Sun Communities Earns $137.1 Million From Continuing Operations After UK Sale, Raises Rent Outlook
The landlord sold Park Holidays for about $1.03 billion net, is spending the proceeds mainly on buybacks, and guided 2027 rent gains above 2026's.
Sun Communities, which owns manufactured housing communities and RV resorts, said its continuing operations earned $137.1 million in the third quarter, against a $53.1 million loss a year earlier. The company reported the results Monday, a little over a month after it closed the sale of its UK business and began putting the proceeds mainly into share buybacks.
Continuing profit, narrower total gain
Continuing operations earned $1.07 per diluted share. Net income attributable to common shareholders, which includes the sold UK business, was $120.7 million, or $1.00 a share, up from $8.5 million, or $0.07, a year earlier.
Core FFO, a REIT cash-earnings gauge, was $2.35 per share against $2.28 a year earlier. Same-property net operating income rose 3.6% for the quarter and 5.2% for the nine months.
For the nine months, the company posted an $880.7 million loss attributable to common shareholders. The company had recorded a $1.1 billion non-cash write-down on the UK assets in the second quarter, and added a further $50.6 million loss on the sale in the third.
Selling the UK, buying back stock
Sun closed the sale of its UK holiday-park business, Park Holidays, on September 22 for about £772.3 million, or roughly $1.05 billion. Net proceeds were about $1.03 billion after closing costs.
In the quarter the company repurchased about 2.4 million shares for $293.3 million, an average of $119.24. Through October 23 it bought about 0.7 million more for $79.8 million at an average of $113.24. It also repaid three mortgage loans totaling $266.6 million, and had $3.8 billion of debt outstanding at quarter end.
"Sun is a simpler, more focused company with a clearer path to long-term value creation," CEO Charles Young said.
Sun owns and operates manufactured housing communities and RV resorts, leasing sites to residents who place their own homes or RVs on them.
Guidance and 2027 rents
Sun raised the low end of its 2026 North America same-property income growth forecast to 4.9%-5.3%, from 4.5%-5.3%. It guided to full-year Core FFO of $6.97 to $7.05 per share, or $7.01 at the midpoint.
Preliminary 2027 rent increases are 5.4% for manufactured housing and 4.4% for annual RV sites, which Young said are above 2026 levels.
Same-property adjusted blended occupancy for manufactured housing and RV was 98.8% at September 30, down from 99.3% a year earlier.
Management hosts its earnings call Tuesday at 11:00 a.m. ET.
Sources
- 8-K Filing — SUN COMMUNITIES INC (SUI) — SEC EDGAR
- Exhibit exhibit991pressreleaseands.htm — SUN COMMUNITIES INC 8-K exhibit — SEC EDGAR
- Sun Communities Reports Results for the Third Quarter of — globenewswire.com
