Sun Communities, Inc., a real estate investment trust (REIT) specializing in manufactured housing (MH) and recreational vehicle (RV) communities, as well as marinas, has reported its financial results for Q1 2023.
The company’s real property revenue grew by 13.8% year-over-year, with a net loss per diluted share of $0.24. Core FFO per share reached $1.23, exceeding the midpoint of guidance by 4.7%. Furthermore, total same property NOI increased by 6.7%, surpassing internal expectations.
Gary A. Shiffman, the chairman, president, and CEO, said: “We are pleased with the start to the year, delivering first quarter results which exceeded our expectations.”
He attributed this growth to the sustained demand for manufactured housing, RV vacationing, and marinas, as well as effective expense management. The company added over 800 revenue-producing sites across MH and RV communities during the quarter and delivered over 330 development and expansion sites. They also raised nearly $600 million of long-term, fixed-rate debt to pay down variable-rate borrowings.
These positive Q1 results hold relevance for the outdoor hospitality industry which can benefit from the growing demand for MH and RV vacationing. With the increase in same property adjusted occupancy for MH and RV by 190 basis points year-over-year, this indicates a thriving market for campgrounds, potentially encouraging private owners to invest in the expansion or improvement of their properties.
The strong performance in same-property NOI growth and transient-to-annual RV conversions of 524 sites also suggest that private campground owners and operators can capitalize on this trend by offering attractive amenities, services, and long-term rental options to retain customers. Creating marketing strategies that target consumers looking for alternative vacation experiences, like RVing, may further promote growth for their businesses.