Sun Communities, Inc.

Greetings. Thank you for joining us today for Sun Community's third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will begin after the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now like to turn the conference over to your host, Gary Schiffman, Chairman and Chief Executive Officer. Thank you. You may begin.

Thank you, Operator. Good morning and thank you for joining us today as we discuss our third quarter results and provide an update on the continuing impact of COVID-19. We hope that you and your families are staying healthy and managing through this challenging time. We are now in our seventh month of navigating the pandemic, and we are pleased to share that our performance continues to exceed our expectations. Our commitment to the safety of our residents, guests, and team members remains our top priority, and we are balancing this responsibility with our pledge to deliver Sun's signature service throughout our communities and resorts. In addition to the solid performance delivered in our manufactured housing and RV portfolios, we are excited to further expand and enhance our platform with the pending acquisition of Safe Harbor marinas. Safe Harbor brings a high-quality rental revenue stream, adds diversity in terms of geography and customer base, and is expected to further enhance Sun's earnings growth potential over the long term. We are pleased with our results for the third quarter as our RV portfolio continued to build reservation momentum on a week-over-week basis, and manufactured housing continued to see increased demand given the need for affordable housing. We outperformed initial expectations discussed during our second quarter earnings call in July, primarily due to the strong performance of our transient RV business and related ancillary income generated at our resorts. our third quarter forecast guided to a net reduction due to the impact from the virus of up to $15 million from our original budget. As the quarter progressed, we continued to perform better than forecast expectations and ultimately outperformed that forecast by approximately $20 million. Our VEENG proved to be a preferred method of vacationing across the country, due in large part to the ability for travelers to drive to and more safely vacation in our resorts, enjoying the outdoor lifestyle while remaining socially distanced. Our reported core FFO per share was $1.60 for the third quarter, 9.6% ahead of last year. The 5.5% same community NOI growth delivered in the third quarter underscores the resiliency of our platform and the demand for our product. In the quarter, we grew same community occupancy 200 basis points to 98.8%. Additionally, during the third quarter, we deployed approximately $205 million in the acquisition of two manufactured housing communities and five RV resorts, totaling approximately 2,500 developed sites and an additional 109 expansion sites. The majority of these acquisitions came to us through our longstanding industry relationships. Our pipeline of single assets and small portfolios in manufactured housing and RV is as full as ever. Sellers continue to see the benefits of a transaction with Sun, given certainty of execution, tax deferment strategies, and the knowledge that Sun will improve and continue managing these assets to the best possible standards. We also completed the construction of approximately 685 sites across our expansions, ground-up, and redevelopment projects, bringing total development sites delivered for the year to almost 1,211 communities and resorts in nine states. On September 29th, we announced the pending acquisition of Safe Harbor Marinas for $2.1 billion. This acquisition will serve to expand our loyal customer base, diversify our geographic footprint, and add incremental revenue streams, which we believe will strengthen our ability to generate industry-leading growth over the long term. We are very excited about Safe Harbor Marinas and look forward to welcoming the entire Safe Harbor team to the Sun family. We anticipate that this acquisition will close at the end of this month. We have not lost sight of the potential impact of the virus and the hardship that it has accompanied the pandemic across the country. Overall, we believe that Sun has been a net beneficiary as a consequence of customer behavior, the demand for our homes, and the safety of our vacation properties. As we have said in the prior two quarters, we did not know the duration or the ultimate impact on the economy or our operations. Thus far, we have proven our ability to navigate the environment and successfully execute our business strategy. Throughout the pandemic, our team has worked tirelessly to serve our residents and guests and produce the results we are discussing with you today. The team has demonstrated an ability to adapt while maintaining Sun's high customer service standards that are central to the business. I would like to thank each one of our team members for going above and beyond in contributing to our outstanding results. I will now turn the call over to John to discuss our operational results in more detail. John?

Thank you, Gary. Our results in the third quarter speak to the resilience of our platform as we outperformed our forecasted expectations across all of our revenue streams. From a total portfolio perspective, we gained 776 revenue producing sites, a 1.3% increase, boosting total occupancy to 97.2%, up 50 basis points from last year. This now brings our year-to-date revenue producing site gains to approximately 1,930 sites, putting us within striking distance of achieving our original RPS gain budget for 2020. The demand for our communities and resorts is stronger than ever. Manufactured housing revenue producing site gains totaled 1400 sites, or 72% of total site gains year to date. 910 of these gains were in manufactured housing expansion communities. The balance of the RPS gains, or 530 sites, came from conversions of transient RV sites to annual leases. Our same community portfolio NOI for the third quarter rose 5.5%, resulting from a 5.4% increase in revenues and a 5.2% increase in operating expenses, which included $1.1 million of PPE-related expenses. Adjusting for our PPE expense, same community NOI growth would have been 6.2%. Our weighted average rental rate increase was 3.6% for the portfolio, with manufactured housing at 3.2% and annual RV at 5.5%. Same community manufactured housing revenues increased by 5.4%, driven by the discussed 3.2% rental rate increase in occupancy gains over the last 12 months. Same community annual RV revenues increased by 3.6%, and transient RV revenues rose by 5%. On the expense side, while we no longer have team members on furlough, we did have payroll savings due to delayed hiring for seasonal positions. Our rental program continues to perform well. In the quarter, we had a 9% increase in applications to rent a home from Sun, and our rental home renewal rate was 67%, consistent with renewal trends experienced during the second quarter. These renewal rates are 10% better than historical averages. For the quarter, total applications to live in a Sun Committee, inclusive of sales, rose 12% year-over-year. Moving to rent collection, manufactured housing and annual RV collections continue to be strong, with MH at approximately 97% and RV at approximately 98%. Month-to-date collections for October are consistent with historical results. These strong collection figures underscore the fundamental strength and stability of our balanced portfolio of manufactured housing and RV communities. With regard to home sales, in the third quarter, we sold 710 homes compared to 906 homes last year. We had less pre-owned inventory to sell as a result of higher renewal rates and longer resident tenure. New home sales revenue grew 20%, and our gross margin expanded 3.5% in the quarter to 18.7%. This was driven by a 29% increase in our average new home price of $153,000. New home sales, many of which are in our ground-up developments and expansions, are concentrated in Colorado, Florida, and South Carolina, and have higher than average new home prices and gross sales margins. Interesting to note, our broker home sales are up 37% in the quarter, indicating continued strong demand in our communities, which has also contributed to less inventory for sale. Our RV business, particularly our transient RV business, experienced heightened demand supporting our thesis about travel preferences during the pandemic. We experienced a consistent build in weekly demand with record visits to our websites and calls to our reservation centers. Anecdotally, our Instagram following has grown fourfold over the last four months. As previously discussed, we saw an acceleration in the recovery of our transient RV business throughout the summer once stay-at-home restrictions were lifted in our communities. To demonstrate the velocity of the recovery, recall that third quarter started with the Fourth of July weekend, where our same-community transient RV revenues were down approximately 5% on a year-over-year basis as travel had just started to pick up. Fast forward to Labor Day, our revenues were up 5.4% on a year-over-year basis. Transiting RV revenues for the month of September ended up being 32% better than our original budget. This strength is carrying into the fourth quarter, and we are anticipating a high single-digit revenue increase over last year. We remain optimistic in our demand outlook given the increasing popularity of RV vacationing. Our experience thus far with the impact of the pandemic has reinforced our confidence in the durability of our cash flows and the strength of our portfolio and our strategy. I would now like to turn the call over to Karen to discuss our financial results and balance sheet. Karen?