Sun Communities, Inc.

Greetings. Thank you for joining us today for Sun Community's fourth quarter 2021 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. Please note that this conference is being recorded. I would now like to turn the conference over to your host, Gary Shiffman, Chairman and Chief Executive Officer. Thank you. You may begin.

Good morning and thank you for joining us as we discuss our fourth quarter and full year 2021 results and provide an overview of our 2022 guidance. The accelerated growth we delivered this past year is a testament to the resilience, desirability, and favorable positioning of our best-in-class portfolio. As the largest owner and operator of manufactured housing communities, RV resorts, and marinas, we are uniquely positioned to meet customer needs across all of our platforms. The ongoing demand for attainable housing and outdoor vacationing and leisure activities are continued tailwinds for Sun. With this backdrop, we have delivered industry-leading and sustained earnings growth, as well as meaningful value creation with our strategic acquisitions. For the year, Core FFO per share increased nearly 28%, and same community NOI grew 11.2% over 2020, building further on the growth we delivered throughout the pandemic, driven by high occupancy and rent increases. We added approximately 2,500 revenue-producing sites, and total home sales increased nearly 43% as compared to the prior year, demonstrating the high demand to live in a Sun community. On the external growth front, during 2021 and through the date of this call, we acquired approximately $1.5 billion of properties and invested approximately $173 million in land for development to build out in the coming years. In the fourth quarter, we realized yet another milestone achievement with the announced pending acquisition of Park Holidays for approximately $1.3 billion, which is anticipated to close mid-March. Park Holidays is the second largest owner and operator of holiday parks in the UK, with 40 owned and two managed communities. Their business model is nearly identical to that of Sun's manufactured housing platform, and this transaction allows us to apply our proven expertise and track record to a fragmented market further expanding our opportunities and accelerating our growth potential. For the RV business, many travelers continue to discover the enjoyment and affordability of an RV vacation. The ongoing demand and interest in the RV lifestyle at Sun Outdoors is evident with accelerated same-community RV revenue growth of nearly 25% compared to 2020, And compared to 2019, the same community RV NOI CAGR increased by 12%. We believe tailwinds support continued demand and a shift in consumer behavior with a strong desire to experience the great outdoors. RV sales continue to increase in volume with RV shipments surpassing 600,000 for 2021, an all-time high for the industry. We are also pleased with the growth we are capturing in the marina business. According to the National Marine Manufacturers Association, boat sales in 2021 surpassed 300,000 units for the second consecutive year, indicating continued demand. Through the end of 2021, starting with the acquisition of Safe Harbor in October of 2020, we have added 125 marinas to our portfolio, including 19 in 2021, and we maintain an active pipeline that will continue to feed our growth and shareholder returns. The long-standing relationships the Safe Harbor team has in the marine industry, the ability to transact with tax-deferred securities, and some attractive cost of capital have made Safe Harbor the premier marina consolidator. At the foundation of this growth and success are SON's core attributes, which encompass our commitment to our team members, including empowerment and accountability, leadership and governance, as well as sustainability. We are pleased to have greatly enhanced our ESG disclosures and established a baseline from which to demonstrate improvements. We recently published our annual ESG report, and we responded to three voluntary frameworks in 2021. This year, SEM will continue to submit responses to these frameworks, improve in areas of identified opportunity, integrate green building practices into our new developments, and incorporate the Marina platform into our ESG reporting process. With confidence in SEM's continued ability to generate industry-leading results, Our board has raised our 2022 distributions with $3.52 per share, up 6% from last year. 2021 was another year of outsized growth for Sun as we continue to expand through acquisitions, expansions, and new MH and RV community developments in addition to consolidating the marina sector. Our unparalleled focus on delivering the best customer experience and optimizing our operating platform is evident in our track record. We are proud of this track record and recognize that we need to continue to invest in our platform, technology, and innovation to deliver industry-leading growth for years to come. Supported by a favorable macro environment, We are confident that Sun is uniquely positioned to capture this opportunity as we execute on our strategic priorities. We are grateful for our dedicated team members' daily commitment as we enhance our offerings and deliver growth with continued best-in-class customer service across the entire Sun platform for our residents, guests, members, and all shareholders. I will now turn the call over to John and Karen to discuss our results and guidance in further detail.

Thank you, Gary. Sun delivered yet another year of strong results in 2021. Our operational strength across the entire platform is a testament to our unrivaled team managing a best-in-class portfolio. In the fourth quarter, same community NOI increased by 8.4% compared to the same period in 2020. It was driven by an 8.5% increase in revenues, reflecting a 3.6% increase in weighted average monthly rent, a 140 basis point occupancy gain, and 15% growth in transient RV revenues. To further provide detail, manufactured housing same-community NOI increased by 6.7%, and the RV segment same-community NOI grew by 14.1%. For the full year, same community NOI increased by 11.2% over the prior year. The NOI increase was mainly due to an 11.8% increase in revenues offset by a 13.1% increase in expenses. The expense growth was mainly driven by our RV same community in line with increased transient RV revenues. Same community MH revenues increased by 5.7%, and RV revenues grew by 24.8% with contributions from occupancy and rate increases. Our $1.4 billion of operating property acquisitions for the year included 11 manufactured housing communities, 24 RV resorts, and 19 marinas with over 15,800 sites, wet slips, and dry storage spaces. Year-to-date in 2022, we have closed on two marinas and one bolt-on for approximately $62 million. We are seeing sustained demand for attainable housing and affordable vacationing. The applications to live in a Sun community average approximately 50,000 applications per year for the last five years, including over 55,000 applications in 2021. Home sales increased by 28.4% for new homes and 46.2% for pre-owned homes as compared to 2020. Brokered home sales increased by 38% for the year, with an average sales price up 27%. We gained nearly 2,500 revenue-producing sites during the year, with almost 1,700 coming from RV transient to annual conversions, a record high for Sun. With each conversion of transient site to annual lease, we gain an average of 50% revenue uplift within the first year. Total portfolio occupancy as of December 31st, 2021 was 97.4%, which provides us with the potential for continued occupancy gains as we fill up vacant sites. In addition, we have an attractive growth pipeline as we continue building new sites in our expansion communities and ground-up developments. To that end, Sun delivered over 1,600 expansion and ground-up development sites at 19 properties in 2021. These include two newly opened manufactured housing communities with a total build-out of nearly 600 sites. Our pipeline of land for future expansion and greenfield development continues to grow with the acquisition of approximately $173 million in land for future development where there is strong demand for attainable housing and vacationing. During 2022, we expect to begin construction on five new greenfield MH communities, which when fully built out, will add approximately 1,500 new MH sites to SUN's portfolio. Over the past five plus years, we have been building our development platform in order to build new modern MH communities for better returns from the cost of acquiring existing MH communities in these locations. We believe this work and investment will provide Sun with a significant competitive advantage as we look to grow our MH portfolio over the next one to five years. As of year end, we had nearly 11,000 zoned and titled sites available for expansion and new development. Forward bookings to our Sun-owned and operated RV resorts are pacing 62% ahead of last year for the first quarter and 53% ahead of the first half of the year. This pacing year over year provides us with confidence that demand for RV vacationing lifestyle remains strong, and we are further investing in this segment to reinforce our leading position and drive ongoing demands on resorts. In 2022, this investment includes an RV rebranding and supporting media campaign as we launch our new branding for our RV resorts, Sun Outdoors. For example, At the end of November, we launched our Sun Outdoors YouTube channel and are producing a number of video series featuring various vacation options at our RV resorts. Additionally, our proprietary Sun Outdoors mobile app was released live this past quarter. The app offers an image-rich, streamlined booking experience for our branded Sun Outdoors and Sun Retreat destinations. Our social media strategy continues to be the top tier performer in the outdoor lifestyle industry as guests explore their sunnier side. Within our marina business, we acquired 19 new marina properties in 2021, including five in the fourth quarter. Same marina rental revenue growth for properties owned and managed by Safe Harbor since 2019 was 17.8% for the full year 2021 over 2019. which is a CAGR increase of rental revenue of 7.4% for the quarter and 8.5% for the year. The main drivers of the revenue increase this quarter was strong wet and dry storage revenues resulting from rate and occupancy increases across the portfolio. During 2021, we consistently executed our four core investment strategies. First, reinvesting in our existing communities leads to steady demand and high occupancy to live in the Sun's properties. second the acquisition of accretive properties continues to add revenue and cash flow third expansion in our existing properties provides occupancy revenue growth and high demand low supply markets and fourth ground up developments provide sun with the ability to build the highest quality communities for our residents and guests while achieving high returns for our shareholders this year with our continued reinvestment our communities acquisition of over 50 operating properties delivery of over 1600 development sites, and opening the first phases of two manufactured housing and two RV developments, Glenn successfully executed on each of these four core strategic pillars. Going into 2022, we are successfully executing our core strategies and continue the momentum to yield industry leading growth, which could not be possible without our entire Sun team. Karen will now discuss our financial results and guidance for 2022.