Sun Communities, Inc.

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Sun Community's third quarter 2025 earnings conference call. At this time, management would like me to inform you that certain statements made during the 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 obligation to advise or update any forward-looking statements to reflect events or circumstances after the date of this release. Having said that, I would like to introduce management with us today. Charles Young, Chief Executive Officer, John McLaren, President, Fernando Castrano Caratini, Chief Financial Officer, and 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 yourselves to one question so everyone who would like to participate has ample opportunity. As a reminder, this call is being recorded. I'll now turn the call over to Charles Young, Chief Executive Officer. Mr. Young, you may now begin.

Good afternoon, and thank you for joining us on today's third quarter earnings call. This is my first earnings call as Chief Executive Officer of Sun, and I want to start by saying how excited I am to be a part of this exceptional team. Since stepping into the role on October 1st, I spent my first month listening, learning, and engaging across the company. I have already visited a large number of our communities, and I look forward to continuing my tours. My first few weeks reaffirmed what drove me to Sun, the strength of our teams, the scale of the platform, the quality of our communities, and the opportunity in front of us. It is clear that Sun's success has been built on a strong foundation, underpinned by a deep commitment and dedication to our residents and guests. I'm thrilled to be joining at this pivotal moment in the company's journey, and I look forward to building on Sun's strong legacy. My near-term focus includes three key areas. One, deepening my understanding of the MH and RV business, ensuring I'm grounded in every aspect of our company's operations and culture. Two, supporting our team as we deliver on our strategy and commitments. And three, assessing opportunities opportunities for discipline, long-term growth. I'm grateful for the warm welcome I've received from the Sun team. I look forward to working together to continue to drive excellence in all that we do for the benefit of our team members, residents, guests, and our stakeholders. With that, I'll turn the call over to John and Fernando to review our third quarter results and outlook in more detail. John? Thank you, Charles. On behalf of the entire team, we are thrilled to welcome you to Sun Communities. Your deep understanding of and experience in the real estate industry and fresh perspectives have already been additive, which will help guide Sun through its next exciting chapter of growth and value creation. Turning to our performance, I am very pleased with the third quarter results. Sun reported core FFO per share of $2.28. exceeding the high end of our guidance range, driven by strong same-property performance in North America and the UK. For the third quarter, within our North American same-property portfolio, NOI increased 5.4%, led by manufactured housing, which delivered 10.1% NOI growth and maintained a solid 98% occupancy. Through the end of September, 50% of our MH residents have received their 2026 rent increase notices, averaging approximately 5%, reflecting the continued strength and stability of our portfolio. In our RV business, same-property annual RV revenue was up 8.1%. Transient RV revenue performed in line with expectations, declining by 7.8%, with roughly half this decline due to our strategy of reducing transient sites as we continue to successfully convert transient guests into RV annuals. As I've shared before, the volume of RV transient annual conversions has returned to a more normalized growth pace following several record conversion years. RV same property NOI declined 1.1%, and we remain focused on cost controls with same property RV expenses down year over year. For 2026, annual RV rental rates are being set with an estimated average annual increases of approximately 4%. In the UK, same property NOI grew 5.4%, supported by 4.8% revenue growth and 4% expense growth. While home sale volumes are lighter given broader macro challenges and when compared against recent record volumes, our team continues to maintain elevated market share by providing differentiated services and amenities at Park Holiday's high-quality communities. Our Park Holidays homeowners have received 2026 rent increase notices averaging approximately 4.1%. Our UK team continues to execute exceptionally well as they strategically shift the earnings mix toward recurring real property income while driving operational excellence. I want to take a moment to thank our entire team for the discipline and dedication toward achieving our goals and continuing to position us for a strong future. Their commitment to operational excellence, including expense discipline and top-line growth, resident and guest relations, and accountability is what enabled us to deliver these great results. With that, I will turn the call over to Fernando to review our financial results and updated 2025 guidance in more detail. Fernando? Thank you, John. I will start with an update on capital deployment and our balance sheet. Following the initial safe harbor closing on April 30th, we completed the disposition of the remaining nine delayed consent properties for total proceeds of approximately $118 million, with the final closing taking place on August 29th. In addition, during the third quarter, we sold a land parcel for $18 million. In October, We acquired 14 communities for approximately $457 million using 1031 exchange proceeds. These properties include 11 manufactured housing and three annual RV communities, all located in existing Sun Markets, allowing us to leverage our teams, scale, and infrastructure. In the UK, during and subsequent to the quarter, we purchased the titles to seven properties previously held under long-term ground leases, for approximately $124 million. Year to date, we have purchased 28 ground leases for approximately $324 million and agreed to purchase five additional ground leases for approximately $63 million with closing expected by the end of the first quarter of 2026. These transactions create meaningful financial and strategic flexibility and eliminate significant lease complexity. As of September 30th, total debt stood at $4.3 billion, with a weighted average interest rate of 3.4%, and a weighted average maturity of 7.4 years. For a former for the closed transactions in our common distribution in October, our net debt is approximately $3.7 billion, and our net debt to recurring EBITDA on a trailing 12-month basis is approximately 3.6 times. Under our $1 billion authorized share repurchase program, we have repurchased approximately 4 million shares for $500 million year-to-date at an average price of $125.74 per share. We continue to view buybacks as a way to enhance long-term shareholder value while maintaining balance sheet flexibility. Turning to our full year 2025 guidance, Based on our strong third quarter results and recent capital actions, we are raising our core FFO per share expectations by 4 cents at the midpoint to a range of 659 to 667, reflecting continued operational strength and disciplined execution of our strategic priorities. North American same property NOI growth guidance has been increased to 5.1% at the midpoint, up 40 basis points from the prior quarter, driven by solid performance across both manufactured housing and RV segments. Manufactured housing SING property NOI is now expected to grow by 7.8% at the midpoint, reflecting continued outperformance through the third quarter and a steady demand across the portfolio. RV SING property NOI guidance has been raised to a 1% decline at the midpoint, supported by stable third quarter results, and improving transient trends relative to prior expectations. UK same property NOI guidance has been increased to approximately 4% at the midpoint, reflecting better than expected third quarter performance and continued real property strength in the Park Holidays platform. For additional details regarding our full year guidance, please see our supplemental disclosures. Our guidance reflects all completed acquisitions, dispositions, and capital markets activity through October 30th. It does not include the impact of potential future transactions or capital markets activity, which may be reflected in research analyst estimates. I will now turn the call back over to Charles for concluding thoughts. Charles? Thank you, Fernando. The team delivered a strong performance in the third quarter, and we are encouraged by the positive momentum. I am incredibly excited to be its son and I look forward to providing updates as we work together to drive consistent growth for years to come.

We have concluded our prepared remarks and we will now open the call for questions. Operator?