Sun Communities REIT Expansion and Performance

Sun Communities REIT has a long history of expansion and growth, with a current portfolio of over 400 communities across the United States and Canada.

The company's expansion strategy has focused on acquiring existing manufactured housing communities, with a goal of increasing its portfolio by 5-7% annually.

Sun Communities REIT has a strong track record of performance, with a 10-year annualized return on equity of 12.3%.

The company's financial performance has been driven by its ability to increase revenue and reduce expenses, resulting in a significant increase in funds from operations (FFO) per share.

Milton M. Shiffman began investing in real estate in 1964, working as a doctor and developing commercial property in his spare time.

He established the predecessor to Sun Communities in 1975 and later retired from his medical practice in 1981 to focus on the company.

In 1985, Shiffman and his son Gary A. Shiffman incorporated the firm to pursue further growth options.

The real estate industry began experiencing a decline in the late 1980s, with commercial property values dropping by 30-50% by the early 1990s.

Congress created the REIT in 1960 to enable small investors to take a stake in large real estate investments, which were designed to pool resources and produce income through commercial real estate ownership and finance.

Ninety percent of a REIT's taxable income is paid out to its shareholders each year.

The Shiffmans made the calculation that the market would recover from the troubles of the 1980s and took Sun Communities, Inc. public as a REIT in December 1993.

At the time of the initial public offering (IPO), the company operated 31 manufactured communities with 9,036 sites in six states.

Sun Communities began expanding rapidly after its IPO, acquiring 15 properties for $92 million in its first year as a public REIT. This marked the beginning of a period of significant growth for the company.

In 1995, Sun added 3,900 new sites to its inventory, with the acquisition of Scio Farms of Ann Arbor, Michigan, for $23.6 million. This was the largest single community that Sun had ever acquired at the time.

The company's expansion continued throughout the mid-1990s, with a focus on acquiring manufactured housing communities in high-growth areas. By the end of 1995, Sun had acquired two new communities in Florida and two in Austin, Texas.

Sun Communities began expanding rapidly after its IPO, raising $145.8 million.

In January 1994, it acquired Timberline Estates, a manufactured community with 296 sites located near Grand Rapids, Michigan.

This was just the beginning, as Sun went on to purchase seven more communities by July of that year.

By the end of 1994, Sun had acquired 15 properties for $92 million and expanded into Florida and St. Louis, Missouri.

Securing revenues of $32.3 million and a net income of $7.8 million was a significant milestone for the company.

Sun continued to expand in 1995, adding 3,900 new sites to its inventory.

The company's fifth purchase using operating partnership (O.P.) units was Kensington Meadows, a Michigan community.

Sun's use of O.P. units allowed it to fund acquisitions without the costs associated with raising equity in the public marketplace.

The issuance of O.P. units created opportunities to acquire quality communities that would not otherwise be available due to tax ramifications to the seller.

In 1995, Sun acquired two new communities in Florida and two in Austin, Texas, which was considered the fastest-growing area in the state.

Its revenues for the year increased 39 percent to $45.1 million, while its net income reached $11.7 million.

Mergers and Partnerships are key strategies for expanding your business. They can provide access to new markets, technologies, and talent, which can drive growth and increase competitiveness.

A successful merger or partnership requires careful planning and execution. This involves aligning company cultures, integrating systems and processes, and managing potential risks and challenges.

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Careful consideration must be given to the potential risks and challenges of a merger or partnership. This includes assessing the compatibility of company cultures, evaluating the potential impact on employees, and managing potential conflicts of interest.

By carefully selecting the right partners and executing a well-planned strategy, businesses can achieve significant growth and success through mergers and partnerships.

In the early 2000s, Sun's community members were significantly affected by market conditions, leading to a decline in sales and profits.

Sales dropped to $145.7 million in 2002, with profits of only $13.6 million, less than half of the previous year's net.

By 2003, sales rebounded nicely to $193.5 million, and net income increased to $23.7 million.

However, 2004 saw a dip in occupancy rates, especially during the second half of the year, resulting in a net loss of $40.5 million.

The following year, Sun suffered a loss of $5.5 million on sales of $210.9 million, despite some improvement.

Between 2004 and 2005, Sun experienced its first slump in sales of manufactured homes, with 537 sales completed in 2004 and 425 sales in 2005.

Occupancy rates in Sun's communities dropped below 85 percent in 2005 and remained low, averaging below 83 percent for two more years.

Despite these challenges, by 2007, there were signs of recovery, with sales of new and preowned units increasing to 712.

Applications by prospective tenants reached 15,000, 50 percent more than the previous year's total, and continued to rise to 17,000 in 2008.

In 2009, Sun saw a net loss, but also experienced a significant increase in revenue-producing sites, with 224 new sites added that year.

This was the first gain of 200 or more since 2000, and marked a turning point in the company's fortunes.

Returning to Growth was a notable trend for Sun in 2011. The company's samesite occupancy rates were above 85 percent, a significant improvement over previous years.

That year, Sun acquired 23 new properties in Florida and Michigan, expanding its portfolio. A public equity offering at the end of the year brought in net proceeds of more than $150 million.

In 2012, Sun raised another $382.8 million through common stock and preferred equity offerings, further growing its financial resources. Occupancy rates across its portfolio reached 87.3 percent by the end of the year.

Sales of homes increased more than 21 percent over the previous year, a clear indication of the company's growing success. The company also acquired another 14 properties, including an RV community in Lancaster County, Pennsylvania.

By year-end 2012, Sun had acquired several RV and resort-type communities in various states, including Connecticut, Maine, Massachusetts, New Jersey, Ohio, Virginia, and Wisconsin. This geographic diversification was a key strategy for the company's growth.

In 2013, Sun continued to expand its portfolio with more RV and resort properties, further increasing its geographic reach. The year ended with sales of $415.2 million, a significant milestone for the company.