Sun Communities, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sun Community's fourth quarter and year-end 2025 earnings conference call. At this time, management would like for me to inform you that certain statements made during this call, which are not historical facts, may be deemed forward-looking statements within the meaning of the Private Security 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 would like to introduce management with us. today, Charles Young, Chief Executive Officer, John McLaren, President, Fernando Castro 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 begin.

Good morning and thank you for joining us today. I'm pleased to report our fourth quarter and full year 2025 results. We concluded the year with strong operational momentum, delivering core FFO per share of $1.40 for the quarter and $6.68 for the full year, both above the high end of our guidance ranges. The strength of our performance and optimism in our outlook is grounded in the durable fundamentals of our sectors in which we operate. We provide attainable housing and affordable vacationing to our residents and guests in our manufactured housing and recreational vehicle communities. Our operational model is anchored in high resident and guest engagement, which facilitates the recurring and predictable rental streams our properties generate. That stability reflects strong demand, limited new supplies, and the value proposition our communities provide, as demonstrated by our same property MH portfolio's 98.1% occupancy. Affordability is a core attribute of our business model. Manufactured housing offers a high-quality living environment at a cost significantly below traditional housing alternatives, while our RV communities provide accessible short- and long-term vacation stays that resonate with today's consumers. After spending time at our MH and RV communities over the past few months, what stands out to me is the sense of community that we create, which I believe is a meaningful competitive advantage for our platform. In MH, our residents are members of active, connected environments that foster long-term relationships and loyalty. In RV, our long-stay guests value the flexibility and lifestyle our properties offer, using them as seasonal homes or year-round destinations. Our results this past year demonstrate these favorable dynamics. North American same property NOI growth was 7.9% for the quarter and 5.7% for the full year, reflecting strong revenue growth and disciplined expense management. From a capital allocation standpoint, 2025 was a year of meaningful positive change. Following the safe harbor sale, we significantly reduced leverage and enhanced our financial flexibility. we ended the year at 3.4 times net debt to EBITDA, which provides substantial financial stability and a foundation for pursuing attractive, accretive growth opportunities. Importantly, we returned over $1.5 billion of capital to shareholders in 2025. Building on that, as detailed in our recent press release, our board approved an approximate 8% or $0.08 per share increase to our quarterly distribution rate. This reflects our confidence in the consistency of cash flow our portfolio generates, our strong operating performance, and the strength of our balance sheet. As we enter 2026, we are building on our strong foundation and taking a focused, practical approach to long-term value creation. This is not a departure from what has worked. Rather, it builds upon and further refines Sun's strong in-place platform. with an emphasis on sharpening execution, enhancing performance, and strategically targeting capital investment. We remain confident in the strength and durability of our core manufactured housing and annual RV businesses. These segments provide recurring predictable cash flows, which we believe will continue to generate steady earnings growth and margin improvement over time. At the same time, we're focused on maximizing the performance of our RV platform to enhance growth and reduce volatility both within the segment and as an important feeder to growing annual RVs. That work is centered on improving operational execution, leveraging better data and technology, and driving greater discipline across the portfolio. Our strategy embodies thoughtful and strategic evolution and involves continued focus on what has positioned Sunwell while sharpening our focus on enhancing execution and driving sustainable long-term growth. There are three core pillars that support our strategy to drive long-term outperformance. First, thoughtful capital allocation, maintaining a strong and flexible balance sheet while delivering growth. With our best-in-class balance sheet, we will manage capital prudently while seeking to enhance growth. Second, continued optimization of our operating platform, driving greater consistency, accountability, and efficiency across the organization. And third, strategic investment in our communities. Our infrastructure and a unified digital backbone will enhance our resident and guest experience and enable better, faster, and data-driven decision-making across the business. We have made meaningful progress over the past year, simplifying the business and strengthening the balance sheet. And we believe our strategy positions us to capitalize on the opportunities ahead in our core platform. We look forward to sharing more details updates as we advance our strategic priorities and actions. I want to thank the entire Sun team for the warm welcome over the past few months. I'm proud to be a part of this organization and grateful for our team members' commitment to serving our residents and guests every day. With that, I'll turn the call over to John and Fernando to discuss results in more detail. John? Thank you, Charles.

For our fourth quarter results, our team executed exceptionally well, and our performance reflects that. Total North American same property NOI increased 7.9% year-over-year, driven by a 5.9% revenue growth and 2% expense growth, with blended occupancy over 99%. Within manufactured housing, same property NOI increased 8.8%, driven primarily by exceptional MH performance and disciplined expense management. Revenue grew 7.3%. while operating expenses increased 3.2%, reflecting continued focus on balance, efficiency, and cost control. In RV, same property NOI increased 5%, driven by 2.7% revenue growth and strong expense discipline with operating expenses up only 60 basis points. Revenue growth reflected higher RV contract rates with transient performance in line with our expectations. For the full year, North American same property NOI increased 5.7%, driven by 4.5% revenue growth and partially offset by 2.2% increase in expenses. We exceeded our guidance in manufactured housing, delivering 8.9% same property NOI growth for the year. In RV, same property NOI declined 1.4%, which was within our guidance range. Turning to the UK, Fourth quarter same property NOI declined approximately $500,000, reflecting ongoing macroeconomic pressures, including the national minimum wage increase. For the full year, UK same property NOI increased 3.5%, supported by 5% revenue growth, driven by higher MH and transient income, partially offset by 6.6% increase in operating expenses. UK home sales volumes are down 4.9% compared to 2024's record levels. Across the organization, we remain focused on operational excellence, disciplined cost management, and leveraging technology and data to enhance efficiency and the resident guest experience. Having been a part of Sun for nearly 24 years, I can tell you now is truly one of the most exciting times I've experienced as we carry the strong momentum we built in 2025 into 2026. Our 2025 performance reflects the dedication, skill, and focus of our team throughout the portfolio. It is a privilege to be part of it, and I want to thank our team members for their continued commitment to service and operational excellence. As we enter 2026, we remain focused on consistent execution, driving steady revenue growth and maintaining expense discipline. With that, I'll turn the call over to Fernando to walk through our financial results in 2026 guidance. Fernando? Thank you, John. In the fourth quarter, core FFO per share was $1.40, beating the high end of our guidance range by one cent. For the full year, core FFO per share was $6.68, also one cent above the high end of our guidance range. During 2025, we continued executing on our simplification strategies. selling over $200 million of non-strategic assets and land parcels. We also deployed 1031 exchange proceeds to acquire 14 manufactured housing and annual RV communities, totaling $457 million, further enhancing the quality and growth profile of our portfolio. We purchased the titles to 32 UK properties that were previously controlled through ground leases for approximately $387 million. As a result of the ground lease purchases, Sun now holds a freehold interest in nearly all our UK properties, further strengthening our long-term financial position and strategic flexibility. 2025 was a transformational year for our balance sheet. During the year, we repaid more than $3.3 billion of total debt. We ended 2025 with net debt to trailing 12-month recurring EBITDA of 3.4 times, no floating rate exposure, and a weighted average interest rate of 3.4% with a 7.1-year weighted average maturity. Following these transactions, we now have a well-laddered debt maturity profile with $492 million maturing in 2026 and no maturities until 2028. As of December 31, 2025, we had $636 million of total cash on the balance sheet. In September, we closed on a new $2 billion five-year credit facility, undrawn at year end, further enhancing our liquidity and overall financial flexibility. Importantly, we received two credit rating upgrades in 2025. S&P raised some to BBB+, and Moody's upgraded us to BAA2, reflecting the strength of our balance sheet and credit profile. Turning to capital return, for the full year, we repurchased 4.3 million shares at an average price of $125.62 per share, representing approximately $539 million of repurchase activity. After year end and through February 24th, re-repurchased an additional 456,000 shares totaling $57.3 million. These actions reflect a disciplined and balanced capital allocation framework showcasing our strong financial position while returning capital to shareholders. Turning to 2026 guidance. We are establishing full year core FFO per share guidance at a midpoint of 693 with a range of 683 For the first quarter of 2026, we are guiding to $1.28 at the midpoint. At the midpoint, within North America, we expect full-year same-property NOI growth of approximately 4.5%, breaking that down further. Manufactured housing is expected to grow by 5.9%, and RV is expected to grow by 0.9%. In the UK, we expect approximately 2.2% same property NOI growth for 2026. FFO from UK home sales is anticipated to be approximately $50 million at the midpoint for the year. For additional details regarding our assumptions and the components of guidance, please refer to our supplemental disclosures. Our guidance reflects completed acquisitions, dispositions, and capital markets activity through February 24th. Of note, it does not assume future acquisitions, additional share repurchases, or other capital markets activity, which is often reflected in analyst estimates for the year. With that, I'll turn the call back to Charles for closing remarks.