amenity kits are being provided to guests upon check-in which include hand sanitizer, face masks and sanitation wipes.
•Contactless processes are put in place for rent collection, lease renewals, reservations and guest check-ins.
•Large quantities of personal protection equipment and cleaning products are distributed to all of Sun's locations.
While COVID-19 had a material effect on our employees, residents and guests during 2021, it did not materially impact our financial performance.
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COMMITMENT TO A SUSTAINABLE FUTURE
While the pandemic has been the defining issue of the last two years, climate change is the challenge of our lifetime. Climate change poses a clear threat and challenge to the real estate sector, as buildings contribute up to 30 percent of global annual greenhouse gas (“GHG”) emissions. Climate change impacts are material to our overall value as well as our ability to serve our residents, guests, employees, investors and other stakeholders. We are committed to reducing our GHG emissions and working to improve upon the environmental performance of the communities and properties within our portfolio. We are at the very beginning of this process with a focus on expanding our climate analysis to be more comprehensive and integrated into our overall business strategy. Some of our accomplishments include:
Climate Risk Assessment - In 2021, we performed an analysis of the climate risk impact on our properties. Various models were used to determine risks related to the sea-level rise, flooding, wildfire, water scarcity, cold waves and heat waves across three timeframes (2020, 2030 and 2050). We reviewed the results of this assessment and are using them to develop our risk mitigation and resilience (climate change adaptation) strategies. We are now integrating a climate risk analysis in the due diligence process during acquisitions of properties.
Greenhouse Gas Emissions - We created a framework to track the GHG emissions across our portfolio. We are implementing GHG emissions-reduction strategies where feasible to reduce emissions and their negative impact on climate change. The framework allows us to track, monitor and evaluate current performance, and make adjustments to our GHG emissions-reduction strategies.
Please see the Risk Factors in Item 1A, and our accompanying Consolidated Financial Statements and related notes thereto beginning on page F-1 of this Annual Report on Form 10-K for more detailed information.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains various "forward-looking statements" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and we intend that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this filing that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as "forecasts," "intends," "intend," "intended," "goal," "estimate," "estimates," "expects," "expect," "expected," "project," "projected," "projections," "plans," "predicts," "potential," "seeks," "anticipates," "anticipated," "should," "could," "may," "will," "designed to," "foreseeable future," "believe," "believes," "scheduled," "guidance," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements reflect our current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this filing. These risks and uncertainties may cause our actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks disclosed under "Risk Factors" in this Annual Report on Form 10-K and in our other filings with the SEC, such risks and uncertainties include, but are not limited to:
•Outbreaks of disease, including the COVID-19 pandemic, and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operations;
•Changes in general economic conditions, the real estate industry and the markets in which we operate;
•Difficulties in our ability to evaluate, finance, complete and integrate acquisitions, developments and expansions successfully;
•Our liquidity and refinancing demands;
•Our ability to obtain or refinance maturing debt;
•Our ability to maintain compliance with covenants contained in our debt facilities and our senior unsecured notes;
•Availability of capital;
•Changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, Australian dollar and British pound;
•Our ability to maintain rental rates and occupancy levels;
•Our ability to maintain effective internal control over financial reporting and disclosure controls and procedures;
•Increases in interest rates and operating costs, including insurance premiums and real property taxes;
•Risks related to natural disasters such as hurricanes, earthquakes, floods, droughts and wildfires;
•General volatility of the capital markets and the market price of shares of our capital stock;
•Our ability to maintain our status as a REIT;
•Changes in real estate and zoning laws and regulations;
•Legislative or regulatory changes, including changes to laws governing the taxation of REITs;
•Litigation, judgments or settlements;
•Competitive market forces;
•The ability of purchasers of manufactured homes and boats to obtain financing; and
•The level of repossessions by manufactured home and boat lenders.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. We undertake no obligation to publicly update or revise any forward-looking statements included or incorporated by reference into this filing, whether as a result of new information, future events, changes in our expectations or otherwise, except as required by law.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. All written and oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by these cautionary statements.
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The summary of risks below provides an overview of the principal risks that could affect our business, financial condition, results of operations, cash flows and / or prospects. This summary does not contain all of the information that may be important to you, and you should read the more detailed discussion of risks that follows this summary.
SUMMARY OF RISK FACTORS
MATERIAL RISKS RELATING TO OUR MH, RV AND MARINA BUSINESSES
•The geographic concentration of our properties in specific regions exposes us to the risks of downturns in local economies or other local real estate market conditions;
•We build and develop new MH communities, RV resorts and marinas and expand our existing properties, which exposes us to risks relating to zoning and permit laws, construction delays, unexpected development costs and fluctuations in occupancy rates at our newly developed properties;
•The industries in which we operate are highly-fragmented and we are subject to competition with national and regional players that may have greater resources than us;
•The cyclical and seasonal nature of the RV and marina industries lead to fluctuations in our operating results;
•Our continued growth is subject to our ability to successfully integrate and finance our acquisitions on favorable terms.
•The successful operation of our marinas depends on our ability to retain key employees with experience in the marina business, including Baxter R. Underwood, who is the Chief Executive Officer of Safe Harbor;
•Many of our properties are in areas that experience extreme weather conditions like floods, hurricanes, wildfires, sea-level rises or earthquakes and climate change could exacerbate these weather conditions;
•Marinas are specific-use properties and may contain features or assets that have limited alternative uses;
•Many of our marinas are situated on land controlled by governmental bodies and we must lease this land from them. These governmental authorities may terminate, fail to renew, or interpret in ways unfavorable to us, any of the permits, licenses, leases and approvals necessary for the operation of our marinas;
•Our properties are subject to various federal, state, local and foreign environmental laws and we may incur liability under these environmental laws for remediation and disposal of hazardous materials located on our properties;
•We may not complete our previously announced acquisition of Park Holidays and, even if we complete the acquisition, we may not realize the intended benefits of the Park Holidays acquisition;
•We will be subject to additional legal, regulatory, tax, supply chain, political and economic risks as we continue to expand our international investments;
•The ongoing COVID-19 pandemic may materially and adversely impact our financial condition, results of operations, cash flows and performance in unanticipated ways; and
•State and local rent control laws may inhibit our ability to increase rents to recover increases in our operating expenses.
RISKS RELATED TO OUR DEBT FINANCINGS
•We have a significant amount of debt which could limit our operational flexibility or otherwise adversely affect our financial condition;
•Any failure to meet our obligations on our secured debt could result in foreclosure on the collateral securing the debt; and
•Increases in market interest rates could materially increase our costs associated with existing and future debt. We mitigate the risks underlying increases in interest rates through hedging activities, but no hedging activity can protect us completely.
TAX RISKS RELATED TO OUR STATUS AS A REIT
•If we fail to qualify as a REIT our taxable income would be subject to federal income tax at a regular corporate rate which would materially and adversely affect our financial condition;
•The Operating Partnership could be classified as a "publicly traded partnership" which would subject it to taxation as a corporation and lead to substantial tax liabilities; and
•Compliance with the complex requirements and tests that are applied to REITs may hinder our ability to operate solely to maximize profits.
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RISKS RELATED TO RELATED PARTY TRANSACTIONS AND OUR STRUCTURE
•Some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests;
•Our governing documents prohibit, with limited exceptions, a single stockholder from owning more than 9.8 percent of our capital stock, which may discourage a change of control of the Company; and
•Certain provisions of Maryland law may discourage third parties from conducting a tender offer or otherwise acquiring us via a change of control transaction that could be beneficial to our stockholders.
GENERAL RISK FACTORS
•Our share price is subject to fluctuations that could be caused by a wide range of factors that could ultimately lead to a complete loss on our shareholders' investment;
•The sale or issuance of substantial amounts of our common or preferred stock could materially and adversely affect the market price of our common or preferred stock;
•We may not generate cash flows in an amount sufficient enough to make distributions on our stock, to pay our indebtedness, or to fund our other liquidity needs;
•A failure to maintain an effective system of internal controls may cause our financial reports to become inaccurate which could harm our reputation and have a material adverse effect on our operating results;
•Our, or our third party vendors', networks could become compromised, and the information stored there could be accessed, publicly disclosed, lost or stolen;
•We may experience losses in excess of our insurance coverages;
•Adverse content about us on social media platforms could result in damage to our reputation or brand; and
•We may be adversely impacted by fluctuations in foreign currency exchange rates.
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ITEM 1A. RISK FACTORS
Our prospects are subject to certain uncertainties and risks. Our future results could differ materially from current results, and our actual results could differ materially from those projected in forward-looking statements as a result of certain risk factors. These risk factors include, but are not limited to, those set forth below, other one-time events, and important factors disclosed previously and from time to time in our other filings with the SEC.
MATERIAL RISKS RELATING TO OUR MH, RV AND MARINA BUSINESSES
General economic conditions and the concentration of our MH, RV and Marina properties in certain geographic areas may affect our ability to generate sufficient revenue.
The market and economic conditions in our current markets generally, and specifically in metropolitan areas of our current markets, may significantly affect occupancy or rental rates. Occupancy and rental rates, in turn, may significantly affect our revenues, and if our properties do not generate revenues sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and ability to pay or refinance our debt obligations could be adversely affected.
As of December 31, 2021, 152 MH and RV properties, representing 25.5 percent of developed sites, are located in Florida; 90 properties, representing 17.8 percent of developed sites, are located in Michigan; 33 properties, representing 6.3 percent of developed sites, are located in Texas; and 45 properties, representing 6.3 percent of developed sites, are located in California. As of December 31, 2021, we have revenue concentrations of marinas in Florida, Rhode Island and California of approximately 22.6 percent, 8.0 percent and 6.5 percent, respectively. As a result of the geographic concentration of our MH and RV properties in Florida, Michigan, Texas and California, and geographic concentration of our marinas in Florida, Rhode Island and California, we are exposed to the risks of downturns in local economies or other local real estate market conditions which could adversely affect occupancy rates, rental rates and property values in these markets.
Our revenue would also be adversely affected if tenants were unable to pay rent or if sites were unable to be rented on favorable terms. If we were unable to promptly relet or renew the leases for a significant number of the sites, or if the rental rates upon such renewal or reletting were significantly lower than expected rates, then our business and results of operations could be adversely affected. In addition, certain expenditures associated with each property (such as real estate taxes and maintenance costs) generally are not reduced when circumstances cause a reduction in income from the property. Furthermore, real estate investments are relatively illiquid and, therefore, will tend to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions.
The following factors, among others, may adversely affect the revenues generated by our properties:
•Outbreaks of disease, including the COVID-19 pandemic, and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operations;
•The national and local economic climate which may be adversely impacted by, among other factors, plant closings and industry slowdowns;
•Local real estate market conditions such as the oversupply of MH and RV sites or a reduction in demand for MH and RV sites in an area;
•A decrease in the number of people interested in the RV lifestyle or boating;
•Changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, the Australian dollar and the British pound;
•The number of repossessed homes in a particular market;
•An oversupply of, or a reduced demand for, manufactured homes;
•The difficulty facing potential purchasers in obtaining affordable financing as a result of heightened lending criteria;
•An increase or decrease in the rate of manufactured home repossessions which provide aggressively priced competition to new manufactured home sales;
•The lack of an established MH dealer network;
•The housing rental market which may limit the extent to which rents may be increased to meet increased expenses without decreasing occupancy rates;
•The perceptions by prospective tenants of the safety, convenience and attractiveness of our MH properties and the neighborhoods where they are located;
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•Zoning or other environmental regulatory restrictions;
•Competition from other available MH communities and RV resorts and alternative forms of housing (such as apartment buildings and site-built single-family homes) and from other marinas;
•Our ability to effectively manage, maintain and insure our properties;
•Increased operating costs, including insurance premiums, real estate taxes and utilities; and
•The enactment of rent control laws or laws taxing the owners of manufactured homes.
We may not be able to integrate or finance our expansion and development activities.
We build and develop new MH communities, RV resorts and marinas and we expand existing communities and marinas. Our construction and development pipeline may be exposed to the following risks which are in addition to those risks associated with the ownership and operation of established MH communities, RV resorts and marinas:
•We may not be able to obtain financing with favorable terms for development which may make us unable to proceed with the development;
•We may be unable to obtain, or face delays in obtaining, necessary zoning, building and other governmental permits and authorizations, which could result in increased costs and delays, and even require us to abandon development of the property entirely if we are unable to obtain such permits or authorizations;
•We may abandon development opportunities that we have already begun to explore and as a result we may not recover expenses already incurred in connection with exploring such development opportunities;
•We may be unable to complete construction and lease-up of a property on schedule resulting in increased debt service expense and construction costs;
•We may incur construction and development costs for a property which exceed our original estimates due to increased materials, labor or other costs, which could make completing the development uneconomical and we may not be able to increase rents to compensate for the increase in development costs which may impact our profitability;
•We may be unable to secure long-term financing on completion of development resulting in increased debt service and lower profitability;
•Occupancy rates and rents at a newly developed property may fluctuate depending on several factors, including market and economic conditions, which may result in the property not being profitable; and
•Climate change may cause new marina developments to be paused or restricted.
If any of the above risks occur, our business and results of operations could be adversely affected.
Competition affects occupancy levels and rents, which could adversely affect our revenues.
The MH, RV and marina industries are highly-fragmented. There is competition within the MH, RV and marina markets we currently serve and in new markets that we may enter. We have both national and regional competitors in the MH, RV and marina markets. Our properties are located in developed areas that include other MH communities, RV resorts and marinas. The number of competitive MH communities, RV resorts and marinas in a particular area could have a material adverse effect on our ability to lease sites and increase rents charged at our properties or at any newly acquired properties. We may be competing with others with greater resources. In addition, other forms of multi‑family residential properties, such as private and federally funded or assisted multi-family housing projects and single‑family housing, provide housing alternatives to potential tenants of MH communities and RV resorts.
The cyclical and seasonal nature of the RV and marina industries may lead to fluctuations in our operating results.
The RV and marina industries can experience cycles of growth and downturn due to seasonality patterns. Results of operations in any one period may not be indicative of results in future periods. In the RV market, certain properties maintain higher occupancy during the summer months, while other properties maintain higher occupancy during the winter months. The RV market typically shows a decline in demand over the winter months, yet usually produces higher growth in the spring and summer months due to higher use by vacationers. In the marina market, demand for wet slip storage increases during the summer months as customers contract for the summer boating season, which also drives non-storage revenue streams such as service, fuel and on-premise restaurants or convenience storage. Demand for dry storage increases during the winter season as seasonal weather patterns require boat owners to store their vessels on dry docks and within covered racks. Our results on a quarterly basis can fluctuate due to this cyclicality and seasonality.
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We may not be able to integrate or finance our acquisitions and our acquisitions may not perform as expected.
We have acquired and intend to continue to selectively acquire MH, RV and marina properties. Our acquisition activities and their success are subject to the following risks:
•We may be unable to acquire a desired property because of competition from other well-capitalized real estate investors, including both publicly traded REITs and institutional investment funds;
•Even if we enter into an acquisition agreement for a property, it is usually subject to customary conditions to closing, including completion of due diligence investigations to our satisfaction, which may not be satisfied;
•Even if we are able to acquire a desired property, competition from other real estate investors may significantly increase the purchase price;
•We may be unable to finance acquisitions on favorable terms;
•Acquired properties may fail to perform as expected;
•Acquired properties may be located in new markets where we face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area, and unfamiliarity with local governmental and permitting procedures; and
•We may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations.
If any of the above risks occur, our business and results of operations could be adversely affected.
In addition, we may acquire properties subject to liabilities and we may be left with no, or limited, recourse, with respect to unknown liabilities. As a result, we may have to pay substantial sums to settle any liabilities asserted against us based upon ownership of newly acquired properties, which could adversely affect our cash flow.
We depend on Safe Harbor's management to operate our marina business, and our acquisition of Safe Harbor presents us with new risks.
Before we acquired Safe Harbor in October 2020, we did not own or operate any marinas. Safe Harbor's operations are separate from our other operations. The successful operation of our marinas depends on our ability to retain key employees with experience in the marina business, including Baxter R. Underwood, who is the Chief Executive Officer of Safe Harbor. The loss of services of Mr. Underwood or other key employees could have a materially adverse effect on our ability to operate Safe Harbor. Although Mr. Underwood has entered into an employment and non-competition agreement, upon certain events he will have the option to eliminate the non-competition covenant by foregoing certain compensation and other benefits.
We do not currently maintain or contemplate obtaining any "key-man" life insurance on any of the key employees of Safe Harbor. Our entry into the marina business also subjects us to new laws and regulations and may lead to increased litigation and regulatory risk including but not limited to statutes and government regulations that govern the use of, and construction on, rivers, lakes and other waterways. Exposure to the marina industry may expose us to certain weather events and risks to which we have not previously been exposed. Additionally, the marina business may be affected in different ways or to a greater extent than our existing MH and RV business by the COVID-19 pandemic with respect to infection control, facility and work-site access, or other related issues.
Investments through joint ventures involve risks not present for properties in which we are the sole owner.
We have invested and may continue to invest as a joint venture partner in joint ventures. These investments involve risks, including, but not limited to, the possibility the other joint venture partner may have business goals which are inconsistent with ours, possess the ability to take or force action or withhold consent contrary to our requests, fail to provide capital or fulfill its obligations, or become insolvent and require us to assume and fulfill the joint venture's financial obligations. Conflicts arising between us and our joint venture partners may be difficult to manage or resolve and it could be difficult to manage or otherwise monitor the existing business arrangements. We and our joint venture partners may each have the right to initiate a buy-sell arrangement, which could cause us to sell our interest, or acquire a joint venture partner's interest, at a time when we otherwise would not have entered into such a transaction. Each joint venture agreement is individually negotiated, and our ability to operate, finance or dispose of a property in our sole discretion may be limited to varying degrees depending on the terms of the applicable joint venture agreement.
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Many of our properties are located in areas that experience extreme weather conditions and natural disasters and climate change may adversely affect our business.
Extreme weather or weather-related conditions and other natural disasters, including hurricanes, flash floods, sea-level rise, tornadoes, wildfires or earthquakes, may interrupt our operations, damage our properties and reduce the number of customers who utilize our properties in the affected areas. Many of our properties are on coastlines that are subject to hurricane seasons, flash flooding and sea-level rise; in areas adversely affected by wildfires, such as the western United States; and in earthquake-prone areas, such as the West Coast. If there are prolonged disruptions at our properties due to extreme weather or natural disasters, our results of operations and financial condition could be materially adversely affected.
While we maintain insurance coverage that may cover certain of the costs and loss of revenue associated with the effect of extreme weather and natural disasters at our properties, our coverage is subject to deductibles and limits on maximum benefits. We cannot assure you that we will be able to fully collect, if at all, on any claims resulting from extreme weather or natural disasters.
If any of our properties are damaged or if their operations are disrupted as a result of extreme weather or natural disasters, or if extreme weather or natural disasters adversely impact general economic or other conditions in the areas in which our properties are located or from which they draw their tenants and customers, our business, financial condition and results of operations could be materially adversely affected.
Significant changes in the climate could exacerbate extreme weather conditions or natural disasters that may occur in areas where our properties are located, all of which may result in additional physical damage to, or a decrease in demand for, properties located in these areas or affected by these conditions. If the impact of climate change is material in nature, including significant property damage to or destruction of our properties, or occur for lengthy periods of time, our financial condition or results of operations may be adversely affected. In addition, changes in federal, state, local and foreign legislation and regulation based on concerns about climate change could result in increased capital expenditures on our properties (for example, to improve their energy efficiency and / or resistance to inclement weather) without a corresponding increase in revenue, resulting in adverse impacts to our net income.
Marinas may not be readily adaptable to other uses.
Marinas are specific-use properties and may contain features or assets that have limited alternative uses. These properties may also have distinct operational functions that involve specific procedures and training. If the operations of any of our marinas become unprofitable due to industry competition, operational execution or otherwise, then it may not be feasible to operate the property for another use, and the value of certain features or assets used at the property, or the property itself, may be impaired. Should any of these events occur, our financial condition, results of operations and cash flows could be adversely impacted.
We may be unable to obtain, renew or maintain permits, licenses and approvals necessary for the operation of our marinas.
The U.S. Army Corps of Engineers, the Coast Guard and other governmental bodies control much of the land located beneath and surrounding many of our marinas and lease such land to Safe Harbor under leases that typically range from five to 50 years. As a result, it is unlikely that we can obtain fee-simple title to the land on or near these marinas. If these governmental authorities terminate, fail to renew, or interpret in ways that are materially less favorable any of the permits, licenses and approvals necessary for operation of these properties, then our financial condition, results of operations and cash flows could be adversely impacted.
Some marinas must be dredged from time to time to remove silt and mud that collect in harbor-areas in order to assure that boat traffic can safely enter the harbor. Dredging and disposing of the dredged material can be very costly and require permits from various governmental authorities. If the permits necessary to dredge marinas or dispose of the dredged material cannot be timely obtained after the acquisition of a marina, or if dredging is not practical or is exceedingly expensive, the operations of such property would be materially and adversely affected.
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We may incur liability under environmental laws arising from conditions at properties we acquire or operations at the properties we own and operate.
Under various federal, state, local and foreign laws, ordinances and regulations, an owner or operator of real estate is liable for the costs of removal or remediation of certain hazardous substances at, on, under, or in such property. Such hazardous substances may be used at or located on our properties, especially our marinas. Such laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous substances. The presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner's ability to sell or rent the property, to borrow using the property as collateral or to develop the property. Persons who arrange for the disposal or treatment of hazardous substances also may be liable for the costs of removal or remediation of such substances at a disposal or treatment facility owned or operated by another person. In addition, certain environmental laws impose liability for the management and disposal of asbestos-containing materials and for the release of such materials into the air. These laws may result in fines or penalties and may permit third parties to seek recovery from owners or operators of real properties for personal injury associated with asbestos-containing materials.
As the purchaser of properties we acquire or in connection with the operation of properties we own or manage, we may be liable for removal or remediation costs, governmental fines and injuries to persons and property. When we arrange for the treatment or disposal of hazardous substances at landfills or other facilities owned by other persons, we may be liable for the removal or remediation costs at such facilities.
We subject our properties to a Phase I or similar environmental assessment as well as limited compliance evaluations (which involve general inspections without soil sampling or ground water analysis) completed by independent environmental and engineering consultants. In some cases, where these evaluations have recommended further, invasive investigations, those have also been conducted. These environmental evaluations have not revealed any significant environmental liability that would have a material adverse effect on our business. These audits cannot reflect conditions arising after the studies were completed, and no assurances can be given that existing environmental studies reveal all environmental liabilities, that any prior owner or operator of a property or neighboring owner or operator did not create any material environmental condition not known to us, or that a material environmental condition does not otherwise exist as to any one or more properties.
Moreover, we cannot be sure that: (a) future laws, ordinances or regulations will not impose any material environmental liability; or (b) the current environmental condition of our properties will not be affected by tenants and occupants of the properties, by the condition of land or operations in the vicinity of our properties (such as the presence of underground storage tanks), or by unrelated third parties. Environmental liabilities that we may incur could have an adverse effect on our financial condition, results of operations and cash flows.
We may not complete our previously-announced acquisition of Park Holidays.
In November 2021, we entered into an agreement to acquire Park Holidays which owns, operates and manages 42 holiday communities in the United Kingdom. The acquisition values Park Holidays at an enterprise value of £950 million (or approximately $1.3 billion). While we anticipate that the Park Holidays acquisition will close in the first quarter of 2022, the closing is subject to the approval of the UK Financial Conduct Authority, which regulates certain loan brokering activities of Park Holidays. If this condition is not satisfied or waived, or if the Park Holidays purchase agreement is otherwise terminated in accordance with its terms, then we will not complete the Park Holidays acquisition. If we do not complete the acquisition, our common stock will not reflect any interest in Park Holidays; if the closing is delayed, this interest will not be reflected during the period of delay; and if the acquisition is restructured, it is uncertain as to whether this interest will be adversely affected. In addition, the price of our common stock may decline to the extent that the current market price of our common stock reflects a market assumption that the acquisition will be completed and that we will realize certain anticipated benefits of acquiring Park Holidays.
The closing of the Proposed Loan Amendment is subject to, among other things, the closing of our acquisition of Park Holidays. Therefore, if we are unable to complete the acquisition of Park Holidays then we will be unable to complete the Proposed Loan Amendment. Refer to Note 19, "Subsequent Events," in our accompanying Consolidated Financial Statements for additional information about the Proposed Loan Amendment.
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The intended benefits of the Park Holidays acquisition may not be realized.
The Park Holidays acquisition poses risks for our ongoing operations, including, among others:
•That senior management's attention may be diverted from the management of daily operations in our U.S. and Canadian properties to the integration of the Park Holidays properties;
•Costs and expenses associated with any undisclosed or potential liabilities that are not covered by our transaction insurance;
•That the Park Holidays properties may not perform as well as anticipated; and
•Unforeseen difficulties may arise in integrating operations in the United Kingdom into our company.
As a result of the foregoing, we cannot assure you that the Park Holidays acquisition will be accretive to us in the near term or at all. Furthermore, if we fail to realize the intended benefits of the Park Holidays properties, the market price of our common stock could decline to the extent that the market price reflects those benefits.
We will be subject to additional risks from our investment in Park Holidays and any other international investments.
Park Holidays will be our first major investment in the United Kingdom. We are also pursuing other significant acquisition opportunities outside the United States, including in the United Kingdom and elsewere in Europe, although there can be no assurances that we will be successful in completing any of these prospective acquisitions. These investments may expose us to a variety of risks that are different from and in addition to those commonly found in our current markets. Our ownership of Park Holidays and any other international investments will subject us to additional risks, including:
•the laws, rules and regulations applicable in such jurisdictions outside of the United States, including those related to property ownership by foreign entities, consumer and data protection, privacy, network security, encryption, payments and restricting us from removing profits earned from activities within the country to the United States (i.e., nationalization of assets located within a country);
•complying with a wide variety of foreign laws;
•fluctuations in exchange rates between foreign currencies and the U.S. dollar, and exchange controls;
•limited experience with local business and cultural factors that differ from our usual standards and practices;
•changes in the availability, cost and terms of mortgage funds and other borrowings resulting from varying national economic policies or changes in interest rates;
•reliance on local management;
•challenges in establishing effective controls and procedures to regulate operations in different regions and to monitor and ensure compliance with applicable regulations, such as applicable laws related to corrupt practices, employment, licensing, construction, climate change or environmental compliance;
•unexpected changes in regulatory requirements, tax, tariffs, trade barriers and other laws within jurisdictions outside the United States or between the United States and such jurisdictions;
•potentially adverse tax consequences with respect to our properties;
•the impact of regional or country-specific business cycles and economic instability, including deterioration in political relations with the United States, instability in, or further withdrawals from, the European Union or other international trade alliances or agreements;
•the impact of extreme weather or weather-related conditions and other natural disasters that may affect specific locations in which our properties are located, including hurricanes, flash floods, sea-level rise and coastal erosion, that may affect Park Holidays' properties;
•the impact of disruptions in global, regional or local supply chains, including disruptions occurring during and after the COVID-19 pandemic; and
•political instability, uncertainty over property rights, civil unrest, drug trafficking, political activism or the continuation or escalation of terrorist activities.
If we are unable to adequately address these risks, they could have a significant adverse effect on our operations.
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The United Kingdom's departure from the European Union could increase volatility in the financial markets and currency exchange rates, including the British pound.
The United Kingdom's exit from the European Union, commonly referred to as "Brexit," has created an uncertain political and economic environment in the United Kingdom and elsewhere. The consequences of Brexit, and continuing uncertainties related to Brexit, could negatively affect taxes and costs of business, diminish travel to and from the United Kingdom, cause volatility in currency exchange rates, interest rates, and European, United Kingdom or worldwide political, regulatory, economic or market conditions, and contribute to instability in political institutions, regulatory agencies, and financial markets. Brexit could also lead to legal uncertainty arising from divergence of the laws of the United Kingdom from those of the European Union. Any of these effects of Brexit, and others that cannot be anticipated, could adversely effect our existing and planned expansion in the United Kingdom and elsewhere, and therefore, could have a material adverse effect on us.
The current pandemic of the coronavirus, or COVID-19, may materially and adversely impact and disrupt our financial condition, results of operations, cash flows and performance.
The COVID-19 pandemic at times has had, and in the future it could continue to have, or a future pandemic could have, material and adverse effects on our ability to successfully operate, and on our financial condition, results of operations and cash flows, including in the following possible ways, among others:
•A downturn in the economy may affect the ability of the residents or customers in our MH communities and marinas to pay their rent.
•Travel restrictions may affect the ability of potential guests to travel to and use our RV resorts and marinas. A downturn in the economy may independently reduce demand for our RV resorts and marinas, and our RV revenue may decrease if we cannot convert as many transient RV sites to annual RV sites as planned.
•Certain properties may be subject to government restrictions which limit the ability to operate or provide certain amenities.
•We may have difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deterioration in credit and financing conditions may result in insufficient liquidity or affect our access to capital necessary to fund and grow our business and address maturing liabilities on a timely basis. As of December 31, 2021, we had drawn $1.0 billion on our senior credit facility, of which the total capacity, excluding the unexercised accordion feature, is $2.0 billion.
•The financial impact of the COVID-19 pandemic could negatively impact our future compliance with financial covenants of our debt agreements and result in a default and potentially an acceleration of indebtedness, which non-compliance could negatively impact our ability to make additional borrowings under our senior credit facility.
•Our ground up development and expansion activities, and conversions of transient RV sites to annual RV sites may be disrupted, and we may be delayed in our current projects and timelines, the magnitude of which will depend, in part, on the length and severity of the current governmental restrictions or limitations implemented in the future.
•The ancillary revenue from amenities at our properties, such as restaurants, golf courses, resort and marina activities, may decrease.
•The operation of our marinas may be disrupted by the COVID-19 pandemic with respect to infection control, facility and work-site access, or other related issues. As result, we may experience delays in our current projects and timelines, the magnitude of which will depend on governmental restrictions or limitations implemented in the future.
•Negative impacts on our results of operations and our access to capital could cause us to eliminate or reduce the amount of our distributions to stockholders, or to pay some or all of our distributions in common stock rather than cash.
•A general decline in business activity and demand for real estate transactions could adversely affect our ability or desire to acquire additional properties.
•A recession or additional market corrections resulting from the spread of COVID-19 could affect the value of our common stock. We expect our stock price to continue to be volatile.
•Governmental agencies that permit and approve our projects, suppliers, homebuilders, and other business partners and third parties may be prevented from conducting business activities in the ordinary course for an indefinite period of time, which could in turn negatively affect our business.
•Disruptions in the global supply-chain could negatively impact our ability to secure the volume of homes and vacation rentals we need to meet market demand. These disruptions also could drive up costs across our business including capital expenditures, homes, home setups, and general property operations.
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The extent to which the COVID-19 pandemic impacts our operations, financial condition and financial results will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. Nevertheless, the COVID-19 pandemic presents material uncertainty and risk with respect to our performance, financial condition, results of operations, cash flows and performance. Moreover, many risk factors set forth in this Annual Report on Form 10-K should be interpreted as heightened risks as a result of the impact of the COVID-19 pandemic.
Rent control legislation may harm our ability to increase rents.
State and local rent control laws in certain jurisdictions may limit our ability to increase rents at our MH properties to recover increases in operating expenses and the costs of capital improvements. Enactment of such laws has been considered from time to time in other jurisdictions. Certain properties are located, and we may purchase additional properties, in markets that are either subject to rent control or in which rent-limiting legislation exists or may be enacted.
RISKS RELATED TO OUR DEBT FINANCINGS
Our significant amount of debt could limit our operational flexibility or otherwise adversely affect our financial condition, and we may incur more debt in the future.
We have a significant amount of debt. As of December 31, 2021, we had approximately $5.7 billion of total debt outstanding, consisting of approximately $3.4 billion in debt that is secured by mortgage liens on 190 of our properties, $1.2 billion of senior unsecured notes, $1.0 billion on our line of credit and other debt, $35.2 million of mandatorily redeemable preferred equity and $34.7 million of preferred OP units that are mandatorily redeemable. If we fail to meet our obligations under our secured debt, the lenders would be entitled to foreclose on all or some of the collateral securing such debt which could have a material adverse effect on us and our ability to make expected distributions, and could threaten our continued viability.
We are subject to the risks normally associated with debt financing, including the following risks:
•Our cash flow may be insufficient to meet required debt payments, or we may need to dedicate a substantial portion of our cash flow to pay our debt rather than to other areas of our business;
•Our existing indebtedness may limit our operating flexibility due to financial and other restrictive covenants, including restrictions on incurring additional debt;
•It may be more difficult for us to obtain additional financing for our operations, working capital requirements, capital expenditures, debt service or other general requirements;
•We may be more vulnerable in the event of adverse economic and industry conditions or a downturn in our business;
•We may be placed at a competitive disadvantage compared to our competitors that have less debt; and
•We may not be able to refinance at all or on favorable terms, as our debt matures.
If any of the above risks occurred, our financial condition and results of operations could be materially adversely affected.
Despite our current indebtedness levels, we may incur substantially more debt in the future. If new debt is added to our current debt levels, an even greater portion of our cash flow will be needed to satisfy our debt service obligations. As a result, the related risks that we now face could intensify and increase the risk of a default on our indebtedness.
Covenants in our credit agreements and senior unsecured note indentures could limit our flexibility and adversely affect our financial condition.
The terms of our financing agreements and other indebtedness require us to comply with a number of customary financial and other covenants. These covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness even if we have satisfied our payment obligations. Our financing agreements contain certain cross-default provisions that could be triggered in the event that we default on our other indebtedness. These cross-default provisions may require us to repay or restructure our senior credit facility in addition to any mortgage or other debt that is in default. If our properties were foreclosed upon, or if we are unable to refinance our indebtedness at maturity or meet our payment obligations, the amount of our distributable cash flows and our financial condition would be adversely affected.
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Our senior credit facility contains various restrictive corporate covenants including: minimum fixed charge coverage ratio, maximum leverage ratio, maximum dividend payout ratio and maximum secured leverage ratio. In addition to our senior credit facility, our senior unsecured notes also contain various covenants including: aggregate debt test, debt service test, maintenance of total unencumbered assets and a secured debt test. These covenants may restrict our ability to pursue certain business initiatives or certain transactions that might otherwise be advantageous. Furthermore, failure to meet certain of these financial covenants could cause an event of default under and / or accelerate some or all of such indebtedness which could have a material adverse effect on us.
An increase in market interest rates could raise our interest costs on existing and future debt or adversely affect our stock price, and a decrease in interest rates may lead to additional competition for the acquisition of real estate or adversely affect our results of operations.
Our interest costs for any new debt and our current debt obligations may rise if interest rates increase. This increased cost could make the financing of any new acquisition more expensive as well as lower our current period earnings. Rising interest rates could limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing. In addition, an increase in interest rates could decrease the access third parties have to credit, thereby decreasing the amount they are willing to pay to lease our assets and limit our ability to reposition our portfolio promptly in response to changes in economic or other conditions. An increase in market interest rates may lead prospective purchasers of our common stock to expect a higher dividend yield, which could adversely affect the market price of our common stock. Decreases in interest rates may lead to additional competition for the acquisition of real estate due to a reduction in desirable alternative income-producing investments. Increased competition for the acquisition of real estate may lead to a decrease in the yields on real estate targeted for acquisition. In such circumstances, if we are not able to offset the decrease in yields by obtaining lower interest costs on our borrowings, our results of operations may be adversely affected.
Our hedging strategies may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on your investment.
We use various derivative financial instruments to provide a level of protection against interest rate risks, but no hedging strategy can protect us completely. These instruments involve risks, such as the risk that the counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes, that a court could rule that such agreements are not legally enforceable and that we may have to post collateral to enter into hedging transactions, which we may lose if we are unable to honor our obligations. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the REIT income tests. In addition, the nature and timing of hedging transactions may influence the effectiveness of our hedging strategies. Poorly designed strategies or improperly executed transactions could actually increase our risk and losses. Moreover, hedging strategies involve transaction and other costs. We cannot assure you that our hedging strategy and the derivatives that we use will adequately offset the risk of interest rate volatility or that our hedging transactions will not result in losses that may reduce the overall return on your investment.
The phase out of the London Interbank Offered Rate (LIBOR), or the replacement of LIBOR with a different reference rate, may adversely affect interest rates.
The Financial Conduct Authority ("FCA"), the authority that regulates LIBOR, ceased publishing one-week and two-month LIBOR rates after December 31, 2021. All other LIBOR settings will effectively cease after June 30, 2023, and it is expected that LIBOR will no longer be used after this date. Many of our property-level real estate loans have fixed interest rates that will not be impacted by any change in LIBOR. Certain of our other loans, including our borrowings under our $2.0 billion senior credit facility, have interest rates based on LIBOR. Our senior credit facility provides that the administrative agent in consultation with us will endeavor to determine an interest rate to replace the current LIBOR based rate, and until the parties agree on a successor LIBOR rate we can continue to borrow under the senior credit facility using the prime rate. The replacement of LIBOR with an alternative rate or benchmark may adversely affect our interest rates and result in higher borrowing costs. This could materially and adversely affect our results of operations, cash flows and liquidity.
A downgrade in our credit ratings could have material adverse effects on our business and financial condition.
We intend to manage our operations to maintain our investment grade credit ratings from S&P Global and Moody's. These ratings are based on a number of factors, which include assessments of our financial strength, liquidity, capital structure, asset quality, and sustainability of cash flow and earnings. Changes in these factors could lead to a downgrade of our ratings, leading to an adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our financial condition, results of operations and liquidity.
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TAX RISKS RELATED TO OUR STATUS AS A REIT
We may suffer adverse tax consequences and be unable to attract capital if we fail to qualify as a REIT.
We believe that since our taxable year ended December 31, 1994, we have been organized and operated, and intend to continue to operate, so as to qualify for taxation as a REIT under the Code. Although we believe that we have been and will continue to be organized and have operated and will continue to operate so as to qualify for taxation as a REIT, we cannot be assured that we have been or will continue to qualify as a REIT. Qualification as a REIT involves the satisfaction of numerous requirements (some on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations and involves the determination of various factual matters and circumstances not entirely within our control. In addition, frequent changes occur in the area of REIT taxation, which require us to monitor our tax status continually.
If we fail to qualify as a REIT in any taxable year, our taxable income could be subject to U.S. federal income tax at regular corporate rates. Moreover, unless entitled to relief under certain statutory provisions, we also would be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. This treatment would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability to us for the years involved. In addition, distributions to stockholders would no longer be required to be made.
Federal, state and foreign income tax laws governing REITs and related interpretations may change at any time, and any such legislative or other actions affecting REITs could have a negative effect on us.
Federal, state and foreign income tax laws governing REITs, or the administrative interpretations of those laws may be amended at any time. Federal, state and foreign tax laws are under constant review by persons involved in the legislative process, at the Internal Revenue Service and the U.S. Department of the Treasury, and at various state and foreign tax authorities. Changes to tax laws, regulations or administrative interpretations, which may be applied retroactively, could adversely affect us. We cannot predict whether, when, in what forms, or with what effective dates, the tax laws, regulations and administrative interpretations applicable to us may be changed. Accordingly, we cannot assert that any such change will not significantly affect either our ability to qualify for taxation as a REIT or the income tax consequences to us.
We intend for the Operating Partnership to be taxed as a partnership, but we cannot guarantee that it will qualify.
We believe that the Operating Partnership has been organized as a partnership and will qualify for treatment as such under the Code. However, if the Operating Partnership is deemed to be a "publicly traded partnership," it will be treated as a corporation instead of a partnership for federal income tax purposes unless at least 90 percent of its income is qualifying income as defined in the Code. The income requirements applicable to REITs and the definition of "qualifying income" for purposes of this 90 percent test are similar in most respects. Qualifying income for the 90 percent test generally includes passive income, such as specified types of real property rents, distributions and interest. We believe that the Operating Partnership has and will continue to meet this 90 percent test, but we cannot guarantee that it has or will. If the Operating Partnership were to be taxed as a regular corporation, it would incur substantial tax liabilities, we would fail to qualify as a REIT for federal income tax purposes and our ability to raise additional capital could be significantly impaired.
Partnership tax audit rules could have a material adverse effect on us.
The Bipartisan Budget Act of 2015 changed the rules applicable to U.S. federal income tax audits of partnerships. Under the rules, effective for taxable years beginning in 2018, among other changes and subject to certain exceptions, any audit adjustment to items of income, gain, loss, deduction or credit of a partnership (and a partner's allocable share thereof) is determined, and taxes, interest, and penalties attributable thereto are assessed and collected, at the partnership level. Unless the partnership makes an election permitted under the new law or takes certain steps to require the partners to pay their tax on their allocable shares of the adjustment, it is possible that partnerships in which we directly or indirectly invest, including the Operating Partnership, would be required to pay additional taxes, interest and penalties as a result of an audit adjustment. We, as a direct or indirect partner of the Operating Partnership and other partnerships, could be required to bear the economic burden of those taxes, interest and penalties even though the Company, as a REIT, may not otherwise have been required to pay additional corporate-level tax. The changes created by these rules are significant for collecting tax in partnership audits and, accordingly, there can be no assurance that these rules will not have a material adverse effect on us.
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Our ability to accumulate cash may be restricted due to certain REIT distribution requirements.
In order to qualify as a REIT, we must distribute to our stockholders at least 90 percent of our REIT taxable income (calculated without any deduction for dividends paid and excluding net capital gain) and to avoid federal income taxation, our distributions must not be less than 100 percent of our REIT taxable income, including capital gains. As a result of the distribution requirements, we do not expect to accumulate significant amounts of cash. Accordingly, these distributions could significantly reduce the cash available to us in subsequent periods to fund our operations and future growth.
Our taxable REIT subsidiaries, or TRSs, are subject to special rules that may result in increased taxes.
As a REIT, we must pay a 100 percent penalty tax on certain payments that we receive if the economic arrangements between us and any of our TRSs are not comparable to similar arrangements between unrelated parties. The Internal Revenue Service may successfully assert that the economic arrangements of any of our inter-company transactions are not comparable to similar arrangements between unrelated parties. This would result in unexpected tax liability which would adversely affect our cash flows.
Dividends payable by REITs do not qualify for the reduced tax rates applicable to certain dividends.
The maximum federal tax rate for certain qualified dividends payable to domestic stockholders that are individuals, trusts and estates is 20 percent. Dividends payable by REITs, however, are generally not eligible for this reduced rate, although the Tax Cut and Jobs Act permits a 20 percent deduction equal to the amount of qualifying REIT dividends received, thus bringing the maximum federal tax rate on qualifying REIT dividends to 29.6 percent. While this rule does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable rates applicable to regular qualified corporate dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less competitive than investments in stock of non-REIT corporations that pay dividends, which could adversely affect the comparative value of the stock of REITs, including our common stock and preferred stock.
Prospective investors should consult their own tax advisors regarding the effect of this change on their effective tax rate with respect to REIT dividends.
Complying with REIT requirements may cause us to forego otherwise attractive opportunities.
To remain qualified as a REIT for federal income tax purposes, we must continually satisfy requirements and tests under the tax law concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our stock. In order to meet these tests, we may be required to forego or limit attractive business or investment opportunities and distribute all of our net earnings rather than invest in attractive opportunities or hold larger liquid reserves. Therefore, compliance with the REIT requirements may hinder our ability to operate solely to maximize profits.
Our ability to use net operating loss carryforwards to reduce future tax payments may be limited if we experience a change in ownership, or if taxable income does not reach sufficient levels.
Under Section 382 of the Code, if a corporation undergoes an "ownership change" (generally defined as a greater than 50 percent change (by value) in its equity ownership over a rolling three-year period), the corporation's ability to use its pre-ownership-change net operating loss carryforwards to offset its post-ownership-change income may be limited. We may experience ownership changes in the future. If an ownership change were to occur, we would be limited in the portion of net operating loss carryforwards that we could use in the future to offset taxable income for U.S. federal income tax purposes.
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RISKS RELATED TO RELATED PARTY TRANSACTIONS AND OUR STRUCTURE
Some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests.
Lease of Executive Offices - Gary A. Shiffman, together with certain of his family members, indirectly owns an equity interest of approximately 28.1 percent in American Center LLC, the entity from which we lease office space for our principal executive offices. Each of Brian M. Hermelin, Ronald A. Klein and Arthur A. Weiss indirectly owns less than one percent interest in American Center LLC. Mr. Shiffman is our Chief Executive Officer and Chairman of the Board. Each of Mr. Hermelin, Mr. Klein and Mr. Weiss is a director of the Company. Under this agreement, we lease approximately 103,100 rentable square feet of permanent space. The lease agreement includes annual graduated rent increases through the initial end date of October 31, 2026. As of December 31, 2021, the average gross base rent was $19.95 per square foot. Each of Mr. Shiffman, Mr. Hermelin, Mr. Klein and Mr. Weiss may have a conflict of interest with respect to his obligations as our officer and / or director and his ownership interest in American Center LLC.
Use of Airplane - Gary A. Shiffman is the beneficial owner of an airplane that we use from time to time for business purposes. During the years ended December 31, 2021, 2020 and 2019, we paid $0.7 million, $0.3 million and $0.4 million for the use of the airplane, respectively. Mr. Shiffman may have a conflict of interest with respect to his obligations as our officer and director and his ownership interest in the airplane.
Telephone Services - Brian M. Hermelin is a principal and a beneficial owner of an entity that installs and maintains emergency telephone systems at our properties. During the years ended December 31, 2021 and 2020, we paid $0.2 million for these services, respectively. Mr. Hermelin may have a conflict of interest with respect to his obligations as our director and his position with and ownership interest in the provider of these services.
Legal Counsel - During 2019-2021, Jaffe, Raitt, Heuer, & Weiss, Professional Corporation acted as our general counsel and represented us in various matters. Arthur A. Weiss is the Chairman of the Board of Directors and a shareholder of such firm. We incurred legal fees and expenses owed to Jaffe, Raitt, Heuer, & Weiss of approximately $10.3 million, $13.3 million and $11.1 million in the years ended December 31, 2021, 2020 and 2019, respectively.
Tax Consequences Upon Sale of Properties - Gary A. Shiffman holds limited partnership interests in the Operating Partnership which were received in connection with the contribution of properties from partnerships previously affiliated with him. Prior to any redemption of these limited partnership interests for our common stock, Mr. Shiffman will have tax consequences different from those on us and our public stockholders upon the sale of any of these partnerships. Therefore, we and Mr. Shiffman may have different objectives regarding the appropriate pricing and timing of any sale of those properties.
Certain provisions in our governing documents may make it difficult for a third-party to acquire us.
9.8 percent Ownership Limit. In order to qualify and maintain our qualification as a REIT, not more than 50 percent of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer individuals. Thus, ownership of more than 9.8 percent, in number of shares or value, of the issued and outstanding shares of our capital stock by any single stockholder has been restricted, with certain exceptions, for the purpose of maintaining our qualification as a REIT under the Code. Such restrictions in our charter do not apply to Milton M. Shiffman, Gary A. Shiffman and Robert B. Bayer; trustees, personal representatives and agents to the extent acting for them or their respective estates; or certain of their respective relatives.
The 9.8 percent ownership limit, as well as our ability to issue additional shares of common stock or shares of other stock (which may have rights and preferences over the common stock), may discourage a change of control of the Company and may also: (a) deter tender offers for the common stock, which offers may be advantageous to stockholders; and (b) limit the opportunity for stockholders to receive a premium for their common stock that might otherwise exist if an investor were attempting to assemble a block of common stock in excess of 9.8 percent of our outstanding shares or otherwise effect a change of control of the Company.
Preferred Stock. Our charter authorizes the Board of Directors to issue up to 20,000,000 shares of preferred stock, none of which is currently outstanding, and to establish the preferences and rights (including the right to vote and the right to convert into shares of common stock) of any shares issued. The power to issue preferred stock could have the effect of delaying or preventing a change in control of the Company even if a change in control were in the stockholders' interest.
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Certain provisions of Maryland law could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest.
Certain provisions of the Maryland General Corporation Law ("MGCL") may have the effect of inhibiting a third-party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of shares of our capital stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including:
•"Business combination" provisions that, subject to limitations, prohibit certain business combinations between us and an "interested stockholder" (defined generally as any person who beneficially owns 10 percent or more of the voting power of our shares or an affiliate thereof or an affiliate or associate of ours who was the beneficial owner, directly or indirectly, of 10 percent or more of the voting power of our then outstanding voting stock at any time within the two-year period immediately prior to the date in question) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose fair price and / or supermajority and stockholder voting requirements on these combinations; and
•"Control share" provisions that provide that "control shares" of our company (defined as shares that, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a "control share acquisition" (defined as the direct or indirect acquisition of ownership or control of issued and outstanding "control shares") have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
The provisions of the MGCL relating to business combinations do not apply, however, to business combinations that are approved or exempted by our Board of Directors prior to the time that the interested stockholder becomes an interested stockholder. As permitted by the statute, our Board of Directors has by resolution exempted Milton M. Shiffman, Robert B. Bayer and Gary A. Shiffman, their affiliates and all persons acting in concert or as a group with the foregoing, from the business combination provisions of the MGCL and, consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations between us and these persons. As a result, these persons may be able to enter into business combinations with us that may not be in the best interests of our stockholders without compliance by our company with the supermajority vote requirements and the other provisions of the statute.
Also, pursuant to a provision in our bylaws, we have exempted any acquisition of our stock from the control share provisions of the MGCL. However, our Board of Directors may by amendment to our bylaws opt into the control share provisions of the MGCL at any time in the future.
Additionally, Subtitle 8 of Title 3 of the MGCL permits our Board of Directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to elect to be subject to certain provisions relating to corporate governance that may have the effect of delaying, deferring or preventing a transaction or a change of control of our company that might involve a premium to the market price of our common stock or otherwise be in our stockholders' best interests. These provisions include a classified board; two-thirds vote to remove a director; that the number of directors may only be fixed by the Board of Directors; that vacancies on the board as a result of an increase in the size of the board or due to death, resignation or removal can only be filled by the board, and the director appointed to fill the vacancy serves for the remainder of the full term of the class of director in which the vacancy occurred; and a majority requirement for the calling by stockholders of special meetings. Other than a classified board, the filling of vacancies as a result of the removal of a director and a majority requirement for the calling by stockholders of special meetings, we are already subject to these provisions, either by provisions of our charter and bylaws unrelated to Subtitle 8 or by reason of an election to be subject to certain provisions of Subtitle 8. In the future, our Board of Directors may elect, without stockholder approval, to make us subject to the provisions of Subtitle 8 to which we are not currently subject.
Our Board of Directors has power to adopt, alter or repeal any provision of our bylaws or make new bylaws, provided, however, that our stockholders may alter or repeal any provision of our bylaws and adopt new bylaws if any such alteration, repeal or adoption is approved by the affirmative vote of a majority of all votes entitled to be cast on the matter.
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SUN COMMUNITIES, INC.
GENERAL RISK FACTORS
Our share price could be volatile and could decline, resulting in a substantial or complete loss on our stockholders' investment.
The stock markets, including the New York Stock Exchange ("NYSE"), on which we list our common stock, have experienced significant price and volume fluctuations. As a result, the market price of our common stock and preferred stock could be similarly volatile, and investors in our common stock and preferred stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. The price of our common stock and preferred stock could be subject to wide fluctuations in response to a number of factors, including:
•Outbreaks of disease, including the COVID-19 pandemic, and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operations;
•Issuances of other equity securities in the future, including new series or classes of preferred stock;
•Our operating performance and the performance of other similar companies;
•Our ability to maintain compliance with covenants contained in our debt facilities and our senior unsecured notes;
•Actual or anticipated variations in our operating results, funds from operations, cash flows or liquidity;
•Changes in expectations of future financial performance or changes in our earnings estimates or those of analysts;
•Changes in our distribution policy;
•Publication of research reports about us or the real estate industry generally;
•Increases in market interest rates that lead purchasers of our common stock and preferred stock to demand a higher dividend yield;
•Changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, the Australian dollar and the British pound;
•Changes in market valuations of similar companies;
•Adverse market reaction to the amount of our debt outstanding at any time, the amount of our debt maturing in the near-term and medium-term and our ability to refinance our debt, or our plans to incur additional debt in the future;
•Additions or departures of key management personnel;
•Speculation in the press or investment community;
•Equity issuances by us, or share resales by our stockholders or the perception that such issuances or resales may occur;
•Actions by institutional stockholders; and
•General market and economic conditions.
Many of the factors listed above are beyond our control. Those factors may cause the market price of our common stock or preferred stock to decline significantly, regardless of our financial condition, results of operations and prospects. It is impossible to provide any assurance that the market price of our common stock or preferred stock will not fall in the future, and it may be difficult for holders to resell shares of our common stock or preferred stock at prices they find attractive, or at all. In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management's attention and resources.
Substantial sales or issuances of our common or preferred stock could cause our stock price to fall.
The sale or issuance of substantial amounts of our common stock or preferred stock, whether directly by us or in the secondary market, the perception that such sales could occur or the availability of future issuances of shares of our common stock, preferred stock, OP units or other securities convertible into or exchangeable or exercisable for our common stock or preferred stock, could materially and adversely affect the market price of our common stock or preferred stock and our ability to raise capital through future offerings of equity or equity-related securities. In addition, we may issue capital stock that is senior to our common stock in the future for a number of reasons, including to finance our operations and business strategy, to adjust our ratio of debt to equity or for other reasons.
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Based on the applicable conversion ratios then in effect, as of February 15, 2022, in the future we may issue to the limited partners of the Operating Partnership, up to approximately 5.7 million shares of our common stock in exchange for their OP units. The limited partners may sell such shares pursuant to registration rights, if available, or an available exemption from registration. As of February 15, 2022, there were no outstanding options to purchase shares of our common stock under our equity incentive plans, and we currently have the authority to issue restricted stock awards or options to purchase up to an additional 614,662 shares of our common stock pursuant to our equity incentive plans. In addition, we have entered into an At-the-Market Offering Sales Agreement to sell shares of common stock. As of December 31, 2021, we have remaining capacity to sell up to an additional $1.25 billion of common stock under this agreement. No prediction can be made regarding the effect that future sales of shares of our common stock or our other securities will have on the market price of shares.
Our business operations may not generate the cash needed to make distributions on our capital stock or to service our indebtedness, and we may adjust our common stock distribution policy.
Our ability to make distributions on our common stock and preferred stock, and payments on our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to make distributions on our common stock or preferred stock, to pay our indebtedness or to fund our other liquidity needs.
The decision to declare and pay distributions on shares of our common stock in the future, as well as the timing, amount and composition of any such future distributions, will be at the sole discretion of our Board of Directors in light of conditions then existing, including our earnings, financial condition, capital requirements, debt maturities, the availability of debt and equity capital, applicable REIT and legal restrictions, general overall economic conditions and other factors. Any change in our distribution policy could have a material adverse effect on the market price of our common stock.
We rely on key management.
We depend on the efforts of our executive officers, Gary A. Shiffman, John B. McLaren, Karen J. Dearing, Bruce Thelen, Aaron Weiss and Baxter R. Underwood. The loss of services of one or more of these executive officers could have a temporary adverse effect on our operations. We do not currently maintain or contemplate obtaining any "key-man" life insurance on our executive officers.
If we fail to maintain an effective system of internal controls, we may not be able to accurately report financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock.
We are required to establish and maintain internal control over financial reporting and disclosure controls and procedures. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. Disclosure controls and procedures are processes designed to ensure that information required to be disclosed is communicated to management and reported in a timely manner. We cannot be certain that we will be successful in continuing to maintain adequate control over our financial reporting and disclosure controls and procedures. Deficiencies, including any material weakness, in our internal control over financial reporting that may occur could result in misstatements or restatements of our financial statements or a decline in the price of our securities. In addition, as our business continues to grow, and as we continue to make significant acquisitions, our internal controls will become more complex and may require significantly more resources to ensure that our disclosure controls and procedures remain effective. Acquisitions can pose challenges in implementing the required processes, procedures and controls in the operations of the companies that we acquire. Companies that are acquired by us may not have disclosure controls and procedures or internal control over financial reporting that are as thorough or effective as those required by the securities laws that currently apply to us. Moreover, the existence of any material weakness or significant deficiency in our internal controls and procedures would require management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner. If we cannot provide reliable financial reports, our reputation and operating results could be materially adversely affected, which could also cause investors to lose confidence in our reported financial information, which in turn could result in a reduction in the trading price of our common stock.
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SUN COMMUNITIES, INC.
Cybersecurity breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.
We rely intensively on information technology to account for tenant transactions, manage the privacy of tenant data, communicate internally and externally, and analyze our financial and operating results. In the ordinary course of our business, we collect and store sensitive data, including our proprietary business information and that of our tenants, clients, vendors and employees in our facilities and on our network. In addition, we engage third party service providers that may have access to such information in connection with providing necessary information technology and security and other business services to us. This information may include personally identifiable information such as social security numbers, banking information and credit card information.
We address potential breaches or disclosure of this confidential information by implementing a variety of security measures intended to protect the confidentiality and security of this information including (among others) engaging reputable, recognized firms to help us design and maintain our information technology and data security systems, including testing and verification of their proper and secure operations on a periodic basis. We also maintain cyber risk insurance to provide some coverage for certain risks arising out of data and network breaches. Our senior leadership regularly updates the Board of Directors on security matters and meets at least annually to review program progress and plans, incidents if any, and emerging risks.
Despite our security measures, our information technology and infrastructure, as well as that of our third-party vendors, may be vulnerable to attacks by hackers (including through malware, ransomware, computer viruses and email phishing schemes) or breached due to employee error, malfeasance, fire, flood or other physical event, or other disruptions. Any such breach or disruption could compromise our or a third-party vendor's network and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could:
•Result in legal claims or proceedings,
•Disrupt our operations, including our ability to service our tenants and our ability to analyze and report our financial and operating results,
•Decrease our revenues,
•Damage our reputation,
•Cause a loss of confidence,
•Increase our insurance premiums, or
•Have other material adverse effects on our business.
We depend on continuous access to the internet to use our cloud-based applications. Damage to, or failure of our information technology systems, including as a result of any of the reasons described above, could adversely affect our results of operations as we may incur significant costs or data loss. We continually assess new and enhanced information technology solutions to manage the risk of system failure or interruption.
Losses in excess of our insurance coverage or uninsured losses could adversely affect our operating results and cash flow.
We have a significant concentration of MH and RV properties in Florida and California and marinas on coastlines, where natural disasters or other catastrophic events such as hurricanes, flash floods, sea-level rise, tornadoes, wildfires and earthquakes could negatively impact our operating results and cash flows. We maintain comprehensive liability, fire, property, business interruption, general liability and (where appropriate) flood and earthquake insurance, and other lines of insurance we have determined to be appropriate for our business, provided by reputable companies with commercially reasonable deductibles and limits. We believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss, the cost of the coverage and industry practice. However, certain types of losses including, but not limited to, riots or acts of war, may be either uninsurable or not economically insurable. In the event an uninsured loss occurs, we could lose both our investment in and anticipated profits and cash flow from the affected property. We would also continue to be obligated to repay any mortgage indebtedness or other obligations related to the community. If an uninsured liability to a third party were to occur, we would incur the cost of defense and settlement with, or court ordered damages to, that third party. A significant uninsured property or liability loss could have a material adverse effect on our business and our financial condition and results of operations.
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Expanding social media platforms present new challenges.
Social media outlets continue to grow and expand, which presents us with new risks. Adverse content about us and our properties on social media platforms could result in damage to our reputation or brand. Improper posts by employees or others could result in disclosure of confidential or proprietary information regarding our operations.
Our operations are subject to regulation under various federal, state, local and foreign laws and regulations that may expose us to significant costs and liabilities.
Our properties and the operations at them are subject to regulation under various federal, state, local and foreign laws and regulations. Compliance with laws and regulations that govern our operations may require expenditures and modifications of development plans and operations that could have a detrimental effect on the operations of our properties and our financial condition, results of operations and cash flows. There can be no assurance that the application of laws, regulations or policies, or changes in such laws, regulations and policies, will not occur in a manner that could have a detrimental effect on any property.
We may be adversely impacted by fluctuations in foreign currency exchange rates.
Our current and future investments in and operations of Canadian, Australian and United Kingdom properties are or will be exposed to the effects of changes in the Canadian dollar, Australian dollar and British pound, respectively, against the U.S. dollar. Changes in foreign currency exchange rates cannot always be predicted; as a result, substantial unfavorable changes in exchange rates could have a material adverse effect on our financial condition and results of operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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ITEM 2. PROPERTIES
As of December 31, 2021, our properties were located throughout the United States, and in Ontario, Canada and Puerto Rico and consisted of 284 MH communities, 160 RV resorts, 33 properties containing both MH and RV sites, and 125 marinas.
As of December 31, 2021, our properties contained an aggregate of 204,163 developed sites comprised of 98,621 developed MH sites, 30,540 annual RV sites (inclusive of both annual and seasonal usage rights), 29,847 transient RV sites and 45,155 wet slips and dry storage spaces. There are 10,672 additional MH and RV sites suitable for development. Most of our properties include amenities oriented toward family and retirement living. Of our 602 properties, 218 each have 300 or more developed sites, with the largest having 2,341 developed MH and RV sites. See "Real Estate and Accumulated Depreciation, Schedule III," included in our Consolidated Financial Statements, for detail on properties that are encumbered.
As of December 31, 2021, our MH and RV properties had an occupancy rate of 97.4 percent excluding transient RV sites. Since January 1, 2021, the MH and RV properties have averaged an aggregate annual turnover of homes (where the home is moved out of the community) of approximately 2.6 percent and an average annual turnover of residents (where the resident-owned home is sold and remains within the community, typically without interruption of rental income) of approximately 7.1 percent. The average renewal rate for residents in our Rental Program was 73.5 percent for the year ended December 31, 2021.
We believe that our properties' high amenity levels, customer service loyalty, and customer retention program contribute to low turnover and generally high occupancy rates. All of the properties provide residents with attractive amenities with most offering a clubhouse, a swimming pool and laundry facilities. Many of the properties offer additional amenities such as sauna / whirlpool spas, tennis courts, shuffleboard, basketball courts and / or exercise rooms. Many RV resorts offer incremental amenities including golf, pro shops, restaurants, zip lines, waterparks, watersports and thematic experiences.
Our MH and RV properties are principally located in the midwestern, southern and southeastern regions of the U.S., and Ontario, Canada. Our marinas are principally located in the northeastern, southern, mid-Atlantic, western and midwestern regions of the U.S., with the majority of such marinas concentrated in coastal regions, others located in various inland regions, and Puerto Rico. We believe that geographic diversification helps to insulate the portfolio from regional economic influences. We have concentrated our properties within certain areas of the regions in order to achieve economies of scale in management and operation.
The following tables set forth certain information relating to our MH and RV properties as of December 31, 2021. The occupancy percentage includes MH sites and annual RV sites and excludes transient RV sites.
| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
| UNITED STATES | |||||||||||||||||||||||||||||
| MIDWEST | |||||||||||||||||||||||||||||
| Michigan | |||||||||||||||||||||||||||||
| Academy / West Point | MH | Canton | MI | 441 | — | 98.4 | % | 98.0 | % | ||||||||||||||||||||
| Allendale Meadows Mobile Village | MH | Allendale | MI | 352 | — | 99.4 | % | 99.1 | % | ||||||||||||||||||||
| Alpine Meadows Mobile Village | MH | Grand Rapids | MI | 403 | — | 98.5 | % | 97.3 | % | ||||||||||||||||||||
| Andover | MH | Grass Lake | MI | 125 | — | 100.0 | % | N/A | (4) | ||||||||||||||||||||
| Apple Carr Village | MH | Muskegon | MI | 713 | — | 92.8 | % | (1) | 86.5 | % | (1) | ||||||||||||||||||
| Arbor Woods | MH | Ypsilanti | MI | 458 | — | 98.9 | % | 99.1 | % | ||||||||||||||||||||
| Brentwood Mobile Village | MH | Kentwood | MI | 195 | — | 97.9 | % | 99.5 | % | ||||||||||||||||||||
| Broadview Estates | MH | Davison | MI | 474 | — | 88.2 | % | 87.1 | % | ||||||||||||||||||||
| Brookside Village | MH | Kentwood | MI | 196 | — | 98.5 | % | 100.0 | % | ||||||||||||||||||||
| Byron Center Mobile Village | MH | Byron Center | MI | 143 | — | 99.3 | % | 98.6 | % | ||||||||||||||||||||
| Camelot Villa | MH | Macomb | MI | 712 | — | 99.0 | % | 98.6 | % | ||||||||||||||||||||
| Charlevoix Estates | MH | Charlevoix | MI | 183 | — | 98.9 | % | N/A | (4) | ||||||||||||||||||||
| Cider Mill Crossings | MH | Fenton | MI | 621 | — | 94.8 | % | (1) | 87.6 | % | (1) | ||||||||||||||||||
| Cider Mill Village | MH | Middleville | MI | 258 | — | 98.4 | % | 98.4 | % | ||||||||||||||||||||
| Country Acres Mobile Village | MH | Cadillac | MI | 182 | — | 98.9 | % | 95.1 | % | ||||||||||||||||||||
| Country Hills Village | MH | Hudsonville | MI | 239 | — | 99.2 | % | 99.6 | % | ||||||||||||||||||||
| Country Meadows Mobile Village | MH | Flat Rock | MI | 577 | — | 99.7 | % | 98.8 | % | ||||||||||||||||||||
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| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
| Country Meadows Village | MH | Caledonia | MI | 395 | — | 99.7 | % | 100.0 | % | ||||||||||||||||||||
| Creekwood Meadows | MH | Burton | MI | 336 | — | 97.6 | % | 99.1 | % | ||||||||||||||||||||
| Cutler Estates Mobile Village | MH | Grand Rapids | MI | 259 | — | 97.7 | % | 98.8 | % | ||||||||||||||||||||
| Dutton Mill Village | MH | Caledonia | MI | 307 | — | 99.7 | % | 99.3 | % | ||||||||||||||||||||
| East Village Estates | MH | Washington Twp. | MI | 708 | — | 98.4 | % | 99.9 | % | ||||||||||||||||||||
| Egelcraft | MH | Muskegon | MI | 458 | — | 98.9 | % | 97.8 | % | ||||||||||||||||||||
| Fisherman's Cove | MH | Flint Twp. | MI | 162 | — | 98.8 | % | 98.1 | % | ||||||||||||||||||||
| Frenchtown Villa / Elizabeth Woods | MH | Newport | MI | 1,140 | — | 99.3 | % | 99.2 | % | ||||||||||||||||||||
| Grand Mobile Estates | MH | Grand Rapids | MI | 219 | — | 99.1 | % | 98.2 | % | ||||||||||||||||||||
Haas Lake Park RV Campground(2) | RV | New Hudson | MI | 210 | 282 | 100.0 | % | N/A | (4) | ||||||||||||||||||||
| Hamlin | MH | Webberville | MI | 230 | — | 98.3 | % | 98.7 | % | ||||||||||||||||||||
| Hickory Hills Village | MH | Battle Creek | MI | 283 | — | 98.9 | % | 99.6 | % | ||||||||||||||||||||
| Highland Greens Estates | MH | Highland | MI | 879 | — | 64.6 | % | 56.5 | % | ||||||||||||||||||||
| Holiday West Village | MH | Holland | MI | 341 | — | 99.4 | % | 99.7 | % | ||||||||||||||||||||
| Holly Village / Hawaiian Gardens | MH | Holly | MI | 425 | — | 98.4 | % | 97.9 | % | ||||||||||||||||||||
| Hunters Crossing | MH | Capac | MI | 114 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Hunters Glen | MH | Wayland | MI | 396 | — | 98.0 | % | 98.7 | % | ||||||||||||||||||||
| Huntington Run | MH | Kalamazoo | MI | 175 | — | 98.9 | % | N/A | (4) | ||||||||||||||||||||
| Kensington Meadows | MH | Lansing | MI | 290 | — | 97.9 | % | 96.2 | % | ||||||||||||||||||||
| Kimberly Estates | MH | Newport | MI | 387 | — | 98.2 | % | 98.2 | % | ||||||||||||||||||||
| King's Court Mobile Village | MH | Traverse City | MI | 802 | — | 99.5 | % | 99.0 | % | ||||||||||||||||||||
| Knollwood Estates | MH | Allendale | MI | 161 | — | 96.3 | % | 96.9 | % | ||||||||||||||||||||
| Lafayette Place | MH | Warren | MI | 254 | — | 96.9 | % | 99.2 | % | ||||||||||||||||||||
| Lakeview | MH | Ypsilanti | MI | 392 | — | 97.7 | % | 99.0 | % | ||||||||||||||||||||
| Leisure Village | MH | Belmont | MI | 256 | — | 99.6 | % | 99.6 | % | ||||||||||||||||||||
| Lincoln Estates | MH | Holland | MI | 191 | — | 98.4 | % | 98.4 | % | ||||||||||||||||||||
| Meadow Lake Estates | MH | White Lake | MI | 425 | — | 98.8 | % | 99.3 | % | ||||||||||||||||||||
| Meadowbrook Estates | MH | Monroe | MI | 453 | — | 98.7 | % | 99.1 | % | ||||||||||||||||||||
| Meadowlands of Gibraltar | MH | Gibraltar | MI | 320 | — | 99.7 | % | 99.4 | % | ||||||||||||||||||||
| Meadowstone | MH | Hastings | MI | 231 | — | 94.4 | % | N/A | (4) | ||||||||||||||||||||
| Northville Crossing | MH | Northville | MI | 756 | — | 99.7 | % | 99.7 | % | ||||||||||||||||||||
| Oak Island Village | MH | East Lansing | MI | 250 | — | 97.6 | % | 100.0 | % | ||||||||||||||||||||
Petoskey KOA RV Resort(2) | RV | Petoskey | MI | 50 | 239 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Pinebrook Village | MH | Kentwood | MI | 185 | — | 98.9 | % | 98.9 | % | ||||||||||||||||||||
| Pineview Estates | MH | Flint | MI | 1,011 | — | 71.1 | % | N/A | (4) | ||||||||||||||||||||
| Presidential Estates Mobile Village | MH | Hudsonville | MI | 364 | — | 97.3 | % | 99.2 | % | ||||||||||||||||||||
| Richmond Place | MH | Richmond | MI | 117 | — | 98.3 | % | 100.0 | % | ||||||||||||||||||||
| River Haven Village | MH | Grand Haven | MI | 721 | — | 99.2 | % | 96.1 | % | ||||||||||||||||||||
| River Ridge | MH | Saline | MI | 288 | — | 100.0 | % | N/A | (4) | ||||||||||||||||||||
| Rudgate Clinton | MH | Clinton Township | MI | 667 | — | 98.7 | % | 99.3 | % | ||||||||||||||||||||
| Rudgate Manor | MH | Sterling Heights | MI | 931 | — | 98.0 | % | 98.8 | % | ||||||||||||||||||||
| Scio Farms Estates | MH | Ann Arbor | MI | 913 | — | 98.8 | % | 99.1 | % | ||||||||||||||||||||
| Sheffield Estates | MH | Auburn Hills | MI | 228 | — | 100.0 | % | 99.1 | % | ||||||||||||||||||||
| Shelby Forest | MH | Shelby Twp. | MI | 664 | — | 98.9 | % | 99.5 | % | ||||||||||||||||||||
| Shelby West | MH | Shelby Twp. | MI | 644 | — | 99.4 | % | 99.7 | % | ||||||||||||||||||||
| Silver Springs | MH | Clinton Township | MI | 547 | — | 99.3 | % | 100.0 | % | ||||||||||||||||||||
| Southwood Village | MH | Grand Rapids | MI | 394 | — | 99.0 | % | 99.7 | % | ||||||||||||||||||||
| St. Clair Place | MH | St. Clair | MI | 100 | — | 97.0 | % | 97.0 | % | ||||||||||||||||||||
| Stonebridge | MH | Richfield Twp. | MI | — | — | N/A | (1) | N/A | (1) | ||||||||||||||||||||
Sun Outdoors Petoskey Bay Harbor(2) | RV | Petoskey | MI | 13 | 140 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Retreats Gun Lake(2) | RV | Hopkins | MI | 232 | 103 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
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| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
Sun Retreats Silver Lake(2) | RV | Mears | MI | 161 | 103 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Sunset Ridge | MH | Portland | MI | 388 | — | 95.1 | % | 87.6 | % | (1) | |||||||||||||||||||
| Sycamore Village | MH | Mason | MI | 396 | — | 98.7 | % | 99.0 | % | ||||||||||||||||||||
| Sylvan Crossing | MH | Chelsea | MI | 185 | — | 74.6 | % | (1) | N/A | (4) | |||||||||||||||||||
| Sylvan Glen Estates | MH | Brighton | MI | 476 | — | 94.7 | % | N/A | (4) | ||||||||||||||||||||
| Tamarac Village | MH | Ludington | MI | 302 | — | 98.7 | % | 98.3 | % | ||||||||||||||||||||
Tamarac Village RV Resort(2) | RV | Ludington | MI | 111 | 2 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Tanglewood Village | MH | Brownstown | MI | 247 | — | 98.8 | % | N/A | (4) | ||||||||||||||||||||
| Timberline Estates | MH | Coopersville | MI | 296 | — | 98.6 | % | 98.3 | % | ||||||||||||||||||||
| Town & Country Mobile Village | MH | Traverse City | MI | 192 | — | 97.9 | % | 99.0 | % | ||||||||||||||||||||
| Troy Villa | MH | Troy | MI | 282 | — | 85.8 | % | 86.9% | |||||||||||||||||||||
| Warren Dunes Village | MH | Bridgman | MI | 314 | — | 99.7 | % | 98.7 | % | ||||||||||||||||||||
| Waverly Shores Village | MH | Holland | MI | 415 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| West Village Estates | MH | Romulus | MI | 628 | — | 100.0 | % | 98.9 | % | ||||||||||||||||||||
| White Lake Mobile Home Village | MH | White Lake | MI | 315 | — | 96.8 | % | 98.4 | % | ||||||||||||||||||||
| Windham Hills Estates | MH | Jackson | MI | 469 | — | 98.7 | % | 98.3 | % | ||||||||||||||||||||
| Windsor Woods Village | MH | Wayland | MI | 314 | — | 99.7 | % | 99.7 | % | ||||||||||||||||||||
| Woodhaven Place | MH | Woodhaven | MI | 220 | — | 95.5 | % | 100.0 | % | ||||||||||||||||||||
| Michigan Total | 32,257 | 869 | 96.3 | % | 96.6 | % | |||||||||||||||||||||||
| Indiana | |||||||||||||||||||||||||||||
| Brookside Mobile Home Village | MH | Goshen | IN | 570 | — | 97.5 | % | 97.2 | % | ||||||||||||||||||||
| Carrington Pointe | MH | Fort Wayne | IN | 468 | — | 90.2 | % | (1) | 85.5 | % | (1) | ||||||||||||||||||
| Clear Water Mobile Village | MH | South Bend | IN | 227 | — | 98.2 | % | 97.4 | % | ||||||||||||||||||||
| Cobus Green Mobile Home Park | MH | Osceola | IN | 386 | — | 98.4 | % | 98.2 | % | ||||||||||||||||||||
| Four Seasons | MH | Elkhart | IN | 218 | — | 99.5 | % | 98.2 | % | ||||||||||||||||||||
Jellystone Park™ at Barton Lake(2) | RV | Fremont | IN | 87 | 468 | 100.0 | % | N/A | |||||||||||||||||||||
| Liberty Farm | MH | Valparaiso | IN | 220 | — | 96.8 | % | 95.9 | % | ||||||||||||||||||||
| Pebble Creek | MH | Greenwood | IN | 296 | — | 99.0 | % | 98.6 | % | ||||||||||||||||||||
| Pine Hills | MH | Middlebury | IN | 130 | — | 98.5 | % | 98.4 | % | ||||||||||||||||||||
| Roxbury Park | MH | Goshen | IN | 398 | — | 96.2 | % | 97.7 | % | ||||||||||||||||||||
Sun Outdoors Lake Rudolph(2) | RV | Santa Claus | IN | — | 534 | N/A | N/A | ||||||||||||||||||||||
| The Willows | MH | Goshen | IN | 174 | — | 83.3 | % | (1) | N/A | (4) | |||||||||||||||||||
| Indiana Total | 3,174 | 1,002 | 96.0 | % | 95.6 | % | |||||||||||||||||||||||
| Ohio | |||||||||||||||||||||||||||||
| Apple Creek | MH | Amelia | OH | 176 | — | 96.6 | % | 99.4 | % | ||||||||||||||||||||
| East Fork Crossing | MH | Batavia | OH | 350 | — | 99.4 | % | 99.7 | % | ||||||||||||||||||||
| Oakwood Village | MH | Miamisburg | OH | 511 | — | 99.4 | % | 98.6 | % | ||||||||||||||||||||
| Orchard Lake | MH | Milford | OH | 147 | — | 99.3 | % | 97.3 | % | ||||||||||||||||||||
Sun Retreats Geneva on the Lake(2) | RV | Geneva on the Lake | OH | 451 | 129 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Westbrook Senior Village | MH | Toledo | OH | 112 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Westbrook Village | MH | Toledo | OH | 344 | — | 98.5 | % | 98.3 | % | ||||||||||||||||||||
| Willowbrook Place | MH | Toledo | OH | 266 | — | 97.4 | % | 99.2 | % | ||||||||||||||||||||
| Woodside Terrace | MH | Holland | OH | 439 | — | 97.0 | % | 96.8 | % | ||||||||||||||||||||
| Ohio Total | 2,796 | 129 | 98.7 | % | 98.7 | % | |||||||||||||||||||||||
| SOUTH | |||||||||||||||||||||||||||||
| Texas | |||||||||||||||||||||||||||||
Austin Lone Star RV Resort(2) | RV | Austin | TX | 56 | 101 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Bluebonnet Lake | MH | Austin | TX | — | — | N/A | N/A | (4) | |||||||||||||||||||||
33
SUN COMMUNITIES, INC.
| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
| Boulder Ridge | MH | Pflugerville | TX | 1,220 | — | 98.5 | % | 97.1 | % | ||||||||||||||||||||
| Branch Creek Estates | MH | Austin | TX | 400 | — | 99.8 | % | 100.0 | % | ||||||||||||||||||||
Camp Fimfo(2) | RV | New Braunfels | TX | — | 319 | N/A | N/A | (4) | |||||||||||||||||||||
| Chisholm Point Estates | MH | Pflugerville | TX | 427 | — | 98.6 | % | 99.3 | % | ||||||||||||||||||||
| Comal Farms | MH | New Braunfels | TX | 367 | — | 99.5 | % | 98.6 | % | ||||||||||||||||||||
Coyote Ranch Resort(2) | RV | Wichita Falls | TX | — | 165 | N/A | N/A | (4) | |||||||||||||||||||||
| Creeks Crossing | MH | Kyle | TX | 106 | — | 94.3 | % | (1) | N/A | ||||||||||||||||||||
Jellystone Park™ at Guadalupe River(2) | RV | Kerrville | TX | — | 256 | N/A | N/A | ||||||||||||||||||||||
Jellystone Park™ at Hill Country(2) | RV | Canyon Lake | TX | — | 185 | N/A | N/A | ||||||||||||||||||||||
Jellystone Park™ at Whispering Pines(2) | RV | Tyler | TX | — | 131 | N/A | N/A | (4) | |||||||||||||||||||||
Jetstream RV Resort at NASA(2) | RV | Houston | TX | 63 | 139 | 100.0 | % | N/A | (4) | ||||||||||||||||||||
Lone Star Jellystone Park(2) | RV | Waller | TX | — | 345 | N/A | N/A | ||||||||||||||||||||||
| Oak Crest | MH | Austin | TX | 654 | — | 97.6 | % | 94.2 | % | (1) | |||||||||||||||||||
Pearwood RV Resort(2) | RV | Pearland | TX | 41 | 103 | 100.0 | % | N/A | (4) | ||||||||||||||||||||
| Pecan Branch | MH | Georgetown | TX | 229 | — | 96.1 | % | 86.0 | % | (1) | |||||||||||||||||||
| Pine Trace | MH | Houston | TX | 680 | — | 97.8 | % | 98.5 | % | ||||||||||||||||||||
| River Ranch | MH | Austin | TX | 848 | — | 98.5 | % | 97.6 | % | ||||||||||||||||||||
| River Ridge Estates | MH | Austin | TX | 515 | — | 99.2 | % | 99.2 | % | ||||||||||||||||||||
| Saddlebrook | MH | San Marcos | TX | 561 | — | 99.1 | % | 99.1 | % | ||||||||||||||||||||
| Sandy Lake | MH | Carrollton | TX | 54 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sandy Lake RV Resort(2) | RV | Carrollton | TX | 181 | 39 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Stonebridge | MH | San Antonio | TX | 335 | — | 99.7 | % | 99.1 | % | ||||||||||||||||||||
| Summit Ridge | MH | Converse | TX | 446 | — | 99.1 | % | 99.1 | % | ||||||||||||||||||||
Sun Outdoors Lake Travis(2) | RV | Austin | TX | 78 | 166 | 100.0 | % | N/A | |||||||||||||||||||||
Sun Outdoors San Antonio West(2) | RV | San Antonio | TX | 101 | 161 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Outdoors Texas Hill Country(2) | RV | New Braunfels | TX | 116 | 253 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Sunset Ridge | MH | Kyle | TX | 274 | — | 75.9 | % | (1) | 97.1 | % | |||||||||||||||||||
| Travelers World | MH | San Antonio | TX | 8 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Travelers World RV Resort(2) | RV | San Antonio | TX | 25 | 130 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Treetops RV Resort(2) | RV | Arlington | TX | 91 | 83 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Woodlake Trails | MH | San Antonio | TX | 316 | — | 93.7 | % | (1) | 90.5 | % | (1) | ||||||||||||||||||
| Texas Total | 8,192 | 2,576 | 97.7 | % | 97.5 | % | |||||||||||||||||||||||
| SOUTHEAST | |||||||||||||||||||||||||||||
| Florida | |||||||||||||||||||||||||||||
Arbor Terrace RV Park(2) | RV | Bradenton | FL | 269 | 102 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Ariana Village | MH | Lakeland | FL | 207 | — | 99.0 | % | 98.6 | % | ||||||||||||||||||||
| Bahia Vista Estates | MH | Sarasota | FL | 251 | — | 99.6 | % | 99.6 | % | ||||||||||||||||||||
Baker Acres RV Resort(2) | RV | Zephyrhills | FL | 286 | 66 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Big Tree RV Resort(2) | RV | Arcadia | FL | 355 | 56 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Blue Heron Pines | MH | Punta Gorda | FL | 408 | — | 99.5 | % | 98.3 | % | ||||||||||||||||||||
| Blue Jay | MH | Dade City | FL | 207 | — | 99.5 | % | 99.5 | % | ||||||||||||||||||||
Blue Jay RV Resort(2) | RV | Dade City | FL | 41 | 11 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Blueberry Hill(2) | RV | Bushnell | FL | 322 | 83 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Brentwood Estates | MH | Hudson | FL | 191 | — | 99.5 | % | 98.4 | % | ||||||||||||||||||||
| Buttonwood Bay | MH | Sebring | FL | 407 | — | 99.3 | % | 99.0 | % | ||||||||||||||||||||
Buttonwood Bay RV Resort(2) | RV | Sebring | FL | 353 | 179 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Candlelight Manor | MH | South Daytona | FL | 128 | — | 100.0 | % | 99.2 | % | ||||||||||||||||||||
| Carriage Cove | MH | Sanford | FL | 467 | — | 99.6 | % | 100.0 | % | ||||||||||||||||||||
| Central Park | MH | Haines City | FL | 114 | — | 90.4 | % | 90.4 | % | ||||||||||||||||||||
Central Park Resort RV Resort(2) | RV | Haines City | FL | 227 | 137 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
34
SUN COMMUNITIES, INC.
| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
Citrus Hill RV Resort(2) | RV | Dade City | FL | 131 | 51 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Club Naples(2) | RV | Naples | FL | 246 | 59 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Club Wildwood | MH | Hudson | FL | 478 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Colony in the Wood | MH | Port Orange | FL | 383 | — | 100.0 | % | 99.0 | % | ||||||||||||||||||||
| Country Squire | MH | Paisley | FL | 97 | — | 99.0 | % | 99.0 | % | ||||||||||||||||||||
Country Squire RV Resort(2) | RV | Paisley | FL | 24 | 1 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Cypress Greens | MH | Lake Alfred | FL | 259 | — | 98.5 | % | 98.5 | % | ||||||||||||||||||||
Daytona Beach RV Resort(2) | RV | Port Orange | FL | 148 | 85 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Deerwood | MH | Orlando | FL | 569 | — | 99.5 | % | 98.1 | % | ||||||||||||||||||||
Dunedin RV Resort(2) | RV | Dunedin | FL | 196 | 43 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Ellenton Gardens RV Resort(2) | RV | Ellenton | FL | 153 | 41 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Fairfield Village | MH | Ocala | FL | 293 | — | 100.0 | % | 99.7 | % | ||||||||||||||||||||
Flamingo Lake RV Resort(2) | RV | Jacksonville | FL | 80 | 342 | 100.0% | N/A | ||||||||||||||||||||||
| Forest View | MH | Homosassa | FL | 300 | — | 98.7 | % | 98.7 | % | ||||||||||||||||||||
| Glen Haven | MH | Zephyrhills | FL | 52 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Glen Haven RV Resort(2) | RV | Zephyrhills | FL | 173 | 45 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Goldcoaster | MH | Homestead | FL | 531 | — | 99.2 | % | 99.6 | % | ||||||||||||||||||||
Goldcoaster RV Resort(2) | RV | Homestead | FL | 6 | 8 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Grand Bay | MH | Dunedin | FL | 134 | — | 99.3 | % | 100.0 | % | ||||||||||||||||||||
Grand Lakes RV Resort(2) | RV | Citra | FL | 316 | 92 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Grove Ridge RV Resort(2) | RV | Dade City | FL | 166 | 80 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Groves RV Resort(2) | RV | Ft. Myers | FL | 232 | 37 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Gulfstream Harbor | MH | Orlando | FL | 974 | — | 99.9 | % | 99.6 | % | ||||||||||||||||||||
| Hacienda Del Rio | MH | Edgewater | FL | 730 | — | 99.5 | % | 98.8 | % | ||||||||||||||||||||
Hidden River RV Resort(2) | RV | Riverview | FL | 208 | 93 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Holly Forest Estates | MH | Holly Hill | FL | 402 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Homosassa River RV Resort(2) | RV | Homosassa Springs | FL | 135 | 89 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Horseshoe Cove RV Resort(2) | RV | Bradenton | FL | 333 | 143 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Indian Creek Park | MH | Ft. Myers Beach | FL | 353 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Indian Creek RV Park(2) | RV | Ft. Myers Beach | FL | 973 | 104 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Island Lakes | MH | Merritt Island | FL | 301 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| King's Lake | MH | DeBary | FL | 245 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Kings Manor | MH | Lakeland | FL | 239 | — | 97.1 | % | 96.7 | % | ||||||||||||||||||||
| Kings Pointe | MH | Lake Alfred | FL | 226 | — | 99.1 | % | 99.6 | % | ||||||||||||||||||||
| Kissimmee Gardens | MH | Kissimmee | FL | 240 | — | 99.6 | % | 100.0 | % | ||||||||||||||||||||
| Kissimmee South | MH | Davenport | FL | 142 | — | 91.5 | % | 90.8 | % | ||||||||||||||||||||
Kissimmee South RV Resort(2) | RV | Davenport | FL | 144 | 57 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| La Costa Village | MH | Port Orange | FL | 658 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Lake Josephine RV Resort(2) | RV | Sebring | FL | 119 | 59 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Lake Juliana Landings | MH | Auburndale | FL | 274 | — | 98.2 | % | 98.2 | % | ||||||||||||||||||||
| Lake Pointe Village | MH | Mulberry | FL | 362 | — | 99.4 | % | 99.4 | % | ||||||||||||||||||||
Lake San Marino RV Park(2) | RV | Naples | FL | 252 | 155 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Lakeland RV Resort(2) | RV | Lakeland | FL | 206 | 25 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Lakeshore Landings | MH | Orlando | FL | 307 | — | 99.3 | % | 100.0 | % | ||||||||||||||||||||
| Lakeshore Villas | MH | Tampa | FL | 280 | — | 98.2 | % | 98.6 | % | ||||||||||||||||||||
| Lamplighter | MH | Port Orange | FL | 259 | — | 99.6 | % | 100.0 | % | ||||||||||||||||||||
Lazy Lakes RV Resort(2) | RV | Summerland Key | FL | — | 99 | N/A | N/A | (4) | |||||||||||||||||||||
Majestic Oaks RV Resort(2) | RV | Zephyrhills | FL | 231 | 23 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Marco Naples RV Resort(2) | RV | Naples | FL | 207 | 94 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Meadowbrook Village | MH | Tampa | FL | 257 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Mill Creek | MH | Kissimmee | FL | 34 | — | 94.1 | % | 88.2 | % | ||||||||||||||||||||
35
SUN COMMUNITIES, INC.
| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
Mill Creek RV Resort(2) | RV | Kissimmee | FL | 135 | 21 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Naples RV Resort(2) | RV | Naples | FL | 122 | 45 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| New Ranch | MH | Clearwater | FL | 94 | — | 98.9 | % | 97.9 | % | ||||||||||||||||||||
North Lake Estates(2) | RV | Moore Haven | FL | 191 | 81 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Oakview Estates | MH | Arcadia | FL | 119 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Ocean Breeze - Jensen Beach | MH | Jensen Beach | FL | 309 | — | 77.3 | % | (1) | 73.6 | % | (1) | ||||||||||||||||||
Ocean Breeze - Jensen Beach RV Resort(2) | RV | Jensen Beach | FL | 97 | 83 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Ocean Breeze - Marathon | MH | Marathon | FL | 47 | — | 74.5 | % | (1)(5) | 31.9 | % | (1)(5) | ||||||||||||||||||
| Ocean Breeze - Marathon RV Resort | RV | Marathon | FL | — | — | — | % | (5) | — | % | (5) | ||||||||||||||||||
| Orange City | MH | Orange City | FL | 4 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Orange City RV Resort(2) | RV | Orange City | FL | 417 | 104 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Orange Tree Village | MH | Orange City | FL | 246 | — | 100.0 | % | 99.2 | % | ||||||||||||||||||||
| Paddock Park South | MH | Ocala | FL | 188 | — | 80.3 | % | 79.8 | % | ||||||||||||||||||||
| Palm Key Village | MH | Davenport | FL | 204 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Palm Village | MH | Bradenton | FL | 146 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Park Place | MH | Sebastian | FL | 476 | — | 96.8 | % | 96.2 | % | ||||||||||||||||||||
| Park Royale | MH | Pinellas Park | FL | 309 | — | 99.0 | % | 100.0 | % | ||||||||||||||||||||
Pecan Park RV Resort(2) | RV | Jacksonville | FL | 67 | 274 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Pelican Bay | MH | Micco | FL | 216 | — | 99.5 | % | 99.1 | % | ||||||||||||||||||||
Pleasant Lake RV Resort(2) | RV | Bradenton | FL | 296 | 45 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Rainbow | MH | Frostproof | FL | 37 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Rainbow RV Resort(2) | RV | Frostproof | FL | 414 | 48 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Rainbow Village of Largo(2) | RV | Largo | FL | 259 | 50 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Rainbow Village of Zephyrhills(2) | RV | Zephyrhills | FL | 347 | 35 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Red Oaks | MH | Bushnell | FL | 103 | — | 93.2 | % | (1) | 93.2 | % | (1) | ||||||||||||||||||
Red Oaks RV Resort(2) | RV | Bushnell | FL | 512 | 405 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Regency Heights | MH | Clearwater | FL | 391 | — | 98.7 | % | 99.0 | % | ||||||||||||||||||||
| Riverside Club | MH | Ruskin | FL | 728 | — | 89.8 | % | 86.4 | % | ||||||||||||||||||||
| Riverside Village | MH | Jensen Beach | FL | 71 | — | N/A | (1) | N/A | (4) | ||||||||||||||||||||
Rock Crusher Canyon RV Resort(2) | RV | Crystal River | FL | 228 | 167 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Royal Country | MH | Miami | FL | 864 | — | 99.8 | % | 99.9 | % | ||||||||||||||||||||
| Royal Palm Village | MH | Haines City | FL | 395 | — | 87.3 | % | 86.1 | % | ||||||||||||||||||||
| Saddle Oak Club | MH | Ocala | FL | 376 | — | 99.7 | % | 99.7 | % | ||||||||||||||||||||
| Saralake Estates | MH | Sarasota | FL | 202 | — | 99.5 | % | 99.5 | % | ||||||||||||||||||||
| Savanna Club | MH | Port St. Lucie | FL | 1,069 | — | 98.5 | % | 98.5 | % | ||||||||||||||||||||
| Serendipity | MH | North Fort Myers | FL | 338 | — | 97.3 | % | 97.9 | % | ||||||||||||||||||||
Settler's Rest RV Resort(2) | RV | Zephyrhills | FL | 301 | 77 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Shadow Wood Village | MH | Hudson | FL | 260 | — | 78.8 | % | (1) | 87.0 | % | (1) | ||||||||||||||||||
| Shady Road Villas | MH | Ocala | FL | 129 | — | 87.6 | % | 85.4 | % | ||||||||||||||||||||
| Shell Creek Marina | MH | Punta Gorda | FL | 54 | — | 98.1 | % | 98.1 | % | ||||||||||||||||||||
Shell Creek RV Resort & Marina(2) | RV | Punta Gorda | FL | 155 | 30 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Siesta Bay RV Park(2) | RV | Ft. Myers | FL | 751 | 46 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Southern Charm | MH | Zephyrhills | FL | 1 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Southern Charm RV Resort(2) | RV | Zephyrhills | FL | 403 | 93 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Southern Leisure RV Resort(2) | RV | Chiefland | FL | 167 | 330 | 100.0 | % | N/A | (4) | ||||||||||||||||||||
| Southern Pines | MH | Bradenton | FL | 107 | — | 96.3 | % | 96.3 | % | ||||||||||||||||||||
| Southport Springs Golf & Country Club | MH | Zephyrhills | FL | 547 | — | 99.1 | % | 99.3 | % | ||||||||||||||||||||
| Spanish Main | MH | Thontosassa | FL | 56 | — | 91.1 | % | 87.5 | % | ||||||||||||||||||||
Spanish Main RV Resort(2) | RV | Thontosassa | FL | 232 | 47 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Stonebrook | MH | Homosassa | FL | 215 | — | 94.0 | % | (1) | 93.5 | % | (1) | ||||||||||||||||||
| Sun Outdoors Islamorada | MH | Islamorada | FL | — | — | — | % | (5) | — | % | (5) | ||||||||||||||||||
36
SUN COMMUNITIES, INC.
| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
| Sun Outdoors Islamorada RV Resort | RV | Islamorada | FL | — | — | — | % | (5) | — | % | (5) | ||||||||||||||||||
Sun Outdoors Key Largo(2) | RV | Key Largo | FL | 17 | 21 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Outdoors Marathon(2) | RV | Marathon | FL | 27 | 58 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Sun Outdoors Orlando Champions Gate | MH | Davenport | FL | 44 | — | 75.0 | % | 97.7 | % | ||||||||||||||||||||
Sun Outdoors Orlando Champions Gate RV Resort(2) | RV | Davenport | FL | 60 | 200 | 100.0 | % | 100.0% | |||||||||||||||||||||
| Sun Outdoors Panama City Beach | MH | Panama City Beach | FL | 42 | — | 97.6 | % | 95.2 | % | ||||||||||||||||||||
Sun Outdoors Panama City Beach RV Resort(2) | RV | Panama City Beach | FL | — | 159 | — | % | (1) | N/A | ||||||||||||||||||||
Sun Outdoors Sarasota(2) | RV | Sarasota | FL | 1,079 | 440 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Outdoors St. Augustine(2) | RV | St. Augustine | FL | — | 175 | N/A | N/A | ||||||||||||||||||||||
| Suncoast Gateway | MH | Port Richey | FL | 173 | — | 98.8 | % | 98.8 | % | ||||||||||||||||||||
| Sundance | MH | Zephyrhills | FL | 332 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Sunlake Estates | MH | Grand Island | FL | 408 | — | 97.1 | % | 97.1 | % | ||||||||||||||||||||
| Sunset Harbor at Cow Key Marina | MH | Key West | FL | 77 | — | 98.7 | % | 98.7 | % | ||||||||||||||||||||
Sweetwater RV Resort(2) | RV | Zephyrhills | FL | 211 | 80 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Tallowwood Isle | MH | Coconut Creek | FL | 274 | — | 97.1 | % | 95.6 | % | ||||||||||||||||||||
| Tampa East | MH | Dover | FL | 31 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Tampa East RV Resort(2) | RV | Dover | FL | 559 | 110 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| The Hamptons Golf & Country Club | MH | Auburndale | FL | 829 | — | 99.5 | % | 99.0 | % | ||||||||||||||||||||
| The Hideaway | MH | Key West | FL | 13 | — | 100.0 | % | 92.3 | % | ||||||||||||||||||||
| The Hills | MH | Apopka | FL | 97 | — | 99.0 | % | 100.0 | % | ||||||||||||||||||||
| The Landings at Lake Henry | MH | Haines City | FL | 394 | — | 99.2 | % | 99.7 | % | ||||||||||||||||||||
| The Ridge | MH | Davenport | FL | 481 | — | 99.4 | % | 99.4 | % | ||||||||||||||||||||
| The Valley | MH | Apopka | FL | 148 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
ThemeWorld RV Resort(2) | RV | Davenport | FL | 98 | 50 | 100.0 | % | N/A | (4) | ||||||||||||||||||||
Three Lakes(2) | RV | Hudson | FL | 254 | 53 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Tranquility MHC | MH | Bushnell | FL | 26 | — | 23.1 | % | N/A | (4) | ||||||||||||||||||||
| Vista del Lago | MH | Bradenton | FL | 136 | — | 100.0 | % | 99.3 | % | ||||||||||||||||||||
Vista del Lago RV Resort(2) | RV | Bradenton | FL | 35 | 5 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Vizcaya Lakes | MH | Port Charlotte | FL | 108 | — | 96.3 | % | 92.6 | % | ||||||||||||||||||||
| Walden Woods | MH | Homosassa | FL | 213 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Walden Woods II | MH | Homosassa | FL | 213 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Water Oak Country Club Estates | MH | Lady Lake | FL | 1,341 | — | 93.2 | % | 93.6 | % | ||||||||||||||||||||
Waters Edge RV Resort(2) | RV | Zephyrhills | FL | 142 | 75 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Westside Ridge | MH | Auburndale | FL | 219 | — | 99.5 | % | 99.1 | % | ||||||||||||||||||||
| Windmill Village | MH | Davenport | FL | 509 | — | 99.8 | % | 99.6 | % | ||||||||||||||||||||
| Woodlands at Church Lake | MH | Groveland | FL | 291 | — | 85.2 | % | 81.8 | % | ||||||||||||||||||||
Woodsmoke Camping Resort(2) | RV | Fort Myers | FL | 216 | 84 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Florida Total | 40,783 | 5,950 | 98.1 | % | 98.1 | % | |||||||||||||||||||||||
| Virginia | |||||||||||||||||||||||||||||
Chincoteague Island KOA RV Resort(3) | RV | Chincoteague | VA | — | 360 | N/A | N/A | ||||||||||||||||||||||
Gwynn's Island RV Resort & Campground(2) | RV | Gwynn | VA | 116 | 13 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Jellystone Park™ at Luray(2) | RV | East Luray | VA | — | 255 | N/A | N/A | ||||||||||||||||||||||
Jellystone Park™ at Natural Bridge(2) | RV | Natural Bridge Station | VA | 69 | 230 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
New Point RV Resort(2) | RV | New Point | VA | 313 | 11 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Pine Ridge | MH | Prince George | VA | 376 | — | 99.5 | % | 98.9 | % | ||||||||||||||||||||
Shenandoah Acres Family Campground(2) | RV | Stuarts Draft | VA | 379 | 113 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Outdoors Cape Charles(2) | RV | Cape Charles | VA | — | 663 | N/A | N/A | (4) | |||||||||||||||||||||
| Sun Outdoors Chincoteague Bay | RV | Chincoteague | VA | — | — | N/A | (1) | N/A | (4) | ||||||||||||||||||||
Sunset Beach RV Resort(3) | RV | Cape Charles | VA | — | 296 | N/A | N/A | ||||||||||||||||||||||
37
SUN COMMUNITIES, INC.
| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
Tall Pines Harbor Campground(2) | RV | Temperanceville | VA | — | 241 | N/A | N/A | (4) | |||||||||||||||||||||
| Virginia Total | 1,253 | 2,182 | 99.8 | % | 99.6 | % | |||||||||||||||||||||||
| SOUTHWEST | |||||||||||||||||||||||||||||
| California | |||||||||||||||||||||||||||||
49'er Village RV Resort(2) | RV | Plymouth | CA | 88 | 239 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Alta Laguna | MH | Rancho Cucamonga | CA | 296 | — | 99.7 | % | 99.7 | % | ||||||||||||||||||||
| Caliente Sands | MH | Cathedral City | CA | 118 | — | 98.3 | % | 98.3 | % | ||||||||||||||||||||
Cava Robles RV Resort(2) | RV | Paso Robles | CA | — | 332 | N/A | N/A | ||||||||||||||||||||||
| Cisco Grove Campground & RV | RV | Emigrant Gap | CA | 18 | — | 100.0 | % | N/A | (4) | ||||||||||||||||||||
El Capitan Canyon(2) | RV | Goleta | CA | — | 163 | N/A | N/A | ||||||||||||||||||||||
| Forest Springs | MH | Grass Valley | CA | 373 | — | 89.5 | % | (1) | 86.6 | % | (1) | ||||||||||||||||||
| Friendly Village of La Habra | MH | La Habra | CA | 330 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Friendly Village of Modesto | MH | Modesto | CA | 289 | — | 99.7 | % | 99.0 | % | ||||||||||||||||||||
| Friendly Village of Simi | MH | Simi Valley | CA | 222 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Friendly Village of West Covina | MH | West Covina | CA | 157 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Heritage | MH | Temecula | CA | 196 | — | 99.5 | % | 99.5 | % | ||||||||||||||||||||
Indian Wells RV Resort(2) | RV | Indio | CA | 165 | 173 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Jellystone Park™ at Tower Park(2) | RV | Lodi | CA | — | 361 | N/A | N/A | ||||||||||||||||||||||
| Lakefront | MH | Lakeside | CA | 295 | — | 99.0 | % | 100.0 | % | ||||||||||||||||||||
| Lakeview Mobile Estates | MH | Yucaipa | CA | 296 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Lazy J Ranch | MH | Arcata | CA | 220 | — | 99.1 | % | 99.5 | % | ||||||||||||||||||||
| Lemon Wood | MH | Ventura | CA | 231 | — | 100.0 | % | 99.1 | % | ||||||||||||||||||||
| Menifee Development | MH | Menifee | CA | — | — | N/A | (1) | N/A | (4) | ||||||||||||||||||||
| Moreno 66 Development | MH | Moreno Valley | CA | — | — | N/A | (1) | N/A | (4) | ||||||||||||||||||||
| Napa Valley | MH | Napa | CA | 257 | — | 100.0 | % | 99.6 | % | ||||||||||||||||||||
| Oak Creek | MH | Coarsegold | CA | 198 | — | 99.5 | % | 100.0 | % | ||||||||||||||||||||
Ocean Mesa RV Resort(2) | RV | Goleta | CA | — | 104 | N/A | N/A | ||||||||||||||||||||||
| Ocean West | MH | McKinleyville | CA | 130 | — | 99.2 | % | 99.2 | % | ||||||||||||||||||||
| Palos Verdes Shores MH & Golf Community | MH | San Pedro | CA | 242 | — | 99.6 | % | 100.0 | % | ||||||||||||||||||||
| Pembroke Downs | MH | Chino | CA | 163 | — | 99.4 | % | 100.0 | % | ||||||||||||||||||||
| Pismo Dunes RV Resort | RV | Pismo Beach | CA | 331 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Rancho Alipaz | MH | San Juan Capistrano | CA | 132 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Rancho Caballero | MH | Riverside | CA | 303 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Royal Palms | MH | Cathedral City | CA | 438 | — | 97.7 | % | 97.7 | % | ||||||||||||||||||||
| Royal Palms RV Resort | RV | Cathedral City | CA | 39 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Sun Outdoors San Diego Bay | MH | San Diego | CA | 49 | — | N/A | (1) | N/A | (1) | ||||||||||||||||||||
Sun Outdoors San Diego Bay RV Resort(2) | RV | San Diego | CA | — | 197 | N/A | (1) | N/A | (1) | ||||||||||||||||||||
| The Colony | MH | Oxnard | CA | 150 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
The Sands RV & Golf Resort(2) | RV | Desert Hot Springs | CA | 269 | 245 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Vallecito | MH | Newbury Park | CA | 303 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Victor Villa | MH | Victorville | CA | 287 | — | 99.7 | % | 100.0 | % | ||||||||||||||||||||
Vines RV Resort(2) | RV | Paso Robles | CA | — | 130 | N/A | N/A | ||||||||||||||||||||||
| Vista del Lago | MH | Scotts Valley | CA | 202 | — | 99.0 | % | 99.5 | % | ||||||||||||||||||||
Wine Country RV Resort(2) | RV | Paso Robles | CA | — | 203 | N/A | N/A | ||||||||||||||||||||||
| California Total | 6,787 | 2,147 | 98.3 | % | 98.9 | % | |||||||||||||||||||||||
| Arizona | |||||||||||||||||||||||||||||
| Blue Star | MH | Apache Junction | AZ | 4 | — | 100.0 | % | 100.0% | |||||||||||||||||||||
Blue Star(2) | RV | Apache Junction | AZ | 114 | 31 | 100.0 | % | 100.0% | |||||||||||||||||||||
| Brentwood West | MH | Mesa | AZ | 350 | — | 99.7 | % | 99.1 | % | ||||||||||||||||||||
38
SUN COMMUNITIES, INC.
| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
| Buena Vista | MH | Buckeye | AZ | 400 | — | 89.8 | % | 84.8 | % | ||||||||||||||||||||
| Desert Harbor | MH | Apache Junction | AZ | 205 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| La Casa Blanca | MH | Apache Junction | AZ | 198 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Leaf Verde RV Resort(2) | RV | Buckeye | AZ | 113 | 264 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Lost Dutchman | MH | Apache Junction | AZ | 193 | — | 96.4 | % | 98.9 | % | ||||||||||||||||||||
Lost Dutchman RV Resort(2) | RV | Apache Junction | AZ | 3 | 31 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Mountain View | MH | Mesa | AZ | 170 | — | 97.6 | % | 98.8 | % | ||||||||||||||||||||
| Palm Creek Golf | MH | Casa Grande | AZ | 506 | — | 71.1 | % | (1) | 66.6 | % | (1) | ||||||||||||||||||
Palm Creek Golf & RV Resort(2) | RV | Casa Grande | AZ | 976 | 859 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Rancho Mirage | MH | Apache Junction | AZ | 312 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Reserve at Fox Creek | MH | Bullhead City | AZ | 311 | — | 99.7 | % | 99.7 | % | ||||||||||||||||||||
| Sun Valley | MH | Apache Junction | AZ | 268 | — | 97.8 | % | 97.4 | % | ||||||||||||||||||||
| Arizona Total | 4,123 | 1,185 | 95.0 | % | 93.2 | % | |||||||||||||||||||||||
| Colorado | |||||||||||||||||||||||||||||
| Cave Creek | MH | Evans | CO | 447 | — | 99.6 | % | 99.3 | % | ||||||||||||||||||||
| Eagle Crest | MH | Firestone | CO | 441 | — | 99.8 | % | 99.5 | % | ||||||||||||||||||||
Jellystone Park™ at Larkspur(2) | RV | Larkspur | CO | — | 536 | N/A | N/A | ||||||||||||||||||||||
| North Point Estates | MH | Pueblo | CO | 108 | — | 99.1 | % | 100.0 | % | ||||||||||||||||||||
| River Run | MH | Granby | CO | 36 | — | 100.0 | % | 55.6 | % | (1) | |||||||||||||||||||
River Run RV Resort(2) | RV | Granby | CO | — | 451 | N/A | N/A | ||||||||||||||||||||||
| Skyline | MH | Fort Collins | CO | 170 | — | 99.4 | % | 99.4 | % | ||||||||||||||||||||
| Smith Creek Crossing | MH | Granby | CO | 182 | — | 44.5 | % | (1) | 42.7 | % | (1) | ||||||||||||||||||
| Swan Meadow Village | MH | Dillon | CO | 174 | — | 100.0 | % | 99.4 | % | ||||||||||||||||||||
| The Foothills | MH | Fort Collins | CO | — | — | N/A | N/A | (4) | |||||||||||||||||||||
| The Grove at Alta Ridge | MH | Thornton | CO | 409 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Timber Ridge | MH | Ft. Collins | CO | 585 | — | 99.3 | % | 99.5 | % | ||||||||||||||||||||
| Willow Bend | MH | Fort Lupton | CO | — | — | N/A | N/A | (4) | |||||||||||||||||||||
| Colorado Total | 2,552 | 987 | 95.7 | % | 97.0 | % | |||||||||||||||||||||||
| NORTHEAST | |||||||||||||||||||||||||||||
| Connecticut | |||||||||||||||||||||||||||||
| Beechwood | MH | Killingworth | CT | 297 | — | 98.7 | % | 97.3 | % | ||||||||||||||||||||
| Cedar Springs | MH | Southington | CT | 190 | — | 96.8 | % | 93.2 | % | ||||||||||||||||||||
| Forest Hill | MH | Southington | CT | 188 | — | 97.9 | % | 98.4 | % | ||||||||||||||||||||
| Grove Beach | MH | Westbrook | CT | 136 | — | 98.5 | % | 98.5 | % | ||||||||||||||||||||
| Hillcrest | MH | Uncasville | CT | 208 | — | 99.5 | % | 99.5 | % | ||||||||||||||||||||
| Lakeside | MH | Terryville | CT | 76 | — | 100.0 | % | 97.4 | % | ||||||||||||||||||||
| Lakeview CT | MH | Danbury | CT | 179 | — | 93.3 | % | 90.5 | % | ||||||||||||||||||||
| Laurel Heights | MH | Uncasville | CT | 49 | — | 95.9 | % | 95.9 | % | ||||||||||||||||||||
| Marina Cove | MH | Uncasville | CT | 25 | — | 76.0 | % | 76.0 | % | ||||||||||||||||||||
| Millwood | MH | Uncasville | CT | 45 | — | 4.4 | % | (1) | N/A | (1) | |||||||||||||||||||
| New England Village | MH | Westbrook | CT | 60 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Oak Grove | MH | Plainville | CT | 45 | — | 97.8 | % | 97.8 | % | ||||||||||||||||||||
| Rolling Hills | MH | Storrs | CT | 200 | — | 78.5 | % | 77.5 | % | ||||||||||||||||||||
Sun Outdoors Mystic(2) | RV | Old Mystic | CT | 46 | 103 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Three Gardens | MH | Southington | CT | 135 | — | 90.4 | % | 90.4 | % | ||||||||||||||||||||
| Yankee Village | MH | Old Saybrook | CT | 23 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Connecticut Total | 1,902 | 103 | 92.8 | % | 91.7 | % | |||||||||||||||||||||||
39
SUN COMMUNITIES, INC.
| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
| Maine | |||||||||||||||||||||||||||||
| Augusta Village | MH | Augusta | ME | 59 | — | 91.5 | % | 89.8 | % | ||||||||||||||||||||
| Birch Hill Estates | MH | Bangor | ME | 377 | — | 98.9 | % | 98.7 | % | ||||||||||||||||||||
| Cedar Haven | MH | Holden | ME | 155 | — | 89.7 | % | 92.9 | % | ||||||||||||||||||||
| Hancock Heights Estates | MH | Hancock | ME | 113 | — | 99.1 | % | 100.0 | % | ||||||||||||||||||||
| Holiday Park Estates | MH | Bangor | ME | 218 | — | 89.0 | % | 91.3 | % | ||||||||||||||||||||
| Jellystone Park™ Augusta Maine | RV | North Monmouth | ME | 204 | — | 100.0 | % | N/A | (4) | ||||||||||||||||||||
| Maplewood Manor | MH | Brunswick | ME | 296 | — | 99.0 | % | 99.3 | % | ||||||||||||||||||||
| Merrymeeting | MH | Brunswick | ME | 43 | — | 97.7 | % | 100.0 | % | ||||||||||||||||||||
| Riverside Drive Park | MH | Augusta | ME | 163 | — | 82.2 | % | 85.3 | % | ||||||||||||||||||||
Saco / Old Orchard Beach KOA(2) | RV | Saco | ME | — | 191 | N/A | N/A | ||||||||||||||||||||||
Sun Outdoors Old Orchard Beach Downtown(2) | RV | Old Orchard Beach | ME | 86 | 235 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Retreats at Wild Acres(2) | RV | Old Orchard Beach | ME | 326 | 304 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Retreats Old Orchard Beach(2) | RV | Old Orchard Beach | ME | 240 | 46 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Town & Country Village | MH | Lisbon | ME | 144 | — | 98.6 | % | 98.6 | % | ||||||||||||||||||||
Wells Beach Resort Campground(2) | RV | Wells | ME | — | 231 | N/A | N/A | (4) | |||||||||||||||||||||
| Maine Total | 2,424 | 1,007 | 96.5 | % | 96.8 | % | |||||||||||||||||||||||
| New Hampshire | |||||||||||||||||||||||||||||
| Brook Ridge | MH | Hooksett | NH | 91 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Crestwood | MH | Concord | NH | 320 | — | 99.4 | % | 98.8 | % | ||||||||||||||||||||
| Farmwood Village | MH | Dover | NH | 159 | — | 99.4 | % | 100.0 | % | ||||||||||||||||||||
Glen Ellis Family Campground(2) | RV | Glen | NH | 16 | 277 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Hannah Village | MH | Lebanon | NH | 81 | — | 97.5 | % | 100.0 | % | ||||||||||||||||||||
| Hemlocks | MH | Tilton | NH | 103 | — | 100.0 | % | 99.0 | % | ||||||||||||||||||||
Mi-Te-Jo Campground(2) | RV | Milton | NH | 68 | 156 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| River Pines | MH | Nashua | NH | 480 | — | 99.4 | % | 99.0 | % | ||||||||||||||||||||
Strafford / Lake Winnipesaukee South KOA(3) | RV | Strafford | NH | — | 147 | N/A | N/A | ||||||||||||||||||||||
Westward Shores Cottages & RV Resort(2) | RV | West Ossipee | NH | 430 | 70 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| New Hampshire Total | 1,748 | 650 | 99.5 | % | 99.4 | % | |||||||||||||||||||||||
| New Jersey | |||||||||||||||||||||||||||||
| Cape May Crossing | MH | Cape May | NJ | 28 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Deep Run | MH | Cream Ridge | NJ | 243 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Driftwood RV Resort & Campground(2) | RV | Clermont | NJ | 639 | 68 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Holly Shores Camping Resort(2) | RV | Cape May | NJ | — | 310 | N/A | N/A | (4) | |||||||||||||||||||||
Hospitality Creek Campground(2) | RV | Williamstown | NJ | — | 230 | N/A | N/A | (4) | |||||||||||||||||||||
Long Beach RV Resort & Campground(2) | RV | Barnegat | NJ | 175 | 39 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Shady Pines | MH | Galloway Twp. | NJ | 39 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Shady Pines RV Resort(2) | RV | Galloway Twp. | NJ | 64 | 31 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Retreats Avalon(2) | RV | Cape May Court House | NJ | 340 | 188 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Retreats Cape May(2) | RV | Cape May | NJ | 435 | 240 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Retreats Cape May Wildwood(2) | RV | Cape May | NJ | 438 | 191 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Retreats Pleasant Acres Farm(2) | RV | Sussex | NJ | 153 | 139 | 100.0 | % | N/A | (4) | ||||||||||||||||||||
| New Jersey Total | 2,554 | 1,436 | 100.0 | % | 100.0 | % | |||||||||||||||||||||||
| New York | |||||||||||||||||||||||||||||
Adirondack Gateway RV Resort & Campground(2) | RV | Gansevoort | NY | 323 | 19 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Cherrywood | MH | Clinton | NY | 176 | — | 88.6 | % | (1) | 83.5 | % | (1) | ||||||||||||||||||
| Jellystone Park™ at Birchwood Acres | MH | Greenfield Park | NY | 1 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
40
SUN COMMUNITIES, INC.
| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
Jellystone Park™ at Birchwood Acres RV Resort(2) | RV | Greenfield Park | NY | 120 | 184 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Jellystone Park™ at Gardiner(2) | RV | Gardiner | NY | 20 | 318 | 100.0 | % | N/A | |||||||||||||||||||||
Jellystone Park™ of Western New York(2) | RV | North Java | NY | 22 | 337 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Kittatinny Campground & RV Resort(2) | RV | Barryville | NY | — | 527 | N/A | N/A | ||||||||||||||||||||||
| Parkside Village | MH | Cheektowaga | NY | 156 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Sky Harbor | MH | Cheektowaga | NY | 522 | — | 98.7 | % | 98.1 | % | ||||||||||||||||||||
Sun Outdoors Association Island(2) | RV | Henderson | NY | 26 | 274 | 100.0 | % | N/A | (4) | ||||||||||||||||||||
| The Villas at Calla Pointe | MH | Cheektowaga | NY | 116 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| New York Total | 1,482 | 1,659 | 98.2 | % | 97.3 | % | |||||||||||||||||||||||
| OTHER | |||||||||||||||||||||||||||||
Sun Outdoors Orange Beach(2) | RV | Orange Beach | AL | — | 167 | N/A | N/A | ||||||||||||||||||||||
| Fort Dupont | RV | Delaware City | DE | — | — | N/A | N/A | (4) | |||||||||||||||||||||
| High Point Park | MH | Frederica | DE | 409 | — | 97.6 | % | 99.3 | % | ||||||||||||||||||||
| Leisure Point Resort | MH | Millsboro | DE | 202 | — | 94.1 | % | 90.6 | % | ||||||||||||||||||||
Leisure Point RV Resort(2) | RV | Millsboro | DE | 299 | 2 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Sea Air Village | MH | Rehoboth Beach | DE | 379 | — | 98.9 | % | 99.2 | % | ||||||||||||||||||||
Sea Air Village RV Resort(2) | RV | Rehoboth Beach | DE | 123 | 11 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Outdoors Rehoboth Bay(2) | RV | Millsboro | DE | — | 291 | N/A | N/A | ||||||||||||||||||||||
| Countryside Village of Atlanta | MH | Lawrenceville | GA | 261 | — | 100.0 | % | 99.6 | % | ||||||||||||||||||||
| Countryside Village of Gwinnett | MH | Buford | GA | 331 | — | 99.1 | % | 99.7 | % | ||||||||||||||||||||
| Countryside Village of Lake Lanier | MH | Buford | GA | 548 | — | 98.7 | % | 99.1 | % | ||||||||||||||||||||
| Wymberly | MH | Martinez | GA | 274 | — | 78.1 | % | (1) | 100.0 | % | |||||||||||||||||||
| Autumn Ridge | MH | Ankeny | IA | 413 | — | 98.8 | % | 98.1 | % | ||||||||||||||||||||
Jellystone Park™ of Chicago(2) | RV | Millbrook | IL | 144 | 250 | 100.0 | % | N/A | (4) | ||||||||||||||||||||
| Maple Brook | MH | Matteson | IL | 441 | — | 99.8 | % | 99.8 | % | ||||||||||||||||||||
| Oak Ridge | MH | Manteno | IL | 426 | — | 98.1 | % | 96.0 | % | ||||||||||||||||||||
Sun Retreats Rock River(2) | RV | Hillsdale | IL | 243 | 255 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Wildwood Community | MH | Sandwich | IL | 476 | — | 98.9 | % | 98.9 | % | ||||||||||||||||||||
Jellystone Park™ at Mammoth Cave(2) | RV | Cave City | KY | — | 315 | N/A | N/A | (4) | |||||||||||||||||||||
Reunion Lake RV Resort(2) | RV | Ponchatoula | LA | — | 334 | N/A | N/A | ||||||||||||||||||||||
Campers Haven RV Resort(2) | RV | Dennisport | MA | 221 | 45 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Peter's Pond RV Resort(2) | RV | Sandwich | MA | 341 | 65 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Outdoors Cape Cod(2) | RV | East Falmouth | MA | 56 | 199 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Hyde Park | MH | Easton | MD | 240 | — | 99.2 | % | 99.2 | % | ||||||||||||||||||||
Jellystone Park™ at Maryland(2) | RV | Williamsport | MD | — | 228 | N/A | N/A | ||||||||||||||||||||||
| Southside Landing | MH | Cambridge | MD | 96 | — | 93.8 | % | 88.5 | % | ||||||||||||||||||||
Sun Outdoors Frontier Town(2) | RV | Berlin | MD | — | 685 | N/A | N/A | ||||||||||||||||||||||
Sun Outdoors Ocean City(2) | RV | Berlin | MD | 1 | 392 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Sun Outdoors Ocean City Gateway(2) | RV | Whaleyville | MD | — | 210 | N/A | N/A | ||||||||||||||||||||||
| Southern Hills / Northridge Place | MH | Stewartville | MN | 475 | — | 97.5 | % | 98.9 | % | ||||||||||||||||||||
Jellystone Park™ at Memphis(2) | RV | Horn Lake | MS | — | 155 | N/A | N/A | ||||||||||||||||||||||
Rocky Mountain RV Park(2) | RV | Gardiner | MT | — | 75 | N/A | N/A | (4) | |||||||||||||||||||||
| Coastal Estates | MH | Hampstead | NC | 154 | — | 72.1 | % | (1) | 65.6 | % | (1) | ||||||||||||||||||
Fort Tatham RV Resort & Campground(2) | RV | Sylva | NC | 58 | 32 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Glen Laurel | MH | Concord | NC | 260 | — | 98.8 | % | 100.0 | % | ||||||||||||||||||||
Jellystone Park™ at Golden Valley(2) | RV | Bostic | NC | — | 298 | N/A | N/A | ||||||||||||||||||||||
| Meadowbrook | MH | Charlotte | NC | 321 | — | 99.7 | % | 99.7 | % | ||||||||||||||||||||
| Sun Villa Estates | MH | Reno | NV | 324 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Country Village Estates | MH | Oregon City | OR | 518 | — | 100.0 | % | 99.8 | % | ||||||||||||||||||||
Crown Villa RV Resort(2) | RV | Bend | OR | — | 123 | N/A | N/A | ||||||||||||||||||||||
41
SUN COMMUNITIES, INC.
| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
| Forest Meadows | MH | Philomath | OR | 75 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Oceanside RV Resort & Campground(2) | RV | Coos Bay | OR | — | 86 | N/A | N/A | ||||||||||||||||||||||
Pheasant Ridge RV Park(2) | RV | Wilsonville | OR | — | 130 | N/A | N/A | (4) | |||||||||||||||||||||
| Woodland Park Estates | MH | Eugene | OR | 398 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Countryside Estates | MH | Mckean | PA | 304 | — | 97.0 | % | 96.4 | % | ||||||||||||||||||||
Jellystone Park™ at Quarryville(2) | RV | Quarryville | PA | — | 257 | N/A | N/A | ||||||||||||||||||||||
| Pheasant Ridge | MH | Lancaster | PA | 553 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| River Beach Campsites & RV | RV | Milford | PA | — | — | N/A | (1) | N/A | (4) | ||||||||||||||||||||
Sun Outdoors Lancaster County(2) | RV | Narvon | PA | 280 | 142 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Carolina Pines RV Resort(2) | RV | Conway | SC | 163 | 671 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Country Lakes | MH | Little River | SC | 136 | — | 100.0 | % | 95.6 | % | ||||||||||||||||||||
| Crossroads | MH | Aiken | SC | 168 | — | 73.2 | % | (1) | 60.8 | % | (1) | ||||||||||||||||||
Crossroads RV Resort(2) | RV | Aiken | SC | 20 | 2 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Lakeside Crossing | MH | Conway | SC | 691 | — | 88.4 | % | (1) | 82.9 | % | (1) | ||||||||||||||||||
| Ocean Pines | MH | Garden City | SC | 579 | — | 99.8 | % | 99.5 | % | ||||||||||||||||||||
| Southern Palms | MH | Ladson | SC | 194 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Bell Crossing | MH | Clarksville | TN | 237 | — | 99.2 | % | 99.6 | % | ||||||||||||||||||||
Sun Outdoors Pigeon Forge(2) | RV | Sevierville | TN | 70 | 238 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Archview RV Resort & Campground(2) | RV | Moab | UT | — | 113 | N/A | N/A | ||||||||||||||||||||||
Blue Water Beach Resort(2) | RV | Garden City | UT | — | 177 | N/A | N/A | (4) | |||||||||||||||||||||
Canyonlands RV Resort & Campground(2) | RV | Moab | UT | — | 131 | N/A | N/A | ||||||||||||||||||||||
Moab Valley RV Resort & Campground(2) | RV | Moab | UT | — | 131 | N/A | N/A | ||||||||||||||||||||||
Pony Express RV Resort & Campground(2) | RV | North Salt Lake | UT | — | 185 | N/A | N/A | ||||||||||||||||||||||
Slickrock RV Resort & Campground(2) | RV | Moab | UT | — | 190 | N/A | N/A | ||||||||||||||||||||||
| 47 North | MH | Cle Elum | WA | — | — | N/A | (1) | N/A | (4) | ||||||||||||||||||||
Beachwood Resort(2) | RV | Blaine | WA | 372 | 300 | 100.0 | % | N/A | (4) | ||||||||||||||||||||
Gig Harbor RV Resort(2) | RV | Gig Harbor | WA | — | 112 | N/A | N/A | ||||||||||||||||||||||
Fond du Lac East / Kettle Moraine KOA(2) | RV | Glenbeulah | WI | 231 | 94 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Thunderhill Estates | MH | Sturgeon Bay | WI | 266 | — | 96.6 | % | 97.0 | % | ||||||||||||||||||||
| Other Total | 12,771 | 7,091 | 97.4 | % | 96.3 | % | |||||||||||||||||||||||
| US TOTAL / AVERAGE | 124,798 | 28,973 | 97.3 | % | 97.3 | % | |||||||||||||||||||||||
| CANADA | |||||||||||||||||||||||||||||
Arran Lake RV Resort & Campground(2) | RV | Allenford | ON | 185 | 5 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Craigleith RV Resort & Campground(2) | RV | Clarksburg | ON | 85 | 26 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Deer Lake RV Resort & Campground(2) | RV | Huntsville | ON | 210 | 31 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Grand Oaks RV Resort & Campground(2) | RV | Cayuga | ON | 248 | 40 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| Gulliver's Lake RV Resort & Campground | RV | Millgrove | ON | 198 | — | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Hidden Valley RV Resort & Campground(2) | RV | Normandale | ON | 205 | 40 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Lafontaine RV Resort & Campground(2) | RV | Tiny | ON | 215 | 48 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Lake Avenue RV Resort & Campground(2) | RV | Cherry Valley | ON | 125 | 11 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Pickerel Park RV Resort & Campground(2) | RV | Napanee | ON | 167 | 42 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Pleasant Beach Campground(2) | RV | Sherkston | ON | 87 | 15 | 100.0 | % | N/A | (4) | ||||||||||||||||||||
Sherkston Shores Beach Resort & Campground(2) | RV | Sherkston | ON | 1,575 | 360 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Silver Birches RV Resort & Campground(2) | RV | Lambton Shores | ON | 139 | 23 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Trailside RV Resort & Campground(2) | RV | Seguin | ON | 217 | 20 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Willow Lake RV Resort & Campground(2) | RV | Scotland | ON | 369 | 4 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Willowood RV Resort & Campground(2) | RV | Amherstburg | ON | 143 | 184 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Woodland Lake RV Resort & Campground(2) | RV | Bornholm | ON | 195 | 25 | 100.0 | % | 100.0 | % | ||||||||||||||||||||
| CANADA TOTAL / AVERAGE | 4,363 | 874 | 100.0 | % | 100.0 | % | |||||||||||||||||||||||
42
SUN COMMUNITIES, INC.
| Property Name | MH/RV | City | State | MH and Annual RV Sites as of 12/31/2021 | Transient RV Sites as of 12/31/2021 | Occupancy as of 12/31/2021 | Occupancy as of 12/31/2020 | ||||||||||||||||||||||
| COMPANY TOTAL / AVERAGE | 129,161 | 29,847 | 97.4 | % | 97.3 | % | |||||||||||||||||||||||
(1)Occupancy in these properties reflects the fact that these properties are in a lease-up phase following an expansion, redevelopment or initial construction.
(2)Occupancy percentage excludes transient RV sites. Percentage calculated by dividing revenue producing sites by developed sites. A revenue producing site is defined as a site that is occupied by a paying resident or reserved by a customer with annual or seasonal usage rights. A developed site is defined as an adequate sized parcel of land that has road and utility access which is zoned and licensed (if required) for use as a home site.
(3)We have an ownership interest in Sunset Beach, Strafford and Chincoteague Island, but do not maintain and operate the property.
(4)No occupancy in these properties for the year ended December 31, 2020 as properties were acquired during the year ended December 31, 2021.
(5)Occupancy in these properties at December 31, 2021 and 2020 reflects the redevelopment following asset impairments resulting from Hurricane Irma in September 2017.
The following tables set forth certain information relating to our Safe Harbor branded marinas as of December 31, 2021.
| Marina Property Name | City | State / Municipal | Wet Slips and Dry Storage Spaces as of 12/31/2021 | Wet Slips and Dry Storage Spaces as of 12/31/2020 | ||||||||||
| UNITED STATES | ||||||||||||||
| NORTHEAST | ||||||||||||||
| Connecticut | ||||||||||||||
| Bruce & Johnsons | Branford | CT | 664 | 664 | ||||||||||
Dauntless(1) | Essex | CT | 332 | 332 | ||||||||||
Dauntless Shipyard(1) | Essex | CT | — | — | ||||||||||
| Deep River | Deep River | CT | 310 | 310 | ||||||||||
Essex Island(1) | Essex | CT | — | — | ||||||||||
| Ferry Point | Old Saybrook | CT | 138 | 138 | ||||||||||
Harbor House(2) | Stamford | CT | — | — | ||||||||||
| Mystic | Mystic | CT | 253 | 253 | ||||||||||
| Pilots Point | Westbrook | CT | 879 | 879 | ||||||||||
| Stratford | Stratford | CT | 210 | 210 | ||||||||||
Yacht Haven(2) | Stamford | CT | 513 | 513 | ||||||||||
| Connecticut Total | 3,299 | 3,299 | ||||||||||||
| Rhode Island | ||||||||||||||
Allen Harbor(3) | North Kingstown | RI | 183 | N/A | ||||||||||
| Cove Haven | Barrington | RI | 346 | 346 | ||||||||||
Cowesett(8) | Warwick | RI | 1,178 | 1,178 | ||||||||||
| Greenwich Bay | Warwick | RI | 545 | 545 | ||||||||||
Island Park(4) | Portsmouth | RI | — | — | ||||||||||
| Jamestown Boatyard | Jamestown | RI | 132 | 132 | ||||||||||
| New England Boatworks | Portsmouth | RI | 229 | 229 | ||||||||||
| Newport Shipyard | Newport | RI | 75 | 75 | ||||||||||
Sakonnet(4) | Portsmouth | RI | 445 | 445 | ||||||||||
| Silver Spring | South Kingstown | RI | 100 | 100 | ||||||||||
Wickford(5) | North Kingstown | RI | — | — | ||||||||||
Wickford Cove(5) | North Kingstown | RI | 252 | 252 | ||||||||||
| Rhode Island Total | 3,485 | 3,302 | ||||||||||||
| New York | ||||||||||||||
| Capri | Port Washington | NY | 369 | 369 | ||||||||||
| Gaines | Rouses Point | NY | 272 | 272 | ||||||||||
| Glen Cove | Glen Cove | NY | 540 | 540 | ||||||||||
Greenport(6) | Greenport | NY | 414 | 414 | ||||||||||
43
SUN COMMUNITIES, INC.
| Marina Property Name | City | State / Municipal | Wet Slips and Dry Storage Spaces as of 12/31/2021 | Wet Slips and Dry Storage Spaces as of 12/31/2020 | ||||||||||
| Haverstraw | West Haverstraw | NY | 921 | 921 | ||||||||||
| Post Road | Mamaroneck | NY | 46 | 46 | ||||||||||
Stirling(6) | Greenport | NY | — | — | ||||||||||
| Willsboro Bay | Willsboro | NY | 221 | 221 | ||||||||||
| New York Total | 2,783 | 2,783 | ||||||||||||
| Massachusetts | ||||||||||||||
Edgartown(3) | Edgartown | MA | 161 | N/A | ||||||||||
| Fiddler's Cove | North Falmouth | MA | 229 | 229 | ||||||||||
| Green Harbor | Marshfield | MA | 203 | 203 | ||||||||||
| Hawthorne Cove | Salem | MA | 425 | 425 | ||||||||||
| Marina Bay | Quincy | MA | 710 | 710 | ||||||||||
| Onset Bay | Buzzards Bay | MA | 231 | 231 | ||||||||||
| Plymouth | Plymouth | MA | 197 | 197 | ||||||||||
| Sunset Bay | Hull | MA | 241 | 241 | ||||||||||
Vineyard Haven(3) | Vineyard Haven | MA | 149 | N/A | ||||||||||
| Massachusetts Total | 2,546 | 2,236 | ||||||||||||
| Maryland | ||||||||||||||
| Annapolis | Annapolis | MD | 391 | 391 | ||||||||||
| Bohemia Vista | Chesapeake Bay | MD | 125 | 125 | ||||||||||
| Carroll Island | Baltimore | MD | 479 | 479 | ||||||||||
| Great Oak Landing | Chestertown | MD | 391 | 391 | ||||||||||
| Hacks Point | Earleville | MD | 72 | 72 | ||||||||||
| Narrows Point | Grasonville | MD | 569 | 569 | ||||||||||
| Oxford | Oxford | MD | 135 | 135 | ||||||||||
Podickory Point(3) | Annapolis | MD | 236 | N/A | ||||||||||
| Zahnisers | Solomons | MD | 247 | 247 | ||||||||||
| Maryland Total | 2,645 | 2,409 | ||||||||||||
| New Jersey | ||||||||||||||
| Crystal Point | Point Pleasant | NJ | 284 | 284 | ||||||||||
| Manasquan River | Brick Township | NJ | 234 | 234 | ||||||||||
| New Jersey Total | 518 | 518 | ||||||||||||
| Maine | ||||||||||||||
| Great Island | Harpswell | ME | 157 | 157 | ||||||||||
| Rockland | Rockland | ME | 13 | 13 | ||||||||||
| Maine Total | 170 | 170 | ||||||||||||
| New Hampshire | ||||||||||||||
Wentworth by the Sea(3) | New Castle | NH | 231 | N/A | ||||||||||
| New Hampshire Total | 231 | N/A | ||||||||||||
| Vermont | ||||||||||||||
| Shelburne Shipyard | Shelburne | VT | 174 | 174 | ||||||||||
| Vermont Total | 174 | 174 | ||||||||||||
| SOUTH | ||||||||||||||
| Georgia | ||||||||||||||
| Aqualand | Flowery Branch | GA | 1,625 | 1,625 | ||||||||||
| Bahia Bleu | Thunderbolt | GA | 259 | 259 | ||||||||||
44
SUN COMMUNITIES, INC.
| Marina Property Name | City | State / Municipal | Wet Slips and Dry Storage Spaces as of 12/31/2021 | Wet Slips and Dry Storage Spaces as of 12/31/2020 | ||||||||||
| Hideaway Bay | Flowery Branch | GA | 635 | 635 | ||||||||||
| Trade Winds | Appling | GA | 314 | 314 | ||||||||||
| Georgia Total | 2,833 | 2,833 | ||||||||||||
| Kentucky | ||||||||||||||
| Beaver Creek | Monticello | KY | 356 | 356 | ||||||||||
| Burnside | Somerset | KY | 347 | 347 | ||||||||||
| Grider Hill | Albany | KY | 704 | 704 | ||||||||||
| Jamestown | Jamestown | KY | 707 | 707 | ||||||||||
| Wisdom Dock | Albany | KY | 291 | 291 | ||||||||||
| Kentucky Total | 2,405 | 2,405 | ||||||||||||
| Texas | ||||||||||||||
| Emerald Point | Austin | TX | 651 | 651 | ||||||||||
| Pier 121 | Lewisville | TX | 1,082 | 1,082 | ||||||||||
| Walden | Montgomery | TX | 391 | 391 | ||||||||||
| Texas Total | 2,124 | 2,124 | ||||||||||||
| Arkansas | ||||||||||||||
| Brady Mountain | Royal | AR | 582 | 582 | ||||||||||
| Arkansas Total | 582 | 582 | ||||||||||||
| Tennessee | ||||||||||||||
| Eagle Cove | Byrdstown | TN | 78 | 78 | ||||||||||
| Holly Creek | Celina | TN | 306 | 306 | ||||||||||
| Tennessee Total | 384 | 384 | ||||||||||||
| Mississippi | ||||||||||||||
| Aqua Yacht | Iuka | MS | 587 | 587 | ||||||||||
| Mississippi Total | 587 | 587 | ||||||||||||
| Alabama | ||||||||||||||
| Sportsman | Orange Beach | AL | 729 | 729 | ||||||||||
| Alabama Total | 729 | 729 | ||||||||||||
| Oklahoma | ||||||||||||||
| Harbors View | Afton | OK | 172 | 172 | ||||||||||
| Oklahoma Total | 172 | 172 | ||||||||||||
| SOUTHEAST | ||||||||||||||
| Florida | ||||||||||||||
Angler House(3) | Islamorada | FL | 22 | N/A | ||||||||||
| Burnt Store | Punta Gorda | FL | 975 | 975 | ||||||||||
| Calusa Island | Goodland | FL | 620 | 620 | ||||||||||
| Cape Harbour | Cape Coral | FL | 256 | 256 | ||||||||||
Emerald Coast(3) | Niceville | FL | 408 | N/A | ||||||||||
Harborage Yacht Club(3) | Stuart | FL | 297 | N/A | ||||||||||
| Harbortown | Fort Pierce | FL | 350 | 350 | ||||||||||
Islamorada(3) | Islamorada | FL | 267 | N/A | ||||||||||
Lauderdale Marine Center(3) | Fort Lauderdale | FL | 101 | N/A | ||||||||||
Marathon(3) | Marathon | FL | 153 | N/A | ||||||||||
| New Port Cove | Riviera Beach | FL | 362 | 362 | ||||||||||
45
SUN COMMUNITIES, INC.
| Marina Property Name | City | State / Municipal | Wet Slips and Dry Storage Spaces as of 12/31/2021 | Wet Slips and Dry Storage Spaces as of 12/31/2020 | ||||||||||
| North Palm Beach | North Palm Beach | FL | 110 | 110 | ||||||||||
| Old Port Cove | North Palm Beach | FL | 208 | 208 | ||||||||||
| Pier 77 | Bradenton | FL | 199 | 199 | ||||||||||
| Pineland | Bokeelia | FL | 259 | 259 | ||||||||||
| Regatta Pointe | Palmetto | FL | 367 | 367 | ||||||||||
| Riviera Beach | Riviera Beach | FL | 20 | 20 | ||||||||||
| Siesta Key | Sarasota | FL | 198 | 198 | ||||||||||
South Fork(7) | Fort Lauderdale | FL | — | — | ||||||||||
| West Palm Beach | West Palm Beach | FL | 61 | 61 | ||||||||||
| Florida Total | 5,233 | 3,985 | ||||||||||||
| South Carolina | ||||||||||||||
| Beaufort | Beaufort | SC | 124 | 124 | ||||||||||
| Bristol | Charleston | SC | 249 | 249 | ||||||||||
Charleston City(9) | Charleston | SC | 450 | 450 | ||||||||||
| City Boatyard | Charleston | SC | 213 | 213 | ||||||||||
Port Royal(3) | Port Royal | SC | 252 | N/A | ||||||||||
| Port Royal Landing | Port Royal | SC | 161 | 161 | ||||||||||
| Reserve Harbor | Pawleys Island | SC | 239 | 239 | ||||||||||
| Skull Creek | Hilton Head | SC | 186 | 186 | ||||||||||
| South Carolina Total | 1,874 | 1,622 | ||||||||||||
| North Carolina | ||||||||||||||
| Kings Point | Cornelius | NC | 784 | 784 | ||||||||||
| Peninsula Yacht Club | Cornelius | NC | 476 | 476 | ||||||||||
| Skippers Landing | Troutman | NC | 389 | 389 | ||||||||||
| South Harbour Village | Southport | NC | 146 | 146 | ||||||||||
| Westport | Denver | NC | 587 | 587 | ||||||||||
| North Carolina Total | 2,382 | 2,382 | ||||||||||||
| Virginia | ||||||||||||||
Stingray Point(3) | Deltaville | VA | 228 | N/A | ||||||||||
| Virginia Total | 228 | N/A | ||||||||||||
| MIDWEST | ||||||||||||||
| Michigan | ||||||||||||||
| Belle Maer | Harrison Township | MI | 542 | 542 | ||||||||||
Detroit River(3) | Detroit | MI | 473 | N/A | ||||||||||
| Grand Isle | Grand Haven | MI | 450 | 450 | ||||||||||
| Great Lakes | Muskegon | MI | 466 | 466 | ||||||||||
| Jefferson Beach | St. Clair Shores | MI | 898 | 898 | ||||||||||
| Toledo Beach | La Salle Township | MI | 363 | 363 | ||||||||||
| Michigan Total | 3,192 | 2,719 | ||||||||||||
| Ohio | ||||||||||||||
| Lakefront | Port Clinton | OH | 477 | 477 | ||||||||||
| Sandusky | Sandusky | OH | 550 | 550 | ||||||||||
| Ohio Total | 1,027 | 1,027 | ||||||||||||
| WEST | ||||||||||||||
| California | ||||||||||||||
| Anacapa Isle | Oxnard | CA | 450 | 450 | ||||||||||
46
SUN COMMUNITIES, INC.
| Marina Property Name | City | State / Municipal | Wet Slips and Dry Storage Spaces as of 12/31/2021 | Wet Slips and Dry Storage Spaces as of 12/31/2020 | ||||||||||
| Ballena Isle | Alameda | CA | 414 | 414 | ||||||||||
| Cabrillo Isle | San Diego | CA | 527 | N/A | ||||||||||
| Emeryville | Emeryville | CA | 460 | 460 | ||||||||||
| Loch Lomond | San Rafael | CA | 529 | 529 | ||||||||||
Shelter Island(3) | San Diego | CA | 60 | N/A | ||||||||||
South Bay(3) | Chula Vista | CA | 413 | N/A | ||||||||||
Sunroad(3) | San Diego | CA | 643 | N/A | ||||||||||
| Ventura Isle | Ventura | CA | 444 | 444 | ||||||||||
| California Total | 3,940 | 2,297 | ||||||||||||
| US TOTAL | 43,543 | 38,739 | ||||||||||||
| PUERTO RICO | ||||||||||||||
Puerto del Rey(3) | Fajardo | PR | 1,612 | N/A | ||||||||||
| PUERTO RICO TOTAL | 1,612 | N/A | ||||||||||||
| COMPANY TOTAL | 45,155 | 38,739 | ||||||||||||
(1)Wet slips and dry storage spaces from Dauntless Shipyard and Essex Island are grouped into Dauntless.
(2)Wet slips and dry storage spaces from Harbor House are grouped into Yacht Haven.
(3)Property acquired during year ended December 31, 2021.
(4)Wet slips and dry storage spaces from Island Park are grouped into Sakonnet.
(5)Wet slips and dry storage spaces from Wickford are grouped into Wickford Cove.
(6)Wet slips and dry storage spaces from Stirling are grouped into Greenport.
(7)Property currently under development.
(8)Wet slips and dry storage spaces from Apponaug Harbor are grouped into Cowesett.
(9)Wet slips and dry storage spaces from Ashley Fuels are grouped into Charleston City.
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SUN COMMUNITIES, INC.
ITEM 3. LEGAL PROCEEDINGS
Legal Proceedings Arising in the Ordinary Course of Business
We are involved in various legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material adverse impact on our results of operations or financial condition.
Environmental Matters
Item 103 of SEC Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will exceed an applied threshold not to exceed $1.0 million. Applying this threshold, there are no environmental matters to disclose for the year ended December 31, 2021.
ITEM 4. MINE SAFETY DISCLOSURES
None.
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SUN COMMUNITIES, INC.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock has been listed on the NYSE since December 8, 1993, and trades under the symbol "SUI." On February 15, 2022, the closing share price of our common stock was $190.55 per share on the NYSE, and there were 484 holders of record for the 115,961,958 outstanding shares of common stock.
On February 15, 2022, the following OP units of the Operating Partnership were outstanding:
| OP Units | OP Units Issued and Outstanding | Exchangeable Shares of Common Stock | ||||||||||||
| Aspen preferred OP units | 1,283,819 | 388,070 | ||||||||||||
| Series A-1 preferred OP units | 273,524 | 667,132 | ||||||||||||
| Series A-3 preferred OP units | 40,268 | 74,917 | ||||||||||||
| Series C preferred OP units | 306,013 | 339,674 | ||||||||||||
| Series D preferred OP units | 488,958 | 391,166 | ||||||||||||
| Series E preferred OP units | 85,000 | 58,621 | ||||||||||||
| Series F preferred OP units | 90,000 | 56,250 | ||||||||||||
| Series G preferred OP units | 240,710 | 155,297 | ||||||||||||
| Series H preferred OP units | 581,407 | 354,516 | ||||||||||||
| Series I preferred OP units | 922,000 | 562,195 | ||||||||||||
| Series J preferred OP units | 240,000 | 145,455 | ||||||||||||
| Common OP units | 2,552,378 | 2,552,378 | ||||||||||||
| Total | 7,104,077 | 5,745,671 | ||||||||||||
We have historically paid regular quarterly distributions to holders of our common stock and common OP units. In addition, we are obligated to make distributions to holders of shares of Aspen preferred OP units, Series A-1 preferred OP units, Series C preferred OP units, Series D preferred OP units, Series E preferred OP units, Series F preferred OP units, Series G preferred OP units, Series H preferred OP units, Series I preferred OP units, Series J preferred OP units, and Series A-3 preferred OP units. See "Structure of the Company" under Part I, Item 1 of this Annual Report on Form 10-K. Our ability to make distributions on our common stock and preferred OP units, payments on our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future. The decision to declare and pay distributions on shares of our common stock and common OP units in the future, as well as the timing, amount and composition of any such future distributions, will be at the sole discretion of our Board of Directors in light of conditions then existing, including our earnings, financial condition, capital requirements, debt maturities, the availability of debt and equity capital, applicable REIT and legal restrictions, general overall economic conditions and other factors.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table reflects information about the securities authorized for issuance under our equity compensation plans as of December 31, 2021:
| Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of shares of common stock remaining available for future issuance under equity compensation plans (excluding securities reflected in column a) | ||||||||||||||||||
| Plan Category | (a) | (b) | (c) | |||||||||||||||||
| Equity compensation plans approved by stockholders | — | $ | — | 627,632 | ||||||||||||||||
Total | — | $ | — | 627,632 | ||||||||||||||||
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SUN COMMUNITIES, INC.
Recent Sales of Unregistered Securities
From time to time, we may issue shares of common stock in exchange for OP units that may be tendered to the Operating Partnership for redemption in accordance with the terms and provisions of the limited partnership agreement of the Operating Partnership. Such shares are issued based on the exchange ratios and formulas described in "Structure of the Company" under Part I, Item 1 of this Annual Report on Form 10-K. Below is the activity of conversions for the quarter and year ended December 31, 2021:
| Three Months Ended | Year Ended | |||||||||||||||||||||||||
| December 31, 2021 | December 31, 2021 | |||||||||||||||||||||||||
| OP Units | Conversion Rate | Units / Shares | Common Stock | Units / Shares | Common Stock | |||||||||||||||||||||
| Common OP units | 1.0000 | 7,640 | 7,640 | 86,364 | 86,364 | |||||||||||||||||||||
| Series A-1 preferred OP units | 2.4390 | 414 | 1,009 | 19,710 | 48,067 | |||||||||||||||||||||
| Series C preferred OP units | 1.1100 | 140 | 155 | 140 | 155 | |||||||||||||||||||||
All of the securities described above were issued in private placements in reliance on Section 4(a)(2) of the Securities Act, including Regulation D promulgated thereunder, based on certain investment representations made by the parties to whom the securities were issued. No underwriters were used in connection with any of such issuances.
Purchases of Equity Securities
Common stock repurchases during the three months ended December 31, 2021 were:
| Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs | |||||||||||||||||||||||
| Period | (a) | (b) | (c) | (d) | ||||||||||||||||||||||
| October 1, 2021 - October 31, 2021 | 4,961 | $ | 195.04 | — | $ | — | ||||||||||||||||||||
| November 1, 2021 - November 30, 2021 | 783 | $ | 195.13 | — | $ | — | ||||||||||||||||||||
| December 1, 2021 - December 31, 2021 | — | $ | — | — | $ | — | ||||||||||||||||||||
| Total | 5,744 | $ | 195.05 | — | $ | — | ||||||||||||||||||||
During the three months ended December 31, 2021, we withheld 5,744 shares from employees to satisfy estimated statutory income tax obligations related to vesting of restricted stock awards. The value of the common stock withheld was based on the closing price of our common stock on the applicable vesting date.
Performance Graph
Set forth below is a line graph comparing the yearly percentage change in the cumulative total shareholder return on our common stock against the cumulative total return of a broad market index composed of all issuers listed on the NYSE and an industry index comprised of 13 publicly traded REITs, for the five year period ending on December 31, 2021. This line graph assumes a $100.00 investment on December 31, 2016, a reinvestment of distributions and actual increase of the market value of our common stock relative to an initial investment of $100.00. The comparisons in this table are required by the SEC and are not intended to forecast or be indicative of possible future performance of our common stock.
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SUN COMMUNITIES, INC.
Peer Group
We utilize peer group data for quantitative benchmarking against external market participants. We select our peer group based on a number of quantitative and qualitative factors including, but not limited to, revenues, total assets, market capitalization, industry, sub-industry, location, total shareholder return history, executive compensation components and peer decisions made by other companies. From time to time, we update our peer group based on analysis of the aforementioned factors and application of judgment.
| Year Ended | ||||||||||||||||||||||||||||||||||||||
| Index | December 31, 2016 | December 31, 2017 | December 31, 2018 | December 31, 2019 | December 31, 2020 | December 31, 2021 | ||||||||||||||||||||||||||||||||
| Sun Communities, Inc. | $ | 100.00 | $ | 124.94 | $ | 141.05 | $ | 212.86 | $ | 220.49 | $ | 310.43 | ||||||||||||||||||||||||||
| Dow Jones U.S. Real Estate Residential Index | $ | 100.00 | $ | 106.44 | $ | 109.94 | $ | 143.84 | $ | 129.07 | $ | 204.42 | ||||||||||||||||||||||||||
| NYSE Composite Index | $ | 100.00 | $ | 118.73 | $ | 108.10 | $ | 135.68 | $ | 145.16 | $ | 175.17 | ||||||||||||||||||||||||||
SUI Peer Group(1) | $ | 100.00 | $ | 106.93 | $ | 106.28 | $ | 134.00 | $ | 122.70 | $ | 204.19 | ||||||||||||||||||||||||||
(1)SUI peer group includes: American Campus Communities, Inc., Apartment Investment and Management Company, AvalonBay Communities, Inc., Camden Property Trust, CubeSmart, Equity Lifestyles Properties, Inc., Essex Property Trust, Inc., Extra Space Storage Inc., Federal Realty Investment Trust, Invitation Homes, Inc., Mid-America Apartment Communities, Inc., The Macerich Company and UDR, Inc.
The information included under the heading "Performance Graph" is not to be treated as "soliciting material" or as "filed" with the SEC, and is not incorporated by reference into any filing by the Company under the Securities Act or the Exchange Act that is made on, before or after the date of filing of this Annual Report on Form 10-K.
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SUN COMMUNITIES, INC.
ITEM 6. [Reserved]
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SUN COMMUNITIES, INC.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and accompanying footnotes thereto included in this Annual Report on Form 10-K. In addition to the results presented in accordance with GAAP below, we have provided NOI and FFO as supplemental performance measures. Refer to Non-GAAP Financial Measures in this Item 7 for additional information.
OVERVIEW
We are a fully integrated REIT. As of December 31, 2021, we owned and operated, directly or indirectly, or had an interest in, a portfolio of 602 developed properties located in 39 states throughout the United States, Ontario, Canada and Puerto Rico, including 284 MH communities, 160 RV resorts, 33 properties containing both MH and RV sites, and 125 marinas. We have been in the business of acquiring, operating, developing and expanding MH communities and RV resorts since 1975 and marinas since 2020. We lease individual sites with utilities access for placement of manufactured homes, RVs or boats to our customers. We are also engaged in the marketing, selling and leasing of new and pre-owned homes to current and future residents in our MH communities. The Rental Program operations within our MH communities support and enhance our occupancy levels, property performance and cash flows.
COVID-19 IMPACT
The impact of COVID-19 in 2021 was minimal compared to 2020.
In response to the COVID-19 pandemic, we continue to provide essential services using social distancing techniques and minimal contact. To promote social distancing, we are encouraging our residents to use our online rent payment portals and other payment methods. We continue to follow the numerous health and safety measures we previously implemented at our communities and our main office to keep team members safe. These measures include increased cleaning and sanitation of shared spaces and social distancing protocols throughout our footprint. We closely monitor and track orders by federal, state and local authorities, provide status updates to our operations and main office leadership teams, and adjust our operating processes accordingly. We have implemented and continue to encourage remote working arrangements, wherever possible, to keep our team members safe and to do our part to promote social distancing.
The extent to which the COVID-19 pandemic impacts our operations, financial condition and financial results will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. The uncertainty of this situation precludes any prediction as to the full impact of the COVID-19 pandemic.
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SUN COMMUNITIES, INC.
EXECUTIVE SUMMARY
2021 General Overview
•Total revenues for 2021 increased 62.5 percent to $2.3 billion.
•Core FFO for 2021 was $6.51 per diluted share and OP unit, an increase of 27.9 percent over 2020.
•Achieved MH and RV real property Same Community NOI growth of 11.2 percent over 2020.
•Attained MH and RV Same Community occupancy of 98.9 percent.
•Home sales volume increased 42.6 percent to 4,088 homes in 2021 as compared to 2,866 in 2020.
•Brokered homes sales increased by 38.0 percent to 3,528 in 2021 as compared to 2,557 in 2020.
•Achieved 1-year, 3-year and 5-year total shareholder return of 40.8 percent, 120.1 percent and 210.3 percent, respectively, outperforming or in-line with the MSCI US REIT, Russell 1000, U.S. REIT Residential and S&P 500 indexes.
•We acquired 54 properties, totaling over 16,800 sites, wet slips and dry storage spaces, and sites for expansion for a total purchase price of $1.4 billion.
•Completed the construction of over 1,030 total sites at eight ground-up developments and re-development properties.
•Delivered nearly 580 total expansion sites in 11 MH and RV properties.
•Successfully integrated Safe Harbor, which contributed 16.5 percent of the real property NOI - Total Portfolio in 2021.
•Received investment grade ratings of BBB and Baa3 with a stable outlook from S&P Global and Moody's, respectively, which provides us with an additional source of financing.
•Closed two underwritten senior unsecured note offerings for aggregate net proceeds of approximately $1.2 billion.
•Closed an underwritten registered public offering, in which we sold 4,000,000 shares of our common stock and completed a forward sale agreement for an additional 4,050,000 shares of our common stock, for net proceeds of approximately $1.1 billion.
•Completed two forward sale agreements relating to an underwritten registered public offering of 4,025,000 shares of our common stock at a public offering price of $185.00 per share.
•Entered into a definitive agreement to acquire Park Holidays, the second largest owner and operator of holiday communities in the United Kingdom for approximately £950.0 million, or $1.3 billion.
Property Operations
Occupancy in our MH and annual RV properties, as well as our ability to increase rental rates, directly affect revenues. Our revenue streams are predominantly derived from customers renting our sites on a long-term basis. Our Same Community properties continue to achieve revenue and occupancy increases which drive continued NOI growth. Our home sales in our communities remained strong in 2021 and we expect this trend to continue.
| Year Ended | ||||||||||||||||||||
| Portfolio Information: | December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||||
Occupancy % - Total Portfolio - MH and Annual RV blended(1) | 97.4 | % | 97.3 | % | 96.4 | % | ||||||||||||||
Occupancy % - Same Community - Adjusted MH and Annual RV blended(1)(2)(3) | 98.9 | % | 97.5 | % | 97.0 | % | ||||||||||||||
| Core FFO per share | $ | 6.51 | $ | 5.09 | $ | 4.92 | ||||||||||||||
Real property NOI - Total Portfolio (in thousands) | $ | 982,123 | $ | 721,302 | $ | 649,706 | ||||||||||||||
Real property NOI - Same Community (in thousands) - MH and RV | $ | 763,389 | $ | 658,431 | $ | 630,672 | ||||||||||||||
| Homes sales volume | 4,088 | 2,866 | 3,439 | |||||||||||||||||
(1) Occupancy percent includes annual RV sites and excludes transient RV sites.
(2) Occupancy percent excludes recently completed but vacant expansion sites.
(3) Same Community is based on the as reported year end Same Community count for each respective year.
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SUN COMMUNITIES, INC.
Acquisition Activity
During the past three years, we have completed acquisitions of over 225 properties with over 28,500 sites and over 45,000 wet slips and dry storage spaces located in high growth areas and retirement and vacation destinations such as California, Florida, Texas, Arizona and coastal areas in the Eastern United States.
During 2021, we acquired 35(1) MH communities and RV resorts, and 19(1) marinas, as detailed below:
MH & RV Property Name(1) | Property Type | Sites, Wet Slips, and Dry Storage Spaces | State | Month Acquired | ||||||||||||||||||||||
| Sun Outdoors Association Island | RV | 294 | NY | January | ||||||||||||||||||||||
| Blue Water Beach Resort | RV | 177 | UT | February | ||||||||||||||||||||||
| Tranquility MHC | MH | 25 | FL | February | ||||||||||||||||||||||
| Islamorada and Angler House | Marina | 251 | FL | February | ||||||||||||||||||||||
| Prime Martha's Vineyard | Marina | 395 | MA | March | ||||||||||||||||||||||
| Pleasant Beach Campground | RV | 102 | ON, Canada | March | ||||||||||||||||||||||
| Sun Outdoors Cape Charles | RV | 669 | VA | March | ||||||||||||||||||||||
| Beachwood Resort | RV | 672 | WA | March | ||||||||||||||||||||||
| ThemeWorld RV Resort | RV | 148 | FL | April | ||||||||||||||||||||||
| Sylvan Glen Estates | MH | 476 | MI | April | ||||||||||||||||||||||
| Shelter Island Boatyard | Marina | 52 | CA | May | ||||||||||||||||||||||
| Lauderdale Marine Center | Marina | 206 | FL | May | ||||||||||||||||||||||
| Apponaug Harbor | Marina | 348 | RI | June | ||||||||||||||||||||||
| Cabrillo Isle | Marina | 476 | CA | June | ||||||||||||||||||||||
| Marathon | Marina | 135 | FL | June | ||||||||||||||||||||||
| Allen Harbor | Marina | 176 | RI | July | ||||||||||||||||||||||
Cisco Grove Campground & RV(2) | RV | 18 | CA | July | ||||||||||||||||||||||
Four Leaf Portfolio(3) | MH | 2,545 | MI / IN | July | ||||||||||||||||||||||
| Harborage Yacht Club | Marina | 300 | FL | July | ||||||||||||||||||||||
| Zeman Portfolio | RV | 686 | IL / NJ | July | ||||||||||||||||||||||
| Southern Leisure RV Resort | RV | 496 | FL | August | ||||||||||||||||||||||
| Sunroad Marina | Marina | 617 | CA | August | ||||||||||||||||||||||
| Lazy Lakes RV Resort | RV | 99 | FL | August | ||||||||||||||||||||||
| Puerto del Rey | Marina | 1,746 | Puerto Rico | September | ||||||||||||||||||||||
| Stingray Point | Marina | 222 | VA | September | ||||||||||||||||||||||
| Detroit River | Marina | 440 | MI | September | ||||||||||||||||||||||
| Jetstream RV Resort at NASA | RV | 202 | TX | September | ||||||||||||||||||||||
Beaver Brook Campground(4) | RV | 204 | ME | October | ||||||||||||||||||||||
| Emerald Coast | Marina | 311 | FL | November | ||||||||||||||||||||||
| Tall Pines Harbor Campground | RV | 241 | VA | November | ||||||||||||||||||||||
| Wells Beach Resort Campground | RV | 231 | ME | November | ||||||||||||||||||||||
| Port Royal | Marina | 167 | SC | November | ||||||||||||||||||||||
| Podickory Point | Marina | 209 | MD | December | ||||||||||||||||||||||
| Jellystone Park at Mammoth Cave | RV | 315 | KY | December | ||||||||||||||||||||||
| South Bay | Marina | 333 | CA | December | ||||||||||||||||||||||
| Wentworth by the Sea | Marina | 155 | NH | December | ||||||||||||||||||||||
| Rocky Mountain RV Park | RV | 75 | MT | December | ||||||||||||||||||||||
| Haas Lake RV Park Campground | RV | 492 | MI | December | ||||||||||||||||||||||
| Pearwood RV Resort | RV | 144 | TX | December | ||||||||||||||||||||||
| Holly Shores Camping Resort | RV | 310 | NJ | December | ||||||||||||||||||||||
| Pheasant Ridge RV Park | RV | 130 | OR | December | ||||||||||||||||||||||
Coyote Ranch Resort(5) | RV | 165 | TX | December | ||||||||||||||||||||||
| Jellystone Park at Whispering Pines | RV | 131 | TX | December | ||||||||||||||||||||||
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SUN COMMUNITIES, INC.
MH & RV Property Name(1) | Property Type | Sites, Wet Slips, and Dry Storage Spaces | State | Month Acquired | ||||||||||||||||||||||
| Hospitality Creek Campground | RV | 230 | NJ | December | ||||||||||||||||||||||
| Total | 15,816 | |||||||||||||||||||||||||
(1) Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional detail on the acquisition of MH, RV and marina properties.
(2) Contains 407 development sites.
(3) Contains 340 development sites.
(4) Contains 150 development sites.
(5) Contains 165 development sites.
Disposition Activity
On July 2, 2021, we sold two MH communities located in Indiana and Missouri, containing a combined 677 sites, for $67.5 million. The gain from the sale of the property was approximately $49.4 million.
On August 26, 2021, we sold four MH communities located in Arizona, Illinois and Missouri, containing a combined 1,137 sites, for $94.6 million. The gain from the sale of the property was approximately $58.7 million.
Construction Activity
Ground-up Developments - During the year ended December 31, 2021, we constructed over 1,000 total sites at seven ground-up development properties and one re-development located in California, Colorado, Texas, Florida, North Carolina and South Carolina.
Expansions - We have been focused on expansion opportunities adjacent to our existing properties, and we have developed over 2,100 sites within the past three years. We have expanded nearly 580 total sites at 11 MH and RV properties in 2021.
We continue to expand our properties utilizing our inventory of owned and entitled land. We have 10,672 MH and RV sites suitable for future development.
Markets
Our MH and RV properties are largely concentrated in Florida, Michigan, Texas and California, which contain 62.6 percent of our total MH and RV sites. We have expanded our market share in multiple states through recent acquisitions and increased our property holdings in high growth areas of the U.S. including retirement and vacation destinations.
We have also experienced strong revenue growth through recent acquisitions of RV resorts. The age demographic of RV resorts is attractive, as the population of retirement age adults in the U.S. is growing. RV resorts have become a trending vacation opportunity not only for the retiree population, but as an affordable vacation alternative for families and millennials.
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SUN COMMUNITIES, INC.
The following table identifies our MH and RV markets by total sites:
| December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||
| Major Market | Number of Properties | Total Sites | % of Total Sites | Number of Properties | Total Sites | % of Total Sites | ||||||||||||||||||||||||||||||||
| Florida | 132 | 46,733 | 29.4 | % | 128 | 45,814 | 30.7 | % | ||||||||||||||||||||||||||||||
| Michigan | 84 | 33,126 | 20.8 | % | 74 | 29,632 | 19.8 | % | ||||||||||||||||||||||||||||||
| Texas | 30 | 10,768 | 6.8 | % | 24 | 9,576 | 6.4 | % | ||||||||||||||||||||||||||||||
| California | 36 | 8,934 | 5.6 | % | 35 | 8,906 | 6.0 | % | ||||||||||||||||||||||||||||||
| Arizona | 12 | 5,308 | 3.3 | % | 14 | 5,660 | 3.8 | % | ||||||||||||||||||||||||||||||
| Ontario, Canada | 16 | 5,237 | 3.3 | % | 15 | 5,056 | 3.4 | % | ||||||||||||||||||||||||||||||
| Indiana | 12 | 4,176 | 2.6 | % | 12 | 4,176 | 2.8 | % | ||||||||||||||||||||||||||||||
| New Jersey | 11 | 3,990 | 2.5 | % | 8 | 3,160 | 2.1 | % | ||||||||||||||||||||||||||||||
| Colorado | 10 | 3,539 | 2.2 | % | 10 | 3,415 | 2.3 | % | ||||||||||||||||||||||||||||||
| Virginia | 10 | 3,435 | 2.2 | % | 8 | 1,875 | 1.3 | % | ||||||||||||||||||||||||||||||
| Maine | 15 | 3,431 | 2.2 | % | 13 | 2,995 | 2.0 | % | ||||||||||||||||||||||||||||||
| New York | 10 | 3,141 | 2.0 | % | 9 | 2,841 | 1.9 | % | ||||||||||||||||||||||||||||||
| Ohio | 9 | 2,925 | 1.8 | % | 9 | 2,925 | 2.0 | % | ||||||||||||||||||||||||||||||
| South Carolina | 6 | 2,624 | 1.7 | % | 6 | 2,503 | 1.7 | % | ||||||||||||||||||||||||||||||
| New Hampshire | 10 | 2,398 | 1.5 | % | 10 | 2,237 | 1.5 | % | ||||||||||||||||||||||||||||||
| Illinois | 5 | 2,235 | 1.4 | % | 5 | 2,151 | 1.4 | % | ||||||||||||||||||||||||||||||
| Connecticut | 16 | 2,005 | 1.3 | % | 16 | 2,005 | 1.3 | % | ||||||||||||||||||||||||||||||
| Maryland | 6 | 1,852 | 1.2 | % | 6 | 1,852 | 1.2 | % | ||||||||||||||||||||||||||||||
| Delaware | 4 | 1,716 | 1.1 | % | 4 | 1,709 | 1.1 | % | ||||||||||||||||||||||||||||||
| Pennsylvania | 5 | 1,536 | 1.0 | % | 5 | 1,535 | 1.0 | % | ||||||||||||||||||||||||||||||
| Georgia | 4 | 1,414 | 0.9 | % | 4 | 1,355 | 0.9 | % | ||||||||||||||||||||||||||||||
| Oregon | 6 | 1,330 | 0.8 | % | 5 | 1,200 | 0.8 | % | ||||||||||||||||||||||||||||||
| North Carolina | 5 | 1,123 | 0.7 | % | 5 | 1,083 | 0.7 | % | ||||||||||||||||||||||||||||||
| Massachusetts | 3 | 927 | 0.6 | % | 3 | 928 | 0.6 | % | ||||||||||||||||||||||||||||||
| Utah | 6 | 927 | 0.6 | % | 5 | 750 | 0.5 | % | ||||||||||||||||||||||||||||||
| Washington | 2 | 784 | 0.5 | % | 1 | 112 | 0.1 | % | ||||||||||||||||||||||||||||||
| Wisconsin | 2 | 591 | 0.4 | % | 2 | 588 | 0.4 | % | ||||||||||||||||||||||||||||||
| Tennessee | 2 | 545 | 0.3 | % | 2 | 545 | 0.4 | % | ||||||||||||||||||||||||||||||
| Minnesota | 1 | 475 | 0.3 | % | 1 | 475 | 0.3 | % | ||||||||||||||||||||||||||||||
| Iowa | 1 | 413 | 0.3 | % | 1 | 413 | 0.3 | % | ||||||||||||||||||||||||||||||
| Louisiana | 1 | 334 | 0.2 | % | 1 | 226 | 0.2 | % | ||||||||||||||||||||||||||||||
| Nevada | 1 | 324 | 0.2 | % | 1 | 324 | 0.2 | % | ||||||||||||||||||||||||||||||
| Kentucky | 1 | 315 | 0.2 | % | — | — | — | % | ||||||||||||||||||||||||||||||
| Alabama | 1 | 167 | 0.1 | % | 1 | 142 | 0.1 | % | ||||||||||||||||||||||||||||||
| Mississippi | 1 | 155 | 0.1 | % | 1 | 155 | 0.1 | % | ||||||||||||||||||||||||||||||
| Montana | 1 | 75 | — | % | — | — | — | % | ||||||||||||||||||||||||||||||
| Missouri | — | — | — | % | 2 | 976 | 0.7 | % | ||||||||||||||||||||||||||||||
| 477 | 159,008 | 446 | 149,295 | |||||||||||||||||||||||||||||||||||
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SUN COMMUNITIES, INC.
Our marinas are largely concentrated in Florida, Connecticut, Rhode Island, Massachusetts, New York, Maryland and California.
The following table identifies our marina markets by total wet slips and dry storage spaces:
| December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Major Market | Number of Properties | Wet Slips | Dry Storage Spaces | Total Wet Slips / Dry Storage Spaces | % Wet Slips / Dry Storage Spaces | Number of Properties | Wet Slips | Dry Storage Spaces | Total Wet Slips / Dry Storage Spaces | % Wet Slips / Dry Storage Spaces | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Florida | 20 | 2,701 | 2,532 | 5,233 | 11.6 | % | 14 | 2,038 | 1,947 | 3,985 | 10.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| California | 9 | 3,884 | 56 | 3,940 | 8.7 | % | 5 | 2,297 | — | 2,297 | 5.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Rhode Island | 12 | 3,308 | 177 | 3,485 | 7.7 | % | 11 | 3,292 | 10 | 3,302 | 8.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Connecticut | 11 | 3,299 | — | 3,299 | 7.3 | % | 11 | 3,299 | — | 3,299 | 8.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Michigan | 6 | 2,637 | 555 | 3,192 | 7.1 | % | 5 | 2,268 | 451 | 2,719 | 7.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Georgia | 4 | 2,587 | 246 | 2,833 | 6.3 | % | 4 | 2,587 | 246 | 2,833 | 7.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| New York | 8 | 2,783 | — | 2,783 | 6.2 | % | 8 | 2,783 | — | 2,783 | 7.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Maryland | 9 | 2,156 | 489 | 2,645 | 5.9 | % | 8 | 2,022 | 387 | 2,409 | 6.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Massachusetts | 9 | 2,045 | 501 | 2,546 | 5.6 | % | 7 | 1,988 | 248 | 2,236 | 5.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Kentucky | 5 | 2,365 | 40 | 2,405 | 5.3 | % | 5 | 2,365 | 40 | 2,405 | 6.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| North Carolina | 5 | 1,081 | 1,301 | 2,382 | 5.3 | % | 5 | 1,081 | 1,301 | 2,382 | 6.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Texas | 3 | 1,841 | 283 | 2,124 | 4.6 | % | 3 | 1,841 | 283 | 2,124 | 5.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| South Carolina | 8 | 1,261 | 613 | 1,874 | 4.1 | % | 7 | 1,249 | 373 | 1,622 | 4.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Puerto Rico | 1 | 987 | 625 | 1,612 | 3.6 | % | — | — | — | — | — | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Ohio | 2 | 888 | 139 | 1,027 | 2.3 | % | 2 | 888 | 139 | 1,027 | 2.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Alabama | 1 | 81 | 648 | 729 | 1.6 | % | 1 | 81 | 648 | 729 | 1.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Mississippi | 1 | 453 | 134 | 587 | 1.3 | % | 1 | 453 | 134 | 587 | 1.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Arkansas | 1 | 582 | — | 582 | 1.3 | % | 1 | 582 | — | 582 | 1.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| New Jersey | 2 | 488 | 30 | 518 | 1.1 | % | 2 | 488 | 30 | 518 | 1.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Tennessee | 2 | 384 | — | 384 | 0.9 | % | 2 | 384 | — | 384 | 1.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| New Hampshire | 1 | 231 | — | 231 | 0.5 | % | — | — | — | — | — | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Virginia | 1 | 228 | — | 228 | 0.5 | % | — | — | — | — | — | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Vermont | 1 | 102 | 72 | 174 | 0.4 | % | 1 | 102 | 72 | 174 | 0.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma | 1 | 172 | — | 172 | 0.4 | % | 1 | 172 | — | 172 | 0.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Maine | 2 | 170 | — | 170 | 0.4 | % | 2 | 170 | — | 170 | 0.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 125 | 36,714 | 8,441 | 45,155 | 106 | 32,430 | 6,309 | 38,739 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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SUN COMMUNITIES, INC.
NON-GAAP FINANCIAL MEASURES
In addition to the results reported in accordance with GAAP in our "Results of Operations" below, we have provided information regarding net operating income ("NOI") and funds from operations ("FFO") as supplemental performance measures. We believe NOI and FFO are appropriate measures given their wide use by and relevance to investors and analysts following the real estate industry. NOI provides a measure of rental operations and does not factor in depreciation, amortization and non-property specific expenses such as general and administrative expenses. FFO, reflecting the assumption that real estate values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation / amortization of real estate assets. In addition, NOI and FFO are commonly used in various ratios, pricing multiples / yields and returns and valuation calculations used to measure financial position, performance and value.
NOI is derived from operating revenues minus property operating expenses and real estate taxes. NOI is a non-GAAP financial measure that we believe is helpful to investors as a supplemental measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. We use NOI as a key measure when evaluating performance and growth of particular properties and / or groups of properties. The principal limitation of NOI is that it excludes depreciation, amortization, interest expense and non-property specific expenses such as general and administrative expenses, all of which are significant costs. Therefore, NOI is a measure of the operating performance of our properties rather than of the Company overall.
We believe that GAAP net income (loss) is the most directly comparable measure to NOI. NOI should not be considered to be an alternative to GAAP net income (loss) as an indication of our financial performance or GAAP cash flow from operating activities as a measure of our liquidity; nor is it indicative of funds available for our cash needs, including our ability to make cash distributions. Because of the inclusion of items such as interest, depreciation and amortization, the use of GAAP net income (loss) as a performance measure is limited as these items may not accurately reflect the actual change in market value of a property, in the case of depreciation and in the case of interest, may not necessarily be linked to the operating performance of a real estate asset, as it is often incurred at a parent company level and not at a property level.
FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating property, plus real estate related depreciation and amortization, real estate related impairments, and after adjustments for unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure that management believes is a useful supplemental measure of our operating performance. By excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO provides a performance measure that, when compared period-over-period, reflects the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not readily apparent from GAAP net income (loss). Management believes the use of FFO has been beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. We also use FFO excluding certain gain and loss items that management considers unrelated to the operational and financial performance of our core business ("Core FFO"). We believe that Core FFO provides enhanced comparability for investor evaluations of period-over-period results.
We believe that GAAP net income (loss) is the most directly comparable measure to FFO. The principal limitation of FFO is that it does not replace GAAP net income (loss) as a performance measure or GAAP cash flow from operations as a liquidity measure. Because FFO excludes significant economic components of GAAP net income (loss) including depreciation and amortization, FFO should be used as a supplement to GAAP net income (loss) and not as an alternative to it. Further, FFO is not intended as a measure of a REIT's ability to meet debt principal repayments and other cash requirements, nor as a measure of working capital. FFO is calculated in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that interpret the NAREIT definition differently.
59
SUN COMMUNITIES, INC.
RESULTS OF OPERATIONS
Summary Statements of Operations
The following tables reconcile the Net income attributable to Sun Communities, Inc. common stockholders to NOI and summarize our consolidated financial results for the years ended December 31, 2021, 2020 and 2019 (in thousands):
| Year Ended | ||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | ||||||||||||||||||
| Net Income Attributable to Sun Communities, Inc. Common Stockholders | $ | 380,152 | $ | 131,614 | $ | 160,265 | ||||||||||||||
| Interest income | (12,232) | (10,119) | (17,857) | |||||||||||||||||
| Brokerage commissions and other revenues, net | (30,127) | (17,230) | (14,127) | |||||||||||||||||
| General and administrative expense | 181,210 | 109,616 | 92,777 | |||||||||||||||||
| Catastrophic event-related charges, net | 2,239 | 885 | 1,737 | |||||||||||||||||
| Business combinations | 1,362 | 23,008 | — | |||||||||||||||||
| Depreciation and amortization | 522,745 | 376,876 | 328,067 | |||||||||||||||||
Loss on extinguishment of debt (see Note 8) | 8,127 | 5,209 | 16,505 | |||||||||||||||||
| Interest expense | 158,629 | 129,071 | 133,153 | |||||||||||||||||
| Interest on mandatorily redeemable preferred OP units / equity | 4,171 | 4,177 | 4,698 | |||||||||||||||||
Gain on remeasurement of marketable securities (see Note 14) | (33,457) | (6,129) | (34,240) | |||||||||||||||||
| (Gain) / loss on foreign currency translation | 3,743 | (7,666) | (4,479) | |||||||||||||||||
| Gain on disposition of property | (108,104) | (5,595) | — | |||||||||||||||||
| Other expense, net | 12,122 | 5,188 | 1,701 | |||||||||||||||||
(Gain) / loss on remeasurement of notes receivable (see Note 4) | (685) | 3,275 | — | |||||||||||||||||
Income from nonconsolidated affiliates (see Note 6) | (3,992) | (1,740) | (1,374) | |||||||||||||||||
Loss on remeasurement of investment in nonconsolidated affiliates (see Note 6) | 160 | 1,608 | — | |||||||||||||||||
Current tax expense (see Note 12) | 1,236 | 790 | 1,095 | |||||||||||||||||
Deferred tax (benefit) / expense (see Note 12) | 91 | (1,565) | (222) | |||||||||||||||||
| Preferred return to preferred OP units / equity interests | 12,095 | 6,935 | 6,058 | |||||||||||||||||
| Income attributable to noncontrolling interests | 21,490 | 8,902 | 9,768 | |||||||||||||||||
| Preferred stock distribution | — | — | 1,288 | |||||||||||||||||
| NOI | $ | 1,120,975 | $ | 757,110 | $ | 684,813 | ||||||||||||||
| Year Ended | ||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | ||||||||||||||||||
| Real property NOI | $ | 982,123 | $ | 721,302 | $ | 649,706 | ||||||||||||||
| Home sales NOI | 74,382 | 28,624 | 32,825 | |||||||||||||||||
| Service, retail, dining and entertainment expenses NOI | 64,470 | 7,184 | 2,282 | |||||||||||||||||
| NOI | $ | 1,120,975 | $ | 757,110 | $ | 684,813 | ||||||||||||||
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SUN COMMUNITIES, INC.
Seasonality of Revenue
The RV and marina industries are seasonal in nature, and the results of operations in any one period may not be indicative of results in future periods.
In the RV segment, certain properties maintain higher occupancy during the summer months, while other properties maintain higher occupancy during the winter months. Based on the location of our properties with transient RV sites, our portfolio generally produces higher revenues between April and September than between October and March. Real property - transient revenue is included in RV segment revenue. The following table presents the seasonality of real property-transient revenue for the years ended December 31, 2021, 2020 and 2019:
| Real property - transient revenue (in thousands) | For the Three Months Ended | ||||||||||||||||||||||||||||||||||
| Year | March 31 | June 30 | September 30 | December 31 | Total | ||||||||||||||||||||||||||||||
| 2021 | $ | 266,641 | 11.9 | % | 27.3 | % | 44.9 | % | 15.9 | % | 100.0 | % | |||||||||||||||||||||||
| 2020 | $ | 134,691 | 18.8 | % | 15.6 | % | 44.9 | % | 20.7 | % | 100.0 | % | |||||||||||||||||||||||
| 2019 | $ | 121,504 | 20.1 | % | 23.2 | % | 40.3 | % | 16.4 | % | 100.0 | % | |||||||||||||||||||||||
In the marina market, demand for wet slip storage increases during the summer months as customers contract for the summer boating season, which also drives non-storage revenue streams such as service, fuel and on-premise restaurants or convenience stores. Demand for dry storage increases during the winter season as seasonal weather patterns require boat owners to store their vessels on dry docks and within covered racks. Seasonal real property revenue was approximately $246.6 million and $24.4 million for the years ended December 31, 2021 and 2020, respectively. In 2021, seasonal real property revenue was recognized 17.7 percent in the first quarter, 25.0 percent in the second quarter, 29.9 percent in the third quarter and 27.4 percent in the fourth quarter. In 2020, seasonal real property revenue was recognized 100 percent in the fourth quarter, given that the Safe Harbor acquisition closed during the fourth quarter.
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SUN COMMUNITIES, INC.
Comparison of the Years Ended December 31, 2021 and 2020
Real Property Operations - Total Portfolio
The following tables reflect certain financial and other information for our Total Portfolio as of and for the years ended December 31, 2021 and 2020 (in thousands, except for statistical information):
| Year Ended | |||||||||||||||||||||||
| Financial Information | December 31, 2021 | December 31, 2020 | Change | % Change | |||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Real property (excluding Transient) | $ | 1,166,704 | $ | 867,532 | $ | 299,172 | 34.5 | % | |||||||||||||||
| Real property - transient | 281,432 | 172,430 | 109,002 | 63.2 | % | ||||||||||||||||||
| Other | 151,720 | 90,157 | 61,563 | 68.3 | % | ||||||||||||||||||
| Total Operating | 1,599,856 | 1,130,119 | 469,737 | 41.6 | % | ||||||||||||||||||
| Expense | |||||||||||||||||||||||
| Property Operating | 617,733 | 408,817 | 208,916 | 51.1 | % | ||||||||||||||||||
| Real Property NOI | $ | 982,123 | $ | 721,302 | $ | 260,821 | 36.2 | % | |||||||||||||||
| As of | |||||||||||||||||
| Other Information | December 31, 2021 | December 31, 2020 | Change | ||||||||||||||
Number of properties(1) | 602 | 552 | 50 | ||||||||||||||
| Wet slips and dry storage spaces | 45,155 | 38,739 | 6,416 | ||||||||||||||
| MH occupancy | 96.6 | % | |||||||||||||||
RV occupancy(2) | 100.0 | % | |||||||||||||||
MH & RV blended occupancy(3) | 97.4 | % | 97.3 | % | 0.1 | % | |||||||||||
| Sites available for MH & RV development | 10,672 | 10,025 | 647 | ||||||||||||||
| Monthly base rent per site - MH | $ | 603 | $ | 589 | (8) | $ | 14 | ||||||||||
Monthly base rent per site - RV(7) | $ | 526 | $ | 513 | (8) | $ | 13 | ||||||||||
| Monthly base rent per site - Total | $ | 585 | $ | 571 | (8) | $ | 14 | ||||||||||
(1)Includes MH communities, RV resorts and marinas.
(2)Occupancy percentages include annual RV sites and exclude transient RV sites.
(3)Occupancy percentages include MH and annual RV sites, and exclude transient RV sites.
(4)Adjusted occupancy percentages include MH and exclude recently completed but vacant expansion sites.
(5)Adjusted occupancy percentages include annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.
(6)Adjusted occupancy percentages include MH and annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.
(7)Monthly base rent pertains to annual RV sites and excludes transient RV sites.
(8) Canadian currency figures included within the year ended December 31, 2020 have been translated at 2021 average exchange rates, respectively.
The $260.8 million increase in Real property NOI from 2020 to 2021 consists of $76.8 million from Same Community as detailed below, $148.0 million from the marinas and $36.0 million from recently acquired properties in the year ended December 31, 2021 as compared to 2020.
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SUN COMMUNITIES, INC.
Real Property Operations - Same Community Portfolio
A key management tool used when evaluating performance and growth of our properties is a comparison of the Same Community portfolio. Same Community refers to properties that we have owned for at least the preceding year, exclusive of properties recently completed or under construction, and other properties as determined by management. The Same Community data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions or unique situations. In order to evaluate the growth of the Same Community portfolio, management has classified certain items differently than our GAAP statements. The reclassification difference between our GAAP statements and our Same Community portfolio is the reclassification of utility revenues from real property revenue to operating expenses. A significant portion of our utility charges are re-billed to our residents. For the years ended December 31, 2021 and 2020, Canadian currency figures included within the year ended December 31, 2020 have been translated at 2021 average exchange rates. For the years ended December 31, 2020 and 2019, Canadian currency figures included within the year ended December 31, 2019 have been translated at 2020 average exchange rates.
| Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Same Community | MH | RV | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Information | December 31, 2021 | December 31, 2020 | Change | % Change | December 31, 2021 | December 31, 2020 | Change | % Change | December 31, 2021 | December 31, 2020 | Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real property (excluding Transient) | $ | 875,361 | $ | 824,669 | $ | 50,692 | 6.1 | % | $ | 693,374 | $ | 663,564 | $ | 29,810 | 4.5 | % | $ | 181,987 | $ | 161,105 | $ | 20,882 | 13.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Real property - transient | 194,754 | 144,077 | 50,677 | 35.2 | % | 1,460 | 1,722 | (262) | (15.2) | % | 193,294 | 142,355 | 50,939 | 35.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 39,011 | 23,362 | 15,649 | 67.0 | % | 19,265 | 10,298 | 8,967 | 87.1 | % | 19,746 | 13,064 | 6,682 | 51.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Operating | 1,109,126 | 992,108 | 117,018 | 11.8 | % | 714,099 | 675,584 | 38,515 | 5.7 | % | 395,027 | 316,524 | 78,503 | 24.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Operating | 345,737 | 305,561 | 40,176 | 13.1 | % | 182,771 | 169,072 | 13,699 | 8.1 | % | 162,966 | 136,489 | 26,477 | 19.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Property NOI | $ | 763,389 | $ | 686,547 | $ | 76,842 | 11.2 | % | $ | 531,328 | $ | 506,512 | $ | 24,816 | 4.9 | % | $ | 232,061 | $ | 180,035 | $ | 52,026 | 28.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Same Community | MH | RV | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Information | December 31, 2020 | December 31, 2019 | Change | % Change | December 31, 2020 | December 31, 2019 | Change | % Change | December 31, 2020 | December 31, 2019 | Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real property (excluding Transient) | $ | 788,721 | $ | 747,710 | $ | 41,011 | 5.5 | % | $ | 631,382 | $ | 597,030 | $ | 34,352 | 5.8 | % | $ | 157,339 | $ | 150,680 | $ | 6,659 | 4.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Real property - transient | 131,693 | 137,271 | (5,578) | (4.1) | % | 1,405 | 1,891 | (486) | (25.7) | % | 130,288 | 135,380 | (5,092) | (3.8) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 22,568 | 26,833 | (4,265) | (15.9) | % | 9,655 | 13,439 | (3,784) | (28.2) | % | 12,913 | 13,394 | (481) | (3.6) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Operating | 942,982 | 911,814 | 31,168 | 3.4 | % | 642,442 | 612,360 | 30,082 | 4.9 | % | 300,540 | 299,454 | 1,086 | 0.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Operating | 284,551 | 281,142 | 3,409 | 1.2 | % | 156,370 | 154,401 | 1,969 | 1.3 | % | 128,181 | 126,741 | 1,440 | 1.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Property NOI | $ | 658,431 | $ | 630,672 | $ | 27,759 | 4.4 | % | $ | 486,072 | $ | 457,959 | $ | 28,113 | 6.1 | % | $ | 172,359 | $ | 172,713 | $ | (354) | (0.2) | % | |||||||||||||||||||||||||||||||||||||||||||||||
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SUN COMMUNITIES, INC.
| As of | As of | |||||||||||||||||||||||||||||||||||||
| Other Information | December 31, 2021 | December 31, 2020 | Change | December 31, 2020 | December 31, 2019 | Change | ||||||||||||||||||||||||||||||||
| Number of properties | 403 | 403 | — | 367 | 367 | — | ||||||||||||||||||||||||||||||||
| MH occupancy | 97.6 | % | 97.4 | % | ||||||||||||||||||||||||||||||||||
RV occupancy(1) | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||||||||||
MH & RV blended occupancy(2) | 98.2 | % | 98.0 | % | ||||||||||||||||||||||||||||||||||
Adjusted MH occupancy(3) | 98.6 | % | 98.5 | % | ||||||||||||||||||||||||||||||||||
Adjusted RV occupancy(4) | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||||||||||
Adjusted MH & RV blended occupancy(5) | 98.9 | % | 97.5 | % | (6) | 1.4 | % | 98.8 | % | 97.0 | % | (6) | 1.8 | % | ||||||||||||||||||||||||
| Sites available for development | 6,866 | 7,332 | (466) | 6,682 | 6,314 | 368 | ||||||||||||||||||||||||||||||||
| Monthly base rent per site - MH | $ | 611 | $ | 591 | (8) | $ | 20 | $ | 600 | $ | 580 | (8) | $ | 20 | ||||||||||||||||||||||||
Monthly base rent per site - RV(7) | $ | 537 | $ | 512 | (8) | $ | 25 | $ | 514 | $ | 488 | (8) | $ | 26 | ||||||||||||||||||||||||
| Monthly base rent per site - Total | $ | 593 | $ | 573 | (8) | $ | 20 | $ | 579 | $ | 558 | (8) | $ | 21 | ||||||||||||||||||||||||
(1) Occupancy percentages include annual RV sites and exclude transient RV sites.
(2) Occupancy percentages include MH and annual RV sites, and exclude transient RV sites.
(3) Adjusted occupancy percentages include MH and exclude recently completed but vacant expansion sites.
(4) Adjusted occupancy percentages include annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.
(5) Adjusted occupancy percentages include MH and annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.
(6) The occupancy percentages for 2020 and 2019 have been adjusted to reflect incremental growth period-over-period from filled MH expansion sites and the conversion of transient RV sites to annual RV sites.
(7) Monthly base rent pertains to annual RV sites and excludes transient RV sites.
(8) Canadian currency figures included within the year ended December 31, 2020 and 2019 have been translated at 2021 and 2020 average exchange rates, respectively.
Years ended December 31, 2021 and 2020
The Same Community data includes all properties that we have owned and operated continuously since January 1, 2020, exclusive of ground-up development and redevelopment properties recently completed or under construction, and other properties as determined by management. We have reclassified $69.0 million and $63.1 million of utilities rebilled for the years ended December 31, 2021 and 2020, respectively, from Income from real property to Property operating expense to reflect the utility expenses associated with our Same Community portfolio net of resident retail.
The $76.8 million, or 11.2 percent, increase in Total Same Community NOI is due to a $52.0 million, or 28.9 percent, increase in NOI from the RV segment and $24.8 million, or 4.9 percent, increase in NOI from the MH segment.
The RV segment's $52.0 million, or 28.9 percent, increase in NOI is primarily due to an increase in Real property - transient revenue of $50.9 million, or 35.8 percent, due to increased transient and vacation rental stays at our resorts. The results of the comparative 2020 period were impacted by the required closure, or delayed opening, of over 40 of our RV resorts due to the COVID-19 pandemic.
The MH segment's $24.8 million, or 4.9 percent, increase in NOI is primarily due to an increase in Real property (excluding transient) revenue of $29.8 million, or 4.5 percent. Real property (excluding transient) revenue increased due to a 3.4 percent increase in monthly base rent per MH site and a 1.4 percent increase in occupancy when compared to the same period in 2020.
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Years ended December 31, 2020 and 2019
The Same Community data includes all properties which we have owned and operated continuously since January 1, 2019, exclusive of ground-up development and redevelopment properties recently completed or under construction, and other properties as determined by management. We have reclassified $37.7 million and $34.7 million of utilities rebilled for the years ended December 31, 2020 and 2019, respectively, from Income from real property to Property operating expense to reflect the utility expenses associated with our Same Community portfolio net of recovery.
The $27.8 million, or 4.4 percent, growth in Total Same Community NOI is due to a 1.8 percent increase in occupancy and $28.1 million, or 6.1 percent, increase in NOI from the MH segment.
The RV segment NOI remained flat when compared to the same period in 2019.
The MH segment $28.1 million, or 6.1 percent, growth in NOI is primarily due to an increase in Real property (excluding transient) revenue of $34.4 million, or 5.8 percent. Real property (excluding transient) revenue increased due to a 3.4 percent increase in monthly base rent per MH site and a 1.8 percent increase in occupancy when compared to the same period in 2019.
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Marina Summary
The following table reflects certain financial and other information for our marinas for the year ended December 31, 2021 (in thousands, except for statistical information):
| Year Ended | |||||||||||||||||||||||
| December 31, 2021 | December 31, 2020(a) | Change | % Change | ||||||||||||||||||||
| Financial Information | |||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Real property (excluding transient) | $ | 250,984 | $ | 25,632 | $ | 225,352 | N/M | ||||||||||||||||
| Real property - transient | 14,790 | 805 | 13,985 | N/M | |||||||||||||||||||
| Other | 14,053 | 880 | 13,173 | N/M | |||||||||||||||||||
| Total Operating | 279,827 | 27,317 | 252,510 | N/M | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
Property Operating(b) | 117,711 | 13,175 | 104,536 | N/M | |||||||||||||||||||
| Real Property NOI | 162,116 | 14,142 | 147,974 | N/M | |||||||||||||||||||
| Service, retail, dining and entertainment | |||||||||||||||||||||||
| Revenue | 269,170 | 19,393 | 249,777 | N/M | |||||||||||||||||||
| Expense | 219,040 | 16,061 | 202,979 | N/M | |||||||||||||||||||
| NOI | 50,130 | 3,332 | 46,798 | N/M | |||||||||||||||||||
| Marina NOI | $ | 212,246 | $ | 17,474 | $ | 194,772 | N/M | ||||||||||||||||
| Other Information | |||||||||||||||||||||||
| Number of properties | 125 | 106 | 19 | 17.9% | |||||||||||||||||||
| Total wet slips and dry storage | 45,155 | 38,739 | 6,416 | 16.6% | |||||||||||||||||||
N/M = Percentage change is not meaningful.
(a) Contains two months of activity.
(b) Marina results net $15.0 million for the year ended December 31, 2021 and $4.5 million for the two months ended December 31, 2020 of certain utility revenue against the related utility expense in property operating and maintenance expense.
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Home Sales Summary
We purchase new homes and acquire pre-owned and repossessed manufactured homes, generally located within our communities, from lenders, dealers, and former residents to lease or sell to current and prospective residents.
The following table reflects certain financial and statistical information for our Home Sales Program for the years ended December 31, 2021 and 2020 (in thousands, except for average selling prices and statistical information):
| Year Ended | |||||||||||||||||||||||
| Financial Information | December 31, 2021 | December 31, 2020 | Change | % Change | |||||||||||||||||||
| New homes | |||||||||||||||||||||||
| New home sales | $ | 114,852 | $ | 79,728 | $ | 35,124 | 44.1% | ||||||||||||||||
| New home cost of sales | 94,103 | 65,533 | 28,570 | 43.6% | |||||||||||||||||||
| Gross Profit – new homes | 20,749 | 14,195 | 6,554 | 46.2% | |||||||||||||||||||
| Gross margin % – new homes | 18.1 | % | 17.8 | % | 0.3 | % | |||||||||||||||||
| Average selling price – new homes | $ | 156,902 | $ | 139,874 | $ | 17,028 | 12.2% | ||||||||||||||||
| Pre-owned homes | |||||||||||||||||||||||
| Pre-owned home sales | $ | 165,300 | $ | 95,971 | $ | 69,329 | 72.2% | ||||||||||||||||
| Pre-owned home cost of sales | 93,024 | 66,351 | 26,673 | 40.2% | |||||||||||||||||||
| Gross Profit – pre-owned homes | 72,276 | 29,620 | 42,656 | 144.0% | |||||||||||||||||||
| Gross margin % – pre-owned homes | 43.7 | % | 30.9 | % | 12.8 | % | |||||||||||||||||
| Average selling price – pre-owned homes | $ | 49,255 | $ | 41,799 | $ | 7,456 | 17.8% | ||||||||||||||||
| Total home sales | |||||||||||||||||||||||
| Revenue from home sales | $ | 280,152 | $ | 175,699 | $ | 104,453 | 59.4% | ||||||||||||||||
| Cost of home sales | 187,127 | 131,884 | 55,243 | 41.9% | |||||||||||||||||||
| Home selling expenses | 18,643 | 15,191 | 3,452 | 22.7% | |||||||||||||||||||
| Home Sales NOI | $ | 74,382 | $ | 28,624 | $ | 45,758 | 159.9% | ||||||||||||||||
| Statistical Information | |||||||||||||||||||||||
| New home sales volume | 732 | 570 | 162 | 28.4% | |||||||||||||||||||
| Pre-owned home sales volume | 3,356 | 2,296 | 1,060 | 46.2% | |||||||||||||||||||
| Total home sales volume | 4,088 | 2,866 | 1,222 | 42.6% | |||||||||||||||||||
Gross Profit - New Homes
For the year ended December 31, 2021, the $6.6 million, or 46.2 percent, increase in gross profit is primarily the result of a 28.4 percent increase in new home sales volume, coupled with a 12.2 percent increase in new home average selling price, as compared to the same period in 2020.
Gross Profit - Pre-owned Homes
For the year ended December 31, 2021, the $42.7 million, or 144.0 percent, increase in gross profit is primarily the result of a 46.2 percent increase in pre-owned home sales volume, coupled with a 12.8 percent increase in gross margin, primarily due to a 17.8 percent increase in the pre-owned home average selling price, as compared to the same period in 2020.
Homes sales NOI
For the year ended December 31, 2021, the $45.8 million, or 159.9 percent, increase in NOI is primarily the result of a 42.6 percent increase in home sales volume, coupled with an increase in new home and pre-owned home average selling price and pre-owned home margin, as compared to the same period in 2020.
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Rental Program Summary
The following table reflects certain financial and other information for our Rental Program for the years ended December 31, 2021 and 2020 (in thousands, except for statistical information):
| Year Ended | |||||||||||||||||||||||
| Financial Information | December 31, 2021 | December 31, 2020 | Change | % Change | |||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Home rent | $ | 66,442 | $ | 62,546 | $ | 3,896 | 6.2 | % | |||||||||||||||
| Site rent | 71,670 | 74,823 | (3,153) | (4.2) | % | ||||||||||||||||||
| Total | 138,112 | 137,369 | 743 | 0.5 | % | ||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Rental Program operating and maintenance | 19,725 | 20,408 | (683) | (3.3) | % | ||||||||||||||||||
| Rental Program NOI | $ | 118,387 | $ | 116,961 | $ | 1,426 | 1.2 | % | |||||||||||||||
| Other Information | |||||||||||||||||||||||
| Number of sold rental homes | 1,071 | 850 | 221 | 26.0 | % | ||||||||||||||||||
| Number of occupied rentals, end of period | 9,870 | 11,752 | (1,882) | (16.0) | % | ||||||||||||||||||
| Investment in occupied rental homes, end of period | $ | 556,342 | $ | 629,162 | $ | (72,820) | (11.6) | % | |||||||||||||||
| Weighted average monthly rental rate, end of period | $ | 1,110 | $ | 1,042 | $ | 68 | 6.5 | % | |||||||||||||||
The Rental Program NOI is included in Real property NOI. The Rental Program NOI is separately reviewed to assess the overall growth and performance of the Rental Program and its financial impact on our operations.
For the year ended December 31, 2021, Rental Program NOI increased $1.4 million, or 1.2 percent as compared to the same period in 2020. The increase is primarily due to a 6.5 percent increase in weighted average monthly rent, coupled with a 3.3 percent decrease in expenses, partially offset by a decrease in the number of occupied rental homes as compared to the same period in 2020.
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Other Items - Statements of Operations(1)
The following table summarizes other income and expenses for the years ended December 31, 2021 and 2020 (amounts in thousands):
| Year Ended | |||||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | Change | % Change | ||||||||||||||||||||
| Service, retail, dining and entertainment, net | $ | 64,470 | $ | 7,184 | $ | 57,286 | 797.4 | % | |||||||||||||||
| Interest income | $ | 12,232 | $ | 10,119 | $ | 2,113 | 20.9 | % | |||||||||||||||
| Brokerage commissions and other, net | $ | 30,127 | $ | 17,230 | $ | 12,897 | 74.9 | % | |||||||||||||||
| General and administrative expense | $ | 181,210 | $ | 109,616 | $ | 71,594 | 65.3 | % | |||||||||||||||
| Catastrophic event-related charges, net | $ | 2,239 | $ | 885 | $ | 1,354 | 153.0 | % | |||||||||||||||
| Business combination expense, net | $ | 1,362 | $ | 23,008 | $ | (21,646) | (94.1) | % | |||||||||||||||
| Depreciation and amortization | $ | 522,745 | $ | 376,876 | $ | 145,869 | 38.7 | % | |||||||||||||||
Loss on extinguishment of debt (see Note 8) | $ | 8,127 | $ | 5,209 | $ | 2,918 | 56.0 | % | |||||||||||||||
| Interest expense | $ | 158,629 | $ | 129,071 | $ | 29,558 | 22.9 | % | |||||||||||||||
| Interest on mandatorily redeemable preferred OP units / equity | $ | 4,171 | $ | 4,177 | $ | (6) | (0.1) | % | |||||||||||||||
Gain on remeasurement of marketable securities (see Note 14) | $ | 33,457 | $ | 6,129 | $ | 27,328 | 445.9 | % | |||||||||||||||
| Gain / (loss) on foreign currency translation | $ | (3,743) | $ | 7,666 | $ | (11,409) | (148.8) | % | |||||||||||||||
| Gain on dispositions of properties | $ | 108,104 | $ | 5,595 | $ | 102,509 | N/M | ||||||||||||||||
| Other expense, net | $ | (12,122) | $ | (5,188) | $ | (6,934) | 133.7 | % | |||||||||||||||
Gain / (loss) on remeasurement of notes receivable (see Note 4) | $ | 685 | $ | (3,275) | $ | 3,960 | 120.9 | % | |||||||||||||||
Income from nonconsolidated affiliates (see Note 6) | $ | 3,992 | $ | 1,740 | $ | 2,252 | 129.4 | % | |||||||||||||||
Loss on remeasurement of investment in nonconsolidated affiliates (see Note 6) | $ | (160) | $ | (1,608) | $ | 1,448 | 90.0 | % | |||||||||||||||
Current tax expense (see Note 12) | $ | (1,236) | $ | (790) | $ | (446) | 56.5 | % | |||||||||||||||
Deferred tax benefit / (expense) (see Note 12) | $ | (91) | $ | 1,565 | $ | (1,656) | (105.8) | % | |||||||||||||||
| Preferred return to preferred OP units / equity interests | $ | 12,095 | $ | 6,935 | $ | 5,160 | 74.4 | % | |||||||||||||||
| Income attributable to noncontrolling interests | $ | 21,490 | $ | 8,902 | $ | 12,588 | 141.4 | % | |||||||||||||||
(1) Only items determined by management to be material, of interest, or unique to the periods disclosed above are explained below.
N/M = Percentage change is not meaningful.
Service, retail, dining and entertainment, net - for the year ended December 31, 2021, increased primarily due to the addition of marina service revenue, driven by a full year of activity from Safe Harbor, and increases in RV resort activity revenues as compared to 2020.
Brokerage commissions and other, net - for the year ended December 31, 2021, increased primarily due to an increase in brokerage commissions as a result of an increase in the number of brokered home sales, as compared to 2020.
General and administrative expense - for the year ended December 31, 2021, increased primarily due to a full year of activity from Safe Harbor, and an increase in wages and incentives driven by growth in strategic initiatives and acquisition activity, as compared to 2020.
Business combination expense, net - for the year ended December 31, 2021, decreased due to the prior year acquisition of Safe Harbor. Refer to Note 3, "Real Estate Acquisitions and Dispositions," of our accompanying Consolidated Financial Statements for additional information.
Depreciation and amortization - for the year ended December 31, 2021, increased as a result of acquisition, expansion and development activity driving growth in our portfolio of MH communities, RV resorts and marinas as compared to 2020. Refer to Note 3, "Real Estate Acquisitions and Dispositions," of our accompanying Consolidated Financial Statements for additional information.
Loss on extinguishment of debt - for the year ended December 31, 2021, increased primarily due to the termination of the Safe Harbor line of credit and financing activities as compared to 2020. Refer to Note 8, "Debt and Line of Credit," in our accompanying Consolidated Financial Statements for additional information.
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Interest expense - for the year ended December 31, 2021, increased primarily due to the higher carrying balance of debt as compared to the same period in 2020. Refer to Note 8, "Debt and Line of Credit," of our accompanying Consolidated Financial Statements for additional information.
Gain on remeasurement of marketable securities - for the year ended December 31, 2021, increased due to higher gain on the remeasurement of our investment in marketable securities as compared to 2020. Refer to Note 15, "Fair Value of Financial Instruments," in our accompanying Consolidated Financial Statements for additional information.
Gain / (loss) on foreign currency translation - for the year ended December 31, 2021, there was a $3.7 million loss as compared to a $7.7 million gain in the same period in 2020, primarily due to fluctuations in exchange rates on Canadian and Australian denominated currencies.
Gain on dispositions of properties - for the year ended December 31, 2021, increased due to a gain resulting from the sale of six MH communities in various states. Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for additional information.
Other expense, net - for the year ended December 31, 2021, increased primarily due to an estimated contingent liability related to potential termination of certain ground leases.
Gain / (loss) on remeasurement of notes receivable - represents the change in fair value of our in-house financing notes receivable portfolio, for which we elected the fair value option on January 1, 2020. Refer to Note 4, "Notes and Other Receivables," and Note 14, "Fair Value of Financial Instruments," in our accompanying Consolidated Financial Statements for additional information.
Income from nonconsolidated affiliates - for the year ended December 31, 2021, increased primarily due to increased equity income at GTSC LLC ("GTSC") and the Sungenia joint venture ("Sungenia JV") as compared to 2020. Refer to Note 6, "Investments in Nonconsolidated Affiliates," in our accompanying Consolidated Financial Statements for additional information.
Preferred return to preferred OP units / equity interests - for the year ended December 31, 2021 increased primarily as a result of preferred OP units issued in conjunction with various acquisitions since 2020. Refer to Note 3, "Real Estate Acquisitions and Dispositions," and Note 9, "Equity and Temporary Equity," of our accompanying Consolidated Financial Statements for additional information.
Income attributable to noncontrolling interests - for the year ended December 31, 2021, increased as compared to 2020, primarily due to improved financial performance of the Company and its consolidated VIEs. Refer to Note 7, "Consolidated Variable Interest Entities," in our accompanying Consolidated Financial Statements for additional information.
Year Ended December 31, 2020 Compared to the Year Ended December 31, 2019
Pursuant to the FAST Act Modernization and Simplification of Regulation S-K, discussions related to the changes in results of operations for the year ended December 31, 2020 compared to the year ended December 31, 2019 have been omitted, except for the Same Community results where the presentation structure has changed consistent with our new segment reporting, and prior year data differ from amounts previously disclosed in Form 10-K for the year ended December 31, 2020 as a result of prior year reclassification and site count changes. Such omitted discussion can be found under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on February 18, 2021.
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RECONCILIATION OF NET INCOME ATTRIBUTABLE TO SUN COMMUNITIES, INC. COMMON STOCKHOLDERS TO FFO
The following table reconciles Net income attributable to Sun Communities, Inc. common stockholders to FFO for the years ended December 31, 2021, 2020 and 2019 (in thousands, except per share amounts):
| Year Ended | ||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | ||||||||||||||||||
| Net Income Attributable to Sun Communities, Inc. Common Stockholders | $ | 380,152 | $ | 131,614 | $ | 160,265 | ||||||||||||||
| Adjustments | ||||||||||||||||||||
| Depreciation and amortization | 521,856 | 376,897 | 328,646 | |||||||||||||||||
| Depreciation on nonconsolidated affiliates | 123 | 66 | — | |||||||||||||||||
Gain on remeasurement of marketable securities | (33,457) | (6,129) | (34,240) | |||||||||||||||||
| Loss on remeasurement of investment in nonconsolidated affiliates | 160 | 1,608 | — | |||||||||||||||||
| (Gain) / loss on remeasurement of notes receivable | (685) | 3,275 | — | |||||||||||||||||
| Income attributable to noncontrolling interests | 14,783 | 7,881 | 8,474 | |||||||||||||||||
| Preferred return to preferred OP units | 1,888 | 2,231 | 2,610 | |||||||||||||||||
| Preferred distribution to Series A-4 preferred stock | — | — | 1,288 | |||||||||||||||||
| Interest expense on Aspen preferred OP units | 2,056 | — | — | |||||||||||||||||
| Gain on dispositions of properties | (108,104) | (5,595) | — | |||||||||||||||||
| Gain on dispositions of assets, net | (60,485) | (22,180) | (26,356) | |||||||||||||||||
FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1) | $ | 718,287 | $ | 489,668 | $ | 440,687 | ||||||||||||||
| Adjustments | ||||||||||||||||||||
Business combination expense and other acquisition related costs(2) | 10,005 | 25,334 | 1,146 | |||||||||||||||||
| Loss on extinguishment of debt | 8,127 | 5,209 | 16,505 | |||||||||||||||||
| Catastrophic event-related charges, net | 2,239 | 885 | 1,737 | |||||||||||||||||
Earnings - catastrophic event-related charges(3) | 200 | — | — | |||||||||||||||||
| (Gain) / loss on foreign currency translation | 3,743 | (7,666) | (4,480) | |||||||||||||||||
Other adjustments, net(4) | 16,139 | 2,130 | 1,337 | |||||||||||||||||
Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1) | $ | 758,740 | $ | 515,560 | $ | 456,932 | ||||||||||||||
| Weighted average common shares outstanding - basic | 112,582 | 97,521 | 88,460 | |||||||||||||||||
| Add | ||||||||||||||||||||
| Common stock issuable upon conversion of stock options | — | 1 | 1 | |||||||||||||||||
| Restricted stock | 220 | 455 | 454 | |||||||||||||||||
| Common OP units | 2,562 | 2,458 | 2,448 | |||||||||||||||||
| Common stock issuable upon conversion of certain preferred OP units | 1,151 | 907 | 1,454 | |||||||||||||||||
| Weighted Average Common Shares Outstanding - Fully Diluted | 116,515 | 101,342 | 92,817 | |||||||||||||||||
| FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities Per Share - Fully Diluted | $ | 6.16 | $ | 4.83 | $ | 4.75 | ||||||||||||||
| Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities Per Share - Fully Diluted | $ | 6.51 | $ | 5.09 | $ | 4.92 | ||||||||||||||
(1)The effect of certain anti-dilutive convertible securities is excluded from these items.
(2)These costs represent business combination expenses and expenses incurred to bring recently acquired properties up to our operating standards, including items such as tree trimming and painting costs that do not meet our capitalization policy.
(3)Adjustment related to estimated loss of earnings in excess of the applicable business interruption deductible in relation to our three Florida Keys communities that were impaired by Hurricane Irma which had not yet been received from our insurer.
(4)Other adjustments, net include the change in estimated contingent consideration payments, long term lease termination expense and deferred tax (benefit) / expense for the years ended December 31, 2021, 2020 and 2019, RV rebranding non-recurring cost for the year ended December 31, 2021, and deferred compensation amortization upon retirement for the year ended December 31, 2020.
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LIQUIDITY AND CAPITAL RESOURCES
Short-term Liquidity
Our principal short-term liquidity demands have historically been, and are expected to continue to be, distributions to our stockholders and the unit holders of the Operating Partnership, property acquisitions, development and expansion of properties, capital improvement of properties, the purchase of new and pre-owned homes, and debt repayment. We intend to meet our short-term liquidity requirements through available cash balances, cash flows generated from operations, draws on our line of credit, and the use of debt and equity offerings under our shelf registration statement. Refer to Note 8, "Debt and Line of Credit," and Note 9, "Equity and Temporary Equity," in our accompanying Consolidated Financial Statements for additional information.
We also intend to continue to strengthen our capital and liquidity positions by focusing on our core fundamentals, which are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We take a disciplined approach to selecting the optimal mix of financing sources to meet our liquidity demands and minimize our overall cost of capital. In June 2021, we received investment grade ratings of BBB and Baa3 with a stable outlook from S&P Global and Moody's, respectively. We plan on leveraging this enhanced strength in the credit markets to utilize a greater proportion of unsecured debt to lower our cost of capital and increase our financial flexibility.
Acquisitions
Subject to market conditions, we intend to continue to identify opportunities to expand our development pipeline and acquire existing properties. We finance acquisitions through available cash, secured financing, draws on our lines of credit, the assumption of existing debt on properties, and the issuance of debt and equity securities. We will continue to evaluate acquisition opportunities that meet our criteria. Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for information regarding recent property acquisitions.
We anticipate that our acquisition of Park Holidays will close within the three months ending March 31, 2022, subject to the approval of the UK Financial Conduct Authority. We anticipate that we will need approximately $1.3 billion in cash to fund the acquisition of Park Holidays.
We have obtained commitments from our lenders to amend, extend and upsize the Senior Credit Facility simultaneously with, and conditioned on, the closing of the acquisition of Park Holidays. The proposed amendment (the "Proposed Loan Amendment") would provide for borrowing up to an aggregate of $4.2 billion with the ability to upsize the total borrowing by an additional $800.0 million. The Proposed Loan Amendment would provide a revolving loan facility of up to $3.05 billion and a term loan facility of $1.15 billion.
We intend to use a portion of the proceeds from the Proposed Loan Amendment to fund the cash purchase price of Park Holidays. There can be no assurance that we will be able to successfully enter into the Proposed Loan Amendment on the terms described above or at all. If the Proposed Loan Amendment is not entered into, we may use our previously announced bridge loan, further described below, to fund all or a portion of the cash purchase price of Park Holidays.
Capital Expenditures
Our capital expenditures include expansion sites and development construction costs, recurring capital expenditures, lot modifications, growth projects, acquisition-related capital expenditures, rental home purchases and rebranding cost.
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Our capital expenditure activity is summarized as follows (in thousands):
| Year Ended | ||||||||||||||
| December 31, 2021 | December 31, 2020 | |||||||||||||
| Expansion and Development | $ | 201,601 | $ | 248,146 | ||||||||||
| Recurring Capital Expenditures | 64,631 | 33,472 | ||||||||||||
| Lot Modifications | 28,802 | 29,414 | ||||||||||||
| Growth Projects | 77,037 | 28,315 | ||||||||||||
| Acquisition-related Capital Expenditures | 176,463 | 46,739 | ||||||||||||
| Rental Program | 117,371 | 143,117 | ||||||||||||
| Rebranding | 6,142 | N/A | ||||||||||||
| Other | 524 | 9,320 | ||||||||||||
| Total capital expenditures activity | $ | 672,571 | $ | 538,523 | ||||||||||
Expansion and development expenditures - consist primarily of construction costs such as roads, activities, and amenities, and costs necessary to complete home and RV site improvements, such as driveways, sidewalks and landscaping at our MH communities and RV resorts. Expenditures also include costs to rebuild after damage has been incurred at MH, RV or marina properties.
Recurring capital expenditures - relate to our continued commitment to the upkeep of our MH and RV properties and include items such as dredging, dock repairs and improvements, and equipment maintenance and upgrades at our marinas.
Lot modification capital expenditures - are incurred to modify the foundational structures required to set a new home after a previous home has been removed. These expenditures are necessary to create a revenue stream from a new site renter and often improve the quality of the community. Other lot modification expenditures include land improvements added to annual RV sites to aid in the conversion of transient RV guests to annual contracts.
Growth projects - consist of revenue generating or expense reducing activities at MH communities, RV resorts and marinas. This includes, but is not limited to, utility efficiency and renewable energy projects, site, slip or amenity upgrades such as the addition of a garage, shed or boat lift, and other special capital projects that substantiate an incremental rental increase.
Acquisition-related Capital Expenditures - consist of capital improvements identified during due diligence that are necessary to bring our communities, resorts, and marinas up to our operating standards. These include items such as: upgrading clubhouses; landscaping; new street light systems; new mail delivery systems; pool renovation including larger decks, heaters, and furniture; new maintenance facilities; lot modifications; and new signage.
Rental Program - investment in the acquisition of homes intended for the Rental Program and the purchase of vacation rental homes at our RV resorts. Expenditures for these investments depend upon the condition of the markets for repossessions and new home sales, rental homes and vacation rental homes.
Rebranding costs - includes new signage at our RV resorts and costs of building an RV mobile application and updated website.
Cash Flow Activities
Our cash flow activities are summarized as follows (in thousands):
| Year Ended | ||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | ||||||||||||||||||
| Net Cash Provided by Operating Activities | $ | 753,572 | $ | 543,295 | $ | 476,734 | ||||||||||||||
| Net Cash Used for Investing Activities | $ | (2,338,249) | $ | (2,486,517) | $ | (1,010,457) | ||||||||||||||
| Net Cash Provided by Financing Activities | $ | 1,570,391 | $ | 2,000,844 | $ | 505,880 | ||||||||||||||
| Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | $ | (157) | $ | 189 | $ | 411 | ||||||||||||||
Cash, cash equivalents, and restricted cash decreased by approximately $14.4 million from $92.6 million as of December 31, 2020, to $78.2 million as of December 31, 2021.
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Operating Activities - Net cash provided by operating activities increased $210.3 million to $753.6 million for the year ended December 31, 2021, compared to $543.3 million for the year ended December 31, 2020. The increase was driven by an increase in net income from property operations due to the acquisition of Safe Harbor in October 2020 and improved operating performance at our MH and RV properties.
Our net cash flows provided by operating activities from continuing operations may be adversely impacted by, among other things: (a) the market and economic conditions in our current markets generally, and specifically in metropolitan areas of our current markets; (b) lower occupancy and rental rates of our properties; (c) increased operating costs, such as wage and benefit costs, insurance premiums, real estate taxes and utilities, that cannot be passed on to our tenants; (d) decreased sales of manufactured homes; (e) current volatility in economic conditions and the financial markets; and (f) the effects of the COVID-19 pandemic. Refer to "Risk Factors" in Part I, Item 1A in this Annual Report on Form 10-K.
Investing Activities - Net cash used for investing activities was $2.3 billion for the year ended December 31, 2021, compared to $2.5 billion for year ended December 31, 2020. The decrease in Net cash used for investing activities was driven by a reduction in cash outflows to acquire new properties due to the prior year acquisition of Safe Harbor. During the year ended December 31, 2021, net cash used for investing activities included the following:
•Net cash deployed of $1.6 billion to acquire 54 properties totaling over 16,800 sites, wet slips and dry storage spaces and sites for expansion, and 11 land parcels approved for development of nearly 4,000 MH sites.
•Cash deployed of $672.6 million for capital expenditure activity.
•Cash deployed of $242.6 million for issuance of notes receivable to real estate developers and operators.
•Proceeds of $162.1 million from the disposition of six MH communities.
•Proceeds of $113.8 million from sale of rental homes and equipment.
Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for additional information.
Financing Activities - Net cash provided by financing activities decreased $430.5 million to $1.6 billion for the year ended December 31, 2021, compared to $2.0 billion for the year ended December 31, 2020. During the year ended December 31, 2021, net cash provided by financing activities included the following:
•Proceeds of $1.1 billion from equity issuances, primarily due to the March 2021 underwritten public offering of an aggregate of 8,050,000 shares at a public offering price of $140.00 per share.
•Issuance of an aggregate of $1.2 billion of senior unsecured notes from issuances in June 2021 and October 2021.
•Payments of $390.8 million for distributions to holders of common stock and common OP units.
•Net payments of $198.9 million under our credit facility agreement, net of proceeds.
Refer to Note 8, "Debt and Line of Credit," and Note 9, "Equity and Temporary Equity," in our accompanying Consolidated Financial Statements for additional information.
Equity and Debt Activity
Registering of Debt Securities
In March 2020, the SEC adopted amendments to Rule 3-10 of Regulation S-X and created Rule 13-01 to simplify disclosure requirements related to certain registered securities. The rule became effective January 4, 2021. In April 2021, we filed a new universal shelf registration statement on Form S-3 with the SEC registering, among other securities, debt securities of the Operating Partnership, which are fully and unconditionally guaranteed by us.
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Public Equity Offerings
Offerings
On November 15 and 16, 2021, we entered into two forward sale agreements relating to an underwritten registered public offering of 4,025,000 shares of our common stock at a public offering price of $185.00 per share. The offering closed on November 18, 2021. We did not initially receive any proceeds from the sale of shares of our common stock by the forward purchaser or its affiliates. We intend to use the net proceeds, if any, received upon the future settlement of the forward sale agreements, which we expect to occur no later than November 18, 2022, to fund a portion of the Park Holidays total consideration, to repay borrowings outstanding under our senior credit facility, to fund possible future acquisitions of properties and / or for working capital and general corporate purposes.
On March 2, 2021, we priced a $1.1 billion underwritten public offering of an aggregate of 8,050,000 shares at a public offering price of $140.00 per share, before underwriting discounts and commissions. The offering consisted of 4,000,000 shares offered directly by us and 4,050,000 shares offered under a forward equity sales agreement. We sold the 4,000,000 shares on March 9, 2021 and received net proceeds of $537.6 million after deducting expenses related to the offering. In May and June 2021, we completed the physical settlement of the remaining 4,050,000 shares and received net proceeds of $539.7 million after deducting expenses related to the offering. Proceeds from the offering were used to acquire assets and pay down borrowings under our revolving line of credit.
On September 30, 2020 and October 1, 2020, we entered into two forward sale agreements (the "September 2020 Forward Equity Offerings") relating to an underwritten registered public offering of 9,200,000 shares of our common stock at a public offering price of $139.50 per share. The offering closed on October 5, 2020. On October 26, 2020, we physically settled these forward sales agreements by the delivery of shares of our common stock. Proceeds from the offering were approximately $1.23 billion after deducting expenses related to the offering. We used the net proceeds of this offering to fund the cash portion of the acquisition of Safe Harbor, and for working capital and general corporate purposes.
In May 2020, we closed an underwritten registered public offering of 4,968,000 shares of common stock. Proceeds from the offering were $633.1 million after deducting expenses related to the offering. We used the net proceeds of this offering to repay borrowings outstanding under the revolving loan under our senior credit facility.
At the Market Offering Sales Agreements
On December 17, 2021, we entered into an At the Market Offering Sales Agreement with certain sales agents and forward sellers pursuant to which we may sell, from time to time, up to an aggregate gross sales price of $1.25 billion of our common stock (the "December 2021 Sales Agreement"), through the sales agents, acting as our sales agents or, if applicable, as forward sellers, or directly to the sales agents as principals for their own accounts. The sales agents and forward sellers are entitled to compensation in an agreed amount not to exceed 2.0 percent of the gross price per share for any shares sold under the December 2021 Sales Agreement. We simultaneously terminated our June 2021 Sales Agreement (as defined below) upon entering into the December 2021 Sales Agreement.
On June 4, 2021, we entered into an At the Market Offering Sales Agreement with certain sales agents and forward sellers pursuant to which we could sell, from time to time, up to an aggregate gross sales price of $500.0 million of our common stock (the "June 2021 Sales Agreement"), through the sales agents, acting as our sales agents or, if applicable, as forward sellers, or directly to the sales agents as principals for their own accounts. The sales agents and forward sellers are entitled to compensation in an agreed amount not to exceed 2.0 percent of the gross price per share for any shares sold under the Sales Agreement. We simultaneously terminated our previous At the Market Offering Sales Agreement entered into in July 2017 upon entering into the June 2021 Sales Agreement.
There were no sales of common stock under the December 2021 Sales Agreement as of December 31, 2021. We entered into forward sale agreements with respect to 1,820,109 shares of common stock under the June 2021 Sales Agreement for $356.5 million during the year ended December 31, 2021 prior to its termination. These forward sale agreements were not settled as of December 31, 2021 but we expect to settle them no later than September 2022. There were zero issuances of common stock under the prior At the Market Offering Sales Agreement entered into in July 2017, during the years ended December 31, 2021, 2020 and 2019, and from inception through termination of such prior sales agreement, we sold shares of our common stock for gross proceeds of $163.8 million.
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Senior Unsecured Notes
On October 5, 2021, we issued $450.0 million of senior unsecured notes with an interest rate of 2.3 percent and a seven-year term, due November 1, 2028 (the "2028 Notes"). Interest on the 2028 Notes is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2022. In addition, on October 5, 2021, we issued $150 million of senior unsecured notes with an interest rate of 2.7 percent and a ten-year term due July 15, 2031. These notes are additional notes of the same series as the $600.0 million aggregate principal amount of 2.7 percent senior unsecured notes due July 15, 2031 that we issued on June 28, 2021, described below. The net proceeds from the offering were approximately $595.5 million after deducting underwriters' discounts and estimated offering expenses. The proceeds were used to pay down borrowings under our line of credit.
On June 28, 2021, we issued $600.0 million of senior unsecured notes with an interest rate of 2.7 percent and a ten-year term, due July 15, 2031 (the "2031 Notes"). Interest on the 2031 Notes is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2022. The net proceeds from the offering were approximately $592.4 million, after deducting underwriters' discounts and estimated offering expenses. The proceeds were used to pay down borrowings under our line of credit.
The total outstanding balance on senior unsecured notes was $1.2 billion at December 31, 2021.
The obligations of the Operating Partnership to pay principal, premiums, if any, and interest on the 2031 and 2028 Notes are guaranteed on a senior basis by Sun Communities, Inc. The guarantee is full and unconditional, and the Operating Partnership is a consolidated subsidiary of the Company. Under Rule 3-10 of Regulation S-X, as amended, subsidiary issuers of obligations guaranteed by the parent are not required to provide separate financial statements, provided that the subsidiary obligor is consolidated into the parent company's consolidated financial statements, the parent guarantee is "full and unconditional" and, subject to certain exceptions, the alternative disclosure required by Rule 13-01 is provided, which includes narrative disclosure and summarized financial information. Accordingly, separate consolidated financial statements of the Operating Partnership have not been presented. Furthermore, as permitted under Rule 13-01(a)(4)(vi), we have excluded the summarized financial information for the Operating Partnership as the assets, liabilities and results of operations of the Operating Partnership are not materially different from the corresponding amounts presented in our consolidated financial statements and management believes such summarized financial information would be repetitive and not provide incremental value to investors.
Line of Credit
On June 14, 2021, we entered into a new senior credit agreement (the "Credit Agreement") with certain lenders. The Credit Agreement combined and replaced our prior $750.0 million credit facility, which was scheduled to mature on May 21, 2023, (the "A&R Facility"), and the $1.8 billion credit facility between Safe Harbor and certain lenders, which was scheduled to mature on October 11, 2024 (the "Safe Harbor Facility"). The Safe Harbor Facility was terminated in connection with the execution of the Credit Agreement. We repaid all amounts due and outstanding under the Safe Harbor Facility on or prior to June 14, 2021. We recognized a Loss on extinguishment of debt in our Consolidated Statement of Operations related to the termination of the A&R Facility and the Safe Harbor Facility of $0.2 million and $7.9 million, respectively.
Pursuant to the Credit Agreement, we may borrow up to $2.0 billion under a revolving loan (the "Senior Credit Facility"). The Senior Credit Facility is available to fund all of the Company's businesses, including its marina business conducted by Safe Harbor. The Credit Agreement also permits, subject to the satisfaction of certain conditions, additional borrowings (with the consent of the lenders) in an amount not to exceed $1.0 billion with the option to treat all, or a portion, of such additional funds as an incremental term loan.
The Senior Credit Facility has a four-year term ending June 14, 2025, and, at our option, the maturity date may be extended for two additional six-month periods, subject to the satisfaction of certain conditions. However, the maturity date with respect to $500.0 million of available borrowing under the Senior Credit Facility is October 11, 2024, which, under the terms of the Senior Credit Agreement, may not be extended. The Senior Credit Facility bears interest at a floating rate based on the Adjusted Eurocurrency rate or BBSY rate, plus a margin that is determined based on the Company's credit ratings calculated in accordance with the Senior Credit Agreement, which can range from 0.725 percent to 1.4 percent. As of December 31, 2021, the margin based on our credit ratings was 0.85 percent on the Senior Credit Facility.
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At the lenders' option, the Senior Credit Facility will become immediately due and payable upon an event of default under the Credit Agreement. We had $1.0 billion of borrowings on the Senior Credit Facility as of December 31, 2021, all scheduled to mature June 14, 2025. As of December 31, 2020, we had $40.4 million of borrowings on the revolving loan and no borrowings on the term loan under our A&R Facility, respectively. As of December 31, 2020, we had $652.0 million and $500.0 million of borrowings under the revolving loan and term loan under the Safe Harbor Facility, respectively. These balances are recorded in the Unsecured debt line item on the Consolidated Balance Sheets.
The Senior Credit Facility provides us with the ability to issue letters of credit. Our issuance of letters of credit does not increase our borrowings outstanding under the Senior Credit Facility, but does reduce the borrowing amount available. At December 31, 2021 and 2020, we had approximately $2.2 million and $2.4 million (including none and $0.3 million associated with the Safe Harbor Facility) of outstanding letters of credit, respectively.
We have obtained commitments from our lender group to amend the Senior Credit Facility in connection with the acquisition of Park Holidays. Refer to Note 19, "Subsequent Events," in our accompanying Consolidated Financial Statements for additional information about the Proposed Loan Amendment.
Potential Bridge Loan
On November 13, 2021, we entered into a commitment letter with Citigroup Global Markets, Inc. ("Citigroup"), pursuant to which, and subject to certain terms and conditions (including the closing of the acquisition of Park Holidays), Citigroup (on behalf of its affiliates) committed to lend us up to £950.0 million, or approximately $1.3 billion converted at the December 31, 2021 exchange rate, under a new senior unsecured bridge loan (the "Bridge Loan"). If we enter into the Bridge Loan, the proceeds of the Bridge Loan will be used to finance a portion of the cash consideration payable for the acquisition of Park Holidays. As of December 31, 2021, we did not have any borrowings outstanding under the Bridge Loan.
Financial Covenants
Pursuant to the terms of the Senior Credit Facility, we are subject to various financial and other covenants. The most restrictive financial covenants for the Senior Credit Facility are as follows:
| Covenant | Requirement | As of December 31, 2021 | ||||||||||||
| Maximum leverage ratio | <65.0% | 28.4% | ||||||||||||
| Minimum fixed charge coverage ratio | >1.40 | 4.57 | ||||||||||||
| Maximum dividend payout ratio | <95.0% | 49.3% | ||||||||||||
| Maximum secured leverage ratio | <40.0% | 15.3% | ||||||||||||
In addition, we are required to maintain the following covenants with respect to the senior unsecured notes payable:
| Covenant | Requirement | As of December 31, 2021 | ||||||||||||
| Total debt to total assets | ≤ 60.0% | 38.6% | ||||||||||||
| Secured debt to total assets | ≤ 40.0% | 22.9% | ||||||||||||
| Consolidated income available for debt service to debt service | ≥ 1.50 | 5.81 | ||||||||||||
| Unencumbered total asset value to total unsecured debt | ≥ 150.0% | 431.7% | ||||||||||||
As of December 31, 2021, we were in compliance with the above covenants and do not anticipate that we will be unable to comply with these covenants in the near term.
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Proactive management of transition away from LIBOR
LIBOR has been used extensively in the U.S. and globally as a reference rate for various commercial and financial contracts, including variable-rate debt and interest rate swap contracts. However, based on an announcement made by the FCA on March 3, 2021, one-week and two-month LIBOR rates ceased to be published after December 31, 2021, and all other LIBOR settings will effectively cease after June 30, 2023, and it is expected that LIBOR will no longer be used after this date. In addition, it is expected that LIBOR will no longer be used in new contracts entered into after December 31, 2021. To address the impending discontinuation of LIBOR, in the U.S. the Alternative Reference Rates Committee ("ARRC") was established to help ensure the successful transition from LIBOR to a more robust reference rate, its recommended alternative, the Secured Overnight Financing Rate (“SOFR”). SOFR is a new index calculated by reference to short-term repurchase agreements backed by U.S. Treasury securities, as its preferred replacement for U.S. dollar LIBOR. We have been closely monitoring developments related to the transition away from LIBOR and have implemented proactive measures to minimize the potential impact of the transition to the Company, specifically:
•During the year ended December 31, 2021, we issued two series of senior unsecured notes that each pay a fixed rate of interest. As of December 31, 2021, we have an aggregate balance $1.2 billion of senior unsecured notes.
•Our Senior Credit Facility agreement contains fallback language generally consistent with the ARRC's recommendation, which provides a streamlined amendment approach for negotiating a benchmark replacement.
•We continue to monitor developments by the FCA, the ARRC, and other governing bodies involved in LIBOR transition.
Refer to Item 1A. "Risk factors" in this annual report on Form 10-K for additional information about our management of risks related to the transition away from LIBOR.
Interest Rate Hedging
During and subsequent to the year ended December 31, 2021, we entered into four treasury lock contracts with an aggregate notional value of $600.0 million to hedge interest rate risk associated with future issuances of fixed-rate long-term debt.
Long-term Financing and Capital Requirements
Long-term Financing
We anticipate meeting our long-term liquidity requirements, such as scheduled debt maturities, large property acquisitions, expansion and development of properties, other nonrecurring capital improvements and Operating Partnership unit redemptions through the long-term unsecured and secured indebtedness and the issuance of certain debt or equity securities subject to market conditions.
We had unrestricted cash on hand as of December 31, 2021, of approximately $65.8 million. As of December 31, 2021, there was approximately $994.5 million of remaining capacity on the Senior Credit Facility. At December 31, 2021 we had a total of 412 unencumbered MH, RV and marina properties.
From time to time, we may also issue shares of our capital stock, issue equity units in our Operating Partnership, issue unsecured notes, obtain other debt financing or sell selected assets. Our ability to finance our long-term liquidity requirements in such a manner will be affected by numerous economic factors affecting the MH, RV and marina industries at the time, including the effects of the COVID-19 pandemic, the availability and cost of mortgage debt, our financial condition, the operating history of the properties, the state of the debt and equity markets, and the general national, regional and local economic conditions. When it becomes necessary for us to approach the credit markets, the volatility in those markets could make borrowing more difficult to secure, more expensive, or effectively unavailable. In the event our current credit ratings are downgraded, it may become difficult or more expensive to obtain additional financing or refinance existing unsecured indebtedness as maturities become due. Refer to "Risk Factors" in Part I, Item 1A of this Annual Report on Form 10-K. If we are unable to obtain additional debt or equity financing on acceptable terms, our business, results of operations and financial condition would be adversely impacted.
As of December 31, 2021, our net debt to enterprise value was approximately 18.0 percent (assuming conversion of all common OP units, Series A-1 preferred OP units, Series A-3 preferred OP units, Series C preferred OP units, Series D preferred OP units, Series E preferred OP units, Series F preferred OP units, Series G preferred OP units, Series H preferred OP units, Series I preferred OP units and Series J preferred OP units to shares of common stock). Our debt has a weighted average maturity of approximately 8.8 years and a weighted average interest rate of 3.0 percent.
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Capital Requirements
Our capital requirements as of December 31, 2021 include both short and long term obligations:
Our primary long-term liquidity needs are principal payments on outstanding indebtedness as summarized in the table below:
| Payments Due By Period (in thousands) | ||||||||||||||||||||||||||
Outstanding Indebtedness(1) | Total Due | Short-term Obligation ≤1 Year | Long-term Obligation After 1 Year | Refer to | ||||||||||||||||||||||
| Principal payments on long-term debt | $ | 5,698,458 | $ | 141,959 | $ | 5,556,499 | Note 8. Debt and Line of Credit | |||||||||||||||||||
Interest expense(2) | 1,413,255 | 174,250 | 1,239,005 | |||||||||||||||||||||||
| Operating leases | 237,742 | 9,978 | 227,764 | Note 16. Leases | ||||||||||||||||||||||
| Finance lease | 4,408 | 194 | 4,214 | Note 16. Leases | ||||||||||||||||||||||
| Total Outstanding Indebtedness | $ | 7,353,863 | $ | 326,381 | $ | 7,027,482 | ||||||||||||||||||||
(1)Our outstanding indebtedness in this table excludes debt premiums, discounts and deferred financing costs, as applicable.
(2)Our obligations related to interest expense are calculated based on the current debt levels, rates and maturities as of December 31, 2021 (including finance leases), and actual payments required in future periods may be different than the amounts included above. Perpetual securities include one year of interest expense for payment due after five years.
Certain of our nonconsolidated affiliates, which are accounted for under the equity-method of accounting, have incurred indebtedness. We have not guaranteed the debt of our nonconsolidated affiliates in the arrangements referenced below, nor do we have any obligations to fund this debt should the nonconsolidated affiliates be unable to do so. Refer to Note 6, "Investments in Nonconsolidated Affiliates," in the accompanying Consolidated Financial Statements for additional information about these entities.
GTSC - During September 2019, GTSC, entered into a warehouse line of credit with a maximum loan amount of $125.0 million. During September 2020, May 2021 and December 2021, the maximum amount was increased to $180.0 million, $230.0 million and $255.0 million, respectively, with an option to increase to $275.0 million subject to the lender's consent. As of December 31, 2021, the aggregate carrying amount of debt, including both our and our partner's share, incurred by GTSC was $243.1 million (of which our proportionate share is $97.2 million). As of December 31, 2020, the aggregate carrying amount of debt, including both our and our partner's share, incurred by GTSC was $167.7 million (of which our proportionate share is $67.1 million). The debt bears interest at a variable rate based on a Commercial Paper or adjusted Secured Overnight Financing Rate plus 1.65 percent per annum and matures on December 15, 2025.
Sungenia JV - During May 2020, Sungenia JV, entered into a debt facility agreement with a maximum loan amount of $27.0 million Australian dollars, or $19.6 million converted at the December 31, 2021 exchange rate. As of December 31, 2021, the aggregate carrying amount of debt, including both our and our partners' share, incurred by Sungenia JV was $6.3 million (of which our proportionate share is $3.1 million). As of December 31, 2020, the aggregate carrying amount of debt, including both our and our partners' share, incurred by Sungenia JV was $6.7 million (of which our proportionate share is $3.3 million). The debt bears interest at a variable rate based on the BBSY rate plus 2.05 percent per annum and is available for a minimum of three years.
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SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES
Critical Accounting Estimates
Our Consolidated Financial Statements are prepared in accordance with United States of America generally accepted accounting principles ("GAAP"), which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses in the periods presented. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable; however, due to inherent uncertainties in making estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods.
Our significant accounting estimates include acquisitions (of investment properties) and impairment (of long live assets or properties, right-of-use assets and goodwill). Refer to Note 1, "Significant Accounting Policies," in our accompanying Consolidated Financial Statements for information regarding our critical accounting estimates that affect the Consolidated Financial Statements and that use judgments and assumptions. In addition, the likelihood that materially different amounts could be reported under varied conditions and assumptions is discussed.
Impact of New Accounting Standards
Refer to Note 18, "Recent Accounting Pronouncements," in our accompanying Consolidated Financial Statements for information regarding new accounting pronouncements.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the exposure to loss resulting from changes in market factors such as interest rates, foreign currency exchange rates, commodity prices and equity prices.
Interest Rate Risk
Our principal market risk exposure is interest rate risk. We mitigate this risk by maintaining prudent amounts of leverage, minimizing capital costs, and interest expense while continuously evaluating all available debt and equity resources and following established risk management policies and procedures, which include the periodic use of derivatives. Our primary strategy in entering into derivative contracts is to minimize the variability that interest rate changes could have on our future cash flows. From time to time, we employ derivative instruments that effectively convert a portion of our variable rate debt to fixed rate debt. We do not enter into derivative instruments for speculative purposes.
Our variable rate debt totaled $1.0 billion and $1.2 billion as of December 31, 2021 and 2020, respectively, and at such dates bore interest at the Adjusted Eurocurrency Rate or BBSY rate, plus a margin, and Prime or various LIBOR rates, respectively. If the Adjusted Eurocurrency Rate or BBSY rates, and Prime or LIBOR rates increased or decreased by 1.0 percent, our interest expense would have increased or decreased by approximately $8.2 million and $3.4 million for the years ended December 31, 2021 and 2020, respectively, based on the $821.2 million and $339.5 million average balances outstanding under our variable rate debt facilities, respectively.
Foreign Currency Exchange Rate Risk
Foreign currency exchange rate risk is the risk that fluctuations in currencies against the U.S. dollar will negatively impact our results of operations. We are exposed to foreign currency exchange rate risk as a result of remeasurement and translation of the assets and liabilities of our Canadian properties, our Australian equity investment, and our United Kingdom assets and joint venture into U.S. dollars. Fluctuations in foreign currency exchange rates can therefore create volatility in our results of operations and may adversely affect our financial condition.
At December 31, 2021 and 2020, our stockholder's equity included $663.6 million and $250.8 million from our investments and operations in Canada, Australia and the United Kingdom, which collectively represented 9.9 percent and 4.5 percent of total stockholder's equity, respectively. Based on our sensitivity analysis, a 10.0 percent strengthening of the U.S. dollar against the Canadian dollar, Australian dollar and British pound would have caused a reduction of $66.4 million and $25.1 million to our total stockholder's equity at December 31, 2021 and 2020, respectively.
Capital Market Risk
We are exposed to risks related to the equity capital markets, and our related ability to raise capital through the issuance of our common stock or other equity instruments. We are also exposed to risks related to the debt capital markets, and our related ability to finance our business through borrowings under other financing arrangements. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing and terms of capital we raise.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements and supplementary data are filed herewith under Item 15.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures (pursuant to Rules 13a-15(e) or 15d-15(e) of the Exchange Act) at December 31, 2021. Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2021.
Management's report on internal control over financial reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, misstatements due to error or fraud may not be prevented or detected on a timely basis.
Our management performed an assessment of the effectiveness of our internal control over financial reporting at December 31, 2021, utilizing the criteria discussed in the "Internal Control - Integrated Framework (2013)" issued by the Committee of Sponsoring Organizations of the Treadway Commission. The objective of this assessment was to determine whether our internal control over financial reporting was effective at December 31, 2021. Based on management's assessment, we have concluded that our internal control over financial reporting was effective at December 31, 2021.
The effectiveness of our internal control over financial reporting has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in its report which is included herein.
Changes in internal control over financial reporting
There were no material changes in our internal control over financial reporting during the quarter ended December 31, 2021.
ITEM 9B. OTHER INFORMATION
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Pursuant to the general instructions of Item 401 of Regulation S-K, certain information regarding our executive officers is contained in Part I of this Form 10-K. Unless provided in an amendment to this Annual Report on Form 10-K, the other information required by this Item is incorporated herein by reference to the applicable information in the proxy statement for our 2022 annual meeting (the "Proxy Statement,") including the information set forth under the captions "Proposal No.1 Election of Directors - Consideration of Director Nominees," "Corporate Governance - Board of Directors," "Corporate Governance - Board of Directors - Board Structure - Committees of the Board of Directors," "Security Ownership Information - Security Ownership of Directors and Executive Officers," and "Information About Executive Officers - Executive Officers Biographies."
ITEM 11. EXECUTIVE COMPENSATION
Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the applicable information in the Proxy Statement, including the information set forth under the captions "Proposal No.1 Election of Directors - Director Compensation," "Corporate Governance - Board of Directors - Board Structure - Compensation Committee Interlocks and Insider Participation," and "Compensation Discussion and Analysis." The information in the section captioned "Executive Compensation - Compensation Committee Report" in the Proxy Statement or an amendment to this Annual Report on Form 10-K is incorporated by reference herein but shall be deemed furnished, not filed, and shall not be deemed to be incorporated by reference into any filing we make under the Securities Act or the Exchange Act.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the applicable information in the Proxy Statement, including the information set forth under the captions "Security Ownership Information."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the Proxy Statement, including the information set forth under the captions "Corporate Governance - Board of Directors," "Corporate Governance - Board of Directors - Board Structure - Committees of the Board of Directors," "Corporate Governance - Board of Directors - Board Structure - Leadership Structure and Independence of Non-Employee Directors," and "Corporate Governance - Board of Directors - Other Board Policies and Processes - Certain Relationships and Related Party Transactions."
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the Proxy Statement, including the information set forth under the caption for the proposal related to "Ratification of Selection of Grant Thornton LLP."
83
SUN COMMUNITIES, INC.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following documents are filed herewith as part of this Form 10-K:
1. Financial Statements
A list of the financial statements required to be filed as a part of this Annual Report on Form 10‑K is shown in the "Index to the Consolidated Financial Statements and Financial Statement Schedules" filed herewith.
2. Financial Statement Schedules
The financial statement schedules required to be filed as a part of this Annual Report on Form 10‑K is shown in the "Index to the Consolidated Financial Statements and Financial Statement Schedules" filed herewith.
3. Exhibits
A list of the exhibits required by Item 601 of Regulation S‑K to be filed as a part of this Annual Report on Form 10-K is filed herewith.
ITEM 16. FORM 10-K SUMMARY
None.
84
SUN COMMUNITIES, INC.
EXHIBITS
| Exhibit Number | Description | Method of Filing | ||||||
| 2.1* | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed on September 29, 2020 | |||||||
| 3.1 | Incorporated by reference to Sun Communities, Inc.'s Annual Report on Form 10-K filed on February 22, 2018 | |||||||
| 3.2 | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed on May 12, 2017 | |||||||
| 4.1 | Incorporated by reference to Sun Communities, Inc.'s Annual Report on Form 10-K filed for the year ended December 31, 2019 | |||||||
| 4.2 | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed on September 29, 2020 | |||||||
| 4.3 | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on June 28, 2021 | |||||||
| 4.4 | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on June 28, 2021 | |||||||
| 4.5 | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on June 28, 2021 | |||||||
| 4.6 | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on October 5, 2021 | |||||||
| 4.7 | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on October 5, 2021 | |||||||
| 10.1 | Incorporated by reference to Sun Communities, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2002, as amended | |||||||
| 10.2 | Incorporated by reference to Sun Communities, Inc.'s Annual Report on Form 10-K filed on February 21, 2019 | |||||||
| 10.3* | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed February 5, 2019 | |||||||
| 10.4* | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed January 13, 2020 | |||||||
| 10.5* | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed January 14, 2020 | |||||||
| 10.6* | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed May 18, 2020 | |||||||
| 10.7* | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed October 6, 2020 | |||||||
| 10.8* | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed November 5, 2020 | |||||||
| 10.9* | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed January 4, 2021 | |||||||
| 10.10* | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on April 23, 2021 | |||||||
| 10.11 | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed July 25, 2012 | |||||||
| 10.12 | Incorporate by reference to Exhibit A to Sun Communities, Inc.'s Definitive Proxy Statement filed on March 29, 2018 | |||||||
| 10.13 | Incorporated by reference to Sun Communities, Inc.'s Proxy Statement dated April 29, 2015 for the Annual meeting of Stockholders held July 20, 2015 | |||||||
| 10.14 | Filed herewith | |||||||
| 10.15 | Incorporated by reference to Sun Communities, Inc.'s Registration Statement No. 33 69340 | |||||||
| 10.16 | Incorporated by reference to Sun Communities, Inc.'s Registration Statement No. 33 80972 | |||||||
| 10.17 | Incorporated by reference to Sun Communities, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2004 | |||||||
| 10.18* | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on March 31, 2021 | |||||||
85
SUN COMMUNITIES, INC.
| 10.19* | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on March 31, 2021 | |||||||
| 10.20* | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on March 31, 2021 | |||||||
| 10.21* | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on July 20, 2021 | |||||||
| 10.22* | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on October 18, 2021 | |||||||
| 10.23 | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed July 15, 2014 | |||||||
| 10.24* | Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K filed on December 29, 2020 | |||||||
| 10.25* | Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on June 14, 2021 | |||||||
| 21.1 | Filed herewith | |||||||
| 22.1 | Filed herewith | |||||||
| 23.1 | Filed herewith | |||||||
| 31.1 | Filed herewith | |||||||
| 31.2 | Filed herewith | |||||||
| 32.1 | Furnished herewith | |||||||
| 101.INS | XBRL Instance Document | The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | Filed herewith | ||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith | ||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith | ||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | Filed herewith | ||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith | ||||||
| * | Certain schedules and exhibits have been omitted pursuance to Item 601(a)(5) of Regulation S-K because such schedules and exhibits do not contain information which is material to an investment decision or which is not otherwise disclosed in the filed agreements. The Company will furnish the omitted schedules and exhibits to the SEC upon request by the SEC. | |||||||
| # | Management contract or compensatory plan or arrangement | |||||||
86
SUN COMMUNITIES, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SUN COMMUNITIES, INC. (Registrant) | |||||||||||
| Dated: February 22, 2022 | By | /s/ | Gary A. Shiffman | ||||||||
| Gary A. Shiffman Chief Executive Officer | |||||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Name | Capacity | Date | |||||||||||||||
| /s/ | Gary A. Shiffman | Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) | February 22, 2022 | ||||||||||||||
| Gary A. Shiffman | |||||||||||||||||
| /s/ | Karen J. Dearing | Executive Vice President, Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer) | February 22, 2022 | ||||||||||||||
| Karen J. Dearing | |||||||||||||||||
| /s/ | Tonya Allen | Director | February 22, 2022 | ||||||||||||||
| Tonya Allen | |||||||||||||||||
| /s/ | Meghan G. Baivier | Director | February 22, 2022 | ||||||||||||||
| Meghan G. Baivier | |||||||||||||||||
| /s/ | Stephanie W. Bergeron | Director | February 22, 2022 | ||||||||||||||
| Stephanie W. Bergeron | |||||||||||||||||
| /s/ | Brian M. Hermelin | Director | February 22, 2022 | ||||||||||||||
| Brian M. Hermelin | |||||||||||||||||
| /s/ | Ronald A. Klein | Director | February 22, 2022 | ||||||||||||||
| Ronald A. Klein | |||||||||||||||||
| /s/ | Clunet R. Lewis | Director | February 22, 2022 | ||||||||||||||
| Clunet R. Lewis | |||||||||||||||||
| /s/ | Arthur A. Weiss | Director | February 22, 2022 | ||||||||||||||
| Arthur A. Weiss | |||||||||||||||||
87
SUN COMMUNITIES, INC.
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE
| Page | |||||
Reports of Independent Registered Public Accounting Firm (PCAOB ID Number | F-2 | ||||
| Financial Statements: | |||||
Consolidated Balance Sheets as of December 31, 2021 and 2020 | F-5 | ||||
Consolidated Statements of Operations for the Years Ended December 31, 2021, 2020 and 2019 | F-6 | ||||
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2021, 2020 and 2019 | F-7 | ||||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, 2020 and 2019 | F-8 | ||||
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2021, 2020 and 2019 | F-10 | ||||
| Notes to Consolidated Financial Statements | F-11 | ||||
| Real Estate and Accumulated Depreciation, Schedule III | F-58 | ||||
F - 1
SUN COMMUNITIES, INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
Sun Communities, Inc.
Opinion on the financial statements
We have audited the accompanying Consolidated Balance Sheets of Sun Communities, Inc. (a Maryland corporation) and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related Consolidated Statements of Operations, Comprehensive Income, Stockholders' Equity, and Cash Flows for each of the three years in the period ended December 31, 2021, and the related notes and schedule included under Item 15(a) (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"), and our report dated February 22, 2022 expressed an unqualified opinion.
Basis for opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Accounting for Acquisitions
The Company's strategy includes growth by acquisition. As described in footnote 1 and 3 to the consolidated financial statements, the Company evaluates acquisitions to determine whether the acquisition should be classified as either an asset acquisition or business combination. For asset acquisitions, the Company allocates the purchase price of these properties on a relative fair value basis and capitalizes direct acquisition related costs as part of the purchase price. Acquisitions that meet the definition of a business combination are recorded at fair value using a fair value model under which the assets and liabilities are generally recognized at their fair values and the difference between the consideration transferred, excluding transaction costs, and the fair values of the assets and liabilities is recognized as goodwill. The Company acquired approximately $1.42 billion of real estate during the year ended December 31, 2021. We identified the evaluation of the measurement of the fair values used in purchase price allocation of real estate as a critical audit matter.
The principal consideration for our determination that the evaluation of the measurement of the fair value used in the purchase price allocation of real estate was a critical audit matter was that it may involve a high degree of subjectivity in evaluating the reasonableness of management's estimates and the assumptions used in those estimates, related to the recognition and measurement of assets acquired and liabilities assumed.
F - 2
SUN COMMUNITIES, INC.
Our audit procedures related to evaluating the fair values used in the purchase price allocation of real estate acquisition included the following, among others. We obtained an understanding and tested the design and operating effectiveness of relevant controls relating to accounting for acquisitions, such as controls over the evaluation of accounting treatment and the recognition and measurement of assets acquired, liabilities assumed, and consideration paid. For each acquisition, we obtained and evaluated the third-party purchase price allocation report, along with relevant supporting documentation such as the executed purchase agreement, in order to corroborate our understanding of the substance of the acquisition as well as assess the completeness of the assets acquired and liabilities assumed. For a selection of real estate acquisitions, we involved our real estate valuation professionals with specialized skills and knowledge who assisted in evaluating the assumptions used in the fair value measurements of the purchase price allocations. More specifically, we assessed, through the use of our internal valuation specialist, whether (1) the values assigned to the tangible assets appeared reasonable based on a cost or market approach for similar properties in each geographic area, (2) intangible assets were properly considered and identified, and (3) the significant assumptions used in valuing the assets and liabilities were reasonable and (4) if applicable, the reasonableness of the fair value of equity interests issued as consideration in the transaction. Our overall assessment of the amounts reported and disclosed in the consolidated financial statements included consideration of whether such information was consistent with evidence obtained in other areas of the audit.
Impairment of Investment Properties
As described in footnote 1, the Company reviews the carrying value of its long-lived assets, which includes its investment properties, for impairment on a quarterly basis or whenever events or changes in circumstances indicate a possible impairment. Events or circumstances that may prompt a test of recoverability may include a significant decrease in the anticipated market price, an adverse change to the extent or manner in which an asset may be used or in its physical condition or other events that may significantly change the value of the long-lived asset.
The Company reviews investment properties for potential impairment through an analysis of net operating income trends period over period. In the event that any impairment indicators are present, the Company undertakes additional analyses utilizing expected undiscounted future cash flows for identified investment properties. Forecasting of cash flows requires management to make estimates and assumptions about variables such as growth rates, forecasted net operating income, estimated holding period, and capitalization rates. In 2021, the Company's net operating income trend analysis resulted in 20 investment properties requiring undiscounted cash flow analysis. No impairments were identified as a result of the Company's review for impairment.
The principal considerations for our determination that the impairment of investment properties is a critical audit matter is that auditing management's evaluation of impairment is challenging due to the high degree of subjective auditor judgment necessary in evaluating management's identification of indicators of potential impairment and determination of undiscounted cash flows for properties where impairment indicators have been identified. The significant assumptions used in the undiscounted cash flows analysis include growth rates, forecasted net operating income, estimated holding period, and capitalization rates, which can be affected by expectations about future market or economic conditions, demand, and competition.
We performed the following procedures, among others, in connection with forming our overall opinion on the financial statements. We obtained an understanding of management's process to identify indicators of impairment. We evaluated the design and tested the operating effectiveness of the controls that address the identification of indicators of impairment, including management's review of the operations and financial performance of investment properties, and management's preparation of undiscounted cash flow analysis. We examined and evaluated the Company's net operating income trend analysis and its assessment of other events, and if undiscounted cash flow analysis was necessary, we evaluated the significant assumptions and methods used in developing that analysis. As part of our evaluation, we assessed the historical accuracy of the Company's estimates and ability to forecast property performance. We also performed sensitivity analyses of certain significant assumptions to evaluate the changes in the undiscounted cash flows of certain properties that would result from changes in the assumptions used by management. We compared the consistency of capitalization rates used in the analysis to comparable recent acquisitions completed by the Company which have been reviewed by our valuation specialists.
/s/ GRANT THORNTON LLP
We have served as the Company's auditor since 2003.
February 22, 2022
F - 3
SUN COMMUNITIES, INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
Sun Communities, Inc.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Sun Communities, Inc. (a Maryland corporation) and subsidiaries (the "Company") as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the consolidated financial statements of the Company as of and for the year ended December 31, 2021, and our report dated February 22, 2022 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT THORNTON LLP
Philadelphia, Pennsylvania
February 22, 2022
F - 4
SUN COMMUNITIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
| As of | ||||||||||||||
| December 31, 2021 | December 31, 2020 | |||||||||||||
| Assets | ||||||||||||||
| Land | $ | $ | ||||||||||||
| Land improvements and buildings | ||||||||||||||
| Rental homes and improvements | ||||||||||||||
| Furniture, fixtures and equipment | ||||||||||||||
| Investment property | ||||||||||||||
| Accumulated depreciation | ( | ( | ||||||||||||
Investment property, net (including $ | ||||||||||||||
Cash, cash equivalents and restricted cash (including $ | ||||||||||||||
Marketable securities (see Note 14) | ||||||||||||||
| Inventory of manufactured homes | ||||||||||||||
| Notes and other receivables, net | ||||||||||||||
| Goodwill | ||||||||||||||
Other intangible assets, net (including $ | ||||||||||||||
Other assets, net (including $ | ||||||||||||||
| Total Assets | $ | $ | ||||||||||||
| Liabilities | ||||||||||||||
Secured debt (see Note 8) (including $ | $ | $ | ||||||||||||
Unsecured debt (see Note 8) (including $ | ||||||||||||||
| Distributions payable | ||||||||||||||
| Advanced reservation deposits and rent | ||||||||||||||
| Accrued expenses and accounts payable | ||||||||||||||
Other liabilities (including $ | ||||||||||||||
| Total Liabilities | ||||||||||||||
Commitments and contingencies (see Note 15) | ||||||||||||||
Temporary equity (see Note 9) (including $ | ||||||||||||||
| Stockholders' Equity | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| Distributions in excess of accumulated earnings | ( | ( | ||||||||||||
| Total Sun Communities, Inc. stockholders' equity | ||||||||||||||
| Noncontrolling interests | ||||||||||||||
| Common and preferred OP units | ||||||||||||||
Consolidated entities (including $ | ||||||||||||||
| Total noncontrolling interests | ||||||||||||||
| Total Stockholders' Equity | ||||||||||||||
| Total Liabilities, Temporary Equity and Stockholders' Equity | $ | $ | ||||||||||||
See accompanying Notes to Consolidated Financial Statements.
F - 5
SUN COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
| Year Ended | ||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | ||||||||||||||||||
| Revenues | ||||||||||||||||||||
| Real property | $ | $ | $ | |||||||||||||||||
| Home sales | ||||||||||||||||||||
| Service, retail, dining and entertainment | ||||||||||||||||||||
| Interest | ||||||||||||||||||||
| Brokerage commissions and other, net | ||||||||||||||||||||
| Total Revenues | ||||||||||||||||||||
| Expenses | ||||||||||||||||||||
| Property operating and maintenance | ||||||||||||||||||||
| Real estate tax | ||||||||||||||||||||
| Home costs and selling | ||||||||||||||||||||
| Service, retail, dining and entertainment | ||||||||||||||||||||
| General and administrative | ||||||||||||||||||||
| Catastrophic event-related charges, net | ||||||||||||||||||||
| Business combinations | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
Loss on extinguishment of debt (see Note 8) | ||||||||||||||||||||
| Interest | ||||||||||||||||||||
| Interest on mandatorily redeemable preferred OP units / equity | ||||||||||||||||||||
| Total Expenses | ||||||||||||||||||||
| Income Before Other Items | ||||||||||||||||||||
Gain on remeasurement of marketable securities (see Note 14) | ||||||||||||||||||||
| Gain / (loss) on foreign currency translation | ( | |||||||||||||||||||
| Gain on dispositions of properties | ||||||||||||||||||||
| Other expense, net | ( | ( | ( | |||||||||||||||||
Gain / (loss) on remeasurement of notes receivable (see Note 4) | ( | |||||||||||||||||||
Income from nonconsolidated affiliates (see Note 6) | ||||||||||||||||||||
Loss on remeasurement of investment in nonconsolidated affiliates (see Note 6) | ( | ( | ||||||||||||||||||
Current tax expense (see Note 12) | ( | ( | ( | |||||||||||||||||
Deferred tax benefit / (expense) (see Note 12) | ( | |||||||||||||||||||
| Net Income | ||||||||||||||||||||
| Less: Preferred return to preferred OP units / equity interests | ||||||||||||||||||||
| Less: Income attributable to noncontrolling interests | ||||||||||||||||||||
| Net Income Attributable to Sun Communities, Inc. | ||||||||||||||||||||
| Less: Preferred stock distribution | ||||||||||||||||||||
| Net Income Attributable to Sun Communities, Inc. Common Stockholders | $ | $ | $ | |||||||||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||||||||
| Weighted average common shares outstanding - diluted | ||||||||||||||||||||
Basic earnings per share (see Note 13) | $ | $ | $ | |||||||||||||||||
Diluted earnings per share (see Note 13) | $ | $ | $ | |||||||||||||||||
See accompanying Notes to Consolidated Financial Statements.
F - 6
SUN COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
| Year Ended | |||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||
| Net Income | $ | $ | $ | ||||||||||||||
| Foreign currency translation gain / (loss) adjustment | ( | ||||||||||||||||
| Unrealized gain on interest rate swaps | |||||||||||||||||
| Total Comprehensive Income | |||||||||||||||||
| Less: Comprehensive income attributable to noncontrolling interests | ( | ( | ( | ||||||||||||||
| Comprehensive Income attributable to Sun Communities, Inc. | $ | $ | $ | ||||||||||||||
See accompanying Notes to Consolidated Financial Statements.
F - 7
SUN COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Year Ended | |||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||
| Operating Activities | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Gain on disposition of assets | ( | ( | ( | ||||||||||||||
| Gain on disposition of properties | ( | ( | |||||||||||||||
| (Gain) / loss on foreign currency translation | ( | ( | |||||||||||||||
Gain on remeasurement of marketable securities (see Note 14) | ( | ( | ( | ||||||||||||||
| Loss on remeasurement of contingent liabilities | |||||||||||||||||
| Share-based compensation | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
Deferred tax (benefit) / expense (see Note 12) | ( | ( | |||||||||||||||
| Amortization of below market leases | ( | ( | ( | ||||||||||||||
| Amortization of debt premium | ( | ( | ( | ||||||||||||||
| Amortization of deferred financing costs | |||||||||||||||||
| Amortization of ground lease intangibles | |||||||||||||||||
Loss on extinguishment of debt (see Note 8) | |||||||||||||||||
(Gain) / loss on remeasurement of notes receivable (see Note 4) | ( | ||||||||||||||||
Loss on remeasurement of investment in nonconsolidated affiliates (see Note 6) | |||||||||||||||||
Income from nonconsolidated affiliates (see Note 6) | ( | ( | ( | ||||||||||||||
| Distributions of income from nonconsolidated affiliates | |||||||||||||||||
| Change in notes receivable from financed sales of inventory homes, net of repayments | ( | ( | |||||||||||||||
| Change in inventory, other assets and other receivables, net | ( | ( | |||||||||||||||
| Change in other liabilities | |||||||||||||||||
| Net Cash Provided By Operating Activities | |||||||||||||||||
| Investing Activities | |||||||||||||||||
| Investment in properties | ( | ( | ( | ||||||||||||||
| Acquisitions of properties, net of cash acquired | ( | ( | ( | ||||||||||||||
| Proceeds from disposition of assets and depreciated homes, net | |||||||||||||||||
| Proceeds from disposition of properties | |||||||||||||||||
| Issuance of notes and other receivables | ( | ( | ( | ||||||||||||||
| Repayments of notes and other receivables | |||||||||||||||||
| Investments in marketable securities | ( | ( | ( | ||||||||||||||
| Investments in nonconsolidated affiliates | ( | ( | ( | ||||||||||||||
| Distributions of capital from nonconsolidated affiliates | |||||||||||||||||
| Net Cash Used For Investing Activities | ( | ( | ( | ||||||||||||||
| Financing Activities | |||||||||||||||||
| Issuance of common stock, OP units and preferred OP units, net | |||||||||||||||||
| Contributions from noncontrolling interest | |||||||||||||||||
| Redemption of Series G preferred OP units | ( | ||||||||||||||||
| Redemption of Series B-3 preferred OP units | ( | ||||||||||||||||
| Borrowings on lines of credit | |||||||||||||||||
| Payments on lines of credit | ( | ( | ( | ||||||||||||||
| Proceeds from issuance of debt | |||||||||||||||||
| Payments on debt | ( | ( | ( | ||||||||||||||
| Fees paid in connection with extinguishment of debt | ( | ( | ( | ||||||||||||||
| Proceeds received from return of prepaid deferred financing costs | |||||||||||||||||
| Distributions | ( | ( | ( | ||||||||||||||
| Payments for deferred financing costs | ( | ( | ( | ||||||||||||||
| Payment of contingent liability | ( | ||||||||||||||||
| Net Cash Provided By Financing Activities | |||||||||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ||||||||||||||||
| Net change in cash, cash equivalents and restricted cash | ( | ( | |||||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | |||||||||||||||||
| Cash, Cash Equivalents and Restricted Cash, End of Period | $ | $ | $ | ||||||||||||||
F - 8
| Year Ended | |||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||
| Supplemental Information | |||||||||||||||||
Cash paid for interest (net of capitalized interest of $ | $ | $ | $ | ||||||||||||||
| Cash paid for interest on mandatorily redeemable debt | $ | $ | $ | ||||||||||||||
| Cash paid for income taxes | $ | $ | $ | ||||||||||||||
| Noncash investing and financing activities | |||||||||||||||||
| Reduction in secured borrowing balance | $ | $ | $ | ||||||||||||||
| Change in distributions declared and outstanding | $ | $ | $ | ||||||||||||||
| Conversion of common and preferred OP units | $ | $ | $ | ||||||||||||||
| Asset held for sale | $ | $ | $ | ||||||||||||||
| Conversion of Series A-4 preferred stock | $ | $ | $ | ||||||||||||||
| Release of note receivable and accrued interest | $ | $ | $ | ||||||||||||||
| Noncash investing and financing activities at the date of acquisition | |||||||||||||||||
| Acquisitions - Common stock and OP units issued | $ | $ | $ | ||||||||||||||
| Acquisitions - Debt | $ | $ | $ | ||||||||||||||
| Acquisitions - Series D preferred interest | $ | $ | $ | ||||||||||||||
| Acquisitions - Series E preferred interest | $ | $ | $ | ||||||||||||||
| Acquisitions - Series F preferred interest | $ | $ | $ | ||||||||||||||
| Acquisitions - Series G preferred interest | $ | $ | $ | ||||||||||||||
| Acquisitions - Series H preferred interest | $ | $ | $ | ||||||||||||||
| Acquisitions - Series I preferred interest | $ | $ | $ | ||||||||||||||
| Acquisitions - Series J preferred interest | $ | $ | $ | ||||||||||||||
| Acquisitions - Holdback | $ | $ | $ | ||||||||||||||
| Acquisitions - Escrow | $ | $ | $ | ||||||||||||||
| Acquisitions - Deferred liability | $ | $ | $ | ||||||||||||||
See accompanying Notes to Consolidated Financial Statements.
F - 9
SUN COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
| Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||
| Temporary Equity | Common Stock | Additional Paid-in Capital | Distributions in Excess of Accumulated Earnings | Accumulated Other Comprehensive Income / (Loss) | Non-controlling Interests | Total Stockholders' Equity | Total Equity | ||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2018 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock and common OP units, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Conversion of OP units | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||
| Conversion of series A-4 preferred stock | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Other redeemable non-controlling interests | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Share-based compensation - amortization and forfeitures | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Issuance of Series D OP Units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Distributions | ( | — | — | ( | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock and common OP units, net | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Conversion of OP units | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||
| Other redeemable non-controlling interests | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Share-based compensation - amortization and forfeitures | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Issuance of Series E preferred OP units | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Issuance of Series F preferred OP units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Issuance of Series G preferred OP units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Redemption of Series G OP Units | ( | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Issuance of Series H preferred OP units | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Issuance of Series I preferred OP units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Remeasurement of notes receivable and equity method investment | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Distributions | ( | — | — | ( | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock and common OP units, net | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Conversion of OP units | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||
| Equity interest in consolidated entities | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Other redeemable non-controlling interests | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Share-based compensation - amortization and forfeitures | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Issuance of Series J preferred OP units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Distributions | ( | — | — | ( | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| OP Units accretion | — | ( | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2021 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements.
F - 10
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies
Business
Sun Communities, Inc., a Maryland corporation, and all wholly-owned or majority-owned and controlled subsidiaries, including Sun Communities Operating Limited Partnership, a Michigan limited partnership (the "Operating Partnership"), Sun Home Services, Inc., a Michigan corporation ("SHS") and Safe Harbor Marinas, LLC ("Safe Harbor") are referred to herein as the "Company," "us," "we," and "our."
We are a fully integrated real estate investment trust ("REIT"). As of December 31, 2021, we owned and operated or held an interest in a portfolio of 602 MH communities, RV resorts, and marinas (collectively, the "properties") located in 39 states throughout the United States and in Ontario, Canada and Puerto Rico including 284 MH communities, 160 RV resorts, 33 properties containing both MH and RV sites, and 125 marinas. As of December 31, 2021, the properties contained an aggregate of 204,163 developed sites comprised of 98,621 developed MH sites, 30,540 annual RV sites (inclusive of both annual and seasonal usage rights), 29,847 transient RV sites, and 45,155 wet slips and dry storage spaces.
Principles of Consolidation
We consolidate our majority-owned subsidiaries in which we have the ability to control the operations of our subsidiaries and all variable interest entities with respect to which we are the primary beneficiary. We also consolidate entities in which we have a direct or indirect controlling or voting interest. All significant intercompany transactions have been eliminated. Any subsidiaries in which we have an ownership percentage equal to or greater than 50 percent, but less than 100 percent, or considered a VIE, represent subsidiaries with a non-controlling interest. The non-controlling interests in our subsidiaries are allocated their proportionate share of the subsidiaries' financial results.
Certain prior period amounts have been reclassified on our Consolidated Financial Statements to conform with current year presentation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions related to the reported amounts included in our Consolidated Financial Statements and accompanying footnotes thereto. Actual results could differ from those estimates.
Segment Information
FASB Accounting Standards Codification ("ASC") Topic 280, "Segment Reporting," establishes standards for the way business enterprises report information about operating segments in its financial statements. In accordance with ASC 280, effective January 1, 2021, we changed our organizational structure from a two -segment to a three -segment structure as a result of the acquisition of Safe Harbor and its internal organization. The new structure reflects how the chief operating decision maker manages the business, makes operating decisions, allocates resources and evaluates operating performance. All prior period amounts are recast to conform to the way we internally manage our business and monitor segment performance. Certain reclassifications have been made to the prior period financial statements and related notes in order to conform to the current period presentation. The most significant changes were the combining of rental home revenue with real property revenue, the combining of rental home operating and maintenance expenses with property operating expenses, and the combining of home selling expenses with cost of home sales. Vacation rental home rent has been reclassified from ancillary income into real property. In addition, ancillary revenues and expenses have been renamed service, retail, dining & entertainment. There was no impact to prior period net income, stockholders equity or cash flows for any of the reclassifications. Our three reportable segments are: (i) Manufactured home ("MH") communities, (ii) Recreational vehicle ("RV") resorts and (iii) Marina.
The MH segment owns, operates, develops, or has an interest in, a portfolio of MH communities and is in the business of acquiring, operating and developing ground up MH communities to provide affordable housing solutions to residents. The MH segment also provides manufactured home sales and leasing services to tenants and prospective tenants of our communities.
F - 11
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The RV segment owns, operates, develops, or has an interest in, a portfolio of RV resorts and is in the business of acquiring, operating and developing ground up RV resorts throughout the U.S. and in Ontario, Canada. It also provides leasing services for vacation rentals within the RV resorts.
The Marina segment owns, operates, and develops marinas, and is in the business of acquiring, and operating marinas throughout the U.S. with the majority of such marinas concentrated in coastal regions, others located in various inland regions, and Puerto Rico.
We evaluate segment operating performance based on NOI. Refer to Note 11, "Segment Reporting," for additional information.
Investment Property
Investment property is recorded at cost, less accumulated depreciation.
Impairment of long-lived assets - we review the carrying value of long-lived assets to be held and used for impairment quarterly or whenever events or changes in circumstances indicate a possible impairment. Future events could occur which would cause us to conclude that impairment indicators exist, and significant adverse changes in national, regional, or local market conditions or trends may cause us to change the estimates and assumptions used in our impairment analysis. The results of an impairment analysis could be material to our financial statements. Our primary indicator for potential impairment is based on NOI trends period over period. Circumstances that may prompt a test of recoverability may include a significant decrease in the anticipated market price, an adverse change to the extent or manner in which an asset may be used or in its physical condition or other events that may significantly change the value of the long-lived asset. An impairment loss is recognized when a long-lived asset's carrying value is not recoverable and exceeds estimated fair value.
We estimate the fair value of our long-lived assets based on discounted future cash flows and any potential disposition proceeds for a given asset. Forecasting cash flows requires management to make estimates and assumptions about such variables as the estimated holding period, rental rates, occupancy, development and operating expenses during the holding period, as well as disposition proceeds. Management uses its best judgment when developing these estimates and assumptions, but the development of the projected future cash flows is based on subjective variables.
Real estate held for sale - we periodically classify real estate as "held for sale." An asset is classified as held for sale after an active program to sell an asset has commenced and when the sale is probable. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded. Within Other Assets, net on the Consolidated Balance Sheets are $0.7 million of real estate held for sale at one property and $32.1 million of real estate held for sale which is the carrying value of four properties respectively, as of December 31, 2021 and 2020.
Acquisitions - we evaluate acquisitions pursuant to ASC 805 "Business Combinations" to determine whether the acquisition should be classified as either an asset acquisition or a business combination.
Acquisitions for which substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets are accounted for as an asset acquisition. Most of our property acquisitions are accounted for as asset acquisitions. For asset acquisitions, we allocate the purchase price of these properties on a relative fair value basis and capitalize direct acquisition related costs as part of the purchase price. Acquisition costs that do not meet the criteria to be capitalized are expensed as incurred and presented as General and administrative costs in our Consolidated Statements of Operations.
Acquisitions that meet the definition of a business combination are recorded at fair value using a fair value model under which the assets and liabilities are generally recognized at their fair values and the difference between the consideration transferred, excluding transaction costs, and the fair values of the assets and liabilities is recognized as goodwill. For acquisitions that meet the definition of a business combination, we allocate the purchase price of those properties on a fair value basis and expense the acquisitions related transaction costs as incurred. Transaction costs are presented as Business combination in our Consolidated Statements of Operations.
For asset acquisitions and business combinations, we allocate the purchase price to net tangible and identified intangible assets acquired based on their fair values. In making estimates of fair values for purposes of allocating purchase price, we utilize an independent third-party to value the net tangible and identified intangible assets in connection with the acquisition of the respective property. We provide historical and pro forma financial information obtained about each property, as well as any other information needed in order for the third-party to ascertain the fair value of the tangible and intangible assets acquired.
F - 12
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Capitalized Costs
We capitalize certain costs incurred in connection with the development, redevelopment, capital enhancement and leasing of our properties. Management is required to use professional judgment in determining whether such costs meet the criteria for capitalization or immediate expense. The amounts are dependent on the volume and timing of such activities, and the costs associated with such activities:
Maintenance, repairs and minor improvements to properties are expensed when incurred.
Renovations and improvements to our properties are capitalized and depreciated over their estimated useful lives and real estate project costs related to the development of new community or expansion sites are capitalized until the property is substantially complete and available for occupancy. Costs incurred to initially renovate pre-owned and repossessed homes that we acquire for our Rental Program are capitalized, and the majority of costs incurred to refurbish the homes at turnover and repair the homes while occupied, are expensed unless they extend the life of the home. Renovations and improvements to marinas are capitalized and depreciated over their estimated useful lives. Improvements made to docks, buildings, systems, equipment, shorelines and site improvements are capitalized until the project is substantially complete and available for use.
Certain expenditures to dealers and residents related to obtaining lessees in our communities are capitalized and amortized based on the anticipated term of occupancy of a resident.
Costs associated with implementing our software are capitalized and amortized over the estimated useful lives of the related software and hardware.
Costs associated with purchases of furniture, fixtures and equipment, major replacements and improvements are capitalized and subsequently depreciated over their respective underlying assets estimated useful lives.
Costs incurred to obtain new debt financing (i.e. deferred financing costs) are capitalized and amortized over the terms of the underlying loan agreement using the effective interest method for senior unsecured notes and the straight-line method (which approximates the effective interest method) for other financing. Deferred financing costs include fees and costs incurred to obtain long-term financing. Unamortized deferred financing costs are written off when debt is retired before the maturity date. Upon amendment of the line of credit or refinancing of mortgage debt, unamortized deferred financing costs and any related discounts or premiums are accounted for in accordance with ASC 470-50-40, "Modifications and Extinguishments." At December 31, 2021 and 2020, $6.4 million and $11.7 million of lines of credit deferred financing costs, respectively, were presented as a component of Other assets, net on the Consolidated Balance Sheets. At December 31, 2021 and 2020, $13.0 million and $13.9 million of mortgage loans payable, deferred financing costs and discounts and premiums, respectively, were netted and presented as a component of Secured debt on the Consolidated Balance Sheets.
Cash and Cash Equivalents
We consider all highly liquid investments with a maturity of three months or less from the date of purchase to be cash and cash equivalents. At December 31, 2021 and 2020, $65.8 million and $77.3 million of cash and cash equivalents, respectively, was included as a component of Cash, cash equivalents and restricted cash on the Consolidated Balance Sheets. The maximum amount of credit risk arising from cash deposits in excess of federally insured amounts was approximately $58.9 million and $74.5 million as of December 31, 2021 and 2020, respectively.
Restricted Cash
Restricted cash consists primarily of utility deposits and amounts held in deposit for tax, insurance and repair escrows held by lenders in accordance with certain debt agreements. At December 31, 2021 and 2020, $12.4 million and $15.3 million of restricted cash, respectively, was included as a component of Cash, cash equivalents and restricted cash on the Consolidated Balance Sheets. Changes in the restricted cash are reported in our Consolidated Statements of Cash Flows as operating, investing or financing activities based on the nature of the underlying activity. Restricted cash and restricted cash equivalents are included with cash and cash equivalents in the reconciliation of the beginning of period and the end of period cash balance on the Consolidated Statements of Cash Flows.
F - 13
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Inventory
Inventory of manufactured homes is stated at lower of specific cost or net realizable value based on the specific identification method and the balance is separately disclosed on our Consolidated Balance Sheet. Other inventory at our MH and RV properties consists primarily of service and merchandise related items, grocery, food and beverage products and are stated at the lower of cost or net realizable value. Physical inventory counts are performed where inventory exists. Inventory records are adjusted accordingly to reflect actual inventory counts and any resulting shortage is recognized. Inventory at our marinas consists primarily of boat parts used in our service centers and retail related items such as merchandise used in our ship stores, gasoline and diesel fuel, and food and beverage products. Inventories at our marinas are stated at the lower of cost or net realizable value with cost determined using the weighted-average method. Physical inventory counts are performed where inventory exists. Inventory records are adjusted accordingly to reflect actual inventory counts and any resulting shortage is recognized. The inventory balance is included in Other assets, net on our Consolidated Balance Sheet.
Investments in Nonconsolidated Affiliates
We apply the equity method of accounting to entities in which we do not have a direct or indirect controlling interest or for variable interest entities where we are not considered the primary beneficiary but can exercise influence over the entity with respect to its operations and major decisions. Under the equity method of accounting, the cost of an investment is adjusted for our share of the equity in net income or loss from the date of acquisition, reduced by distributions received and increased by contributions made. The income or loss of each entity is allocated in accordance with the provisions of the applicable operating agreements. The allocation provisions in these agreements may differ from the ownership interests held by each investor. The cost method is applied when (a) the investment is minimal (typically less than 5.0 percent) and (b) our investment is passive. Our exposure to losses associated with nonconsolidated joint ventures is primarily limited to the carrying value of these investments. Accordingly, distributions from a joint venture in excess of our carrying value are recognized in earnings. We review the carrying value of our investments in nonconsolidated affiliates for other than temporary impairment whenever events or changes in circumstances indicate a possible impairment. Financial condition, operational performance and other economic trends are among the factors we consider when we evaluate the existence of impairment indicators. Refer to Note 6, "Investments in Nonconsolidated Affiliates," for additional information.
Notes and Other Receivables
Notes receivable - includes installment loans for manufactured homes purchased from us, notes receivable from real estate developers and operators and other receivables.
Installment notes receivable on manufactured homes - represent notes receivable for the purchase of manufactured homes primarily located in our communities, which are secured by the underlying manufactured home sold. Interest income is accrued based upon the unpaid principal balance of the loans. Past due status of our notes receivable is determined based upon the contractual terms of the note. When a note receivable becomes 60 days delinquent, we stop accruing interest on the note receivable. The interest on nonaccrual loans is accounted for on the cash basis until qualifying for return to accrual.
Notes receivable from real estate developers and operators - represent short-term construction loans provided to real estate developers and loans provided to real estate operators to finance acquisition and development costs.
F - 14
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Upon the adoption of ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("CECL"), we elected the fair value option for installment notes receivable on manufactured homes, and notes receivable from real estate developers and operators. Effective January 1, 2020, installment notes receivable on manufactured homes and notes receivable from real estate developers and operators are measured at fair value pursuant to FASB ASC 820, "Fair Value Measurements and Disclosures." The adoption of fair value did not result in any opening balance adjustments for notes receivable from real estate developers and operators as the carrying values of these notes generally approximate their fair market values either due to the short-term nature of the loan and / or the note being secured by underlying collateral and / or personal guarantees. Subsequent to the adoption, the fair value is evaluated quarterly, and any fair value adjustments are recorded in Loss on remeasurement of notes receivable on the Consolidated Statement of Operations. Refer to Note 14, "Fair Value of Financial Instruments," for additional information regarding the estimates and assumptions used to estimate the fair value of each financial instrument class.
Other receivables - are generally comprised of sale proceeds receivable from home sales near year end, amounts due from marina customers for storage service and lease payments, amounts due from MH and annual RV residents for rent and related charges (utility charges, fees and other pass through charges), insurance receivables and various other miscellaneous receivables. Adoption of CECL did not require incremental CECL reserves as we believe that the risk of future expected loss on those accounts is immaterial due to the short-term nature of the accounts, history of collectability, past relationships and various other mitigating factors. Accounts outstanding longer than the contractual payment terms are considered past due.
Accounts receivable from marina customers are stated at amounts due net of an allowance for doubtful accounts. Receivables related to our marina rents are reserved when we believe that collection is less than probable, which is generally 50 percent for certain receivable balances over 180 days, and 60 percent after the balance reaches 60 days past due for all other receivables.
Accounts receivable from residents are typically due within 30 days and stated at amounts due from residents net of an allowance for doubtful accounts. We evaluate the recoverability of our receivables whenever events occur or there are changes in circumstances such that management believes it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan and lease agreements. Receivables related to MH community rents are reserved when we believe that collection is less than probable, which is generally after a resident balance reaches 60 to 90 days past due.
Refer to Note 4, "Notes and Other Receivables," for additional detail on receivables.
Goodwill
Goodwill is deductible for income tax purposes. As such, the goodwill portion allocated to our taxable REIT subsidiary entities will reduce their taxable income. Given that REITs do not customarily report any taxable income (due to the dividends paid deduction), we do not expect any significant tax benefits arising from the goodwill allocable to the REIT.
The carrying amount of goodwill is separately disclosed on our Consolidated Balance Sheets. Refer to Note 5, "Goodwill and Other Intangible Assets," for additional information on goodwill.
We account for implementation costs in a hosting arrangement in accordance with ASU 2018-15, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)" which aligns requirements for capitalizing implementation costs in a hosting arrangement as a service contract with internally developed software, and expense capitalized costs of the hosting arrangement over the term of the arrangement.
F - 15
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Other Intangible Assets
Other intangible assets primarily comprise in-place leases (including slip in-place leases), non-competition agreements, trademarks and trade names, customer relationships and franchise agreements. Other intangible assets are reviewed for impairment on an annual basis or more frequently if indicators of impairment are identified.
Intangible assets with finite lives - we amortize identified intangible assets that are determined to have finite lives over the period the assets are expected to contribute directly or indirectly to the future cash flows of the property or business.
Trademarks and trade names - we account for trademarks and trade names pursuant to ASC 350, "Intangibles-Goodwill and Other." Some trademarks and trade names have an indefinite useful life and some have a to five year useful life. Trademarks and trade names with finite lives are amortized over their useful life. Trademarks and trade names with indefinite-lives are not amortized. Trademarks and trade names are reviewed for impairment on an annual basis or more frequently if indicators of impairment are identified. We first review qualitative factors to determine if a quantitative impairment test is necessary. If the qualitative assessment reveals that it's "more likely than not" that the asset is impaired, a calculation of the fair value is performed and the asset is written down to its implied fair value, if it is lower than its carrying amount. As of December 31, 2021 and 2020, we recognized $119.1 million and $116.5 million of trademarks and trade names in relation to acquisitions accounted for as business combinations, respectively.
The carrying amounts of the other identified intangible assets are included in Other intangible assets, net on our Consolidated Balance Sheets. Refer to Note 5, "Goodwill and Other Intangible Assets," for additional information on other intangible assets.
Deferred Taxes
We are subject to certain state taxes that are considered to be income taxes and have certain subsidiaries that are taxed as regular corporations for U.S. (i.e., federal, state, local, etc.) and non-U.S. income tax purposes. Deferred tax assets or liabilities are recognized for temporary differences between the tax basis of assets and liabilities and their carrying amounts in the financial statements and net operating loss carryforwards in certain subsidiaries, including those domiciled in foreign jurisdictions, which may be realized in future periods if the respective subsidiary generates sufficient taxable income. Deferred tax assets and liabilities are measured using currently enacted tax rates. A valuation allowance is established if, based on the available evidence, it is considered more likely than not that some portion or all of the deferred tax assets will not be realized. Refer to Note 12, "Income Taxes," for additional information.
Temporary Equity
Temporary equity includes preferred securities that are redeemable for cash at the option of the holder or upon the occurrence of an event that is not solely within our control based on a fixed or determinable price. These preferred securities are not mandatorily redeemable for cash nor do they contain a fixed maturity date. Temporary equity is classified between Liabilities and Stockholders' Equity on the Consolidated Balance Sheets.
Share-Based Compensation
We account for awards of restricted stock in accordance with ASC 718-10, "Compensation-Stock Compensation." ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). The fair value of restricted stock awards with service vesting is equal to the fair value of our stock on the grant date. Share-based compensation cost for service vesting restricted stock awards is measured based on the closing share price of our common stock on the date of grant. We measure the fair value of awards with performance conditions based on an estimate of shares expected to vest using the closing price of our common stock as of the grant date. If it is not probable that the performance conditions will be satisfied, we do not recognize compensation expense. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. We recognize compensation cost ratably over each tranche of shares based on the fair value estimated by the model. Refer to Note 10, "Share-Based Compensation," for additional information.
Fair Value of Financial Instruments
Our financial instruments consist primarily of cash, cash equivalents and restricted cash, marketable securities, notes and accounts receivables, debt and contingent consideration liabilities. We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures, pursuant to ASC 820, "Fair Value Measurements and Disclosures."
F - 16
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ASC 820, "Fair Value Measurements and Disclosures," requires disclosure regarding determination of fair value for assets and liabilities and establishes a hierarchy under which these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumption. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair value hierarchy:
Level 1 - Quoted unadjusted prices for identical instruments in active markets that we have the ability to access;
Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severity, etc.) in active markets or can be corroborated by observable market data; and
Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The unobservable inputs reflect our assumptions about the assumptions that market participants would use.
Refer to Note 14, "Fair Value of Financial Instruments," for additional information on methods and assumptions used to estimate the fair value of each financial instrument class.
Revenue Recognition
As a real estate owner and operator, the majority of our revenue is derived from site and home leases, and wet slip and dry storage space leases that are accounted for pursuant to ASC 842, "Leases." We account for revenue from contracts with customers following ASC 606, "Revenue from Contracts with Customers" except for those that are within the scope of other topics in the FASB accounting standards codification. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. A five-step transactional analysis is required to determine how and when to recognize revenue. For transactions in the scope of ASC 606, we recognize revenue when control of goods or services transfers to the customer, in the amount that we expect to receive for the transfer of goods or provision of services. Refer to Note 2, "Revenue," for additional information.
Income from real property at our MH and RV properties includes revenue from residents and guests in our communities and resorts, who lease the site on which their home or RV is located, and either own or lease their home or RV, rental home revenue, and short-term vacation home and site rentals. Revenues from residents and guests includes revenues from site leases to annual MH residents and annual RV guests, and site rentals to transient RV guests. Resident leases are generally for one-year, but may range from month-to-month to two year terms and are renewable by mutual agreement between the parties, or in some cases, as provided by statute. Revenues from site and home leases fall under the scope of ASC 842, and is accounted for as operating leases with straight-line recognition. Non-lease components of our site lease contracts, which are primarily provision of utility services, are accounted for with the site lease as a single lease under ASC 842. Rental home revenues which comprise rental agreements whereby we lease homes to residents in our communities, and short-term vacation home and site rentals are accounted for under ASC 842. Additionally, we include collections of real estate taxes from residents and guests within Income from real property.
Income from real property at our marinas includes rental income which consists primarily of wet slip leases, dry storage space leases and commercial leases. The majority of our wet slip and dry storage space leases have annual terms that are generally billed seasonally and are renewable by mutual agreement between the parties. Wet slip and dry storage space leases are paid annually, seasonally, quarterly, monthly or transient by night. Wet slip rental revenues are recognized as earned on a monthly basis during the slip rental season and dry storage space lease revenues are typically earned on a monthly basis over the course of the term of the lease. Commercial lease income is typically earned on a monthly basis. When payment is received in advance of being earned, those amounts are classified as deferred revenues. We recognize lease income on a straight-line basis when rental agreements contain material escalation clauses. Additionally, storage income is earned when services have been rendered, and is included in Income from real property. Those revenues are recognized net of taxes collected from customers and submitted to taxing authorities.
F - 17
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Revenue from home sales - our taxable REIT subsidiary, SHS, sells manufactured homes to current and prospective residents in our communities. We recognize revenue for home sales pursuant to ASC 606 as manufactured homes are tangible personal property that can be located on any land parcel. Manufactured homes are not permanent fixtures or improvements to the underlying real estate and we therefore do not consider them to be subject to the guidance in ASC 360-20, "Real Estate Sales." In accordance with the core principle of ASC 606, we recognize revenue from home sales at the time of closing when control of the home transfers to the customer. After closing of the sale transaction, we have no remaining performance obligation. As of December 31, 2021 and 2020, we had $33.5 million and $23.6 million, respectively, of receivables from contracts with customers, which consists of home sales proceeds, and are presented as a component of Notes and other receivables, net on our Consolidated Balance Sheets. These receivables represent balances owed to us for previously completed performance obligations for sales of manufactured homes. We report real estate taxes collected from residents and remitted to taxing authorities in revenue.
Service, retail, dining and entertainment revenue - is primarily composed of proceeds from restaurant, golf, merchandise, retail, fuel, service and other activities at our RV resorts and marinas, and is included in the scope of ASC 606. Revenues are recognized at the point of sale when control of the good or service transfers to the customer and our performance obligation has been satisfied. In addition, Marina rental income, which includes boat rentals is earned when the customer takes control of the good or service and is included in Service, retail, dining and entertainment revenue. Sales and other taxes that we collect concurrent with revenue-producing activities are excluded from the transaction price.
Interest income - is earned primarily on our notes receivable, which include installment notes receivables on manufactured homes purchased by us from loan originators and notes receivable from real estate developers and operators. Interest income on these receivables is accrued based on the unpaid principal balances of the underlying loans on a level yield basis over the life of the loans. Interest income is not in the scope of ASC 606. Refer to Note 4, "Notes and Other Receivables," for additional information.
Brokerage commissions and other - comprise (a) brokerage commissions at our marinas, and (b) brokerage commissions for sales of manufactured homes at our MH and RV properties, where we act as agent and arrange for a third party to transfer a manufactured home, a park model or a boat to a customer within one of our properties. Brokerage commission revenues are recognized on a net basis at closing, when the transaction is completed and our performance obligations have been fulfilled. Other revenues primarily include management fee revenue earned from managing third party owned marinas.
Advertising Costs
Advertising costs are expensed as incurred. As of December 31, 2021, 2020 and 2019, we had advertising costs of $9.9 million, $8.3 million and $6.7 million, respectively.
Depreciation and Amortization
Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets, ranging from two months to 40 years depending upon the asset classification.
| Asset Class | Useful Life | |||||||||||||
| Land improvement and building | - | |||||||||||||
| Rental homes | ||||||||||||||
| Furniture, fixtures and equipment | - | |||||||||||||
| Computer hardware and software | - | |||||||||||||
| Dock improvements | - | |||||||||||||
| Site improvements | - | |||||||||||||
| Leasehold improvement | Lesser of lease term or useful life of assets | |||||||||||||
| In-place leases (including slip in-place leases) | - | |||||||||||||
| Goodwill | Indefinite | |||||||||||||
| Non-competition agreements | ||||||||||||||
| Trademarks and trade names | Various(1) | |||||||||||||
| Customer relationships | - | |||||||||||||
| Franchise agreements and other intangible assets | - | |||||||||||||
(1)All trademarks and trade names have an indefinite life or a to five year useful life as of the acquisition date.
F - 18
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Foreign Currency
The assets and liabilities of our Australian and Canadian operations, where the functional currency is the Australian dollar and Canadian dollar, are translated into U.S. dollars using the exchange rate in effect as of the balance sheet date. Income statement amounts are translated at the average exchange rate prevailing during the period. The resulting translation adjustments are recorded as a component of Accumulated other comprehensive income / (loss). Foreign currency exchange gains and losses arising from fluctuations in currency exchange rates on transactions and the effects of remeasurement of monetary balances denominated in currencies other than the functional currency are recorded in earnings.
For the year ended December 31, 2021, we recorded a foreign currency translation loss of $3.7 million as compared to a foreign currency translation gain of $7.7 million and $4.5 million for the years ended December 31, 2020 and 2019, respectively, on our Consolidated Statements of Operations.
Derivative Instruments and Hedging Activities
We do not enter into derivative instruments for speculative purposes. Our objective and strategy in using interest rate derivatives is to manage exposure to interest rate movements, thereby minimizing the effect of interest rate changes and the effect they could have on future cash outflows (forecasted interest payments) on a forecasted issuance of long-term debt. Treasury locks are used to accomplish this objective.
In December 2021, we entered into a treasury lock contract with a notional value of $150.0 million to hedge interest rate risk associated with the future issuance of fixed-rate long term debt. The benchmark index rate used is the on-the-run 10-year U.S. Treasury.
Upon review of ASC Topic 815, "Derivatives and Hedging," we have determined that the treasury lock is a freestanding derivative and is recorded in the Balance Sheet at fair value. The unrealized gains or losses on the treasury lock are initially recorded in Accumulated other comprehensive income, and will be reclassified in earnings within the Interest expense on the Consolidated Statements of Operations in the same period during which the hedged transaction affects earnings. We adjust our Balance Sheet on a quarterly basis to reflect the current fair market value of our derivative. As of December 31, 2021, the fair value of our derivatives was approximately $0.4 million and is included within Other assets, net on the Consolidated Balance Sheets.
Accounting for Leases
Lessee Accounting
Pursuant to ASC Topic 842, "Leases," we determine if an arrangement is a lease at inception. Our operating lease agreements are primarily for land and submerged land under non-cancelable operating leases at certain properties, executive office spaces and certain equipment leases. The ROU asset and liabilities are included within Other assets, net and Other liabilities on the Consolidated Balance Sheets.
For operating leases with a term greater than one year, we recognize the ROU assets and liabilities related to the lease payments on the Consolidated Balance Sheets. The lease liabilities are initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. The ROU assets represent our right to use the underlying assets for the term of the lease and the lease liabilities represent our obligation to make lease payments arising for the agreements. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. The ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The ROU asset is periodically reduced by impairment losses. As of December 31, 2021, we have not encountered any impairment losses. Variable lease payments, except for the ones that depend on index or rate, are excluded from the calculation of the ROU assets and lease liabilities and are recognized as variable lease expense in the Consolidated Statements of Operations in the period in which they are incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Many of our lessee agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised. The lease liability costs are amortized over the straight-line method over the term of the lease. Operating leases with a term of less than one year are recognized as a lease expense over the term of the lease, with no asset or liability recognized on the Consolidated Balance Sheets.
F - 19
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Finance leases where we are the lessee are included in Other assets, net and Other liabilities on our Consolidated Balance Sheets. The lease liabilities are initially measured in the same manner as operating leases and are subsequently measured at amortized cost using the effective interest method. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For finance leases, the ROU asset is subsequently amortized using the straight-line method from the lease commencement date to the earlier of the end of its useful life or the end of the lease term unless the lease transfers ownership of the underlying asset to us, or we are reasonably certain to exercise an option to purchase the underlying asset. In those cases, the ROU asset is amortized over the useful life of the underlying asset. We do not recognize an amortization of finance lease ROU asset on land as land is not amortizable. ROU assets are periodically reduced by impairment losses. As of December 31, 2021, we have had no impairment losses. Refer to Note 16, "Leases," for information regarding leasing activities.
Lessor Accounting
Our income from real property at our MH and RV properties is derived from rental agreements where we are the lessor. ASC 842 limits the definition of initial direct costs to only the incremental costs of signing a lease. Internal sales employees' compensation, payroll-related fringe benefits, certain legal fees rendered prior to the execution of a lease, negotiation costs, advertising and other origination effort costs do not meet the definition of initial direct cost and therefore, are accounted for as general and administrative expense in our Consolidated Statements of Operations. ASC 842 permits the capitalization of direct commission costs.
Our MH and RV sites are typically leased to customers on an annual basis. Seasonal RV sites are generally leased to customers for a period less than one year. Transient RV sites are leased to customers on a short-term basis. In addition, customers may lease homes that are located in our MH communities. Our MH and RV leases with customers are classified as operating leases. Fixed lease income from tenants is recognized on a straight-line basis over the terms of the relevant lease agreement and is included within Income from real property and Brokerage commissions and other revenue, net on the Consolidated Statements of Operations. Variable lease income consists of rent primarily based on a percentage of revenues at the related properties and is included within Income from real property and Brokerage commissions and other revenue, net on the Consolidated Statements of Operations. When collectability is not reasonably assured, the resident is placed on non-accrual status and revenue is recognized when cash payments are received.
Our income from customers for wet slips and dry storage space leases at our marinas is accounted for pursuant to ASC 842. Wet slips and dry storage spaces are typically leased to customers on an annual basis. Seasonal wet slips and dry storage spaces are generally leased to customers for a period less than one year. Transient wet slips and dry storage spaces are leased to customers on a short-term basis. Our wet slips and dry storage space leases are classified as operating leases with lease income recognized over the term of the respective operating lease or the length of a customer's stay.
F - 20
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Revenue
Disaggregation of Revenue
The following table disaggregates our revenue by major source (in thousands):
| Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MH | RV | Marina | Consolidated | MH | RV | Marina | Consolidated | MH | RV | Marina | Consolidated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real property | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | N/A | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Home sales | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Service, retail, dining and entertainment | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brokerage commissions and other, net | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Revenues | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | N/A | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our revenue consists of real property revenue at our MH, RV and Marina properties, revenue from Home sales, Service, retail, dining and entertainment revenue, Interest income, and Brokerage commissions and other revenue.
The majority of our revenue is derived from site and home leases, and wet slip and dry storage space leases that are accounted for pursuant to ASC 842, "Leases." We account for all revenue from contracts with customers following ASC 606, "Revenue from Contracts with Customers," except for those that are within the scope of other topics in the FASB ASC. For additional information, refer to Note 1, "Significant Accounting Policies," for additional information.
F - 21
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Real Estate Acquisitions and Dispositions
2021 Acquisitions and dispositions
For the year ended December 31, 2021, we acquired the following MH communities, RV resorts and marinas:
| Community Name | Type | Sites, Wet Slips and Dry Storage Spaces | Development Sites | State / Province | Month Acquired | |||||||||||||||||||||||||||
| Sun Outdoors Association Island | RV: asset acquisition | NY | January | |||||||||||||||||||||||||||||
| Blue Water Beach Resort | RV: asset acquisition | UT | February | |||||||||||||||||||||||||||||
| Tranquility MHC | MH: asset acquisition | FL | February | |||||||||||||||||||||||||||||
Islamorada and Angler House(1) | Marina: asset acquisition | FL | February | |||||||||||||||||||||||||||||
Prime Martha's Vineyard(1) | Marina: asset acquisition | MA | March | |||||||||||||||||||||||||||||
| Pleasant Beach Campground | RV: asset acquisition | ON, Canada | March | |||||||||||||||||||||||||||||
| Sun Outdoors Cape Charles | RV: asset acquisition | VA | March | |||||||||||||||||||||||||||||
| Beachwood Resort | RV: asset acquisition | WA | March | |||||||||||||||||||||||||||||
| ThemeWorld RV Resort | RV: asset acquisition | FL | April | |||||||||||||||||||||||||||||
Sylvan Glen Estates | MH: asset acquisition | MI | April | |||||||||||||||||||||||||||||
| Shelter Island Boatyard | Marina: asset acquisition | CA | May | |||||||||||||||||||||||||||||
| Lauderdale Marine Center | Marina: asset acquisition | FL | May | |||||||||||||||||||||||||||||
Apponaug Harbor | Marina: asset acquisition | RI | June | |||||||||||||||||||||||||||||
Cabrillo Isle | Marina: business combination | CA | June | |||||||||||||||||||||||||||||
| Marathon | Marina: asset acquisition | FL | June | |||||||||||||||||||||||||||||
| Allen Harbor | Marina: asset acquisition | RI | July | |||||||||||||||||||||||||||||
| Cisco Grove Campground & RV | RV: asset acquisition | CA | July | |||||||||||||||||||||||||||||
Four Leaf Portfolio(2) | MH: asset acquisition | MI / IN | July | |||||||||||||||||||||||||||||
| Harborage Yacht Club | Marina: asset acquisition | FL | July | |||||||||||||||||||||||||||||
Zeman Portfolio(3) | RV: asset acquisition | IL / NJ | July | |||||||||||||||||||||||||||||
| Southern Leisure RV Resort | RV: asset acquisition | FL | August | |||||||||||||||||||||||||||||
| Sunroad Marina | Marina: asset acquisition | CA | August | |||||||||||||||||||||||||||||
Lazy Lakes RV Resort | RV: asset acquisition | FL | August | |||||||||||||||||||||||||||||
| Puerto del Rey | Marina: asset acquisition | Puerto Rico | September | |||||||||||||||||||||||||||||
| Stingray Point | Marina: asset acquisition | VA | September | |||||||||||||||||||||||||||||
| Detroit River | Marina: asset acquisition | MI | September | |||||||||||||||||||||||||||||
| Jetstream RV Resort at NASA | RV: asset acquisition | TX | September | |||||||||||||||||||||||||||||
Beaver Brook Campground | RV: asset acquisition | ME | October | |||||||||||||||||||||||||||||
| Emerald Coast | Marina: business combination | FL | November | |||||||||||||||||||||||||||||
Tall Pines Harbor Campground | RV: asset acquisition | VA | November | |||||||||||||||||||||||||||||
Wells Beach Resort Campground | RV: asset acquisition | ME | November | |||||||||||||||||||||||||||||
Port Royal | Marina: asset acquisition | SC | November | |||||||||||||||||||||||||||||
| Podickory Point | Marina: asset acquisition | MD | December | |||||||||||||||||||||||||||||
| Sunroad Marina (restaurant) | Marina: asset acquisition | CA | December | |||||||||||||||||||||||||||||
Jellystone Park at Mammoth Cave | RV: asset acquisition | KY | December | |||||||||||||||||||||||||||||
| South Bay | Marina: asset acquisition | CA | December | |||||||||||||||||||||||||||||
| Wentworth by the Sea | Marina: asset acquisition | NH | December | |||||||||||||||||||||||||||||
Rocky Mountain RV Park | RV: asset acquisition | MT | December | |||||||||||||||||||||||||||||
Haas Lake RV Park Campground | RV: asset acquisition | MI | December | |||||||||||||||||||||||||||||
| Pearwood RV Resort | RV: asset acquisition | TX | December | |||||||||||||||||||||||||||||
Holly Shores Camping Resort | RV: asset acquisition | NJ | December | |||||||||||||||||||||||||||||
Pheasant Ridge RV Park | RV: asset acquisition | OR | December | |||||||||||||||||||||||||||||
Coyote Ranch Resort | RV: asset acquisition | TX | December | |||||||||||||||||||||||||||||
Jellystone Park at Whispering Pines | RV: asset acquisition | TX | December | |||||||||||||||||||||||||||||
F - 22
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| Community Name | Type | Sites, Wet Slips and Dry Storage Spaces | Development Sites | State / Province | Month Acquired | |||||||||||||||||||||||||||
Hospitality Creek Campground | RV: asset acquisition | NJ | December | |||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
(1) Includes two marinas.
(2) Includes nine MH communities.
(3) Includes two RV Resorts.
The following table summarizes the amounts of assets acquired net of liabilities assumed at the acquisition date and the consideration paid for the acquisitions completed for the year ended December 31, 2021 (in thousands):
| At Acquisition Date | Consideration | ||||||||||||||||||||||||||||||||||||||||||||||
| Investment in property | Inventory of manufactured homes, boat parts and retail related items | In-place leases, goodwill and other intangible assets(1) | Other assets / (liabilities), net | Total identifiable assets acquired net of liabilities assumed | Cash and escrow | Temporary and permanent equity | Total consideration | ||||||||||||||||||||||||||||||||||||||||
| Sun Outdoors Association Island | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Blue Water Beach Resort | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Tranquility MHC | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Islamorada and Angler House | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Prime Martha's Vineyard | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Pleasant Beach Campground | |||||||||||||||||||||||||||||||||||||||||||||||
| Sun Outdoors Cape Charles | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Beachwood Resort | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| ThemeWorld RV Resort | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Sylvan Glen Estates | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Shelter Island Boatyard | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Lauderdale Marine Center | |||||||||||||||||||||||||||||||||||||||||||||||
| Apponaug Harbor | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Marathon | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Allen Harbor | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Cisco Grove Campground & RV | |||||||||||||||||||||||||||||||||||||||||||||||
| Four Leaf Portfolio | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Harborage Yacht Club | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Zeman Portfolio | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Southern Leisure RV Resort | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Sunroad Marina(2) | |||||||||||||||||||||||||||||||||||||||||||||||
| Lazy Lakes RV Resort | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Puerto del Rey | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Stingray Point | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Detroit River | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Jetstream RV Resort at NASA | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Beaver Brook Campground | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Tall Pines Harbor Campground | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Wells Beach Resort Campground | |||||||||||||||||||||||||||||||||||||||||||||||
| Port Royal | ( | ||||||||||||||||||||||||||||||||||||||||||||||
F - 23
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| At Acquisition Date | Consideration | ||||||||||||||||||||||||||||||||||||||||||||||
| Investment in property | Inventory of manufactured homes, boat parts and retail related items | In-place leases, goodwill and other intangible assets(1) | Other assets / (liabilities), net | Total identifiable assets acquired net of liabilities assumed | Cash and escrow | Temporary and permanent equity | Total consideration | ||||||||||||||||||||||||||||||||||||||||
Podickory Point(3) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Jellystone Park at Mammoth Cave(3) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
South Bay(3) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Wentworth by the Sea(3) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Rocky Mountain RV Park(3) | |||||||||||||||||||||||||||||||||||||||||||||||
Haas Lake RV Park Campground(3) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Pearwood RV Resort(3) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Holly Shores Camping Resort(3) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Pheasant Ridge RV Park(3) | |||||||||||||||||||||||||||||||||||||||||||||||
Coyote Ranch Resort(3) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Jellystone Park at Whispering Pines(3) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Hospitality Creek Campground(3) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Business Combination | |||||||||||||||||||||||||||||||||||||||||||||||
| Cabrillo Isle | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Emerald Coast(4) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
(1) Refer to Note 5, "Goodwill and Other Intangible Assets," for additional detail on goodwill and other intangible assets.
(2) The balance includes the marina acquired in August and the restaurant acquired in December of which $9.2 million was recorded in investment property and $21.0 million Other assets / liabilities.
(3) The above allocations are estimates awaiting purchase price allocation.
(4) Purchase price allocation is preliminary as of December 31, 2021, subject to revision based on the final purchase price allocation to be finalized one year from the acquisition date.
As of December 31, 2021, we have incurred $18.0 million of transaction costs which have been capitalized and allocated among the various fixed asset categories for purchases that meet the asset acquisition criteria. As of December 31, 2021, we also incurred $1.4 million of business combination expenses, which are expensed for purchases deemed to be business combinations.
The total amount of Revenues and Net income included in the Consolidated Statements of Operations for the year ended December 31, 2021 related to business combinations completed in 2021 are set forth in the following table (in thousands):
| Year Ended | ||||||||
| December 31, 2021 | ||||||||
| Total revenues | $ | |||||||
| Net income | $ | |||||||
F - 24
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma financial information presents the results of our operations for the years ended December 31, 2021 and 2020, as if the properties combined through business combinations in 2021 had been acquired on January 1, 2020. The unaudited pro forma results reflect certain adjustments for items that are not expected to have a continuing impact, such as adjustments for transaction costs incurred, management fees and acquisition accounting.
The information presented below has been prepared for comparative purposes only and does not purport to be indicative of either future results of operations or the results of operations that would have actually occurred had the acquisition been consummated on January 1, 2020 (in thousands, except per-share data):
| Year Ended (unaudited) | ||||||||||||||
| December 31, 2021 | December 31, 2020 | |||||||||||||
| Total revenues | $ | $ | ||||||||||||
| Net income attributable to Sun Communities, Inc. common stockholders | $ | $ | ||||||||||||
| Net income per share attributable to Sun Communities, Inc. common stockholders - basic | $ | $ | ||||||||||||
| Net income per share attributable to Sun Communities, Inc. common stockholders - diluted | $ | $ | ||||||||||||
Land for Expansion / Development
During the year ended December 31, 2021, we acquired 11 land parcels, which are located across the United States and the United Kingdom for the potential development of nearly 4,000 sites, for total purchase price of $172.8 million.
Other Acquisitions
On December 31, 2021, we acquired Leisure Systems, Inc. for a purchase price of $23.0 million. Leisure Systems, Inc. is the franchisor of the Jellystone Park™ system. The acquisition will be accounted for as a business combination. The purchase price is recognized within Other assets, net in the Consolidated Balance Sheets. The Purchase price allocation is preliminary, subject to revision based on the final purchase price allocation to be finalized one year from the acquisition date.
Dispositions
On July 2, 2021, we sold two 677 sites, for $67.5 49.4
On August 26, 2021, we sold four 1,137 sites, for $94.6 58.7
Refer to Note 19, "Subsequent Events," for information regarding real estate transactions we enter into after December 31, 2021.
F - 25
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2020 Acquisitions
For the year ended December 31, 2020, we acquired the following communities:
| Property Name | Acquisition Type | Sites, Wet Slips and Dry Storage Spaces | Development Sites | State | Month Acquired | |||||||||||||||||||||||||||
Sun Outdoors Cape Cod | RV: asset acquisition | MA | January | |||||||||||||||||||||||||||||
| Jellystone Natural Bridge | RV: asset acquisition | VA | February | |||||||||||||||||||||||||||||
Forest Springs | MH: asset acquisition | CA | May | |||||||||||||||||||||||||||||
| Crown Villa | RV: asset acquisition | OR | June | |||||||||||||||||||||||||||||
| Flamingo Lake | RV: asset acquisition | FL | July | |||||||||||||||||||||||||||||
| Woodsmoke | RV: asset acquisition | FL | September | |||||||||||||||||||||||||||||
| Jellystone Lone Star | RV: asset acquisition | TX | September | |||||||||||||||||||||||||||||
El Capitan & Ocean Mesa(1) | RV: asset acquisition | CA | September | |||||||||||||||||||||||||||||
Highland Green Estates & Troy Villa(2) | MH: asset acquisition | MI | September | |||||||||||||||||||||||||||||
Safe Harbor Marinas(3) | Marina: business combination | Various | October | |||||||||||||||||||||||||||||
Safe Harbor Hideaway Bay | Marina: business combination | GA | November | |||||||||||||||||||||||||||||
| Gig Harbor | RV: asset acquisition | WA | November | |||||||||||||||||||||||||||||
Maine MH Portfolio(4) | MH: asset acquisition | ME | November | |||||||||||||||||||||||||||||
Safe Harbor Anacapa Isle | Marina: business combination | CA | December | |||||||||||||||||||||||||||||
| Annapolis | Marina: asset acquisitions | MD | December | |||||||||||||||||||||||||||||
| Wickford | Marina: asset acquisitions | RI | December | |||||||||||||||||||||||||||||
Rybovich Portfolio(5) | Marina: business combination | FL | December | |||||||||||||||||||||||||||||
| Rockland | Marina: asset acquisitions | ME | December | |||||||||||||||||||||||||||||
| Sun Outdoors Orlando Champions Gate | MH / RV: asset acquisition | FL | December | |||||||||||||||||||||||||||||
| Lakeview Mobile Estates | MH: asset acquisition | CA | December | |||||||||||||||||||||||||||||
| Shenandoah Acres | RV: asset acquisition | VA | December | |||||||||||||||||||||||||||||
| Jellystone at Barton Lake | RV: asset acquisition | IN | December | |||||||||||||||||||||||||||||
| Kittatinny Portfolio | RV: asset acquisition | NY & PA | December | |||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
(1) Includes two RV resorts.
(2) Includes two communities.
(3) Includes 99 owned marinas located in 22 states.
(4) Includes six communities.
(5) Includes two marinas.
F - 26
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the amounts of assets acquired net of liabilities assumed at the acquisition date and the consideration paid for the acquisitions completed in 2020 (in thousands):
| At Acquisition Date | Consideration | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investment in property | Inventory of manufactured homes, boat parts and retail related items | Goodwill, In-place leases and other intangible assets(1) | Other assets / (liabilities), net | Total identifiable assets acquired net of liabilities assumed | Cash and escrow | Debt assumed | Temporary and permanent equity | Total consideration | |||||||||||||||||||||||||||||||||||||||||||||
| Sun Outdoors Cape Cod | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Jellystone Natural Bridge | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forest Springs | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Crown Villa | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Flamingo Lake | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodsmoke | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Lone Star | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
El Capitan & Ocean Mesa (2) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Highland Green Estates & Troy Villa | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gig Harbor | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maine MH Portfolio | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annapolis | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wickford | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rockland | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sun Outdoors Orlando Champions Gate | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakeview Mobile Estates | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shenandoah Acres | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone at Barton Lake | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kittatinny Portfolio | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combination | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Safe Harbor(3) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hideaway Bay | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Anacapa Isle | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Rybovich Portfolio(4) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
(1) Refer to Note 5, "Goodwill and Other Intangible Assets," for additional detail on goodwill and other intangible assets.
(2) We have an obligation to pay the seller $9.0 million for 60 development sites over eight years from the acquisition date. Payment is due on a per site basis as ground is broken, paid the earlier of semi-annually or $4.5 million four years from the date of acquisition and an incremental $4.5 million eight years from the date of acquisition. To the extent we are able to develop those sites, our contingent liability will increase after one year of operation contingent upon achieving a seven percent return on investment. The initial contingent consideration liability of $9.0 million was recognized at acquisition within Investment property in the Consolidated Balance Sheets, and within Acquisition deferred liabilities in the Supplemental information of the Consolidated Statement of Cash Flows.
(3) Purchase price allocation was preliminary as of December 31, 2020 and was subsequently adjusted based on the final purchase price allocation. We reclassified $26.1 million from "Other assets / (liabilities), net" to "Goodwill, In-place leases and other intangible assets." The reclassifications consist of $29.8 million to goodwill and various other asset / liability true-ups of $3.7 million during the year ended December 31, 2021. These adjustments did not have any impact on the Statements of Operations.
(4) Purchase price allocation was preliminary as of December 31, 2020 and was adjusted as of March 31, 2021 based on the final purchase price allocation.
As of December 31, 2020, we have incurred $23.0 million of expensed business combination transaction costs (in relation to the acquisition Safe Harbor, Hideaway Bay, Anacapa Isle and the Rybovich Portfolio, as each such acquisition meets the criteria to be accounted for as business combination), and $13.4 million of capitalized transaction costs for asset acquisitions, which have been allocated among the various categories above.
F - 27
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Land for Expansion / Development
During the year ended December 31, 2020, we acquired eight land parcels, which are located in Orange Beach, Alabama; Jensen Beach, Florida; Citra Lakes, Florida; Comal County, Texas; and Menifee, California for total consideration of $9.7 million. Seven of the land parcels are adjacent to existing communities.
Dispositions
On July 1, 2020, we sold a manufactured housing community located in Montana, containing 226 sites, for $12.6 million. The gain from the sale of the property was approximately $5.6 million.
4. Notes and Other Receivables
The following table sets forth certain information regarding notes and other receivables (in thousands):
| December 31, 2021 | December 31, 2020 | ||||||||||
| Installment notes receivable on manufactured homes, net | $ | $ | |||||||||
| Notes receivable from real estate developers and operators | |||||||||||
| Other receivables, net | |||||||||||
| Total Notes and Other Receivables, net | $ | $ | |||||||||
Installment Notes Receivable on Manufactured Homes
Installment notes receivable are measured at fair value, using indicative pricing models from third party valuation specialists, in accordance with ASC Topic 820 "Fair Value Measurements and Disclosures." The balances of installment notes receivable of $79.1 million (net of fair value adjustment of $0.6 million) and $85.9 million (net of fair value adjustment of $1.3 million) as of December 31, 2021 and 2020, respectively, are secured by manufactured homes. The notes represent financing to purchasers of manufactured homes located in our communities and require monthly principal and interest payments. The notes had a net weighted average interest rate (net of servicing costs) and maturity of 7.6 percent and 14.7 years as of December 31, 2021, and 7.8 percent and 15.2 years as of December 31, 2020, respectively. Refer to Note 14, "Fair Value of Financial Instruments," for additional detail.
The change in the aggregate balance of the installment notes receivable is as follows (in thousands):
| Year Ended | |||||||||||
| December 31, 2021 | December 31, 2020 | ||||||||||
| Beginning balance of gross installment notes receivable | $ | $ | |||||||||
| Financed sale of manufactured homes | |||||||||||
| Adjustment for notes receivable related to assets held for sale | ( | ||||||||||
| Principal payments and payoffs from our customers | ( | ( | |||||||||
| Principal reduction from repossessed homes | ( | ( | |||||||||
| Dispositions of properties | ( | ||||||||||
| Ending balance of gross installment notes receivable | |||||||||||
| Beginning balance of allowance for losses on installment notes receivables | ( | ||||||||||
| Initial fair value option adjustment | |||||||||||
| Ending balance of allowance for losses on installment notes receivables | |||||||||||
| Beginning balance of fair value adjustments on gross installment notes receivable | ( | ||||||||||
| Initial fair value option adjustment | |||||||||||
| Adjustment for notes receivable related to assets held for sale | ( | ||||||||||
| Fair value adjustment | ( | ||||||||||
| Fair value adjustments on gross installment notes receivable | ( | ( | |||||||||
| Ending balance of installment notes receivable, net | $ | $ | |||||||||
F - 28
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Notes Receivable from Real Estate Developers and Operators
The change in the aggregate balance of notes receivable from real estate developers and operators is as follows (in thousands):
| Year Ended | ||||||||||||||
| December 31, 2021 | December 31, 2020 | |||||||||||||
| Beginning balance | $ | $ | ||||||||||||
| Additions | ||||||||||||||
| Payments | ( | ( | ||||||||||||
| Other adjustments | ( | |||||||||||||
| Ending balance | $ | $ | ||||||||||||
Notes receivable from real estate developers and operators are measured at fair value, using indicative pricing models from third party valuation specialists, in accordance with ASC Topic 820 "Fair Value Measurements and Disclosures." As of December 31, 2021 and 2020, the notes receivable balances are primarily comprised of a loan provided to a real estate operator to finance its acquisition and development costs, and construction loans provided to real estate developers in 2021 and 2020. The notes receivable from real estate developers and operators have a net weighted average interest rate and maturity of 7.2 percent and 0.9 years as of December 31, 2021, and 6.2 percent and 1.8 years as of December 31, 2020, respectively. As of December 31, 2021, real estate developers and operators collectively have $40.9 million of undrawn funds on their loans. There were no adjustments to the fair value of notes receivable from real estate developers and operators for the years ended December 31, 2021 and 2020. Refer to Note 14, "Fair Value of Financial Instruments," for additional detail.
Other Receivables, net
Other receivables, net were comprised of amounts due from (in thousands):
| December 31, 2021 | December 31, 2020 | ||||||||||
| Home sale proceeds | $ | $ | |||||||||
Marina customers for storage service and lease payments, net(1) | |||||||||||
MH and annual RV residents for rent, utility charges, fees and other pass through charges, net(2) | |||||||||||
| Insurance receivables | |||||||||||
Other receivables(3) | |||||||||||
| Total Other Receivables, net | $ | $ | |||||||||
(1)Net of allowance of $1.5 million and $1.4 million as of December 31, 2021 and 2020, respectively.
(2)Net of allowance of $5.5 million and $7.2 million as of December 31, 2021 and 2020, respectively.
(3)Includes receivable from Rezplot Systems LLC, a nonconsolidated affiliate in which we have a 49.2 percent ownership interest. In June 2020, we made a convertible secured loan to Rezplot Systems LLC. The note allows for a principal amount of up to $10.0 million to be drawn down over a period of three years, bears an interest rate of 3.0 percent and is secured by all the assets of Rezplot Systems LLC. The outstanding balances were $10.2 million and $2.0 million as of December 31, 2021 and 2020, respectively. Refer to Note 6, "Investments in Nonconsolidated Affiliates," for additional information on Rezplot Systems LLC.
5. Goodwill and Other Intangible Assets
Our intangible assets include goodwill, in-place leases, non-competition agreements, trademarks and trade names, customer relationships, franchise agreements and other intangible assets. These intangible assets are recorded in Goodwill and Other intangible assets, net on the Consolidated Balance Sheets.
Goodwill
The change in the carrying amount of goodwill is as follows (in thousands):
| December 31, 2019 | Acquisitions | Other(1) | December 31, 2020 | Acquisitions | Other(1) | December 31, 2021 | |||||||||||||||||||||||||||||||||||
| Goodwill | $ | — | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
(1) The measurement periods for the valuation of assets acquired and liabilities assumed end as soon as information on the facts and circumstances that existed as of the acquisition dates becomes available but do not exceed 12 months. Adjustments in purchase price allocations may require a change in the amounts allocated to goodwill during the periods in which the adjustments are determined. These purchase accounting adjustments are presented under Other in the table above.
F - 29
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The entire goodwill balance was allocated to the Marina segment as of December 31, 2021 and 2020.
Goodwill impairment - we performed qualitative and quantitative assessments in accordance with ASC 350-20, "Goodwill and Other." We determined that the fair value of the Marina reporting unit exceeded its carrying value as of December 31, 2021. As a result, there was no impairment of goodwill during the year ended December 31, 2021. We did not record any impairment of goodwill during the year ended December 31, 2020.
Other intangible assets, net
The gross carrying amounts and accumulated amortization of our intangible assets are as follows (in thousands):
| December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||
| Other Intangible Asset | Useful Life | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||||||||||
| In-place leases | - | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||
| Non-competition agreements | ( | |||||||||||||||||||||||||||||||
| Trademarks and trade names | ( | |||||||||||||||||||||||||||||||
| Customer relationships | ( | ( | ||||||||||||||||||||||||||||||
| Franchise agreements and other intangible assets | ( | ( | ||||||||||||||||||||||||||||||
| Total finite-lived assets | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
| Indefinite-lived assets - Trademarks and trade names | N/A | — | — | |||||||||||||||||||||||||||||
| Indefinite-lived assets - Other | N/A | — | — | |||||||||||||||||||||||||||||
| Total indefinite-lived assets | $ | $ | — | $ | $ | — | ||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Amortization expenses related to our Other intangible assets are as follows (in thousands):
| Year Ended | ||||||||||||||||||||
| Intangible Asset Amortization Expense | December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||||
| In-place leases | $ | $ | $ | |||||||||||||||||
| Non-competition agreements | ||||||||||||||||||||
| Trademarks and trade names | ||||||||||||||||||||
| Customer relationships | ||||||||||||||||||||
| Franchise agreements and other intangible assets | ||||||||||||||||||||
| Total | $ | $ | $ | |||||||||||||||||
We anticipate amortization expense for Other intangible assets to be as follows for the next five years (in thousands):
| 2022 | 2023 | 2024 | 2025 | 2026 | ||||||||||||||||||||||||||||
| In-place leases | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Non-competition agreements | ||||||||||||||||||||||||||||||||
| Trademarks and trade names | ||||||||||||||||||||||||||||||||
| Customer relationships | ||||||||||||||||||||||||||||||||
| Franchise agreements and other intangible assets | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
F - 30
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Investments in Nonconsolidated Affiliates
Investments in joint ventures that are not consolidated, nor recorded at cost, are accounted for using the equity method of accounting as prescribed in FASB ASC Topic 323, "Investments - Equity Method and Joint Ventures." Investments in nonconsolidated affiliates are recorded within Other assets, net on the Consolidated Balance Sheets. Equity income and loss are recorded in the Income / (loss) from nonconsolidated affiliates line item on the Consolidated Statements of Operations.
RezPlot Systems LLC ("Rezplot")
At December 31, 2021 and December 31, 2020, we had a 49.2 percent and 50 percent ownership interest, respectively, in RezPlot, a RV reservation software technology company, which interest we acquired in January 2019.
Sungenia joint venture ("Sungenia JV")
At December 31, 2021 and December 31, 2020, we had a 50
GTSC LLC ("GTSC")
At December 31, 2021 and December 31, 2020, we had a 40
Origen Financial Services, LLC ("OFS")
At December 31, 2021 and December 31, 2020, we had a 22.9
SV Lift, LLC ("SV Lift")
At December 31, 2021 and December 31, 2020, we had a 50
The investment balance in each nonconsolidated affiliate is as follows (in thousands):
| Year Ended | ||||||||||||||
| Investment | December 31, 2021 | December 31, 2020 | ||||||||||||
| Investment in RezPlot | $ | $ | ||||||||||||
| Investment in Sungenia JV | ||||||||||||||
| Investment in GTSC | ||||||||||||||
| Investment in OFS | ||||||||||||||
| Investment in SV Lift | ||||||||||||||
| Total | $ | $ | ||||||||||||
The income / (loss) from each nonconsolidated affiliate is as follows (in thousands):
| Year Ended | ||||||||||||||||||||
| Equity income | December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||||
| RezPlot equity loss | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Sungenia JV equity income / (loss) | ( | |||||||||||||||||||
| GTSC equity income | ||||||||||||||||||||
| OFS equity income | ||||||||||||||||||||
| SV Lift equity loss | ( | ( | ||||||||||||||||||
| Total equity income | $ | $ | $ | |||||||||||||||||
F - 31
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The change in the GTSC investment balance is as follows (in thousands):
| Year Ended | ||||||||||||||
| December 31, 2021 | December 31, 2020 | |||||||||||||
| Beginning balance | $ | $ | ||||||||||||
Initial fair value option adjustment | ||||||||||||||
| Contributions | ||||||||||||||
| Distributions | ( | ( | ||||||||||||
| Equity earnings | ||||||||||||||
| Fair value adjustment | ( | ( | ||||||||||||
| Ending Balance | $ | $ | ||||||||||||
The change in the Sungenia JV investment balance is as follows (in thousands):
| Year Ended | ||||||||||||||
| December 31, 2021 | December 31, 2020 | |||||||||||||
| Beginning balance | $ | $ | ||||||||||||
| Cumulative translation adjustment | ( | |||||||||||||
| Contributions | ||||||||||||||
| Equity earnings | ||||||||||||||
| Ending Balance | $ | $ | ||||||||||||
7. Consolidated Variable Interest Entities
The Operating Partnership
We consolidate the Operating Partnership under the guidance set forth in ASC 810 "Consolidation." We evaluated whether the Operating Partnership met the criteria for classification as a variable interest entity ("VIE") or, alternatively, as a voting interest entity and concluded that the Operating Partnership met the criteria of a VIE. Our significant asset is our investment in the Operating Partnership, and consequently, substantially all of our assets and liabilities represent those assets and liabilities of the Operating Partnership. We are the sole general partner and generally have the power to manage and have complete control over the Operating Partnership and the obligation to absorb its losses or the right to receive its benefits.
Sun NG RV Resorts LLC ("Sun NG Resorts"); Rudgate Village SPE, LLC, Rudgate Clinton SPE, LLC, and Rudgate Clinton Estates SPE, LLC (collectively, "Rudgate"); Sun NG Whitewater RV Resorts LLC; FPG Sun Menifee 80 LLC, SHM South Fork JV, LLC; Sun Solar Energy Project LLC (the "Sun Solar JV"), Sun Solar Energy Project CA II (the "Sun Solar II"), FPG Sun Moreno Valley 66 LLC.
We consolidate Sun NG Resorts, Rudgate, Sun NG Whitewater RV Resorts LLC, FPG Sun Menifee 80 LLC, SHM South Fork JV, LLC, Sun Solar JV, Sun Solar II and FPG Sun Moreno Valley 66 LLC under the guidance set forth in ASC Topic 810 "Consolidation." We concluded that each entity is a VIE where we are the primary beneficiary, as we have the power to direct the significant activities of, and absorb the significant losses and receive the significant benefits from each entity. Refer to Note 8, "Debt and Line of Credit," for additional information on Sun NG Resorts and Note 9, "Equity and Temporary Equity," for additional information on Sun NG Resorts, Sun NG Whitewater RV Resorts LLC, FPG Sun Menifee 80 LLC, SHM South Fork JV, LLC, Sun Solar JV, Sun Solar II and FPG Sun Moreno Valley 66 LLC.
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SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the assets and liabilities of Sun NG Resorts, Rudgate, Sun NG Whitewater RV Resorts LLC, FPG Sun Menifee 80 LLC, SHM South Fork JV, LLC, Sun Solar JV, Sun Solar II and FPG Sun Moreno Valley 66 LLC included in our Consolidated Balance Sheets after eliminations (in thousands):
| December 31, 2021 | December 31, 2020 | ||||||||||
| Assets | |||||||||||
| Investment property, net | $ | $ | |||||||||
| Cash, cash equivalents and restricted cash | |||||||||||
| Other intangible assets, net | |||||||||||
| Other assets, net | |||||||||||
| Total Assets | $ | $ | |||||||||
| Liabilities and Other Equity | |||||||||||
| Secured debt | $ | $ | |||||||||
| Unsecured debt | |||||||||||
| Other liabilities | |||||||||||
| Total Liabilities | |||||||||||
| Temporary equity | |||||||||||
| Noncontrolling interests | |||||||||||
| Total Liabilities and Other Equity | $ | $ | |||||||||
Total assets related to the consolidated VIEs, with the exception of the Operating Partnership, comprised approximately 4.9 percent and 4.3 percent of our consolidated total assets at December 31, 2021 and 2020, respectively. Total liabilities comprised approximately 2.8 percent and 3.1 percent of our consolidated total liabilities at December 31, 2021 and 2020, respectively. Equity Interests and Noncontrolling interests related to the consolidated VIEs, on an absolute basis, comprised less than 1.0 percent of our consolidated total equity at December 31, 2021 and 2020, respectively.
8. Debt and Line of Credit
The following table sets forth certain information regarding debt including premiums, discounts and deferred financing costs (in thousands except statistical information):
| Carrying Amount | Weighted Average Years to Maturity | Weighted Average Interest Rates | |||||||||||||||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||
| Secured Debt | $ | $ | % | % | |||||||||||||||||||||||||||||||
| Unsecured Debt | |||||||||||||||||||||||||||||||||||
| Senior unsecured notes | N/A | % | N/A | ||||||||||||||||||||||||||||||||
| Line of credit and other debt | % | % | |||||||||||||||||||||||||||||||||
| Preferred equity - Sun NG Resorts - mandatorily redeemable | % | % | |||||||||||||||||||||||||||||||||
| Preferred OP units - mandatorily redeemable | % | % | |||||||||||||||||||||||||||||||||
| Total Unsecured Debt | |||||||||||||||||||||||||||||||||||
| Total Debt | $ | $ | % | % | |||||||||||||||||||||||||||||||
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SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Secured Debt
Secured debt consists primarily of mortgage term loans.
During the years ended December 31, 2021 and 2020, we paid off the following mortgage term loans (in thousands except statistical information):
| Period | Repayment Amount | Fixed Interest Rate | Maturity Date | (Gain) / Loss on Extinguishment of Debt | ||||||||||||||||||||||
| Three months ended December 31, 2021 | $ | (1) | % | February 1, 2022 | $ | |||||||||||||||||||||
| Three months ended June 30, 2020 | $ | (2) | % | (4) | March 1, 2021 July 11, 2021 December 1, 2021 | $ | ||||||||||||||||||||
| Three months ended March 31, 2020 | $ | % | March 1, 2021 | $ | ||||||||||||||||||||||
| $ | (3) | % | (4) | July 1, 2020 | $ | ( | ||||||||||||||||||||
(1)Includes two mortgage term loans due to mature on February 1, 2022.
(2)Includes four mortgage term loans, two due to mature on March 1, 2021, one due to mature on July 11, 2021 and the other due to mature on December 1, 2021.
(3)Includes four mortgage term loans due to mature on July 1, 2020.
(4)The interest rate represents the weighted average interest rate on mortgage term loans.
During the year ended December 31, 2021, we did not enter into any new mortgage term loans. During the year ended December 31, 2020, we entered into the following mortgage term loans (in thousands except statistical information):
| Period | Loan Amount | Term (in years) | Interest Rate | Maturity Date | ||||||||||||||||||||||
| Three months ended December 31, 2020 | $ | (1) | % | (2) | May 1, 2030 November 1, 2032 | |||||||||||||||||||||
| Three months ended March 31, 2020 | $ | % | April 1, 2035 | |||||||||||||||||||||||
(1)Includes three mortgage term loans, one for $8.8 million due to mature on May 1, 2030 and two for $39.5 million and $220.5 million, due to mature on November 1, 2032.
(2)The interest rate represents the weighted average interest rate on mortgage term loans.
The mortgage term loans totaling $3.4 billion as of December 31, 2021, are secured by 190 properties comprised of 75,319 sites representing approximately $3.1 billion of net book value.
Unsecured Debt
Senior Unsecured Notes
On October 5, 2021, we issued $450.0 million of senior unsecured notes with an interest rate of 2.3 percent and a -year term, due November 1, 2028 (the "2028 Notes"). Interest on the 2028 Notes is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2022. In addition, on October 5, 2021, we issued $150 million of senior unsecured 2031 Notes (as defined below) with an interest rate of 2.7 percent and a -year term due July 15, 2031. The 2031 Notes are additional notes of the same series as the $600.0 million aggregate principal amount of 2.7 percent senior unsecured notes due July 15, 2031 that we issued on June 28, 2021. The net proceeds from the offering were approximately $595.5 million after deducting underwriters' discounts and estimated offering expenses. The proceeds were used to pay down borrowings under our line of credit.
On June 28, 2021, we issued $600.0 million of senior unsecured notes with an interest rate of 2.7 percent and a -year term, due July 15, 2031 (the "2031 Notes"). Interest on the 2031 Notes is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2022. The net proceeds from the offering were approximately $592.4 million, after deducting underwriters' discounts and estimated offering expenses. The proceeds were used to pay down borrowings under our line of credit.
The total outstanding balance on senior unsecured notes was $1.2 billion at December 31, 2021. This balance is recorded in the Unsecured debt line item on the Consolidated Balance Sheets.
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SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Line of Credit
On June 14, 2021, we entered into a new senior credit agreement (the "Credit Agreement") with certain lenders. The Credit Agreement combined and replaced our prior $750.0 million credit facility, which was scheduled to mature on May 21, 2023, (the "A&R Facility"), and the $1.8 billion credit facility between Safe Harbor and certain lenders, which was scheduled to mature on October 11, 2024 (the "Safe Harbor Facility"). The Safe Harbor Facility was terminated in connection with the execution of the Credit Agreement. We repaid all amounts due and outstanding under the Safe Harbor Facility on or prior to such effective date. We recognized a Loss on extinguishment of debt in our Consolidated Statement of Operations related to the termination of the A&R Facility and the Safe Harbor Facility of $0.2 million and $7.9 million, respectively.
Pursuant to the Credit Agreement, we may borrow up to $2.0 billion under a revolving loan (the "Senior Credit Facility"). The Senior Credit Facility is available to fund all of the Company's business, including its marina business conducted by Safe Harbor. The Credit Agreement also permits, subject to the satisfaction of certain conditions, additional borrowings (with the consent of the lenders) in an amount not to exceed $1.0 billion with the option to treat all, or a portion, of such additional funds as an incremental term loan.
The Senior Credit Facility has a four-year term ending June 14, 2025, and, at our option, the maturity date may be extended for two additional six-month periods, subject to the satisfaction of certain conditions. However, the maturity date with respect to $500.0 million of available borrowing under the Senior Credit Facility is October 11, 2024, which, under the terms of the Credit Agreement, may not be extended. The Senior Credit Facility bears interest at a floating rate based on the Adjusted Eurocurrency Rate or BBSY rate, plus a margin that is determined based on the Company's credit ratings calculated in accordance with the Credit Agreement, which can range from 0.725 percent to 1.4 percent. As of December 31, 2021, the margin based on our credit ratings was 0.85 percent on the Senior Credit Facility.
At the lenders' option, the Senior Credit Facility will become immediately due and payable upon an event of default under the Credit Agreement. We had $1.0 billion of borrowings on the Senior Credit Facility as of December 31, 2021, all scheduled to mature June 14, 2025. As of December 31, 2020, we had $40.4 million of borrowings on the revolving loan and no borrowings on the term loan under our A&R Facility, respectively. As of December 31, 2020, we had $652.0 million and $500.0 million of borrowings under the revolving loan and term loan under the Safe Harbor Facility, respectively. These balances are recorded in the Unsecured debt line item on the Consolidated Balance Sheets.
The Senior Credit Facility provides us with the ability to issue letters of credit. Our issuance of letters of credit does not increase our borrowings outstanding under the Senior Credit Facility, but does reduce the borrowing amount available. At December 31, 2021 and 2020, we had approximately $2.2 million and $2.4 million (including none and $0.3 million associated with the Safe Harbor Facility) of outstanding letters of credit, respectively.
Unsecured Term Loan
In October 2019, we assumed a term loan facility, in the amount of $58.0 million in relation to an acquisition. The term loan has a four-year term ending October 29, 2023, and bears interest at a floating rate based on the Eurodollar rate or Prime rate plus a margin ranging from 1.20 percent to 2.05 percent. Effective July 1, 2021, the agreement was amended to release the associated collateral. The amendment extended the term loan facility maturity date to October 29, 2025 and adjusted the interest rate margin to a range from 0.8 percent to 1.6 percent. As of December 31, 2021, the margin was 0.95 percent. The outstanding balance was $31.6 million at December 31, 2021 and $45.0 million at December 31, 2020. These balances are recorded in the Unsecured debt and Secured debt line items on the Consolidated Balance Sheets, respectively.
Floor Plan
During the year ended December 31, 2021, we terminated our $12.0 million manufactured home floor plan facility and paid off the outstanding balance. The outstanding balance was $4.8 million as of December 31, 2020, and is recorded within the Unsecured debt line item on the Consolidated Balance Sheets.
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SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Potential Bridge Loan
On November 13, 2021, we entered into a commitment letter with Citigroup Global Markets, Inc. ("Citigroup"), pursuant to which, and subject to certain terms and conditions (including the closing of the acquisition of Park Holidays), Citigroup (on behalf of its affiliates) committed to lend us up to £950.0 million, or approximately $1.3 billion converted at the December 31, 2021 exchange rate, under a new senior unsecured bridge loan (the "Bridge Loan"). If we enter into the Bridge Loan, the proceeds of the Bridge Loan will be used to finance a portion of the cash consideration payable for the acquisition of Park Holidays. As of December 31, 2021, we did not have any borrowings outstanding under the Bridge Loan.
Preferred Equity - Sun NG Resorts - mandatorily redeemable
In connection with the investment in Sun NG Resorts, $35.3 million of mandatorily redeemable Preferred Equity ("Preferred Equity - Sun NG Resorts") was purchased by unrelated third parties. The Preferred Equity - Sun NG Resorts carries a preferred rate of return of 6.0 percent per annum. The Preferred Equity - Sun NG Resorts has a seven-year term ending June 1, 2025 and $33.4 million can be redeemed in the fourth quarter of 2024 at the holders' option. The Preferred Equity - Sun NG Resorts as of December 31, 2021 was $35.2 million. These balances are recorded within the Unsecured debt line item on the Consolidated Balance Sheets. Refer to Note 7, "Consolidated Variable Interest Entities," and Note 9, "Equity and Temporary Equity," for additional information.
Preferred OP Units - mandatorily redeemable
Preferred OP units at December 31, 2021 and 2020 include $34.7 million of Aspen preferred OP units issued by the Operating Partnership. As of December 31, 2021, these units are convertible indirectly into 383,389 shares of our common stock.
In January 2020, we amended the Operating Partnership's partnership agreement. The amendment extended the automatic redemption date and reduced the annual distribution rate for 270,000 of the Aspen preferred OP units (the "Extended Units"). Subject to certain limitations, at any time prior to January 1, 2024 (or prior to January 1, 2034 with respect to the Extended Units), the holder of each Aspen preferred OP unit at its option may convert such Aspen preferred OP unit into: (a) if the average closing price of our common stock for the preceding ten trading days is $68.00 per share or less, 0.397 common OP units; or (b) if the ten-day average closing price is greater than $68.00 per share, the number of common OP units is determined by dividing (i) the sum of (A) $27.00 plus (B) 25.0 percent of the amount by which the ten-day average closing price exceeds $68.00 per share, by (ii) the ten-day average closing price. The current preferred distribution rate is 3.8 percent on the Extended Units and 6.5 percent on all other Aspen preferred OP units. On January 2, 2024 (or January 2, 2034 with respect to the Extended Units), we are required to redeem for cash all Aspen preferred OP units that have not been converted to common OP units. As of December 31, 2021, 270,000 of the Extended Units and 1,013,819 other Aspen preferred units were outstanding. These balances are recorded within the Unsecured debt line item on the Consolidated Balance Sheets.
Covenants
The mortgage term loans, senior unsecured notes and Senior Credit Facility are subject to various financial and other covenants. The most restrictive covenants are pursuant to (a) the terms of the Senior Credit Facility, which contains a minimum fixed charge coverage ratio, maximum leverage ratio, distribution ratio and variable rate indebtedness and (b) senior unsecured notes, which contain a total debt to total assets, secured debt to total assets, consolidated income available for debt service to debt service and unencumbered total asset value to unsecured debt covenants. At December 31, 2021, we were in compliance with all covenants.
In addition, certain of our subsidiary borrowers own properties that secure loans. These subsidiaries are consolidated within our accompanying Consolidated Financial Statements, however, each of these subsidiaries' assets and credit are not available to satisfy our debts and other obligations, and any of our other subsidiaries or any other person or entity.
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SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Long-term Debt Maturities
As of December 31, 2021, the total of maturities and amortization of our secured debt (excluding premiums and discounts) and unsecured debt by year were as follows (in thousands):
| Maturities and Amortization By Year | |||||||||||||||||||||||||||||||||||||||||
| Total Due | 2022 | 2023 | 2024 | 2025 | 2026 | Thereafter | |||||||||||||||||||||||||||||||||||
| Secured debt | |||||||||||||||||||||||||||||||||||||||||
| Mortgage loans payable | |||||||||||||||||||||||||||||||||||||||||
| Maturities | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Principal amortization | |||||||||||||||||||||||||||||||||||||||||
| Secured debt total | |||||||||||||||||||||||||||||||||||||||||
| Unsecured Debt | |||||||||||||||||||||||||||||||||||||||||
| Senior unsecured notes | |||||||||||||||||||||||||||||||||||||||||
| Line of credit and other debt | |||||||||||||||||||||||||||||||||||||||||
| Preferred equity - Sun NG Resorts - mandatorily redeemable | |||||||||||||||||||||||||||||||||||||||||
| Preferred OP units - mandatorily redeemable | |||||||||||||||||||||||||||||||||||||||||
| Unsecured debt total | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
9. Equity and Temporary Equity
Temporary Equity
Redeemable Preferred OP Units in Connection with the Acquisition of Certain Properties
Series J Preferred OP Units - In April 2021, we issued 240,000 Series J preferred OP units in connection with the acquisition of Sylvan Glen Estates. The Series J preferred OP units have a stated issuance price of $100.00 per OP unit and carry a preferred return of 2.85 percent. Subject to certain limitations, at any time after the Series J issuance date, each Series J preferred OP unit can be exchanged for a number of shares of our common stock equal to the quotient obtained by dividing $100.00 by $165.00 (as such ratio is subject to adjustments for certain capital events) at the holder's option. Each holder may require redemption in cash during the 30-day period following a change of control of the Company or any time after the fifth anniversary of the Series J issuance date. As of December 31, 2021, 240,000 Series J preferred OP units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.
Series I Preferred OP Units - In December 2020, we issued 922,000 Series I preferred OP units in connection with the acquisition of the Rybovich Portfolio. The Series I preferred OP units have a stated issuance price of $100.00 per OP unit and carry a preferred return of 3.0 percent. Subject to certain limitations, at any time after the Series I issuance date, each Series I preferred OP unit can be exchanged for a number of shares of our common stock equal to the quotient obtained by dividing $100.00 by $164.00 (as such ratio is subject to adjustments for certain capital events) at the holder's option. Each holder may require redemption in cash after the fifth anniversary of the Series I issuance date or upon the holder's death. As of December 31, 2021, 922,000 Series I preferred OP units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.
Series H Preferred OP Units - In October 2020, we issued 581,407 Series H preferred OP units in connection with the acquisition of Safe Harbor. The Series H preferred OP units have a stated issuance price of $100.00 per OP unit and carry a preferred return of 3.0 percent. Subject to certain limitations, at any time after the Series H issuance date, each Series H preferred OP unit can be exchanged for a number of shares of our common stock equal to the quotient obtained by dividing $100.00 by $164.00 (as such ratio is subject to adjustments for certain capital events) at the holder's option. Each holder may require redemption in cash after the fifth anniversary of the Series H issuance date or upon the holder's death. As of December 31, 2021, 581,407 Series H preferred OP units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.
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SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Series G Preferred OP Units - In September 2020, we issued 260,710 Series G preferred OP units in connection with the acquisition of El Capitan & Ocean Mesa Resorts. The Series G preferred OP units have a stated issuance price of $100.00 per OP unit and carry a preferred return of 3.2 percent. Subject to certain limitations, at any time after the Series G issuance date, each Series G preferred OP unit can be exchanged for a number of shares of our common stock equal to the quotient obtained by dividing $100.00 by $155.00 (as such ratio is subject to adjustments for certain capital events) at the holder's option. Each holder may require redemption in cash after the fifth anniversary of the Series G issuance date or upon the holder's death. As of December 31, 2021, 240,710 Series G preferred OP units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.
Series F Preferred OP Units - In May 2020, we issued 90,000 Series F preferred OP units in connection with the acquisition of Forest Springs. The Series F preferred OP units have a stated issuance price of $100.00 per OP unit and carry a preferred return of 3.0 percent. Subject to certain limitations, at any time after the Series F issuance date, each Series F preferred OP unit can be exchanged for a number of shares of our common stock equal to the quotient obtained by dividing $100.00 by $160.00 (as such ratio is subject to adjustments for certain capital events) at the holder's option. Each holder may require redemption in cash after the fifth anniversary of the Series F issuance date or upon the holder's death. As of December 31, 2021, 90,000 Series F preferred OP units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.
Series D Preferred OP Units - In February 2019, we issued 488,958 Series D Preferred OP units in connection with the acquisition of Country Village Estates. The Series D preferred OP units have a stated issuance price of $100.00 per OP Unit and carry a preferred return of 3.75 percent until the second anniversary of the issuance date. Commencing with the second anniversary of the issuance date, the Series D Preferred OP Units carry a preferred return of 4.0 percent. Commencing with the first anniversary of the issuance date, each Series D Preferred OP Unit can be exchanged for our common stock equal to the quotient obtained by dividing $100.00 by $125.00 (as such ratio is subject to adjustments for certain capital events) at the holder's option. The holders may require redemption in cash after the fifth anniversary of the Series D issuance date or upon the holder's death. As of December 31, 2021, 488,958 Series D preferred OP units were outstanding.
Redeemable Equity Interests
Equity Interest - FPG Sun Moreno Valley 66 LLC - In December 2021, in connection with the investment in land for future development in the city of Moreno Valley, California, at the property known as FPG Sun Moreno Valley 66 LLC, Foremost Pacific Group, LLC, ("FPG") purchased $0.1 million of common equity interest in the land (referred to as "Equity Interest - FPG Sun Moreno Valley 66 LLC"). The Equity Interest - FPG Sun Moreno Valley 66 LLC does not have a fixed maturity date. Upon the occurrence of certain events, either FPG or Sun FPG Venture LLC, our subsidiary, can trigger a process under which we may be required to purchase the Equity Interest - FPG Sun Moreno Valley 66 LLC from FPG. The Equity Interest - FPG Sun Moreno Valley 66 LLC balance was $0.1 million as of December 31, 2021. Refer to Note 7, "Consolidated Variable Interest Entities," for additional information.
Equity Interest - Sun Solar Energy Project CA II - In December 2021, we entered into a joint venture with an unrelated third party to operate and maintain solar energy equipment in select California communities ("Sun Solar II"). The unrelated third party will make a series of investments in Sun Solar II upon reaching specified milestones (referred to as "Equity Interest - Sun Solar II"). We are the managing member and made an equity contribution of $12.3 million, subject to adjustment per the terms of the operating agreement. The Equity Interest - Sun Solar II balance was $0.5 million as of December 31, 2021. Refer to Note 7, "Consolidated Variable Interest Entities," for additional information.
Equity Interest - Sun Solar JV - In July 2021, we entered into a joint venture with an unrelated third party to operate and maintain solar energy equipment in select California communities. The unrelated third party made an equity contribution of $1.8 million in the Solar JV (referred to as "Equity Interest - Sun Solar JV"). We are the managing member and made an equity contribution of $5.8 million. The Equity Interest - Sun Solar JV balance was $1.6 million as of December 31, 2021. Refer to Note 7, "Consolidated Variable Interest Entities," for additional information.
Equity Interest - FPG Sun Menifee 80 LLC - In October 2020, in connection with the investment in land for future development in the city of Menifee in California, at the property known as FPG Sun Menifee 80 LLC, Foremost Pacific Group, LLC, "FPG," purchased $0.1 million of common equity interest in the land (referred to as "Equity Interest - FPG Sun Menifee 80 LLC"). The Equity Interest - FPG Sun Menifee 80 LLC does not have a fixed maturity date. Upon the occurrence of certain events, either FPG or Sun FPG Venture LLC, our subsidiary, can trigger a process under which we may be required to purchase the Equity Interest - FPG Sun Menifee 80 LLC from FPG. The Equity Interest - FPG Sun Menifee 80 LLC balance was $0.1 million as of December 31, 2021 and 2020, respectively. Refer to Note 7, "Consolidated Variable Interest Entities," for additional information.
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SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Equity Interest - NG Sun Whitewater LLC - In August 2019, in connection with the investment in land at the property known as Whitewater, NG Sun Whitewater LLC purchased $2.4 million of common equity interest in Sun NG Whitewater RV Resorts LLC (referred to as "Equity Interest - NG Sun Whitewater LLC"). The Equity Interest - NG Sun Whitewater LLC does not have a fixed maturity date. Upon the occurrence of certain events, either NG Sun Whitewater LLC or Sun NG LLC, our subsidiary, can trigger a process under which we may be required to purchase the Equity Interest - NG Sun Whitewater LLC from NG Sun Whitewater LLC. The Equity Interest - NG Sun Whitewater LLC balance was $4.3 million and $5.1 million for the years ended December 31, 2021 and 2020, respectively. Refer to Note 7, "Consolidated Variable Interest Entities," for additional information.
Equity Interest - NG Sun LLC - In June 2018, in connection with the investment in Sun NG Resorts, unrelated third parties purchased $6.5 million of Series B preferred equity interests and $15.4 million of common equity interests in Sun NG Resorts (herein jointly referred to as "Equity Interest - NG Sun LLC"). In April and September 2020, in connection with the acquisitions of Glen Ellis RV Park and Lone Star RV Park, $3.0 million of Series B preferred equity interests were converted to common equity interests. The Series B preferred equity interests carry a preferred return at a rate that, at any time, is equal to the interest rate on Sun NG Resorts' indebtedness at such time. The current rate of return is 5.0 percent. The Equity Interest - NG Sun LLC does not have a fixed maturity date and can be redeemed in the fourth quarters of 2024, 2025 and 2026 at the holders' option. Sun NG LLC, our subsidiary, has the right during certain periods each year, with or without cause, or for cause at any time, to elect to buy NG Sun LLC's interest. During a limited period in 2024, NG Sun LLC has the right to put its interest to Sun NG LLC. If either party exercises their option, the property management agreement will be terminated, and we are required to purchase the remaining interests of NG Sun LLC and the property management agreement at fair value. In December 2021, the operating agreement was amended and Sun NG Resorts initiated a contingent consideration earnout provision in the amount of $38.3 million. The contingent consideration payment was recognized as an additional purchase price payment within Land improvements and buildings in the Consolidated Balance Sheets, and within Acquisition of properties, net of cash acquired in the Consolidated Statement of Cash Flows. The Equity Interest - NG Sun LLC balance was $24.7 million and $23.3 million for the years ended December 31, 2021 and 2020, respectively. Refer to Note 7, "Consolidated Variable Interest Entities," and Note 8, "Debt and Line of Credit," for additional information.
Universal Shelf Registration Statement
On April 5, 2021, in connection with the expiration of our universal shelf registration statement on Form S-3, that was filed with the SEC on April 6, 2018, we filed a new universal shelf registration statement on Form S-3 with the SEC. The new universal shelf registration statement was deemed automatically effective and provides for the registration of unspecified amounts of equity and debt securities. We have the authority to issue 200,000,000 shares of capital stock, of which 180,000,000 shares are common stock, par value $0.01 per share, and 20,000,000 are shares of preferred stock, par value $0.01 per share. As of December 31, 2021, we had 115,976,408 no
Public Equity Offerings
On November 15 and 16, 2021, we entered into two forward sale agreements relating to an underwritten registered public offering of 4,025,000 shares of our common stock at a public offering price of $185.00 per share and completed the offering on November 18, 2021. We did not initially receive any proceeds from the sale of shares of our common stock by the forward purchaser or its affiliates. We intend to use the net proceeds, if any, received upon the future settlement of the forward sale agreements, which we expect to occur no later than November 18, 2022, to fund a portion of the Park Holidays total consideration, to repay borrowings outstanding under our Senior Credit Facility, to fund possible future acquisitions of properties and / or for working capital and general corporate purposes.
On March 2, 2021, we priced a $1.1 billion underwritten public offering of an aggregate of 8,050,000 shares at a public offering price of $140.00 per share, before underwriting discounts and commissions. The offering consisted of 4,000,000 shares offered directly by us and 4,050,000 shares offered under a forward equity sales agreement. We sold the 4,000,000 shares on March 9, 2021 and received net proceeds of $537.6 million after deducting expenses related to the offering. In May and June 2021, we completed the physical settlement of the remaining 4,050,000 shares and received net proceeds of $539.7 million after deducting expenses related to the offering. Proceeds from the offering were used to acquire assets and pay down borrowings under our revolving line of credit.
On September 30, 2020 and October 1, 2020, we entered into two forward sale agreements relating to an underwritten registered public offering of 9,200,000 shares of our common stock at a public offering price of $139.50 per share. The offering closed on October 5, 2020. On October 26, 2020, we physically settled these forward sales agreements by the delivery of shares of our common stock. Proceeds from the offering were approximately $1.23 billion after deducting expenses related to the offering. We used the net proceeds of this offering to fund the cash portion of the acquisition of Safe Harbor, and for working capital and general corporate purposes.
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SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In May 2020, we closed an underwritten registered public offering of 4,968,000 shares of common stock. Proceeds from the offering were $633.1 million after deducting expenses related to the offering. We used the net proceeds of this offering to repay borrowings outstanding under the revolving loan under our senior credit facility.
At the Market Offering Sales Agreement
On December 17, 2021, we entered into an At the Market Offering Sales Agreement with certain sales agents, and forward sellers pursuant to which we may sell, from time to time, up to an aggregate gross sales price of $1.25 billion of our common stock (the "December 2021 Sales Agreement"), through the sales agents, acting as our sales agents or, if applicable, as forward sellers, or directly to the sales agents as principals for their own accounts. The sales agents and forward sellers are entitled to compensation in an agreed amount not to exceed 2.0 percent of the gross price per share for any shares sold under the December 2021 Sales Agreement. We simultaneously terminated our June 2021 Sales Agreement (as defined below) upon entering into the December 2021 Sales Agreement.
On June 4, 2021, we entered into an At the Market Offering Sales Agreement with certain sales agents, and forward sellers pursuant to which we could sell, from time to time, up to an aggregate gross sales price of $500.0 million of our common stock (the "June 2021 Sales Agreement"), through the sales agents, acting as our sales agents or, if applicable, as forward sellers, or directly to the sales agents as principals for their own accounts. The sales agents and forward sellers are entitled to compensation in an agreed amount not to exceed 2.0 percent of the gross price per share for any shares sold under the Sales Agreement. We simultaneously terminated our previous At the Market Offering Sales Agreement entered into in July 2017 upon entering into the June 2021 Sales Agreement.
There were no sales of common stock under the December 2021 Sales Agreement as of December 31, 2021. We entered into forward sale agreements with respect to 1,820,109 shares of common stock under the June 2021 Sales Agreement for $356.5 million during the year ended December 31, 2021 prior to its termination. These forward sale agreements were not settled as of December 31, 2021 but we expect to settle them no later than September 2022. There were no 163.8
Issuances of Common OP Units and Preferred OP Units in Connection with the Acquisition of Certain Properties
Issuances of Common OP Units
Year Ended December 31, 2021 and 2020 | Common OP Units Issued | Related Acquisition | ||||||||||||
| December 2021 | Haas Lake RV Campground | |||||||||||||
| December 2020 | Rybovich Portfolio | |||||||||||||
October 2020 | Safe Harbor | |||||||||||||
May 2020 | Forest Springs | |||||||||||||
Issuance of Series E Preferred OP Units - In January 2020, we issued 90,000 Series E preferred OP units in connection with the acquisition of Sun Outdoors Cape Cod. The Series E preferred OP units have a stated issuance price of $100.00 per OP unit and carry a preferred return of 5.25 percent until the second anniversary of the issuance date. Commencing with the second anniversary of the issuance date, the Series E Preferred OP Units carry a preferred return of 5.5 percent. Commencing with the first anniversary of the issuance date, subject to certain limitations, each Series E Preferred OP Unit can be exchanged for our common stock equal to the quotient obtained by dividing $100.00 by $145.00 (as such ratio is subject to adjustments for certain capital events). As of December 31, 2021, 90,000 Series E preferred OP units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.
Equity Interest
Equity Interest - SHM South Fork JV, LLC - In October 2020, in conjunction with the acquisition of Safe Harbor, we indirectly acquired $4.3 million of Safe Harbor's equity interest in SHM South Fork JV, LLC, a joint venture created for the purpose of acquiring land and constructing a marina in Fort Lauderdale, Florida. The Safe Harbor Equity Interest - SHM South Fork JV, LLC balance was $4.1 million and $4.3 million as of December 31, 2021 and 2020, respectively. Refer to Note 7, "Consolidated Variable Interest Entities," for additional information.
F - 40
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Conversions
Conversions to Common Stock - Subject to certain limitations, holders can convert certain series of stock and OP units to shares of our common stock at any time. Below is the activity of conversions during the years ended December 31, 2021 and 2020:
| Year Ended | ||||||||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||
| Series | Conversion Rate | Units / Shares Converted | Common Stock(1) | Units / Shares Converted | Common Stock(1) | |||||||||||||||||||||
| Common OP unit | ||||||||||||||||||||||||||
| Series A-1 preferred OP unit | ||||||||||||||||||||||||||
| Series C preferred OP unit | ||||||||||||||||||||||||||
(1)Calculation may yield minor differences due to rounding incorporated in the above numbers.
Conversions to Common OP Units - Subject to certain limitations, holders can convert certain series of preferred OP units to common OP units. There were no such conversions during the years ended December 31, 2021 and 2020.
Redemption of OP Units - Subject to certain limitations, holders can redeem certain series OP units for cash, provided that certain requirements are met. There were no redemptions of series OP units during the year ended December 31, 2021. On November 4, 2020, 20,000 Series G preferred OP units were redeemed for a net cash payment of $2.0 million, inclusive of all distributions on the redeemed units that were accrued and unpaid as of the redemption date, in accordance with the terms and conditions set for in the redemption agreement.
Distributions
Distributions declared for the quarter ended December 31, 2021 were as follows:
| Common Stock, Common OP units and Restricted Stock Distributions for the Quarter Ended | Record Date | Payment Date | Distribution Per Share | Total Distribution (in Thousands) | ||||||||||||||||||||||
| December 31, 2021 | 12/31/2021 | 1/18/2022 | $ | $ | ||||||||||||||||||||||
10. Share-Based Compensation
As of December 31, 2021, we had two share-based compensation plans: the Sun Communities, Inc. 2015 Equity Incentive Plan ("2015 Equity Incentive Plan") and the First Amended and Restated 2004 Non-Employee Director Option Plan ("2004 Non-Employee Director Option Plan"). We believe granting equity awards will provide certain executives, key employees and directors additional incentives to promote our financial success and promote employee and director retention by providing an opportunity to acquire or increase the direct proprietary interest of those individuals in our operations and future.
Restricted Stock
The majority of our share-based compensation is awarded as service vesting restricted stock grants to executives and key employees. We have also awarded restricted stock to our non-employee directors. We measure the fair value associated with these awards using the closing price of our common stock as of the grant date to calculate compensation cost. Employee awards typically vest over several years and are subject to continued employment by the employee. Award recipients receive distribution payments on unvested shares of restricted stock.
2015 Equity Incentive Plan
At the Annual Meeting of Stockholders held on July 20, 2015, the stockholders approved the 2015 Equity Plan. The 2015 Equity Plan had been adopted by the Board and was effective upon approval by our stockholders. The maximum number of shares of common stock that may be issued under the 2015 Equity Plan is 1,750,000 shares of our common stock, with 457,767 as of December 31, 2021 shares remaining for future issuance.
F - 41
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Non-Employee Director Plans
2021 Non-Employee Directors Deferred Compensation Plan - In November 2021, we adopted the 2021 Non-Employee Directors Deferred Compensation Plan ("2021 Deferred Compensation Plan"), which was approved by the Compensation Committee of the Board of Directors. The 2021 Deferred Compensation Plan entitles a non-employee director to annually submit an election to defer all or a portion of his or her eligible share-based and cash compensation, effective starting January 2022.
2004 Non-Employee Director Option Plan - The director plan was approved by our stockholders at the Annual Meeting of Stockholders held on July 19, 2012. The director plan amended and restated in its entirety our 2004 Non-Employee Director Stock Option Plan. At the Annual Meeting of the Stockholders held on May 17, 2018, the stockholders approved the First Amendment to the Sun Communities, Inc. First Amended and Restated 2004 Non-Employee Director Option Plan to increase the number of authorized shares under the plan by 200,000 shares.
The types of awards that may be granted under the director plan are options, restricted stock and OP units. Only non-employee directors are eligible to participate in the director plan. The maximum number of options, restricted stock and OP units that may be issued under the Director Plan is 375,000 shares, with 169,865 as of December 31, 2021 shares remaining for future issuance.
During the years ended December 31, 2021 and 2020, shares were granted as follows:
| Grant Period | Type | Plan | Shares Granted | Grant Date Fair Value Per Share | Vesting Type | Vesting Anniversary | Percentage | |||||||||||||||||||||||||||||||||||||
| 2021 | Key Employees | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2021 | Key Employees | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2021 | Executive Officers | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2021 | Executive Officers | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2021 | Executive Officers | 2015 Equity Incentive Plan | (2) | $ | (2) | Market Condition | 3rd | % | ||||||||||||||||||||||||||||||||||||
| 2021 | Executive Officers | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2021 | Executive Officers | 2015 Equity Incentive Plan | (3) | $ | (3) | Market Condition | 3rd | % | ||||||||||||||||||||||||||||||||||||
| 2021 | Key Employees | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2021 | Key Employees | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2021 | Executive Officers | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2021 | Executive Officers | 2015 Equity Incentive Plan | (4) | $ | (4) | Market Condition | 3rd | % | ||||||||||||||||||||||||||||||||||||
| 2021 | Directors | 2004 Non-Employee Director Option Plan | $ | (1) | Time Based | 3rd | % | |||||||||||||||||||||||||||||||||||||
| 2021 | Directors | 2004 Non-Employee Director Option Plan | $ | (1) | Time Based | 3rd | % | |||||||||||||||||||||||||||||||||||||
| 2020 | Key Employees | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2020 | Executive Officers | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2020 | Key Employees | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2020 | Key Employees | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2020 | Executive Officers | 2015 Equity Incentive Plan | $ | (1) | Time Based | |||||||||||||||||||||||||||||||||||||||
| 2020 | Executive Officers | 2015 Equity Incentive Plan | (5) | $ | (5) | Market Condition | 3rd | % | ||||||||||||||||||||||||||||||||||||
| 2020 | Directors | 2004 Non-Employee Director Option Plan | $ | (1) | Time Based | 3rd | % | |||||||||||||||||||||||||||||||||||||
(1)The fair values of the grants were determined by using the average closing price of our common stock on the dates the shares were issued.
(2)Share-based compensation for restricted stock awards with market conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. At the grant date our common stock price was $151.89 . Based on the Monte Carlo simulation we expect 62.1 percent of the 81,000 shares to vest.
(3)Share-based compensation for restricted stock awards with market conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. At the grant date our common stock price was $151.89 . Based on the Monte Carlo simulation we expect 57.6 percent of the 15,000 shares to vest.
(4)Share-based compensation for restricted stock awards with market conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. At the grant date our common stock price was $147.19 . Based on the Monte Carlo simulation we expect 65.5 percent of the 5,100 shares to vest.
(5)Share-based compensation for restricted stock awards with market conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. At the grant date our common stock price was $165.97 . Based on the Monte Carlo simulation we expect 75.6 percent of the 69,000 shares to vest.
F - 42
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes our restricted stock activity for the years ended December 31, 2021, 2020 and 2019:
| Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Unvested restricted shares at January 1, 2019 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | ( | $ | |||||||||
| Forfeited | ( | $ | |||||||||
| Unvested restricted shares at December 31, 2019 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | ( | $ | |||||||||
| Forfeited | ( | $ | |||||||||
| Unvested restricted shares at December 31, 2020 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | ( | $ | |||||||||
| Forfeited | ( | $ | |||||||||
| Unvested restricted shares at December 31, 2021 | $ | ||||||||||
The total fair value of shares vested was $27.8 million, $19.0 million and $15.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.
Total compensation cost recognized for restricted stock was $28.0 million, $22.7 million and $17.5 million for the years ended December 31, 2021, 2020 and 2019, respectively, and is included in General and Administrative Expenses in the accompanying Consolidated Statements of Operations.
The remaining share-based compensation cost, net related to our unvested restricted shares outstanding as of December 31, 2021 is approximately $60.8 million. The following table summarizes our expected share-based compensation cost, net related to our unvested restricted shares, in thousands:
| 2022 | 2023 | 2024 | Thereafter | ||||||||||||||||||||
| Expected share-based compensation costs, net | $ | $ | $ | $ | |||||||||||||||||||
11. Segment Reporting
We group our segments into reportable segments that provide similar products and services. Each operating segment has discrete financial information evaluated regularly by our chief operating decision maker in managing the business, making operating decisions, allocating resources and evaluating operating performance. As described in Note 1, "Significant Accounting Policies," effective January 1, 2021, we transitioned from a two -segment to a three -segment structure: MH, RV and Marina. Hybrid properties are classified to a segment based on the predominant site counts at the properties. We evaluate segment operating performance based on NOI.
F - 43
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A presentation of our segment financial information is summarized as follows (amounts in thousands):
| Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2021 | December 31, 2020(1) | December 31, 2019(1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MH | RV | Marina | Consolidated | MH | RV | Marina | Consolidated | MH | RV | Marina | Consolidated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating revenues | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating expenses / Cost of sales | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOI | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to arrive at net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brokerage commissions and other revenues, net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative expense | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Catastrophic event-related charges, net | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business combination expense, net | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt (see Note 8) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest on mandatorily redeemable preferred OP units / equity | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on remeasurement of marketable securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain / (loss) on foreign currency translation | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on dispositions of properties | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other expense, net | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain / (loss) on remeasurement of notes receivable | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income from nonconsolidated affiliates (see Note 6) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on remeasurement of investment in nonconsolidated affiliates | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current tax expense (see Note 12) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax benefit / (expense) (see Note 12) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Preferred return to preferred OP units / equity interests | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Income attributable to noncontrolling interests | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income Attributable to Sun Communities, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Preferred stock distribution | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income Attributable to Sun Communities, Inc. Common Stockholders | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 44
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| December 31, 2021 | December 31, 2020(1) | ||||||||||||||||||||||||||||||||||||||||||||||
| MH | RV | Marina | Consolidated | MH | RV | Marina | Consolidated | ||||||||||||||||||||||||||||||||||||||||
| Identifiable assets | |||||||||||||||||||||||||||||||||||||||||||||||
| Investment property, net | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash | |||||||||||||||||||||||||||||||||||||||||||||||
| Marketable securities | |||||||||||||||||||||||||||||||||||||||||||||||
| Inventory of manufactured homes | |||||||||||||||||||||||||||||||||||||||||||||||
| Notes and other receivables, net | |||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill | |||||||||||||||||||||||||||||||||||||||||||||||
| Other intangible assets, net | |||||||||||||||||||||||||||||||||||||||||||||||
| Other assets, net | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
(1) Recast to reflect segment changes.
12. Income Taxes
We have elected to be taxed as a REIT pursuant to Section 856(c) of the Internal Revenue Code of 1986, as amended ("Code"). In order for us to qualify as a REIT, at least 95.0 percent of our gross income in any year must be derived from qualifying sources. In addition, a REIT must distribute annually at least 90.0 percent of its REIT taxable income (calculated without any deduction for dividends paid and excluding capital gain) to its stockholders and meet other tests.
Qualification as a REIT involves the satisfaction of numerous requirements (on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are limited judicial or administrative interpretations and involves the determination of various factual matters and circumstances not entirely within our control. In addition, frequent changes occur in the area of REIT taxation, which requires us to continually monitor our tax status. We analyzed the various REIT tests and confirmed that we continued to qualify as a REIT for the year ended December 31, 2021.
As a REIT, we generally will not be subject to United States ("U.S.") federal income taxes at the corporate level on the ordinary taxable income we distribute to our stockholders as dividends. If we fail to qualify as a REIT in any taxable year, our taxable income could be subject to U.S. federal income tax at regular corporate rates. Even if we qualify as a REIT, we may be subject to certain state and local income taxes as well as U.S. federal income and excise taxes on our undistributed income. In addition, taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to federal, state and local income taxes. We are also subject to local income taxes in Canada of certain properties located in Canada. We do not provide for withholding taxes on our undistributed earnings from our Canadian subsidiaries as they are reinvested and will continue to be reinvested indefinitely outside of the U.S. However, we are subject to Australian withholding taxes on distributions from our investment in Ingenia Communities Group.
For income tax purposes, distributions paid to common stockholders consist of ordinary income, capital gains, and return of capital. For the years ended December 31, 2021, 2020 and 2019, distributions paid per share were taxable as follows (unaudited / rounded):
| Year Ended | |||||||||||||||||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||
| Amount | Percentage | Amount | Percentage | Amount | Percentage | ||||||||||||||||||||||||||||||
Ordinary income(1) | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Capital gain | % | % | % | ||||||||||||||||||||||||||||||||
| Return of capital | % | % | % | ||||||||||||||||||||||||||||||||
Total distributions declared | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
(1)98.99499 percent of the ordinary taxable dividend qualifies as a Section 199A dividend for 2021 and 1.00501 percent of the ordinary taxable dividend qualifies as a Qualified Dividend for 2021.
F - 45
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The components of our provision / (benefit) for income taxes attributable to continuing operations for the years ended December 31, 2021, 2020 and 2019 are as follows (amounts in thousands):
| Year Ended | |||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||
| Federal | |||||||||||||||||
| Current | $ | $ | ( | $ | ( | ||||||||||||
| Deferred | ( | ||||||||||||||||
| State and Local | |||||||||||||||||
| Current | |||||||||||||||||
| Deferred | ( | ( | |||||||||||||||
| Foreign | |||||||||||||||||
| Current | |||||||||||||||||
| Deferred | ( | ( | |||||||||||||||
| Total provision / (benefit) | $ | $ | ( | $ | |||||||||||||
A reconciliation of the provision / (benefit) for income taxes with the amount computed by applying the statutory federal income tax rate to income before provision for income taxes for the years ended December 31, 2021, 2020 and 2019 is as follows (amounts in thousands):
| Year Ended | |||||||||||||||||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||
| Pre-tax income / (loss) attributable to taxable subsidiaries | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||
| Federal benefit at statutory tax rate | ( | % | ( | % | ( | % | |||||||||||||||||||||||||||||
| State and local taxes, net of federal benefit | ( | % | ( | % | ( | % | |||||||||||||||||||||||||||||
| Rate differential | ( | % | ( | % | ( | % | |||||||||||||||||||||||||||||
| Change in valuation allowance | ( | % | ( | % | ( | % | |||||||||||||||||||||||||||||
| Others | ( | % | ( | % | ( | % | |||||||||||||||||||||||||||||
| Tax provision / (benefit) - taxable subsidiaries | ( | % | ( | % | ( | % | |||||||||||||||||||||||||||||
| Other state taxes - flow through subsidiaries | |||||||||||||||||||||||||||||||||||
| Total provision / (benefit) | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
Deferred tax assets and liabilities reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and the basis of such assets and liabilities as measured by tax laws. Deferred tax assets are reduced, if necessary, by a valuation allowance to the amount where realization is more likely than not assured after considering all available evidence. Our temporary differences primarily relate to net operating loss carryforwards, and depreciation and basis differences between tax and GAAP. Our deferred tax assets that have a full valuation allowance relate to our taxable REIT subsidiaries.
F - 46
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The deferred tax assets and liabilities included in the Consolidated Balance Sheets are comprised of the following tax effects of temporary differences and based on the most recent tax rate legislation (amounts in thousands):
| As of | |||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||
| Deferred Tax Assets | |||||||||||||||||
| NOL carryforwards | $ | $ | $ | ||||||||||||||
| Depreciation and basis differences | |||||||||||||||||
| Other | ( | ||||||||||||||||
| Gross deferred tax assets | |||||||||||||||||
| Valuation allowance | ( | ( | ( | ||||||||||||||
| Net deferred tax assets | |||||||||||||||||
| Deferred Tax Liabilities | |||||||||||||||||
| Basis differences - US assets | ( | ( | |||||||||||||||
| Basis differences - foreign investment | ( | ( | ( | ||||||||||||||
| Gross deferred tax liabilities | ( | ( | ( | ||||||||||||||
Net Deferred Tax Liability(1) | $ | ( | $ | ( | $ | ( | |||||||||||
(1)Net deferred tax liability is included within Other liabilities in our Consolidated Balance Sheets.
Our U.S. taxable REIT subsidiaries operating loss carryforwards are $119.0 million, or $24.8 million after tax, including SHS loss carryforwards of $116.5 million, or $24.5 million after tax, as of December 31, 2021. The loss carryforwards will begin to expire in 2022 through 2035 if not offset by future taxable income. In addition, our Canadian subsidiaries have operating loss carryforwards of $6.9 million, or $1.8 million after tax, as of December 31, 2021. The loss carryforwards will begin to expire in 2033 through 2038 if not offset by future taxable income.
We had no unrecognized tax benefits as of December 31, 2021 and 2020. We expect no significant increases or decreases in unrecognized tax benefits due to changes in tax positions within one year of December 31, 2021.
We classify certain state taxes as income taxes for financial reporting purposes. We recorded a provision for state income taxes of $1.1 million for the year ended December 31, 2021, $1.5 million for the year ended December 31, 2020, and $0.9 million for the year ended December 31, 2019.
Our policy is to report income tax penalties and income tax related interest expense as a component of income tax expense. No
13. Earnings Per Share
Earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period on a basic and diluted basis. We calculate diluted earnings per share using the more dilutive of the treasury stock method and the two-class method.
From time to time, we enter into forward equity sales agreements, which are discussed in Note 9, "Equity and Temporary Equity." We considered the potential dilution resulting from the forward equity sales agreements on the earnings per share calculations. At inception, the agreements do not have an effect on the computation of basic earnings per share as no shares are delivered unless and until there is a physical settlement. Common shares issued upon the physical settlement of the forward equity sales agreements, weighted for the period these common shares are outstanding, are usually included in the denominator of basic earnings per share. To determine the dilution resulting from the forward equity sales agreements during the period of time prior to settlement, we calculate the number of weighted-average shares outstanding - diluted.
F - 47
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Our potentially dilutive securities include our potential common shares related to our forward equity offerings, our unvested restricted common shares, and our Operating Partnership outstanding common OP units, Series A-1 preferred OP units, Series A-3 preferred OP units, Series C preferred OP units, Series D preferred OP units, Series E preferred OP units, Series F preferred OP units, Series G preferred OP units, Series H preferred OP units, Series I preferred OP units, Series J preferred OP units and Aspen preferred OP Units, which, if converted or exercised, may impact dilution.
Diluted earnings per share considers the impact of potentially dilutive securities except when the potential common shares have an antidilutive effect. Our unvested restricted stock common shares contain rights to receive non-forfeitable distributions and participate equally with common stock with respect to distributions issued or declared, and thus, are participating securities, requiring the two-class method of computing earnings per share. The two-class method determines earnings per share by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares of common stock outstanding for the period. In calculating the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average number of shares outstanding during the period. The remaining potential dilutive common shares do not contain rights to distributions and are included in the computation of diluted earnings per share.
Computations of basic and diluted earnings per share were as follows (in thousands, except per share data):
| Year Ended | ||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | ||||||||||||||||||
| Numerator | ||||||||||||||||||||
| Net Income Attributable to Sun Communities, Inc. Common Stockholders | $ | $ | $ | |||||||||||||||||
| Less: allocation to restricted stock awards | ||||||||||||||||||||
| Basic earnings - Net Income attributable to common stockholders after allocation to restricted stock awards | $ | $ | $ | |||||||||||||||||
| Add: allocation to common and preferred OP units dilutive effect | ||||||||||||||||||||
| Add: allocation to restricted stock awards | ||||||||||||||||||||
Diluted earnings - Net income attributable to common stockholders after allocation to common and preferred OP units(1) | $ | $ | $ | |||||||||||||||||
| Denominator | ||||||||||||||||||||
| Weighted average common shares outstanding | ||||||||||||||||||||
| Add: dilutive stock options | ||||||||||||||||||||
| Add: common and preferred OP units dilutive effect | ||||||||||||||||||||
| Add: dilutive restricted stock | ||||||||||||||||||||
Diluted weighted average common shares and securities(1) | ||||||||||||||||||||
| Earnings Per Share Available to Common Stockholders After Allocation | ||||||||||||||||||||
| Basic earnings per share | $ | $ | $ | |||||||||||||||||
Diluted earnings per share(1) | $ | $ | $ | |||||||||||||||||
(1) For the years ended December 31, 2021 and 2020, diluted earnings per share was calculated using the two-class method. The application of this method resulted in a more dilutive earnings per share for the year. Diluted earnings per share for the year ended December 31, 2019 were calculated using the treasury stock method as the application of this method resulted in a more dilutive earnings per share for that period.
F - 48
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We have excluded certain convertible securities from the computation of diluted earnings per share because the inclusion of these securities would have been anti-dilutive for the periods presented. The following table presents the outstanding securities that were excluded from the computation of diluted earnings per share for the years ended December 31, 2021, 2020 and 2019 (amounts in thousands):
| Year Ended | |||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||
| Common OP units | |||||||||||||||||
| A-1 preferred OP units | |||||||||||||||||
| A-3 preferred OP units | |||||||||||||||||
| Aspen preferred OP units | |||||||||||||||||
| Series C preferred OP units | |||||||||||||||||
| Series D preferred OP units | |||||||||||||||||
| Series E preferred OP units | |||||||||||||||||
| Series F preferred OP units | |||||||||||||||||
| Series G preferred OP units | |||||||||||||||||
| Series H preferred OP units | |||||||||||||||||
| Series I preferred OP units | |||||||||||||||||
| Series J preferred OP units | |||||||||||||||||
| Total Securities | |||||||||||||||||
F - 49
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14. Fair Value of Financial Instruments
Our financial instruments consist primarily of cash, cash equivalents and restricted cash, marketable securities, notes and other receivables, derivatives debt and other liabilities. We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures, pursuant to ASC 820, "Fair Value Measurements and Disclosures." The following methods and assumptions were used in order to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Assets by Hierarchy Level
The table below sets forth our financial assets and liabilities (in thousands) that required disclosure of fair value on a recurring basis as of December 31, 2021. The table presents the carrying values and fair values of our financial instruments as of December 31, 2021 and 2020, that were measured using the valuation techniques described below. The table excludes other financial instruments such as other receivables and accounts payable as the carrying values associated with these instruments approximate their fair value since their maturities are less than one year. These are classified as Level 1 in the hierarchy.
| December 31, 2021 | ||||||||||||||||||||||||||||||||
| Financial Assets | Carrying Value | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value | |||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Marketable securities | ||||||||||||||||||||||||||||||||
| Installment notes receivable on manufactured homes, net | ||||||||||||||||||||||||||||||||
| Notes receivable from real estate developers and operators | ||||||||||||||||||||||||||||||||
| Derivatives designated as hedges - interest rate derivative | ||||||||||||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Financial Liabilities | ||||||||||||||||||||||||||||||||
| Secured debt | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Unsecured debt | ||||||||||||||||||||||||||||||||
| Senior unsecured notes | ||||||||||||||||||||||||||||||||
| Line of credit and other unsecured debt | ||||||||||||||||||||||||||||||||
| Total unsecured debt | ||||||||||||||||||||||||||||||||
| Other financial liabilities (contingent consideration) | ||||||||||||||||||||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| December 31, 2020 | ||||||||||||||||||||||||||||||||
| Financial Assets | Carrying Value | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value | |||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Marketable securities | ||||||||||||||||||||||||||||||||
| Installment notes receivable on manufactured homes, net | ||||||||||||||||||||||||||||||||
| Notes receivable from real estate developers and operators | ||||||||||||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Financial Liabilities | ||||||||||||||||||||||||||||||||
| Secured debt | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Unsecured debt | ||||||||||||||||||||||||||||||||
| Line of credit and other unsecured debt | ||||||||||||||||||||||||||||||||
| Total unsecured debt | ||||||||||||||||||||||||||||||||
| Other financial liabilities (contingent consideration) | ||||||||||||||||||||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
F - 50
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cash, Cash Equivalents and Restricted Cash
The carrying values of cash, cash equivalents and restricted cash approximate their fair market values due to the short-term nature of the instruments. These are classified as Level 1 in the hierarchy.
Marketable Securities
Marketable securities held by us and accounted for under ASC 321 "Investments - Equity Securities" are measured at fair value. Any change in fair value is recognized in the Consolidated Statement of Operations in Gain / (loss) on remeasurement of marketable securities in accordance with ASU 2016-01 "Financial Instruments - Overall (Subtopic 825-10): Recognition and measurement of financial assets and financial liabilities." The fair value is measured by the quoted unadjusted share price which is readily available in active markets (Level 1).
The change in the marketable securities balance is as follows (in thousands):
| Year Ended | |||||||||||
| December 31, 2021 | December 31, 2020 | ||||||||||
| Beginning Balance | $ | $ | |||||||||
| Additional purchases | |||||||||||
| Change in fair value measurement | |||||||||||
| Foreign currency translation adjustment | ( | ||||||||||
| Dividend reinvestment, net of tax | |||||||||||
| Ending Balance | $ | $ | |||||||||
Installment Notes Receivable on Manufactured Homes
Installment notes receivable on manufactured homes are recorded at fair value and are measured using model-derived indicative pricing using primarily unobservable inputs, inclusive of default rates, interest rates and recovery rates (Level 3). Refer to Note 4, "Notes and Other Receivables," for additional information.
Notes Receivable from Real Estate Developers and Operators
Notes receivable from real estate developers and operators are recorded at fair value and are measured using model-derived indicative pricing using primarily unobservable inputs including interest rates and counterparty performance (Level 3). The carrying values of the notes generally approximate their fair market values either due to the nature of the note and / or the note being secured by underlying collateral and / or personal guarantees. Refer to Note 4, "Notes and Other Receivables," for additional information.
Derivatives Designated as Hedges - Interest Rate Derivative
Interest rate derivatives are recorded at fair value and consist of a treasury lock transaction that we have designated as a cash flow hedge of forecasted interest payments on a forecasted issuance of long-term debt. The fair value of the treasury lock is measured using observable inputs based on the 10 year Treasury note rate (Level 2).
Secured Debt
Secured debt consists primarily of our mortgage term loans. The fair value of mortgage term loans is based on the estimates of management and on rates currently quoted, rates currently prevailing for comparable loans and instruments of comparable maturities (Level 2). Refer to Note 8, "Debt and Line of Credit," for additional information.
Unsecured Debt
Senior unsecured notes - the fair value of senior unsecured notes is based on the estimates of management and on rates currently quoted, rates currently prevailing for comparable loans and instruments of comparable maturities (Level 2). Refer to Note 8, "Debt and Line of Credit," for additional information.
F - 51
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Line of credit and other unsecured debt - consists primarily of our Senior Credit Facility. We have variable rates on our Senior Credit Facility. The fair value of the debt with variable rates approximates carrying value as the interest rates of these amounts approximate market rates. The estimated fair value of our indebtedness as of December 31, 2021 approximated its gross carrying value.
Other Financial Liabilities
We estimate the fair value of contingent consideration liabilities based on valuation models using significant unobservable inputs that generally consider discounting of future cash flows using market interest rates and adjusting for non-performance risk over the remaining term of the liability (Level 3).
Level 3 Reconciliation, Measurements and Transfers
We review the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. Availability of secondary market activity and consistency of pricing from third-party sources impacts our ability to classify securities as Level 2 or Level 3.
Our assessment resulted in a net transfer into Level 3 of $138.5 million related to installment notes receivable on manufactured homes and notes from real estate developers during the year ended December 31, 2021.
Inputs that are used to derive the fair value for installment notes receivables on manufactured homes and notes receivable from real estate developers and operators transferred to Level 3 from Level 2 during the quarter ended March 31, 2021 as significant inputs used to value those instruments inclusive of default rates, interest rates, recovery rates, and counterparty performance rely heavily on internally sourced assumptions as opposed to observable market-based inputs.
The following tables summarize changes to our financial instruments carried at fair value and classified within Level 3 of the fair value hierarchy for the year ended December 31, 2021 (in thousands):
| Year Ended | |||||||||||
| December 31, 2021 | |||||||||||
| Assets: | Installment Notes Receivable on MH, net | Notes Receivable From Real Estate Developers and Operators | |||||||||
| Level 3 beginning balance at December 31, 2020 | $ | $ | |||||||||
| Transfer to level 3 | |||||||||||
| Realized gains | |||||||||||
| Purchases and issuances | |||||||||||
| Sales and settlements | ( | ( | |||||||||
| Dispositions of properties | ( | ||||||||||
| Other adjustments | |||||||||||
| Level 3 ending balance at December 31, 2021 | $ | $ | |||||||||
| Year Ended | |||||
| December 31, 2021 | |||||
| Liabilities: | Other Liabilities (Contingent Consideration) | ||||
| Level 3 beginning balance at December 31, 2020 | $ | ||||
| Realized losses | |||||
| Purchases and issuances | |||||
| Sales and settlements | ( | ||||
| Other adjustments | |||||
| Level 3 ending balance at December 31, 2021 | $ | ||||
F - 52
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. Commitments and Contingencies
Legal Proceedings
We are involved in various legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material adverse impact on our results of operations or financial condition.
16. Leases
Lessee Accounting
We lease land under non-cancelable operating leases at certain MH, RV and marina properties expiring at various dates through 2094. The majority of the leases have terms requiring fixed payments plus additional rents based on a percentage of revenues at those properties. We also have other operating leases, primarily office space and equipment expiring at various dates through 2041.
Future minimum lease payments under non-cancellable leases as of December 31, 2021 where we are the lessee include:
| Maturity of Lease Liabilities (in thousands) | Operating Leases | Finance Leases | Total | |||||||||||||||||
| 2022 | $ | $ | $ | |||||||||||||||||
| 2023 | ||||||||||||||||||||
| 2024 | ||||||||||||||||||||
| 2025 | ||||||||||||||||||||
| 2026 | ||||||||||||||||||||
| Thereafter | ||||||||||||||||||||
| Total Lease Payments | $ | $ | $ | |||||||||||||||||
| Less: Imputed interest | ( | ( | ( | |||||||||||||||||
| Present Value of Lease Liabilities | $ | $ | $ | |||||||||||||||||
Right-of-use (ROU) assets and lease liabilities for finance and operating leases as included in our Consolidated Balance Sheets are as follows (in thousands):
| Financial Statement Classification | As of | |||||||||||||||||||
| Description | December 31, 2021 | December 31, 2020 | ||||||||||||||||||
| Lease Assets | ||||||||||||||||||||
| ROU asset obtained in exchange for new finance lease liabilities | Investment property, net | $ | $ | |||||||||||||||||
| ROU asset obtained in exchange for new operating lease liabilities | Other assets, net | $ | $ | |||||||||||||||||
| ROU asset obtained relative to below market operating lease | Other assets, net | $ | $ | |||||||||||||||||
| Lease Liabilities | ||||||||||||||||||||
| Finance lease liabilities | $ | $ | ||||||||||||||||||
| Operating lease liabilities | $ | $ | ||||||||||||||||||
F - 53
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Lease expense for finance and operating leases, and short term lease cost as included in our Consolidated Statements of Operations are as follows (in thousands):
| Year Ended | ||||||||||||||||||||||||||
| Description | Financial Statement Classification | December 31, 2021 | December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||
| Finance Lease Expense | ||||||||||||||||||||||||||
| Interest on lease liabilities | Interest expense | $ | $ | $ | ||||||||||||||||||||||
| Operating lease cost | General and administrative expense, Property operating and maintenance | |||||||||||||||||||||||||
| Variable lease cost | Property operating and maintenance | |||||||||||||||||||||||||
| Short term lease cost | Property operating and maintenance | |||||||||||||||||||||||||
| Total Lease Expense | $ | $ | $ | |||||||||||||||||||||||
Lease term, discount rates and additional information for finance and operating leases are as follows:
| As of | ||||||||
| Lease Term and Discount Rate | December 31, 2021 | |||||||
| Weighted-average Remaining Lease Terms (years) | ||||||||
| Finance lease | ||||||||
| Operating lease | ||||||||
| Weighted-average Discount Rate | ||||||||
| Finance lease | % | |||||||
| Operating lease | % | |||||||
| Year Ended | ||||||||||||||||||||
| Other Information (in thousands) | December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||||
| Cash Paid for Amounts Included in the Measurement of Lease Liabilities | ||||||||||||||||||||
| Operating cash flow from operating leases | $ | $ | $ | |||||||||||||||||
| Financing cash flow from finance leases | ||||||||||||||||||||
| Total Cash Paid On Lease Liabilities | $ | $ | $ | |||||||||||||||||
Lessor Accounting
We are not the lessor for any finance leases at our MH, RV or marina properties as of December 31, 2021.
Almost all of our operating leases at our MH and RV properties where we are the lessor are either month to month or for a time period not to exceed one year. As of December 31, 2021, future minimum lease payments would not exceed 12 months.
Future minimum lease payments under non-cancellable leases at our RV resorts and marinas at the year ended December 31, 2021 where we are the lessor include:
| Maturity of Lease Payments (in thousands) | Operating Leases | |||||||
| 2022 | $ | |||||||
| 2023 | ||||||||
| 2024 | ||||||||
| 2025 | ||||||||
| 2026 | ||||||||
| Thereafter | ||||||||
| Total Undiscounted Cash Flows | $ | |||||||
F - 54
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The components of lease income for our operating leases, as included in our Consolidated Statements of Operations are as follows (in thousands):
| Year Ended | ||||||||||||||||||||||||||
| Description | Financial Statement Classification | December 31, 2021 | December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||
| Operating Leases | ||||||||||||||||||||||||||
| Fixed lease income | Income from real property; Brokerage commissions and other revenue, net | $ | $ | $ | ||||||||||||||||||||||
Variable lease income(1) | Income from real property; Brokerage commissions and other revenue, net | $ | $ | $ | ||||||||||||||||||||||
(1)Consists of rent primarily based on a percentage of acquisition costs and net operating income.
During the year ended December 31, 2021, we terminated our operating ground lease agreements at two properties and settled a contingent consideration earnout provision in the amount of $17.2 million. As these properties were deemed asset acquisitions, the contingent consideration payment was recognized as an additional purchase price within Land improvements and buildings in the Consolidated Balance Sheets, and within Acquisition of properties, net of cash acquired, in the Consolidated Statement of Cash Flows.
In conjunction with the termination, we entered into management agreements with the previous operators to manage these properties effective January 1, 2022.
During the year ended December 31, 2021, we terminated our operating ground lease agreement at one property and settled a contingent consideration earnout provision in the amount of $20.1 million. The initial contingent consideration liability of $9.8 million was recognized at acquisition within Investment property in the Consolidated Balance Sheets, and within financing in the Consolidated Statement of Cash Flows. As this property was deemed a business combination, incremental contingent consideration expense of $10.3 million was recognized within Other expense, net in the Consolidated Statement of Operations and within Operating in the Consolidated Statement of Cash Flows. In conjunction with the termination, we entered into a management agreement with the previous operator to manage the property effective January 1, 2022.
17. Related Party Transactions
Lease of Executive Offices - Gary A. Shiffman, together with certain of his family members, indirectly owns an equity interest of approximately 28.1 percent in American Center LLC, the entity from which we lease office space for our principal executive offices. Each of Brian M. Hermelin, Ronald A. Klein and Arthur A. Weiss indirectly owns less than one percent interest in American Center LLC. Mr. Shiffman is our Chief Executive Officer and Chairman of the Board. Each of Mr. Hermelin, Mr. Klein and Mr. Weiss is a director of the Company. Under this agreement, we lease approximately 103,100 rentable square feet of permanent space. The lease agreement includes annual graduated rent increases through the initial end date of October 31, 2026. As of December 31, 2021, the average gross base rent was $19.95 per square foot. Each of Mr. Shiffman, Mr. Hermelin, Mr. Klein and Mr. Weiss may have a conflict of interest with respect to his obligations as our officer and / or director and his ownership interest in American Center LLC.
Use of Airplane - Gary A. Shiffman is the beneficial owner of an airplane that we use from time to time for business purposes. During the years ended December 31, 2021, 2020 and 2019, we paid $0.7 million, $0.3 million and $0.4 million for the use of the airplane, respectively. Mr. Shiffman may have a conflict of interest with respect to his obligations as our officer and director and his ownership interest in the airplane.
Telephone Services - Brian M. Hermelin is a principal and a beneficial owner of an entity that installs and maintains emergency telephone systems at our properties. During the years ended December 31, 2021 and 2020, we paid $0.2 million for these services, respectively. Mr. Hermelin may have a conflict of interest with respect to his obligations as our director and his position with and ownership interest in the provider of these services.
Legal Counsel - During 2019-2021, Jaffe, Raitt, Heuer, & Weiss, Professional Corporation acted as our general counsel and represented us in various matters. Arthur A. Weiss is the Chairman of the Board of Directors and a shareholder of such firm. We incurred legal fees and expenses owed to Jaffe, Raitt, Heuer, & Weiss of approximately $10.3 million, $13.3 million and $11.1 million in the years ended December 31, 2021, 2020 and 2019, respectively.
Tax Consequences Upon Sale of Properties - Gary A. Shiffman holds limited partnership interests in the Operating Partnership which were received in connection with the contribution of properties from partnerships previously affiliated with him. Prior to any redemption of these limited partnership interests for our common stock, Mr. Shiffman will have tax consequences different from those on us and our public stockholders upon the sale of any of these partnerships. Therefore, we and Mr. Shiffman may have different objectives regarding the appropriate pricing and timing of any sale of those properties.
F - 55
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
18. Recent Accounting Pronouncements
Recent Accounting Pronouncements - Adopted
In July 2021, the FASB issued ASU 2021-05, "Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments." This update amends ASC 842 so that lessors are no longer required to recognize a selling loss upon commencement of a lease with variable lease payments that, prior to the amendments, would have been classified as a sales-type or direct financing lease. Under the amended guidance, a lessor must classify as an operating lease any lease that would otherwise be classified as a sales-type or direct financing lease and that would result in the recognition of a selling loss at lease commencement, provided that the lease includes variable lease payments that do not depend on an index or rate. We adopted the ASU during the three months ended September 30, 2021. The adoption of this ASU did not have an impact on our Consolidated Financial Statements as none of our lessor leases with variable lease payments required us to recognize a selling loss upon commencement of the lease.
Recent Accounting Pronouncements - Not Yet Adopted
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which provides optional guidance for accounting for contracts, hedging relationships, and other transactions affected by the reference rate reform, if certain criteria are met. The provisions of this standard are available for election through December 31, 2022. As of December 31, 2021, we do not expect the reference rate reform will have a material impact on our Consolidated Financial Statements as the majority of our debt has fixed interest rates.
19. Subsequent Events
Acquisitions
On November 13, 2021, we entered into a definitive agreement to acquire Park Holidays, an owner and operator of holiday communities in the United Kingdom, for £950.0 million, or approximately $1.3 billion. We anticipate the closing of the acquisition will occur in the three months ending March 31, 2022.
Subsequent to the year ended December 31, 2021, we acquired the following properties:
| Property Name | Property Type | Sites, Wet Slips and Dry Storage Spaces | Development Sites | City | State / Province | Total Purchase Price (in millions) | ||||||||||||||||||||||||||||||||
| Harrison Yacht Yard | Marina | Grasonville | MD | $ | ||||||||||||||||||||||||||||||||||
| Outer Banks | Marina | Wanchese | NC | |||||||||||||||||||||||||||||||||||
Jarrett Bay Boatworks(1) | Marina | Beaufort | NC | |||||||||||||||||||||||||||||||||||
| Total Subsequent Acquisitions | $ | |||||||||||||||||||||||||||||||||||||
(1)In conjunction with the acquisition, we issued 14,683 common OP units.
Derivatives
In January 2022, we entered into a treasury lock contract with a notional value of $150.0 million to hedge the interest rate risk associated with future issuances of fixed-rate long term debt. The benchmark index rate used is the on-the-run 10-year U.S. Treasury.
In February 2022, we entered into two treasury lock contracts each with an aggregate notional value of $300.0 million to hedge the interest rate risk associated with future issuances of fixed-rate long term debt. The benchmark index rate used is the on-the-run 10-year U.S. Treasury.
Proposed Loan Amendment
In January 2022, we obtained commitments from our lender group to enter into the Proposed Loan Amendment to amend our Credit Agreement. The Proposed Loan Amendment would provide for borrowings of up to an aggregate of $4.2 billion in the form of a $3.05 billion revolving loan facility and a $1.15 billion term loan facility with the ability to draw funds from the combined facility in U.S. dollars, British pounds, Euros, Canadian dollars and Australian dollars. We would also have the ability to upsize our total borrowing by an additional $800.0 million, subject to certain conditions.
F - 56
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The revolving loan facility would mature on the fifth anniversary of the Proposed Loan Amendment, assuming the exercise of two six-month extension options. The term loan facility would mature on the third anniversary of the Proposed Loan Amendment. Interest on the combined facility would be based on Term SOFR, the Adjusted Eurocurrency Rate, the Australian Bank Bill Swap Bid Rate (BBSY), the Daily SONIA Rate or the Canadian Dollar Offered Rate plus a margin which can range from 0.725 percent to 1.6 percent.
The closing of the Proposed Loan Amendment is subject to, among other things, the closing of our acquisition of Park Holidays, the negotiation and execution of definitive documentation acceptable to our lender group, and customary closing contingencies. There can be no assurance that we will be able to successfully enter into the Proposed Loan Amendment on the terms described above or at all.
We have evaluated our Consolidated Financial Statements for subsequent events through the date that this Form 10-K was issued.
F - 57
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
The following tables set forth real estate and accumulated depreciation relating to our MH and RV properties.
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
47 North(5) | Cle Elum, WA | $ | $ | $ | $ | $ | $ | $ | $ | $ | 2021 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 49'er Village RV Resort | Plymouth, CA | ( | 2017 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Academy / West Point | Canton, MI | ( | 2000 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adirondack Gateway RV Resort & Campground | Gansevoort, NY | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Allendale Meadows Mobile Village | Allendale, MI | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alpine Meadows Mobile Village | Grand Rapids, MI | ( | 1996 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alta Laguna | Rancho Cucamonga, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Andover(4) | Grass Lake, MI | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Apple Carr Village | Muskegon, MI | ( | 2011 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Apple Creek | Amelia, OH | ( | 1999 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arbor Terrace RV Park | Bradenton, FL | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arbor Woods | Ypsilanti, MI | ( | 2017 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Archview RV Resort & Campground | Moab, UT | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ariana Village | Lakeland, FL | ( | 1994 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arran Lake RV Resort & Campground | Allenford, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Augusta Village | Augusta, ME | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Austin Lone Star RV Resort | Austin, TX | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Autumn Ridge | Ankeny, IA | ( | (3) | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bahia Vista Estates | Sarasota, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Baker Acres RV Resort | Zephyrhills, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beachwood Resort(4) | Blaine, WA | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beaver Brook Campground(4) | N. Monmouth, ME | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beechwood | Killingworth, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bell Crossing | Clarksville, TN | ( | (3) | ( | 1999 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Big Tree RV Resort | Arcadia, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Birch Hill Estates | Bangor, ME | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Blue Heron Pines | Punta Gorda, FL | ( | 2015 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Blue Jay MH & RV Resort | Dade City, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Blue Star(7) | Apache Junction, AZ | ( | (7) | ( | ( | 2014 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Blue Water Beach Resort(4) | Garden City, UT | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 58
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Blueberry Hill | Bushnell, FL | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bluebonnet Lake(4)(5) | Austin, TX | 2021 | (C) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boulder Ridge | Pflugerville, TX | ( | 1998 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Branch Creek Estates | Austin, TX | ( | 1995 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brentwood Estates | Hudson, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brentwood Mobile Village | Kentwood, MI | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brentwood West | Mesa, AZ | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Broadview Estates | Davison, MI | ( | 1996 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brook Ridge | Hooksett, NH | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brookside Mobile Home Village | Goshen, IN | ( | 1985 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brookside Village | Kentwood, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Buena Vista | Buckeye, AZ | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Buttonwood Bay MH & RV Resort | Sebring, FL | ( | 2001 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Byron Center Mobile Village | Byron Center, MI | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Caliente Sands | Cathedral City, CA | ( | 2017 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Camelot Villa | Macomb, MI | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Camp Fimfo(8) | New Braunfels, TX | ( | 2019 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Campers Haven RV Resort | Dennisport, MA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Candlelight Manor | South Daytona, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Canyonlands RV Resort & Campground | Moab, UT | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cape May Crossing | Cape May, NJ | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carolina Pines RV Resort | Conway, SC | ( | 2017 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carriage Cove | Sanford, FL | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carrington Pointe | Fort Wayne, IN | ( | (3) | ( | 1997 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cava Robles RV Resort | Paso Robles, CA | ( | 2014 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cave Creek | Evans, CO | ( | 2004 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cedar Haven | Holden, ME | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cedar Springs | Southington, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Central Park MH & RV Resort | Haines City, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charlevoix Estates(4) | Charlevoix, MI | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cherrywood | Clinton, NY | ( | (3) | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chincoteague Island KOA RV Resort | Chincoteague, VA | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chisholm Point Estates | Pflugerville, TX | ( | 1995 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 59
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cider Mill Crossings | Fenton, MI | ( | 2011 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cider Mill Village | Middleville, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cisco Grove Campground & RV(4) | Emigrant Gap, CA | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Citrus Hill RV Resort | Dade City, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clear Water Mobile Village | South Bend, IN | ( | 1986 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Club Naples | Naples, FL | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Club Wildwood | Hudson, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Coastal Estates | Hampstead, NC | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cobus Green Mobile Home Park | Osceola, IN | ( | 1993 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colony in the Wood | Port Orange, FL | ( | 2017 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Comal Farms | New Braunfels, TX | ( | 2000 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Country Acres Mobile Village | Cadillac, MI | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Country Hills Village | Hudsonville, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Country Lakes | Little River, SC | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Country Meadows Mobile Village | Flat Rock, MI | ( | 1994 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Country Meadows Village | Caledonia, MI | ( | 2011 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Country Squire MH & RV Resort | Paisley, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Country Village Estates | Oregon City, OR | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Countryside Estates | Mckean, PA | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Countryside Village of Atlanta | Lawrenceville, GA | ( | 2004 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Countryside Village of Gwinnett | Buford, GA | ( | 2004 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Countryside Village of Lake Lanier | Buford, GA | ( | 2004 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Coyote Ranch Resort(4) | Wichita Falls, TX | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Craigleith RV Resort & Campground | Clarksburg, ON | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Creeks Crossing | Kyle, TX | ( | 2019 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Creekwood Meadows | Burton, MI | ( | 1997 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crestwood | Concord, NH | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crossroads | Aiken, SC | ( | 2019 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Crown Villa RV Resort | Bend, OR | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cutler Estates Mobile Village | Grand Rapids, MI | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cypress Greens | Lake Alfred, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Daytona Beach RV Resort | Port Orange, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 60
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deep Run | Cream Ridge, NJ | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deer Lake RV Resort & Campground | Huntsville, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deerwood | Orlando, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Desert Harbor | Apache Junction, AZ | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Driftwood RV Resort & Campground | Clermont, NJ | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dunedin RV Resort | Dunedin, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dutton Mill Village | Caledonia, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Eagle Crest | Firestone, CO | ( | 1998 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| East Fork Crossing | Batavia, OH | ( | 2000 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| East Village Estates | Washington Twp., MI | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Egelcraft | Muskegon, MI | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| El Capitan Canyon | Goleta, CA | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ellenton Gardens RV Resort | Ellenton, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fairfield Village | Ocala, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Farmwood Village | Dover, NH | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fisherman's Cove | Flint Twp., MI | ( | 1993 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Flamingo Lake RV Resort | Jacksonville, FL | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fond du Lac East / Kettle Moraine KOA(8) | Glenbeulah, WI | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forest Hill | Southington, CT | ( | (3) | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forest Meadows | Philomath, OR | ( | 1999 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forest Springs | Grass Valley, CA | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forest View | Homosassa, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fort Dupont(4)(5) | Delaware City, DE | 2021 | (C) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Tatham RV Resort & Campground | Sylva, NC | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Four Seasons | Elkhart, IN | ( | 2000 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Frenchtown Villa / Elizabeth Woods | Newport, MI | ( | 2014 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Friendly Village of La Habra | La Habra, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Friendly Village of Modesto | Modesto, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Friendly Village of Simi | Simi Valley, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Friendly Village of West Covina | West Covina, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gig Harbor RV Resort | Gig Harbor, WA | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Glen Ellis Family Campground | Glen, NH | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 61
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Glen Haven RV Resort | Zephyrhills, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Glen Laurel | Concord, NC | ( | 2001 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Coaster MH & RV Resort | Homestead, FL | ( | 1997 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grand Bay | Dunedin, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grand Lakes RV Resort | Citra, FL | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grand Mobile Estates | Grand Rapids, MI | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grand Oaks RV Resort & Campground | Cayuga, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grove Beach | Westbrook, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grove Ridge RV Resort | Dade City, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Groves RV Resort | Ft. Myers, FL | ( | 1997 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gulfstream Harbor | Orlando, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gulliver's Lake RV Resort & Campground | Millgrove, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gwynn's Island RV Resort & Campground | Gwynn, VA | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Haas Lake Park RV Campground(4) | New Hudson, MI | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hacienda Del Rio | Edgewater, FL | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hamlin | Webberville, MI | ( | 1984 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hancock Heights Estates | Hancock, ME | ( | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hannah Village | Lebanon, NH | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hemlocks | Tilton, NH | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Heritage | Temecula, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hickory Hills Village | Battle Creek, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hidden River RV Resort | Riverview, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hidden Valley RV Resort & Campground | Normandale, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| High Point Park | Frederica, DE | ( | (3) | ( | 1997 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Highland Greens Estates | Highland, MI | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hillcrest | Uncasville, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Holiday Park Estates | Bangor, ME | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Holiday West Village | Holland, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Holly Forest Estates | Holly Hill, FL | ( | 1997 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Holly Shores Camping Resort(4) | Cape May, NJ | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Holly Village / Hawaiian Gardens | Holly, MI | ( | 2004 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 62
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Homosassa River RV Resort | Homosassa Springs, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Horseshoe Cove RV Resort | Bradenton, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hospitality Creek Campground(4) | Williamstown, NJ | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hunters Crossing | Capac, MI | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hunters Glen | Wayland, MI | ( | 2004 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Huntington Run(4) | Kalamazoo, MI | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hyde Park | Easton, MD | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Indian Creek Park | Ft. Myers Beach, FL | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Indian Wells RV Resort | Indio, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Island Lakes | Merritt Island, FL | ( | 1995 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Barton Lake | Fremont, IN | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Birchwood Acres MH & RV Resort | Greenfield Park, NY | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jellystone Park™ of Chicago(4) | Millbrook, IL | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Gardiner | Gardiner, NY | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Golden Valley | Bostic, NC | ( | (3) | ( | 2018 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Guadalupe River | Kerrville, TX | ( | (3) | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Hill Country | Canyon Lake, TX | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Larkspur | Larkspur, CO | ( | 2016 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Luray | East Luray, VA | ( | (3) | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jellystone Park™ at Mammoth Cave(4) | Cave City, KY | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Maryland | Williamsport, MD | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Memphis | Horn Lake, MS | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Natural Bridge | Natural Bridge Station, VA | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ at Quarryville | Quarryville, PA | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jellystone Park™ at Tower Park(2) | Lodi, CA | ( | (3) | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jellystone Park™ of Western New York | North Java, NY | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jellystone Park™ at Whispering Pines(4) | Tyler, TX | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jetstream RV Resort at NASA(4) | Houston, TX | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kensington Meadows | Lansing, MI | ( | 1995 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kimberly Estates | Newport, MI | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| King's Court Mobile Village | Traverse City, MI | ( | 1996 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 63
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| King's Lake | DeBary, FL | ( | 1994 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kings Manor | Lakeland, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| King's Pointe | Lake Alfred, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kissimmee Gardens | Kissimmee, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kissimmee South MH & RV Resort | Davenport, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kittatinny Campground & RV Resort | Barryville, NY | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Knollwood Estates | Allendale, MI | ( | 2001 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| La Casa Blanca | Apache Junction, AZ | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| La Costa Village | Port Orange, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lafayette Place | Warren, MI | ( | 1998 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lafontaine RV Resort & Campground | Tiny, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lake Avenue RV Resort & Campground | Cherry Valley, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lake Josephine RV Resort | Sebring, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lake Juliana Landings | Auburndale, FL | ( | 1994 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lake Pointe Village | Mulberry, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lake San Marino RV Park | Naples, FL | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakefront | Lakeside, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakeland RV Resort | Lakeland, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakeshore Landings | Orlando, FL | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakeshore Villas | Tampa, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lakeside | Terryville, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakeside Crossing | Conway, SC | ( | 2015 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakeview | Ypsilanti, MI | ( | (3) | ( | 2004 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lakeview CT | Danbury, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakeview Mobile Estates | Yucaipa, CA | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lamplighter | Port Orange, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Laurel Heights | Uncasville, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lazy J Ranch | Arcata, CA | ( | 2017 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lazy Lakes RV Resort(2)(4) | Summerland Key, FL | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leaf Verde RV Resort | Buckeye, AZ | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leisure Point Resort | Millsboro, DE | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leisure Village | Belmont, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 64
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lemon Wood | Ventura, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liberty Farm | Valparaiso, IN | ( | 1985 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lincoln Estates | Holland, MI | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lone Star Jellystone Park | Waller, TX | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long Beach RV Resort & Campground | Barnegat, NJ | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lost Dutchman | Apache Junction, AZ | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Majestic Oaks RV Resort | Zephyrhills, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maple Brook | Matteson, IL | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maplewood Manor | Brunswick, ME | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marco Naples RV Resort | Naples, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marina Cove | Uncasville, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Meadow Lake Estates | White Lake, MI | ( | 1994 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Meadowbrook | Charlotte, NC | ( | 2000 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Meadowbrook Estates | Monroe, MI | ( | 1986 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Meadowbrook Village | Tampa, FL | ( | 1994 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Meadowlands of Gibraltar | Gibraltar, MI | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meadowstone(4) | Hastings, MI | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Menifee Development(5) | Menifee, CA | 2020 | (C) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Merrymeeting | Brunswick, ME | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mi-Te-Jo Campground | Milton, NH | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mill Creek MH & RV Resort | Kissimmee, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Millwood | Uncasville, CT | ( | 2019 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Moab Valley RV Resort & Campground | Moab, UT | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Moreno 66 Development(4)(5) | Moreno Valley, CA | 2021 | (C) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mountain View | Mesa, AZ | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Napa Valley | Napa, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Naples RV Resort | Naples, FL | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New England Village | Westbrook, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| New Point RV Resort | New Point, VA | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| New Ranch | Clearwater, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Lake Estates | Moore Haven, FL | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Point Estates | Pueblo, CO | ( | 2001 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 65
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Northville Crossing | Northville, MI | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oak Creek | Coarsegold, CA | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oak Crest | Austin, TX | ( | 2002 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oak Grove | Plainville, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oak Island Village | East Lansing, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oak Ridge | Manteno, IL | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oakview Estates | Arcadia, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oakwood Village | Miamisburg, OH | ( | (3) | ( | 1998 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ocean Breeze Jensen Beach MH & RV Resort | Jensen Beach, FL | ( | 2016 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ocean Breeze MH & RV Resort(6) | Marathon, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ocean Mesa RV Resort | Goleta, CA | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ocean Pines | Garden City, SC | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ocean West | McKinleyville, CA | ( | 2017 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oceanside RV Resort & Campground | Coos Bay, OR | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Orange City MH & RV Resort | Orange City, FL | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Orange Tree Village | Orange City, FL | ( | 1994 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Orchard Lake | Milford, OH | ( | (3) | ( | 1999 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Paddock Park South | Ocala, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palm Creek Golf & RV Resort | Casa Grande, AZ | ( | 2012 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palm Key Village | Davenport, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palm Village | Bradenton, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Palos Verdes Shores MH & Golf Community(2) | San Pedro, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Park Place | Sebastian, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Park Royale | Pinellas Park, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Parkside Village | Cheektowaga, NY | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pearwood RV Resort(4) | Pearland, TX | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pebble Creek | Greenwood, IN | ( | 2000 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pecan Branch | Georgetown, TX | ( | 1999 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pecan Park RV Resort | Jacksonville, FL | ( | 2016 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pelican Bay | Micco, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pembroke Downs | Chino, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Peter's Pond RV Resort | Sandwich, MA | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 66
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Petoskey KOA RV Resort | Petoskey, MI | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pheasant Ridge | Lancaster, PA | ( | 2002 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pheasant Ridge RV Park(2)(4) | Wilsonville, OR | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pickerel Park RV Resort & Campground | Napanee, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pine Hills | Middlebury, IN | ( | 1980 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pine Ridge | Prince George, VA | ( | 1986 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pine Trace | Houston, TX | ( | (3) | ( | 2004 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pinebrook Village | Kentwood, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pineview Estates(4) | Flint, MI | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pismo Dunes RV Resort | Pismo Beach, CA | ( | 2017 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pleasant Beach Campground(4) | Sherkston, ON | ( | (1) | ( | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pleasant Lake RV Resort | Bradenton, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pony Express RV Resort & Campground | North Salt Lake, UT | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Presidential Estates Mobile Village | Hudsonville, MI | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rainbow MH & RV Resort | Frostproof, FL | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rainbow Village of Largo | Largo, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rainbow Village of Zephyrhills | Zephyrhills, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rancho Alipaz(2) | San Juan Capistrano, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rancho Caballero | Riverside, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rancho Mirage | Apache Junction, AZ | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Red Oaks MH & RV Resort(2) | Bushnell, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Regency Heights | Clearwater, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reserve at Fox Creek | Bullhead City, AZ | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reunion Lake RV Resort(2) | Ponchatoula, LA | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Richmond Place | Richmond, MI | ( | (3) | ( | 1998 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| River Beach Campsites & RV | Milford, PA | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| River Haven Village | Grand Haven, MI | ( | 2001 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
River Pines | Nashua, NH | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| River Ranch | Austin, TX | ( | 2000 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
River Ridge(4) | Saline, MI | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| River Ridge Estates | Austin, TX | ( | 2002 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| River Run | Granby, CO | ( | (3) | ( | 2018 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 67
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Riverside Club | Ruskin, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Riverside Drive Park | Augusta, ME | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Riverside Village | Jensen Beach, FL | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rock Crusher Canyon RV Resort | Crystal River, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rocky Mountain RV Park(2)(4) | Gardiner, MT | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rolling Hills | Storrs, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roxbury Park | Goshen, IN | ( | 2001 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Royal Country | Miami, FL | ( | 1994 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Royal Palm Village | Haines City, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Royal Palms MH & RV Resort(2) | Cathedral City, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rudgate Clinton | Clinton Township, MI | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rudgate Manor | Sterling Heights, MI | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Saco / Old Orchard Beach KOA | Saco, ME | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Saddle Oak Club | Ocala, FL | ( | 1995 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Saddlebrook | San Marcos, TX | ( | 2002 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sandy Lake MH & RV Resort | Carrolton, TX | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Saralake Estates | Sarasota, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Savanna Club | Port St. Lucie, FL | ( | 2015 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Scio Farms Estates | Ann Arbor, MI | ( | (3) | ( | 1995 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sea Air Village | Rehoboth Beach, DE | ( | 1997 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Serendipity | North Fort Myers, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Settler's Rest RV Resort | Zephyrhills, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shadow Wood Village | Hudson, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shady Pines MH & RV Resort | Galloway Township, NJ | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shady Road Villas | Ocala, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sheffield Estates | Auburn Hills, MI | ( | 2006 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shelby Forest | Shelby Twp., MI | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shelby West | Shelby Twp., MI | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shell Creek RV Resort & Marina | Punta Gorda, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shenandoah Acres Family Campground | Stuarts Draft, VA | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 68
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sherkston Shores Beach Resort & Campground | Sherkston, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Siesta Bay RV Park | Ft. Myers, FL | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver Birches RV Resort & Campground | Lambton Shores, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver Springs | Clinton Township, MI | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sky Harbor | Cheektowaga, NY | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Skyline | Fort Collins, CO | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Slickrock RV Resort & Campground | Moab, UT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Smith Creek Crossing | Granby, CO | ( | 2018 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southern Charm MH & RV Resort | Zephyrhills, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southern Hills / Northridge Place | Stewartville, MN | ( | 2014 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Southern Leisure RV Resort(4) | Chiefland, FL | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Southern Palms | Ladson, SC | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southern Pines | Bradenton, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southport Springs Golf & Country Club | Zephyrhills, FL | ( | 2015 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Southside Landing | Cambridge, MD | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southwood Village | Grand Rapids, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Spanish Main MH & RV Resort | Thonotasassa, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| St. Clair Place | St. Clair, MI | ( | 1998 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stonebridge (MI)(5) | Richfield Twp., MI | ( | 1998 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stonebridge (TX) | San Antonio, TX | ( | (3) | ( | 2000 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stonebrook | Homosassa, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Strafford / Lake Winnipesaukee South KOA | Strafford, NH | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summit Ridge | Converse, TX | ( | (3) | ( | 2000 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Association Island(4) | Henderson, NY | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Cape Charles(4) | Cape Charles, VA | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Cape Cod(8) | East Falmouth, MA | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Chincoteague Bay(4)(5) | Chincoteague, VA | 2021 | (C) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Frontier Town(8) | Berlin, MD | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Islamorada(6)(8) | Islamorada, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Key Largo(8) | Key Largo, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 69
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Lancaster County(8) | Narvon, PA | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Lake Rudolph(8) | Santa Claus, IN | ( | 2014 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Lake Travis(8) | Austin, TX | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Marathon(8) | Marathon, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Mystic(8) | Old Mystic, CT | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Ocean City(8) | Berlin, MD | ( | 2014 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Ocean City Gateway(8) | Whaleyville, MD | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Old Orchard Beach Downtown(8) | Old Orchard Beach, ME | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Orange Beach(8) | Orange Beach, AL | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Orlando Champions Gate(8) | Davenport, FL | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Panama City Beach(2)(8) | Panama City Beach, FL | ( | 2017 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Petoskey Bay Harbor(8) | Petoskey, MI | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Pigeon Forge(2)(8) | Sevierville, TN | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Rehoboth Bay(8) | Millsboro, DE | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors San Antonio West(8) | San Antonio, TX | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors San Diego Bay(2)(8) | San Diego, CA | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Sarasota(8) | Sarasota, FL | ( | (3) | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors St. Augustine(8) | St. Augustine, FL | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Outdoors Texas Hill Country(8) | New Braunfels, TX | ( | 2016 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Retreats Avalon(8) | Cape May Court House, NJ | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Retreats Cape May(8) | Cape May, NJ | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Retreats Cape May Wildwood(8) | Cape May, NJ | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Retreats Geneva on the Lake(8) | Geneva on the Lake, OH | ( | (3) | ( | 2013 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Retreats Gun Lake(8) | Hopkins, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Retreats Old Orchard Beach(8) | Old Orchard Beach, ME | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Retreats at Pleasant Acres Farm(4) | Sussex, NJ | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Retreats Rock River(8) | Hillsdale, IL | ( | 2017 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Retreats Silver Lake(8) | Mears, MI | ( | 2018 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sun Retreats at Wild Acres(8) | Old Orchard Beach, ME | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 70
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sun Valley | Apache Junction, AZ | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sun Villa Estates | Reno, NV | ( | (3) | ( | 1998 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Suncoast Gateway | Port Richey, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sundance | Zephyrhills, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sunlake Estates | Grand Island, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sunset Beach RV Resort | Cape Charles, VA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sunset Harbor at Cow Key Marina | Key West, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sunset Ridge (MI) | Portland, MI | ( | (3) | ( | 1998 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sunset Ridge (TX) | Kyle, TX | ( | 2000 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Swan Meadow Village | Dillon, CO | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sweetwater RV Resort | Zephyrhills, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sycamore Village | Mason, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sylvan Crossing(4) | Chelsea, MI | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sylvan Glen Estates(4) | Brighton, MI | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tall Pines Harbor Campground(2)(4) | Temperanceville, VA | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tallowwood Isle | Coconut Creek, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tamarac Village MH & RV Resort | Ludington, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tampa East MH & RV Resort | Dover, FL | ( | 2005 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tanglewood Village(4) | Brownstown, MI | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Colony(2) | Oxnard, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Foothills(4)(5) | Fort Collins, CO | 2021 | (C) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Grove at Alta Ridge | Thornton, CO | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Hamptons Golf & Country Club | Auburndale, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Hideaway | Key West, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Hills | Apopka, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Landings at Lake Henry | Haines City, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Ridge | Davenport, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Sands RV & Golf Resort | Desert Hot Springs, CA | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Valley | Apopka, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Villas at Calla Pointe | Cheektowaga, NY | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Willows(4) | Goshen, IN | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 71
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Themeworld RV Resort(4) | Davenport, FL | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Gardens | Southington, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Lakes | Hudson, FL | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Thunderhill Estates | Sturgeon Bay, WI | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Timber Ridge | Ft. Collins, CO | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Timberline Estates | Coopersville, MI | ( | 1994 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Town & Country Mobile Village | Traverse City, MI | ( | 1996 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Town & Country Village | Lisbon, ME | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Trailside RV Resort & Campground | Seguin, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tranquility MHC(4) | Bushnell, FL | ( | 2021 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Traveler's World MH & RV Resort | San Antonio, TX | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Treetops RV Resort | Arlington, TX | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Troy Villa | Troy, MI | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vallecito | Newbury Park, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Victor Villa | Victorville, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vines RV Resort | Paso Robles, CA | ( | 2013 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vista Del Lago | Scotts Valley, CA | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vista Del Lago MH & RV Resort | Bradenton, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vizcaya Lakes | Port Charlotte, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Walden Woods | Homosassa, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warren Dunes Village | Bridgman, MI | ( | 2011 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Water Oak Country Club Estates | Lady Lake, FL | ( | 1993 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waters Edge RV Resort | Zephyrhills, FL | ( | 2016 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waverly Shores Village | Holland, MI | ( | 2011 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wells Beach Resort Campground(2)(4) | Wells, ME | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Village Estates | Romulus, MI | ( | 2012 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westbrook Senior Village | Toledo, OH | ( | 2001 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westbrook Village | Toledo, OH | ( | 1999 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westside Ridge | Auburndale, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westward Shores Cottages & RV Resort | West Ossipee, NH | ( | 2018 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| White Lake Mobile Home Village | White Lake, MI | ( | 1997 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wildwood Community | Sandwich, IL | ( | 2014 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Willow Bend(4)(5) | Fort Lupton, CO | 2021 | (C) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 72
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances(9) | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Willow Lake RV Resort & Campground | Scotland, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Willowbrook Place | Toledo, OH | ( | 1997 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Willowood RV Resort & Campground | Amherstburg, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Windham Hills Estates | Jackson, MI | ( | 1998 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Windmill Village | Davenport, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Windsor Woods Village | Wayland, MI | ( | 2011 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wine Country RV Resort | Paso Robles, CA | ( | 2014 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodhaven Place | Woodhaven, MI | ( | 1998 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodlake Trails | San Antonio, TX | ( | (3) | ( | 2000 | (A&C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodland Lake RV Resort & Campground | Bornholm, ON | (1) | ( | 2016 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodland Park Estates | Eugene, OR | ( | 1998 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodlands at Church Lake | Groveland, FL | ( | 2015 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodside Terrace | Holland, OH | ( | 1997 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodsmoke Camping Resort | Fort Myers, FL | ( | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wymberly | Martinez, GA | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yankee Village | Old Saybrook, CT | ( | 2019 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate Headquarters and Other Fixed Assets | Southfield, MI | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Gross amount carried at December 31, 2021, at our Canadian properties, reflects the impact of foreign currency translation.
(2) All or part of this property is subject to a ground lease.
(3) Gross amount carried at December 31, 2021 has decreased at this property due to a partial disposition of land or depreciable assets, as applicable.
(4) This property was acquired during 2021.
(5) This property was not included in our community count as of December 31, 2021 as it was not fully developed.
(6) This property was impaired as a result of Hurricane Irma in September 2017.
(7) This property was split into two separate properties in 2020.
(8) This property had a name change as of January 25, 2022.
(9) Balance outstanding represents total amount due at maturity and excludes any premiums or discounts and deferred financing costs.
F - 73
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
The following tables set forth real estate and accumulated depreciation relating to our Safe Harbor branded marinas.
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allen Harbor(3)(5) | North Kingstown, RI | $ | — | $ | $ | $ | $ | $ | $ | $ | $ | ( | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Anacapa Isle(3) | Oxnard, CA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Angler House(5) | Islamorada, FL | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annapolis | Annapolis, MD | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Aqua Yacht | Iuka, MS | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aqualand(3) | Flowery Branch, GA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bahia Bleu | Thunderbolt, GA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ballena Isle | Alameda, CA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beaufort(3) | Beaufort, SC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beaver Creek(3) | Monticello, KY | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Belle Maer | Harrison Township, MI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bohemia Vista | Chesapeake Bay, MD | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brady Mountain(3) | Royal, AR | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bristol | Charleston, SC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bruce & Johnsons | Branford, CT | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Burnside(3) | Somerset, KY | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burnt Store | Punta Gorda, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cabrillo Isle(3)(5) | San Diego, CA | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Calusa Island | Goodland, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cape Harbour | Cape Coral, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capri | Port Washington, NY | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carroll Island | Baltimore, MD | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charleston City(3)(8) | Charleston, SC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| City Boatyard | Charleston, SC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cove Haven | Barrington, RI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cowesett(7) | Warwick, RI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Crystal Point | Point Pleasant, NJ | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dauntless(1) | Essex, CT | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dauntless Shipyard(1) | Essex, CT | — | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 74
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deep River | Deep River, CT | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Detroit River(5) | Detroit, MI | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eagle Cove(3) | Byrdstown, TN | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Edgartown(5) | Edgartown, MA | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Emerald Coast(5) | Niceville, FL | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Emerald Point(3) | Austin, TX | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Emeryville(3) | Emeryville, CA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Essex Island(1) | Essex, CT | — | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ferry Point | Old Saybrook, CT | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fiddler's Cove | North Falmouth, MA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gaines | Rouses Point, NY | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Glen Cove | Glen Cove, NY | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grand Isle | Grand Haven, MI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Great Island | Harpswell, ME | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Great Lakes | Muskegon, MI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Great Oak Landing | Chestertown, MD | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Green Harbor | Marshfield, MA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greenport(2) | Greenport, NY | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greenwich Bay | Warwick, RI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grider Hill(3) | Albany, KY | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hacks Point | Earleville, MD | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Harbor House | Stamford, CT | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Harborage Yacht Club(5) | Stuart, FL | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Harbors View(3) | Afton, OK | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Harbortown | Fort Pierce, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Haverstraw(3) | West Haverstraw, NY | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hawthorne Cove | Salem, MA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hideaway Bay(3) | Flowery Branch, GA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Holly Creek(3) | Celina, TN | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Islamorada(5) | Islamorada, FL | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Island Park | Portsmouth, RI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jamestown(3) | Jamestown, KY | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 75
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jamestown Boatyard | Jamestown, RI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jefferson Beach | St. Clair Shores, MI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kings Point | Cornelius, NC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakefront | Port Clinton, OH | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lauderdale Marine Center(5) | Fort Lauderdale, FL | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loch Lomond | San Rafael, CA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Manasquan River | Brick Township, NJ | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marathon(5) | Marathon, FL | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marina Bay | Quincy, MA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mystic | Mystic, CT | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Narrows Point | Grasonville, MD | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| New England Boatworks | Portsmouth, RI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| New Port Cove | Riviera Beach, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newport Shipyard | Newport, RI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Palm Beach | North Palm Beach, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Old Port Cove | North Palm Beach, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Onset Bay | Buzzards Bay, MA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oxford | Oxford, MD | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Peninsula Yacht Club | Cornelius, NC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pier 121(3) | Lewisville, TX | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pier 77 | Bradenton, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pilots Point | Westbrook, CT | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pineland | Bokeelia, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plymouth | Plymouth, MA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Podickory Point(5) | Annapolis, MD | — | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Port Royal(5) | Port Royal, SC | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Port Royal Landing | Port Royal, SC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Post Road | Mamaroneck, NY | — | ( | (4) | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Puerto del Rey(5) | Fajardo, Puerto Rico | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regatta Pointe(3) | Palmetto, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reserve Harbor | Pawleys Island, SC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Riviera Beach | Riviera Beach, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 76
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rockland | Rockland, ME | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sakonnet | Portsmouth, RI | — | ( | (4) | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sandusky(3) | Sandusky, OH | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shelburne Shipyard | Shelburne, VT | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shelter Island Boatyard(3)(5) | San Diego, CA | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Siesta Key | Sarasota, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver Spring | Wakefield, RI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Skippers Landing | Troutman, NC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Skull Creek | Hilton Head, SC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
South Bay(3)(5) | Chula Vista, CA | — | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
South Fork(6) | Fort Lauderdale, FL | — | 2020 | (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| South Harbour Village | Southport, NC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sportsman | Orange Beach, AL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stingray Point(5) | Deltaville, VA | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stirling(2) | Greenport, NY | — | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stratford | Stratford, CT | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunroad Marina(3)(5) | San Diego, CA | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sunset Bay | Hull, MA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toledo Beach | La Salle, MI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trade Winds(3) | Appling, GA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ventura Isle(3) | Ventura, CA | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vineyard Haven(5) | Vineyard Haven, MA | — | ( | 2021 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Walden(3) | Montgomery, TX | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wentworth by the Sea(5) | New Castle, NH | — | 2021 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Palm Beach | West Palm Beach, FL | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westport | Denver, NC | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wickford | Wickford, RI | — | 2020 | (A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wickford Cove | Wickford, RI | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Willsboro Bay | Willsboro, NY | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wisdom Dock(3) | Albany, KY | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yacht Haven | Stamford, CT | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Zahnisers | Solomons, MD | — | ( | 2020 | (A) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F - 77
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition (Improvements) | Gross Amount Carried at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name | Location | Encumbrances | Land | Depreciable Assets | Land | Depreciable Assets | Land | Depreciable Assets | Total | Accumulated Depreciation | Date | Acquired (A) or Constructed (C) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | — | $ | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marinas Headquarters and Other Fixed Assets | Dallas, TX | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | — | $ | $ | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) All costs from Dauntless Shipyard and Essex Island are grouped into Dauntless.
(2) All costs from Stirling are grouped into Greenport.
(3) All or part of this property is subject to a ground lease.
(4) Gross amount carried at December 31, 2021 has decreased at this property due to a partial disposition of land or depreciable assets, as applicable.
(5) This property was acquired during 2021.
(6) Property currently under development.
(7) All costs related to Apponaug Harbor are grouped into Cowesett.
(8) All costs related to Ashley Fuels are grouped into Charleston City.
F - 78
SUN COMMUNITIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION, SCHEDULE III
DECEMBER 31, 2021
(amounts in thousands)
Depreciation of our buildings, improvements, furniture, fixtures, and equipment is calculated over the following useful lives, on a straight line basis:
•Land improvement and buildings: 15 years - 40 years
•Furniture, fixtures, and equipment: 5 years - 30 years
•Dock improvements: 15 years - 40 years
•Site improvements: 7 years - 40 years
The change in investment property for the years ended December 31, 2021, 2020 and 2019 is as follows (in thousands):
| Year Ended | |||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||
| Beginning balance | $ | $ | $ | ||||||||||||||
| Community and land acquisitions, including immediate improvements | |||||||||||||||||
| Community expansion and development | |||||||||||||||||
| Improvements | |||||||||||||||||
| Dispositions and other | ( | ( | ( | ||||||||||||||
| Ending balance | $ | $ | $ | ||||||||||||||
The change in accumulated depreciation for the years ended December 31, 2021, 2020 and 2019 is as follows (in thousands):
| Year Ended | |||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||
| Beginning balance | $ | $ | $ | ||||||||||||||
| Depreciation for the period | |||||||||||||||||
| Asset impairment | ( | ||||||||||||||||
| Dispositions and other | ( | ( | ( | ||||||||||||||
| Ending balance | $ | $ | $ | ||||||||||||||
F - 79
TABLE OF CONTENTS
Part IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Mine Safety DisclosuresPart IIItem 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity SecuritiesItem 6. [reserved]Item 7. Management's Discussion and Analysis Of Financial Condition and Results Of OperationsNote 8. Debt and Line Of CreditNote 16. LeasesItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPart IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and ServicesPart IVItem 15. Exhibits and Financial Statement SchedulesItem 16. Form 10-k Summary