Sun Communities, Inc.

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to Sun Community's second quarter 2025 earnings conference call. At this time, management would like to inform you that certain statements made during this call, which are not historical facts, may be deemed forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. Factors and risks that could cause actual results to differ materially from expectations are detailed in today's press release and from time to time in the company's periodic filings with the SEC. The company undertakes no obligations to advise or update any forward-looking statements to reflect events or circumstances after the date of this release. Having said that, I'd like to introduce management with us today. Gary Sniffman, Chairman and Chief Executive Officer. John McLaurin, President. Fernando Castro-Cartini, Chief Financial Officer. Aaron Weiss. Executive Vice President of Corporate Strategy and Business Development. After their remarks, there will be an opportunity to ask questions. For those who would like to participate in the question and answer session, management asks that you limit yourself to one question so that everyone who would like to participate has ample opportunity. As a reminder, this conference is being recorded. I'll now turn the call over to Gary Sniffman, Chairman and Chief Executive Officer. Mr. Siffman, you may begin.

Good afternoon, and thank you for joining us to review Sun Community's second quarter 2025 results and updated full year outlook. This was a pivotal quarter for Sun as we completed the previously announced sale of Safe Harbor Marinas and repositioned Sun as a pure play owner and operator of manufactured housing and RV communities. I am pleased with our financial results and operational performance as we execute on our strategy to deliver consistent, reliable earnings growth. We have taken deliberate steps to streamline operations, unlock meaningful financial flexibility, and enhance shareholder value. During the quarter, we paid down approximately $3.3 billion of debt, inclusive of prepayment costs, materially improving our balance sheet position, and since closing on a safe harbor transaction, we returned over $830 million to shareholders for special cash distribution and share rate purchases. Additionally, we increased our regular annual distribution rate by over 10%. We have also made significant headway identifying acquisition opportunities using 1031 proceeds. We are evaluating opportunities to acquire manufactured housing properties in strong markets with attractive supply-demand dynamics. We continue to make progress on the delayed consent properties related to the Safe Harbor transaction. In May and June, we successfully closed down six of these properties and are working through final government approvals for the remaining nine. Turning to our operational performance, we are pleased with the strength of our manufactured housing and annual RV businesses. Some reported core FFO per share of $1.76 for the quarter, exceeding the high end of guidance. Total North American same property NOI grew 4.9% in the second quarter, driven primarily by the continued growth and stability of our manufactured housing portfolio, as well as the benefit of our ongoing cost savings initiatives and greater efficiency at the expense level. We believe this demonstrates the resilience of our core business and the strength of our portfolio. As announced last week, Charles Young has been appointed as Sun Community's next Chief Executive Officer and Board Member. following a thorough search process. Charles is a seasoned and highly respected leader with over 25 years of experience across real estate operations, investment, and strategy. He most recently served as president of Invitation Homes and brings with him a strong track record of driving growth, operational excellence, and team development. We're incredibly excited to welcome Charles to Sun. and he will be officially joining on October 1st. The board and I are confident that his leadership, vision, and deep understanding of the real estate industry will build on the foundation we created and guide Sun through its next phase of growth and value creation. I will be stepping into the role of non-executive chairman of the board. This provides for a smooth transition that allows me to continue supporting the company and our exceptional team. It has been an honor and privilege to serve as CEO of Sun for over 40 years, and I could not be prouder of what we've accomplished. It's been an incredible journey in growing Sun from a 31 community portfolio in our initial public offering to where we are today with more than 500 communities. I'm incredibly pleased that this change is happening at a time when the company is well positioned to build on our strong foundation and continue to create value for all of our stakeholders. I'd like to close by expressing my sincere appreciation to the entire Sun team. Their hard work and dedication made these results possible and continues to reinforce Sun's strong position in the market. With that, I'll turn the call over to John and Fernando to walk through the quarter's results and our updated guidance in more detail. John?

Thank you, Gary. We could not be more excited and proud of what our team delivered this quarter. We are executing the plan as we hold ourselves accountable with transparent performance rankings, and the results are clear. We are growing top line, managing operating expenses efficiently, and delivering consistent, high-quality results across the organization. In our North American same property portfolio, we reported 4.9% NOI growth for the quarter, demonstrated a disciplined balance between revenue growth and a focus on expense management, driven primarily by our manufactured housing segment, which had an outstanding quarter. Same property manufactured housing NOI increased 7.7%, and our same property MH occupancy was up 60 basis points from the prior year to 97.6%, reinforcing the ongoing demand to live in a Sun community. As it relates to RV, we remain within our 2025 guidance range. For the second quarter, same property RV NOI declined 1.1%, driven by a 0.9% revenue increase, off by a 3.1% expense increase. Importantly, we've been able to mitigate some of the transient softness through growth in annual RV and by continuing to flex expenses. In the UK, we are seeing strong results. Same property NOI in our UK portfolio increased 10.2% for the quarter, with revenue up 9.5%, driven by strong demand across our communities as well as higher transient revenue. Expenses were up 8.8% as a result of the budgeted national minimum wage increase, but that was partially mitigated by cost savings initiatives. Park Holiday's team continues to perform at a very high level. They have done a tremendous job shifting the revenue mix from home sales to recurring real property income, strengthening the long-term profile of our UK business. The unmatched quality of our UK portfolio and operating team allow Park Holiday's to command its outsized market share and underlies our confidence and continued momentum. As we look at 2025, I truly believe we are performing as well as we ever have as a team in achieving some of the best organic growth I have seen in my long career here at Sun, with a focus on driving top-line growth while maintaining expense efficiently. Most importantly, we have the results to prove it. I want to sincerely thank all of our team members for their tireless effort, hard work, and dedication. These operating results do not happen by accident. They occur through the discipline execution by team members who care about delivering for our residents, guests, and shareholders. I will turn the call over to Fernando to walk through our financial results and update 2025 guidance in more detail. Fernando? Thank you, John. For the second quarter, Sun reported core FFO per share of $1.76, exceeding the high end of our guidance range. This strong result was primarily driven by the outperformance in our manufactured housing and UK segments, supported by continued rent growth and stable occupancy. As previously mentioned, we closed on the sale of Safe Harbor marinas on April 30th, meaningfully simplifying our platform and creating significant financial flexibility for some. Following the initial $5.25 billion Safe Harbor closing, we subsequently closed on six delayed consent subsidiaries, totaling approximately $137 million. The cash proceeds from those sales have been deployed to support a combination of debt reduction, including $3.3 billion of debt that has been repaid, shareholder distributions, and reinvestment into our core portfolio. Turning to our balance sheet, as of June 30th, Sun's total debt balance stood at $4.3 billion, with a weighted average interest rate of 3.4%, and a weighted average maturity of 7.6 years. Our net debt to trailing 12-month recurring EBITDA ratio was 2.9 times at quarter end. Importantly, we have zero floating rate debt outstanding. In addition to our debt reduction, we deployed capital through share repurchases under our $1 billion authorized stock buyback program. During and subsequent to quarter end, we repurchased approximately 2.4 million shares for a total of $300 million. We believe this opportunistic repurchasing enhances long-term shareholder value while maintaining balance sheet strength. We also returned capital to shareholders through a one-time cash distribution of $4 per share during the second quarter, equating to $521 million in total shareholder distributions. With respect to 1031 proceeds from a Safe Harbor transaction, We initially allocated nearly $1 billion into 1031 exchange accounts. As of today, we have identified potential acquisitions totaling approximately $565 million, which allowed us to release $431 million into unrestricted cash accounts in mid-June. We are pleased to have received two credit rating upgrades this quarter. S&P Global raised Sun's rating to BBB Plus from BBB, and Moody's upgraded us to BAA2 from BAA3. Both agencies cite our deleveraging progress, balance sheet strength, and focus on core operations as key drivers for the upgrades. During the quarter, we acquired the titles to 22 properties in the UK that were previously controlled via ground leases for approximately $199 million. inclusive of taxes and fees. This transaction creates financial and strategic flexibility, eliminates material lease obligations, and is expected to be accretive to core FFO on an annual basis. Turning to our full year 2025 guidance, we are raising our FFO per share range to $6.51 to $6.67, a $0.06 or just over 90 basis point increase at the midpoint, reflecting our second quarter outperformance. We have increased North American same property NOI growth guidance to 4.7% at the midpoint, an increase of 40 basis points. Manufactured housing same property NOI is now expected to grow 7.5% at the midpoint, reflecting continued strong performance. RV same property guidance is being maintained at down 1.5% at the midpoint. as our outlook for the remainder of the year is consistent with expectations set during our first quarter earnings call in May. UK same property NOI guidance has been raised to 2.3% at the midpoint, a 40 basis point increase driven by strong second quarter results. We have also updated guidance to reflect changes in interest income and interest expense from the debt pay down, stock buybacks, and the purchase of the 22 UK properties previously subject to ground license. For additional details regarding our full year guidance, please see our supplemental disclosures. As a reminder, our guidance includes acquisitions, dispositions, and capital markets activity through July 30th, and the effect of the completion of the sale of the remaining Safe Harbor delayed consent subsidiaries. but it does not include the impact of additional prospective acquisitions, dispositions, or capital markets activities, which may be included in research analyst estimates. I would now like to turn the call back to Gary for closing remarks.