Maryland | 38-2730780 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) | |
27777 Franklin Rd. | ||
Suite 200 | ||
Southfield, Michigan | 48034 | |
(Address of Principal Executive Offices) | (Zip Code) |
(248) 208-2500 |
Large accelerated filer [ X ] | Accelerated filer [ ] | Non-accelerated filer [ ] | Smaller reporting company [ ] |
Financial Statements: | ||
Consolidated Balance Sheets as of September 30, 2016 (Unaudited) and December 31, 2015 | ||
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2016 and 2015 (Unaudited) | ||
Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2016 and 2015 (Unaudited) | ||
Consolidated Statement of Stockholders’ Equity for the Nine Months Ended September 30, 2016 (Unaudited) | ||
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015 (Unaudited) | ||
(unaudited) September 30, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Land | $ | 1,072,964 | $ | 451,340 | |||
Land improvements and buildings | 4,682,920 | 3,535,909 | |||||
Rental homes and improvements | 485,340 | 460,480 | |||||
Furniture, fixtures and equipment | 125,603 | 102,746 | |||||
Land held for future development | 23,497 | 23,047 | |||||
Investment property | 6,390,324 | 4,573,522 | |||||
Accumulated depreciation | (977,486 | ) | (852,407 | ) | |||
Investment property, net (including $89,772 and $92,009 for consolidated variable interest entities at September 30, 2016 and December 31, 2015; see Note 7) | 5,412,838 | 3,721,115 | |||||
Cash and cash equivalents | 69,829 | 45,086 | |||||
Inventory of manufactured homes | 24,147 | 14,828 | |||||
Notes and other receivables, net | 87,856 | 47,972 | |||||
Collateralized receivables, net | 143,888 | 139,768 | |||||
Other assets, net (including $2,857 and $3,823 for consolidated variable interest entities at September 30, 2016 and December 31, 2015; see Note 7) | 166,148 | 213,030 | |||||
TOTAL ASSETS | $ | 5,904,706 | $ | 4,181,799 | |||
LIABILITIES | |||||||
Mortgage loans payable (including $62,567 and $64,082 for consolidated variable interest entities at September 30, 2016 and December 31, 2015; see Note 7) | $ | 2,854,831 | $ | 2,125,267 | |||
Secured borrowings on collateralized receivables | 144,522 | 140,440 | |||||
Preferred OP units - mandatorily redeemable | 45,903 | 45,903 | |||||
Lines of credit | 57,737 | 24,687 | |||||
Distributions payable | 51,100 | 41,265 | |||||
Other liabilities (including $4,180 and $4,091 for consolidated variable interest entities at September 30, 2016 and December 31, 2015; see Note 7) | 275,650 | 184,859 | |||||
TOTAL LIABILITIES | 3,429,743 | 2,562,421 | |||||
Commitments and contingencies | |||||||
Series A-4 preferred stock, $0.01 par value. Issued and outstanding: 1,682 shares at September 30, 2016 and 2,067 shares at December 31, 2015 | 50,227 | 61,732 | |||||
Series A-4 preferred OP units | 19,906 | 21,065 | |||||
STOCKHOLDERS’ EQUITY | |||||||
Series A preferred stock, $0.01 par value. Issued and outstanding: 3,400 shares at September 30, 2016 and December 31, 2015 | 34 | 34 | |||||
Common stock, $0.01 par value. Authorized: 180,000 shares; Issued and outstanding: 73,027 shares at September 30, 2016 and 58,395 shares at December 31, 2015 | 730 | 584 | |||||
Additional paid-in capital | 3,313,905 | 2,319,314 | |||||
Accumulated other comprehensive loss | (4,876 | ) | — | ||||
Distributions in excess of accumulated earnings | (975,511 | ) | (864,122 | ) | |||
Total Sun Communities, Inc. stockholders' equity | 2,334,282 | 1,455,810 | |||||
Noncontrolling interests: | |||||||
Common and preferred OP units | 73,284 | 82,538 | |||||
Consolidated variable interest entities | (2,736 | ) | (1,767 | ) | |||
Total noncontrolling interests | 70,548 | 80,771 | |||||
TOTAL STOCKHOLDERS’ EQUITY | 2,404,830 | 1,536,581 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 5,904,706 | $ | 4,181,799 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
REVENUES | |||||||||||||||
Income from real property | $ | 184,324 | $ | 137,548 | $ | 453,560 | $ | 382,906 | |||||||
Revenue from home sales | 31,211 | 18,991 | 81,987 | 54,559 | |||||||||||
Rental home revenue | 12,031 | 11,856 | 35,696 | 34,480 | |||||||||||
Ancillary revenues | 16,446 | 12,511 | 28,442 | 20,956 | |||||||||||
Interest | 4,705 | 3,987 | 13,322 | 11,864 | |||||||||||
Brokerage commissions and other income, net | 984 | 462 | 2,137 | 1,728 | |||||||||||
Total revenues | 249,701 | 185,355 | 615,144 | 506,493 | |||||||||||
COSTS AND EXPENSES | |||||||||||||||
Property operating and maintenance | 57,089 | 38,716 | 125,357 | 102,437 | |||||||||||
Real estate taxes | 12,384 | 8,520 | 32,122 | 26,031 | |||||||||||
Cost of home sales | 21,935 | 13,386 | 58,803 | 39,645 | |||||||||||
Rental home operating and maintenance | 6,350 | 7,031 | 17,637 | 18,115 | |||||||||||
Ancillary expenses | 8,539 | 6,936 | 17,248 | 13,631 | |||||||||||
Home selling expenses | 3,553 | 1,910 | 8,689 | 5,397 | |||||||||||
General and administrative | 16,575 | 12,670 | 46,910 | 36,944 | |||||||||||
Transaction costs | 4,191 | 1,664 | 27,891 | 13,150 | |||||||||||
Depreciation and amortization | 61,483 | 44,695 | 159,565 | 130,107 | |||||||||||
Extinguishment of debt | — | — | — | 2,800 | |||||||||||
Interest | 33,800 | 27,453 | 88,522 | 79,593 | |||||||||||
Interest on mandatorily redeemable preferred OP units | 789 | 790 | 2,363 | 2,429 | |||||||||||
Total expenses | 226,688 | 163,771 | 585,107 | 470,279 | |||||||||||
Income before other items | 23,013 | 21,584 | 30,037 | 36,214 | |||||||||||
Gain on disposition of properties, net | — | 18,190 | — | 26,946 | |||||||||||
Provision for income taxes | (283 | ) | (77 | ) | (567 | ) | (229 | ) | |||||||
Income from affiliate transactions | 500 | — | 500 | 7,500 | |||||||||||
Net income | 23,230 | 39,697 | 29,970 | 70,431 | |||||||||||
Less: Preferred return to preferred OP units | 1,257 | 1,302 | 3,793 | 3,692 | |||||||||||
Less: Amounts attributable to noncontrolling interests | 879 | 2,125 | 460 | 3,132 | |||||||||||
Net income attributable to Sun Communities, Inc. | 21,094 | 36,270 | 25,717 | 63,607 | |||||||||||
Less: Preferred stock distributions | 2,197 | 3,179 | 6,748 | 11,353 | |||||||||||
Less: Preferred stock redemption costs | — | 4,328 | — | 4,328 | |||||||||||
Net income attributable to Sun Communities, Inc. common stockholders | $ | 18,897 | $ | 28,763 | $ | 18,969 | $ | 47,926 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 68,655 | 53,220 | 63,716 | 52,855 | |||||||||||
Diluted | 69,069 | 53,665 | 64,146 | 53,271 | |||||||||||
Earnings per share (See Note 13): | |||||||||||||||
Basic | $ | 0.27 | $ | 0.53 | $ | 0.30 | $ | 0.90 | |||||||
Diluted | $ | 0.27 | $ | 0.53 | $ | 0.30 | $ | 0.90 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income / comprehensive income | $ | 23,230 | $ | 39,697 | $ | 29,970 | $ | 70,431 | |||||||
Foreign currency translation adjustment | (5,227 | ) | — | (5,226 | ) | — | |||||||||
Total comprehensive income | 18,003 | 39,697 | 24,744 | 70,431 | |||||||||||
Less: Comprehensive income attributable to the noncontrolling interests | 553 | 2,125 | 110 | 3,132 | |||||||||||
Comprehensive income attributable to Sun Communities, Inc. | $ | 17,450 | $ | 37,572 | $ | 24,634 | $ | 67,299 |
7.125% Series A Cumulative Redeemable Preferred Stock | Common Stock | Additional Paid-in Capital | Distributions in Excess of Accumulated Earnings | Accumulated other comprehensive income | Non-controlling Interests | Total Stockholders' Equity | |||||||||||||||
Balance at December 31, 2015 | $ | 34 | $ | 584 | $ | 2,319,314 | $ | (864,122 | ) | $ | — | $ | 80,771 | $ | 1,536,581 | ||||||
Issuance of common stock from exercise of options, net | — | — | 149 | — | — | — | 149 | ||||||||||||||
Issuance, conversion of OP units and associated costs of common stock, net | — | 144 | 975,850 | — | — | (1,693 | ) | 974,301 | |||||||||||||
Conversion of Series A-4 preferred stock | — | — | 11,503 | — | — | — | 11,503 | ||||||||||||||
Share-based compensation - amortization and forfeitures | — | 2 | 7,089 | 187 | — | — | 7,278 | ||||||||||||||
Foreign currency exchange | — | — | — | — | (4,876 | ) | (350 | ) | (5,226 | ) | |||||||||||
Net income | — | — | — | 29,510 | — | 364 | 29,874 | ||||||||||||||
Distributions | — | — | — | (141,086 | ) | — | (8,544 | ) | (149,630 | ) | |||||||||||
Balance at September 30, 2016 | $ | 34 | $ | 730 | $ | 3,313,905 | $ | (975,511 | ) | $ | (4,876 | ) | $ | 70,548 | $ | 2,404,830 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
OPERATING ACTIVITIES: | |||||||
Net income | $ | 29,970 | $ | 70,431 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Gain on disposition of assets | (9,400 | ) | (4,664 | ) | |||
Gain on disposition of properties, net | — | (26,946 | ) | ||||
Share-based compensation | 7,278 | 5,234 | |||||
Depreciation and amortization | 157,721 | 129,094 | |||||
Amortization of below market lease | (4,644 | ) | (3,724 | ) | |||
Amortization of debt premium | (7,436 | ) | (7,985 | ) | |||
Amortization of deferred financing costs | 1,609 | 1,410 | |||||
Amortization of ground lease intangibles | 368 | — | |||||
Income from affiliate transactions | (500 | ) | (7,500 | ) | |||
Change in notes receivable from financed sales of inventory homes, net of repayments | (22,996 | ) | (4,636 | ) | |||
Change in inventory, other assets and other receivables, net | 14,817 | (17,530 | ) | ||||
Change in other liabilities | 23,492 | 13,594 | |||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 190,279 | 146,778 | |||||
INVESTING ACTIVITIES: | |||||||
Investment in properties | (159,923 | ) | (148,655 | ) | |||
Acquisitions of properties, net of cash acquired | (1,473,368 | ) | (309,275 | ) | |||
Payments for deposits on acquisitions | — | (2,208 | ) | ||||
Proceeds related to affiliate transactions | 500 | 7,500 | |||||
Proceeds related to disposition of assets and depreciated homes, net | 3,755 | 4,849 | |||||
Proceeds related to disposition of properties | 88,696 | 45,488 | |||||
Issuance of notes and other receivables | (1,411 | ) | (727 | ) | |||
Payment for membership interest | — | (1,390 | ) | ||||
Repayments of notes and other receivables | 852 | 1,213 | |||||
NET CASH USED FOR INVESTING ACTIVITIES | (1,540,899 | ) | (403,205 | ) | |||
FINANCING ACTIVITIES: | |||||||
Issuance and associated costs of common stock, OP units, and preferred OP units, net | 748,959 | 77,306 | |||||
Net proceeds from stock option exercise | 149 | 71 | |||||
Borrowings on lines of credit | 474,738 | 394,428 | |||||
Payments on lines of credit | (441,738 | ) | (233,222 | ) | |||
Proceeds from issuance of other debt | 900,781 | 326,689 | |||||
Payments on other debt | (141,490 | ) | (121,247 | ) | |||
Proceeds received from return of prepaid deferred financing costs | — | 6,852 | |||||
Redemption of Series A-4 Preferred Stock | — | (121,445 | ) | ||||
Distributions to stockholders, OP unit holders, and preferred OP unit holders | (141,018 | ) | (121,468 | ) | |||
Preferred stock redemption costs | — | (4,328 | ) | ||||
Payments for deferred financing costs | (24,911 | ) | (6,751 | ) | |||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,375,470 | 196,885 | |||||
Effect of exchange rate changes on cash and cash equivalents | (107 | ) | — | ||||
Net change in cash and cash equivalents | 24,743 | (59,542 | ) | ||||
Cash and cash equivalents, beginning of period | 45,086 | 83,459 | |||||
Cash and cash equivalents, end of period | $ | 69,829 | $ | 23,917 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
SUPPLEMENTAL INFORMATION: | |||||||
Cash paid for interest (net of capitalized interest of $378 and $464, respectively) | $ | 91,346 | $ | 77,673 | |||
Cash paid for interest on mandatorily redeemable debt | $ | 2,363 | $ | 2,620 | |||
Cash paid for income taxes | $ | 612 | $ | 310 | |||
Noncash investing and financing activities: | |||||||
Reduction in secured borrowing balance | $ | 14,718 | $ | 13,243 | |||
Change in distributions declared and outstanding | $ | 9,527 | $ | 4,264 | |||
Conversion of Series A-4 Preferred Stock | $ | 11,503 | $ | — | |||
Conversion of common and preferred OP units | $ | 2,033 | $ | 7,020 | |||
Settlement of membership interest | $ | — | $ | 3,498 | |||
Noncash investing and financing activities at the date of acquisition: | |||||||
Acquisitions - Series A-4 preferred OP units issued | $ | — | $ | 1,000 | |||
Acquisitions - Series A-4 Preferred Stock issued | $ | — | $ | 175,613 | |||
Acquisitions - Common stock and OP units issued | $ | 225,000 | $ | 278,955 | |||
Acquisitions - Series C preferred OP units issued | $ | — | $ | 33,154 | |||
Acquisitions - debt assumed | $ | — | $ | 377,666 | |||
Acquisitions - contingent consideration liability | $ | 9,830 | $ | — |
At Acquisition Date | Carefree | |||
Investment in property | $ | 1,626,289 | ||
Ground leases | 38,010 | |||
In-place leases | 34,660 | |||
Inventory | 13,731 | |||
Below market lease | (28,550 | ) | ||
Total identifiable assets acquired and liabilities assumed (1) | $ | 1,684,140 | ||
Consideration | ||||
Cash and equity | $ | 1,684,140 |
Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2016 | ||||||
(unaudited) | (unaudited) | ||||||
Revenue | $ | 39,960 | $ | 49,067 | |||
Net income | $ | 6,183 | $ | 10,968 |
At Acquisition Date | Petoskey (2) | Sunset Beach (2)(3) | Pecan Park (2) | Hill Country (2) | Kimberly Estates (2) | Total | ||||||||||||||||||
Investment in property | $ | 3,500 | $ | 27,830 | $ | 7,000 | $ | 29,990 | $ | 7,313 | $ | 75,633 | ||||||||||||
Inventory of manufactured homes | — | — | — | — | 97 | 97 | ||||||||||||||||||
In-place leases and other intangible assets | — | — | — | 10 | 340 | 350 | ||||||||||||||||||
Total identifiable assets acquired and liabilities assumed | $ | 3,500 | $ | 27,830 | $ | 7,000 | $ | 30,000 | $ | 7,750 | $ | 76,080 | ||||||||||||
Consideration | ||||||||||||||||||||||||
Cash, proceeds from prior dispositions held in escrow, or contingent liability | $ | 3,500 | $ | 27,830 | $ | 7,000 | $ | 30,000 | $ | 7,750 | $ | 76,080 |
Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2016 | ||||||
(unaudited) | (unaudited) | ||||||
Revenue | $ | 2,616 | $ | 5,119 | |||
Net income | $ | 893 | $ | 1,621 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Total revenues | $ | 250,096 | $ | 228,221 | $ | 689,878 | $ | 635,092 | |||||||
Net income attributable to Sun Communities, Inc. common stockholders | $ | 18,790 | $ | 43,061 | $ | 39,576 | $ | 90,821 | |||||||
Net income per share attributable to Sun Communities, Inc. common stockholders - basic | $ | 0.27 | $ | 0.81 | $ | 0.62 | $ | 1.72 | |||||||
Net income per share attributable to Sun Communities, Inc. common stockholders - diluted | $ | 0.27 | $ | 0.80 | $ | 0.62 | $ | 1.70 |
Number of Payments | Repurchase Percentage | ||
Fewer than or equal to 15 | 100 | % | |
Greater than 15 but less than 64 | 90 | % | |
Equal to or greater than 64 but less than 120 | 65 | % | |
120 or more | 50 | % |
Nine Months Ended | |||
September 30, 2016 | |||
Beginning balance | $ | 140,440 | |
Financed sales of manufactured homes | 18,800 | ||
Principal payments and payoffs from our customers | (9,185 | ) | |
Principal reduction from repurchased homes | (5,533 | ) | |
Total activity | 4,082 | ||
Ending balance | $ | 144,522 |
Nine Months Ended | |||
September 30, 2016 | |||
Beginning balance | $ | (672 | ) |
Lower of cost or market write-downs | 470 | ||
Increase to reserve balance | (432 | ) | |
Total activity | 38 | ||
Ending balance | $ | (634 | ) |
September 30, 2016 | December 31, 2015 | |||||||
Installment notes receivable on manufactured homes, net | $ | 51,251 | $ | 20,418 | ||||
Other receivables, net | 36,605 | 27,554 | ||||||
Total notes and other receivables, net | $ | 87,856 | $ | 47,972 |
Nine Months Ended | |||
September 30, 2016 | |||
Beginning balance | $ | 20,610 | |
Financed sales of manufactured homes | 31,775 | ||
Acquired notes | 3,521 | ||
Principal payments and payoffs from our customers | (3,466 | ) | |
Principal reduction from repossessed homes | (1,038 | ) | |
Total activity | 30,792 | ||
Ending balance | $ | 51,402 |
Nine Months Ended | |||
September 30, 2016 | |||
Beginning balance | $ | (192 | ) |
Lower of cost or market write-downs | 48 | ||
Increase to reserve balance | (7 | ) | |
Total activity | 41 | ||
Ending balance | $ | (151 | ) |
5. | Intangible Assets |
September 30, 2016 | December 31, 2015 | |||||||||||||||||
Intangible Asset | Useful Life | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Ground leases | 8-57 years | $ | 38,010 | $ | (368 | ) | $ | — | $ | — | ||||||||
In-place leases | 7 years | 97,829 | (28,386 | ) | 62,981 | (20,245 | ) | |||||||||||
Franchise fees and other intangible assets | 15 years | 1,864 | (1,009 | ) | 1,864 | (622 | ) | |||||||||||
Total | $ | 137,703 | $ | (29,763 | ) | $ | 64,845 | $ | (20,867 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Intangible Asset | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Ground leases | $ | 368 | $ | — | $ | 368 | $ | — | ||||||||
In-place leases | 3,824 | 2,341 | 8,142 | 6,020 | ||||||||||||
Franchise fees and other intangible assets | 129 | 129 | 387 | 387 | ||||||||||||
Total | $ | 4,321 | $ | 2,470 | $ | 8,897 | $ | 6,407 |
Remainder of 2016 | $ | 3,856 | |
2017 | 15,200 | ||
2018 | 14,322 | ||
2019 | 13,405 | ||
2020 | 11,678 |
September 30, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Investment property, net | $ | 89,772 | $ | 92,009 | |||
Other assets | 2,857 | 3,823 | |||||
Total Assets | $ | 92,629 | $ | 95,832 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Debt | $ | 62,567 | $ | 64,082 | |||
Other liabilities | 4,180 | 4,091 | |||||
Noncontrolling interests | (2,736 | ) | (1,767 | ) | |||
Total Liabilities and Stockholders' Equity | $ | 64,011 | $ | 66,406 |
Principal Outstanding | Weighted Average Years to Maturity | Weighted Average Interest Rates | |||||||||||||||
September 30, 2016 | December 31, 2015 | September 30, 2016 | December 31, 2015 | September 30, 2016 | December 31, 2015 | ||||||||||||
Collateralized term loans - CMBS | $ | 531,366 | $ | 642,429 | 5.4 | 5.3 | 5.2 | % | 5.3 | % | |||||||
Collateralized term loans - FNMA | 1,095,397 | 791,304 | 6.6 | 5.8 | 4.4 | % | 4.6 | % | |||||||||
Collateralized term loans - Life Companies | 894,009 | 502,555 | 12.4 | 14.4 | 3.8 | % | 4.1 | % | |||||||||
Collateralized term loans - FMCC | 334,059 | 197,418 | 8.3 | 9.0 | 4.0 | % | 4.0 | % | |||||||||
Secured borrowing | 144,522 | 140,440 | 15.7 | 15.6 | 10.1 | % | 10.2 | % | |||||||||
Preferred OP units - mandatorily redeemable | 45,903 | 45,903 | 5.5 | 6.1 | 6.9 | % | 6.9 | % | |||||||||
Total debt | $ | 3,045,256 | $ | 2,320,049 | 8.7 | 8.4 | 4.6 | % | 5.0 | % |
Remainder of 2016 | $ | 16,426 | |
2017 | 153,955 | ||
2018 | 108,753 | ||
2019 | 125,187 | ||
2020 | 178,112 | ||
2021 and thereafter | 2,498,470 |
Three Months Ended September 30, 2016 | Three Months Ended September 30, 2015 | ||||||||||||||||||||||||
Real Property Operations | Home Sales and Rentals | Consolidated | Real Property Operations | Home Sales and Rentals | Consolidated | ||||||||||||||||||||
Revenues | $ | 200,770 | $ | 43,242 | $ | 244,012 | $ | 150,059 | $ | 30,847 | $ | 180,906 | |||||||||||||
Operating expenses/Cost of sales | 78,012 | 28,285 | 106,297 | 54,172 | 19,184 | 20,417 | 74,589 | ||||||||||||||||||
Net operating income/Gross profit | 122,758 | 14,957 | 137,715 | 95,887 | 10,430 | 106,317 | |||||||||||||||||||
Adjustments to arrive at net income (loss): | |||||||||||||||||||||||||
Interest and other income, net | 5,689 | — | 5,689 | 4,449 | — | 4,449 | |||||||||||||||||||
Home selling expenses | — | (3,553 | ) | (3,553 | ) | — | (1,910 | ) | (1,910 | ) | |||||||||||||||
General and administrative | (14,309 | ) | (2,266 | ) | (16,575 | ) | (10,735 | ) | (1,935 | ) | (12,670 | ) | |||||||||||||
Transaction costs | (4,171 | ) | (20 | ) | (4,191 | ) | (1,664 | ) | — | (1,664 | ) | ||||||||||||||
Depreciation and amortization | (47,323 | ) | (14,160 | ) | (61,483 | ) | (31,352 | ) | (13,343 | ) | (44,695 | ) | |||||||||||||
Interest | (33,797 | ) | (3 | ) | (33,800 | ) | (27,434 | ) | (19 | ) | (27,453 | ) | |||||||||||||
Interest on mandatorily redeemable preferred OP units | (789 | ) | — | (789 | ) | (790 | ) | — | (790 | ) | |||||||||||||||
Gain on disposition of properties, net | — | — | — | — | 13,415 | 4,775 | 18,190 | ||||||||||||||||||
Provision for income taxes | (242 | ) | (41 | ) | (283 | ) | (51 | ) | (26 | ) | (77 | ) | |||||||||||||
Income from affiliate transactions | 500 | — | 500 | — | — | — | |||||||||||||||||||
Net income (loss) | 28,316 | (5,086 | ) | 23,230 | 41,725 | (2,028 | ) | 39,697 | |||||||||||||||||
Less: Preferred return to preferred OP units | 1,257 | — | 1,257 | 1,302 | — | 1,302 | |||||||||||||||||||
Less: Amounts attributable to noncontrolling interests | 1,192 | (313 | ) | 879 | 2,295 | (170 | ) | 2,125 | |||||||||||||||||
Net income (loss) attributable to Sun Communities, Inc. | 25,867 | (4,773 | ) | 21,094 | 38,128 | (1,858 | ) | 36,270 | |||||||||||||||||
Less: Preferred stock distributions | 2,197 | — | 2,197 | 3,179 | — | 3,179 | |||||||||||||||||||
Less: Preferred stock redemption costs | — | — | — | 4,328 | — | 4,328 | |||||||||||||||||||
Net income (loss) attributable to Sun Communities, Inc. common stockholders | $ | 23,670 | $ | (4,773 | ) | $ | 18,897 | $ | 30,621 | $ | (1,858 | ) | $ | 28,763 |
Nine Months Ended September 30, 2016 | Nine Months Ended September 30, 2015 | |||||||||||||||||||||||
Real Property Operations | Home Sales and Rentals | Consolidated | Real Property Operations | Home Sales and Rentals | Consolidated | |||||||||||||||||||
Revenues | $ | 482,002 | $ | 117,683 | $ | 599,685 | $ | 403,862 | $ | 89,039 | $ | 492,901 | ||||||||||||
Operating expenses/Cost of sales | 174,727 | — | 76,440 | 251,167 | 142,096 | 57,763 | 199,859 | |||||||||||||||||
Net operating income/Gross profit | 307,275 | 41,243 | 348,518 | 261,766 | 31,276 | 293,042 | ||||||||||||||||||
Adjustments to arrive at net income (loss): | ||||||||||||||||||||||||
Interest and other income, net | 15,459 | — | 15,459 | 13,554 | 38 | 13,592 | ||||||||||||||||||
Home selling expenses | — | (8,689 | ) | (8,689 | ) | — | (5,397 | ) | (5,397 | ) | ||||||||||||||
General and administrative | (40,300 | ) | (6,610 | ) | (46,910 | ) | (31,051 | ) | (5,893 | ) | (36,944 | ) | ||||||||||||
Transaction costs | (27,990 | ) | 99 | (27,891 | ) | (13,150 | ) | — | (13,150 | ) | ||||||||||||||
Depreciation and amortization | (118,296 | ) | (41,269 | ) | (159,565 | ) | (90,991 | ) | (39,116 | ) | (130,107 | ) | ||||||||||||
Extinguishment of debt | — | — | — | (2,800 | ) | — | (2,800 | ) | ||||||||||||||||
Interest | (88,512 | ) | (10 | ) | (88,522 | ) | (79,567 | ) | (26 | ) | (79,593 | ) | ||||||||||||
Interest on mandatorily redeemable preferred OP units | (2,363 | ) | — | (2,363 | ) | (2,429 | ) | — | (2,429 | ) | ||||||||||||||
Gain on disposition of properties, net | — | — | — | 22,892 | 4,054 | 26,946 | ||||||||||||||||||
Provision for income taxes | (445 | ) | (122 | ) | (567 | ) | (152 | ) | (77 | ) | (229 | ) | ||||||||||||
Income from affiliate transactions | 500 | — | 500 | 7,500 | — | 7,500 | ||||||||||||||||||
Net income (loss) | 45,328 | (15,358 | ) | 29,970 | 85,572 | (15,141 | ) | 70,431 | ||||||||||||||||
Less: Preferred return to preferred OP units | 3,793 | — | 3,793 | 3,692 | — | 3,692 | ||||||||||||||||||
Less: Amounts attributable to noncontrolling interests | 1,489 | (1,029 | ) | 460 | 4,316 | (1,184 | ) | 3,132 | ||||||||||||||||
Net income (loss) attributable to Sun Communities, Inc. | 40,046 | (14,329 | ) | 25,717 | 77,564 | (13,957 | ) | 63,607 | ||||||||||||||||
Less: Preferred stock distributions | 6,748 | — | 6,748 | 11,353 | — | 11,353 | ||||||||||||||||||
Less: Preferred stock redemption costs | — | — | — | 4,328 | — | 4,328 | ||||||||||||||||||
Net income (loss) attributable to Sun Communities, Inc. common stockholders | $ | 33,298 | $ | (14,329 | ) | $ | 18,969 | $ | 61,883 | $ | (13,957 | ) | $ | 47,926 |
September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
Real Property Operations | Home Sales and Rentals | Consolidated | Real Property Operations | Home Sales and Rentals | Consolidated | ||||||||||||||||||
Identifiable assets: | |||||||||||||||||||||||
Investment property, net | $ | 4,965,843 | $ | 446,995 | $ | 5,412,838 | $ | 3,303,287 | $ | 417,828 | $ | 3,721,115 | |||||||||||
Cash and cash equivalents | 64,131 | 5,698 | 69,829 | 44,150 | 936 | 45,086 | |||||||||||||||||
Inventory of manufactured homes | — | 24,147 | 24,147 | — | 14,828 | 14,828 | |||||||||||||||||
Notes and other receivables, net | 70,056 | 17,800 | 87,856 | 34,258 | 13,714 | 47,972 | |||||||||||||||||
Collateralized receivables, net | 143,888 | — | 143,888 | 139,768 | — | 139,768 | |||||||||||||||||
Other assets, net | 163,120 | 3,028 | 166,148 | 209,957 | 3,073 | 213,030 | |||||||||||||||||
Total assets | $ | 5,407,038 | $ | 497,668 | $ | 5,904,706 | $ | 3,731,420 | $ | 450,379 | $ | 4,181,799 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Numerator | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income (loss) attributable to common stockholders | $ | 18,897 | $ | 28,763 | $ | 18,969 | $ | 47,926 | ||||||||
Allocation of income (loss) to restricted stock awards | (135 | ) | (381 | ) | (22 | ) | (541 | ) | ||||||||
Net income (loss) attributable to common stockholders after allocation | 18,762 | 28,382 | 18,947 | 47,385 | ||||||||||||
Allocation of income (loss) to restricted stock awards | 135 | 381 | 22 | 541 | ||||||||||||
Diluted earnings: net income (loss) attributable to common stockholders after allocation | $ | 18,897 | $ | 28,763 | $ | 18,969 | $ | 47,926 | ||||||||
Denominator | ||||||||||||||||
Weighted average common shares outstanding | 68,655 | 53,220 | 63,716 | 52,855 | ||||||||||||
Add: dilutive stock options | 8 | 14 | 10 | 16 | ||||||||||||
Add: dilutive restricted stock | 406 | 431 | 420 | 400 | ||||||||||||
Diluted weighted average common shares and securities | 69,069 | 53,665 | 64,146 | 53,271 | ||||||||||||
Earnings per share available to common stockholders after allocation: | ||||||||||||||||
Basic | $ | 0.27 | $ | 0.53 | $ | 0.30 | $ | 0.90 | ||||||||
Diluted | $ | 0.27 | $ | 0.53 | $ | 0.30 | $ | 0.90 |
As of September 30, | ||||||
2016 | 2015 | |||||
Common OP units | 2,838 | 2,863 | ||||
Series A-1 preferred OP units | 376 | 389 | ||||
Series A-3 preferred OP units | 40 | 40 | ||||
Series A-4 preferred OP units | 743 | 760 | ||||
Series A-4 Preferred Stock | 1,682 | 2,298 | ||||
Series C preferred OP units | 333 | 340 | ||||
Aspen preferred OP units | 1,284 | 1,284 | ||||
Total securities | 7,296 | 7,974 |
Type | Purpose | Effective Date | Maturity Date | Notional (in millions) | Based on | Variable Rate | Cap Rate | Spread | Effective Fixed Rate | |||||||||||
Cap | Cap Floating Rate | 4/1/2015 | 4/1/2018 | $ | 150.1 | 3 Month LIBOR | 2.5240% | 9.0000% | —% | N/A | ||||||||||
Cap | Cap Floating Rate | 10/3/2011 | 10/3/2016 | $ | 10.0 | 3 Month LIBOR | 3.3240% | 11.0200% | —% | N/A |
September 30, 2016 | December 31, 2015 | |||||||||||||||
Financial assets | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Installment notes receivable on manufactured homes, net | $ | 51,251 | $ | 51,251 | $ | 20,418 | $ | 20,418 | ||||||||
Collateralized receivables, net | $ | 143,888 | $ | 143,888 | $ | 139,768 | $ | 139,768 | ||||||||
Financial liabilities | ||||||||||||||||
Debt (excluding secured borrowings) | $ | 2,900,734 | $ | 3,026,470 | $ | 2,179,609 | $ | 2,181,790 | ||||||||
Secured borrowing | $ | 144,522 | $ | 144,522 | $ | 140,440 | $ | 140,440 | ||||||||
Lines of credit | $ | 57,737 | $ | 56,248 | $ | 24,687 | $ | 23,062 | ||||||||
Other liabilities (contingent consideration) | $ | 9,830 | $ | 9,830 | $ | — | $ | — |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended September 30, | |||||||||
2016 | 2015 | ||||||||
Real Property NOI | $ | 114,851 | $ | 90,312 | |||||
Rental Program NOI | 21,213 | 20,587 | |||||||
Home Sales NOI/Gross profit | 9,276 | 5,605 | |||||||
Ancillary NOI/Gross profit | 7,907 | 5,575 | |||||||
Site rent from Rental Program (included in Real Property NOI) | (15,532 | ) | (15,762 | ) | |||||
NOI/Gross profit | 137,715 | 106,317 | |||||||
Adjustments to arrive at net income: | |||||||||
Other revenues | 5,689 | 4,449 | |||||||
Home selling expenses | (3,553 | ) | (1,910 | ) | |||||
General and administrative | (16,575 | ) | (12,670 | ) | |||||
Transaction costs | (4,191 | ) | (1,664 | ) | |||||
Depreciation and amortization | (61,483 | ) | (44,695 | ) | |||||
Interest expense | (34,589 | ) | (28,243 | ) | |||||
Gain on disposition of properties, net | — | 18,190 | |||||||
Provision for income taxes | (283 | ) | (77 | ) | |||||
Income from affiliate transactions | 500 | — | |||||||
Net income | 23,230 | 39,697 | |||||||
Less: Preferred return to preferred OP units | 1,257 | 1,302 | |||||||
Less: Amounts attributable to noncontrolling interests | 879 | 2,125 | |||||||
Net income attributable to Sun Communities, Inc. | 21,094 | 36,270 | |||||||
Less: Preferred stock distributions | 2,197 | 3,179 | |||||||
Less: Preferred stock redemption costs | — | — | 4,328 | ||||||
Net income attributable to Sun Communities, Inc. common stockholders | $ | 18,897 | $ | 28,763 |
Three Months Ended September 30, | |||||||||||||||
Financial Information (in thousands) | 2016 | 2015 | Change | % Change | |||||||||||
Income from Real Property | $ | 184,324 | $ | 137,548 | $ | 46,776 | 34.0 | % | |||||||
Property operating expenses: | |||||||||||||||
Payroll and benefits | 18,436 | 11,092 | 7,344 | 66.2 | % | ||||||||||
Legal, taxes, and insurance | 1,475 | 2,090 | (615 | ) | (29.4 | )% | |||||||||
Utilities | 21,710 | 15,002 | 6,708 | 44.7 | % | ||||||||||
Supplies and repair | 7,394 | 5,989 | 1,405 | 23.5 | % | ||||||||||
Other | 8,074 | 4,543 | 3,531 | 77.7 | % | ||||||||||
Real estate taxes | 12,384 | 8,520 | 3,864 | 45.4 | % | ||||||||||
Property operating expenses | 69,473 | 47,236 | 22,237 | 47.1 | % | ||||||||||
Real Property NOI | $ | 114,851 | $ | 90,312 | $ | 24,539 | 27.2 | % |
As of September 30, | ||||||||||||
Other Information | 2016 | 2015 | Change | |||||||||
Number of properties | 339 | 251 | 88 | |||||||||
Overall occupancy (1) | 96.2 | % | 93.7 | % | 2.5 | % | ||||||
Sites available for development | 10,504 | 7,749 | 2,755 | |||||||||
Monthly base rent per site - MH | $ | 511 | $ | 480 | $ | 31 | ||||||
Monthly base rent per site - RV (2) | $ | 414 | $ | 418 | $ | (4 | ) | |||||
Monthly base rent per site - Total | $ | 491 | $ | 473 | $ | 18 |
(1) | Overall occupancy (%) includes MH and annual RV sites, and excludes transient RV sites. |
(2) | Monthly base rent pertains to annual RV sites and excludes transient RV sites. |
Three Months Ended September 30, | |||||||||||||||
Financial Information (in thousands) | 2016 | 2015 | Change | % Change | |||||||||||
Income from Real Property | $ | 124,274 | $ | 117,337 | $ | 6,937 | 5.9 | % | |||||||
Property operating expenses: | |||||||||||||||
Payroll and benefits | 11,029 | 9,716 | 1,313 | 13.5 | % | ||||||||||
Legal, taxes, and insurance | 1,116 | 1,892 | (776 | ) | (41.0 | )% | |||||||||
Utilities | 7,954 | 7,564 | 390 | 5.2 | % | ||||||||||
Supplies and repair (1) | 5,352 | 5,270 | 82 | 1.6 | % | ||||||||||
Other | 3,603 | 3,619 | (16 | ) | (0.5 | )% | |||||||||
Real estate taxes | 8,575 | 7,557 | 1,018 | 13.5 | % | ||||||||||
Property operating expenses | 37,629 | 35,618 | 2,011 | 5.6 | % | ||||||||||
Real Property NOI | $ | 86,645 | $ | 81,719 | $ | 4,926 | 6.0 | % |
As of September 30, | ||||||||||||
Other Information | 2016 | 2015 | Change | |||||||||
Number of properties | 219 | 219 | — | |||||||||
Overall occupancy (2) (3) | 96.4 | % | 94.2 | % | 2.2 | % | ||||||
Sites available for development | 6,608 | 6,174 | 434 | |||||||||
Monthly base rent per site - MH | $ | 495 | $ | 478 | $ | 17 | ||||||
Monthly base rent per site - RV (4) | $ | 432 | $ | 417 | $ | 15 | ||||||
Monthly base rent per site - Total | $ | 487 | $ | 470 | $ | 17 |
(1) | Three months ended September 30, 2015 excludes $0.5 million of first year expenses for properties acquired in late 2014 and 2015 incurred to bring the properties up to Sun's operating standards. These costs did not meet the Company's capitalization policy. |
(2) | Overall occupancy (%) includes MH and annual/seasonal RV sites, and excludes recently completed but vacant expansion sites and transient RV sites. |
(3) | Overall occupancy (%) for 2015 has been adjusted to reflect incremental growth year over year from filled expansion sites and the conversion of transient RV sites to annual/seasonal RV sites. |
(4) | Monthly base rent pertains to annual and seasonal RV sites and excludes transient RV sites. |
Three Months Ended September 30, | |||||||||||||||
Financial Information | 2016 | 2015 | Change | % Change | |||||||||||
Rental home revenue | $ | 12,031 | $ | 11,856 | $ | 175 | 1.5 | % | |||||||
Site rent from Rental Program (1) | 15,532 | 15,762 | (230 | ) | (1.5 | )% | |||||||||
Rental Program revenue | 27,563 | 27,618 | (55 | ) | (0.2 | )% | |||||||||
Expenses | |||||||||||||||
Commissions | 551 | 855 | (304 | ) | (35.6 | )% | |||||||||
Repairs and refurbishment | 3,349 | 3,389 | (40 | ) | (1.2 | )% | |||||||||
Taxes and insurance | 1,446 | 1,645 | (199 | ) | (12.1 | )% | |||||||||
Marketing and other | 1,004 | 1,142 | (138 | ) | (12.1 | )% | |||||||||
Rental Program operating and maintenance | 6,350 | 7,031 | (681 | ) | (9.7 | )% | |||||||||
Rental Program NOI | $ | 21,213 | $ | 20,587 | $ | 626 | 3.0 | % | |||||||
Other Information | |||||||||||||||
Number of occupied rentals, end of period | 10,797 | 11,443 | (646 | ) | (5.6 | )% | |||||||||
Investment in occupied rental homes, end of period | $ | 453,521 | $ | 456,027 | $ | (2,506 | ) | (0.5 | )% | ||||||
Number of sold rental homes | 286 | 223 | 63 | 28.3 | % | ||||||||||
Weighted average monthly rental rate, end of period | $ | 879 | $ | 843 | $ | 36 | 4.3 | % |
(1) | The renter’s monthly payment includes the site rent and an amount attributable to the leasing of the home. The site rent is reflected in the Real Property Operations segment. For purposes of management analysis, the site rent is included in the Rental Program revenue to evaluate the incremental revenue gains associated with implementation of the Rental Program, and assess the overall growth and performance of the Rental Program and financial impact to our operations. |
Three Months Ended September 30, | |||||||||||||||
Financial Information | 2016 | 2015 | Change | % Change | |||||||||||
New home sales | $ | 9,391 | $ | 4,469 | $ | 4,922 | 110.1 | % | |||||||
Pre-owned home sales | 21,820 | 14,522 | 7,298 | 50.3 | % | ||||||||||
Revenue from home sales | 31,211 | 18,991 | 12,220 | 64.3 | % | ||||||||||
New home cost of sales | 7,896 | 3,739 | 4,157 | 111.2 | % | ||||||||||
Pre-owned home cost of sales | 14,039 | 9,647 | 4,392 | 45.5 | % | ||||||||||
Cost of home sales | 21,935 | 13,386 | 8,549 | 63.9 | % | ||||||||||
NOI / Gross profit | $ | 9,276 | $ | 5,605 | $ | 3,671 | 65.5 | % | |||||||
Gross profit – new homes | $ | 1,495 | $ | 730 | $ | 765 | 104.8 | % | |||||||
Gross margin % – new homes | 15.9 | % | 16.3 | % | (0.4 | )% | |||||||||
Average selling price – new homes | $ | 90,298 | $ | 74,483 | $ | 15,815 | 21.2 | % | |||||||
Gross profit – pre-owned homes | $ | 7,781 | $ | 4,875 | $ | 2,906 | 59.6 | % | |||||||
Gross margin % – pre-owned homes | 35.7 | % | 33.6 | % | 2.1 | % | |||||||||
Average selling price – pre-owned homes | $ | 27,585 | $ | 25,657 | $ | 1,928 | 7.5 | % | |||||||
Statistical Information | |||||||||||||||
Home sales volume: | |||||||||||||||
New home sales | 104 | 60 | 44 | 73.3 | % | ||||||||||
Pre-owned home sales | 791 | 566 | 225 | 39.8 | % | ||||||||||
Total homes sold | 895 | 626 | 269 | 43.0 | % |
Three Months Ended September 30, | |||||||||||||||
2016 | 2015 | Change | % Change | ||||||||||||
Ancillary revenues, net | $ | 7,907 | $ | 5,575 | $ | 2,332 | 41.8 | % | |||||||
Interest income | 4,705 | 3,987 | 718 | 18.0 | % | ||||||||||
Brokerage commissions and other revenues | 984 | 462 | 522 | 113.0 | % | ||||||||||
Home selling expenses | 3,553 | 1,910 | 1,643 | 86.0 | % | ||||||||||
General and administrative expenses | 16,575 | 12,670 | 3,905 | 30.8 | % | ||||||||||
Transaction costs | 4,191 | 1,664 | 2,527 | 151.9 | % | ||||||||||
Depreciation and amortization | 61,483 | 44,695 | 16,788 | 37.6 | % | ||||||||||
Interest expense | 34,589 | 28,243 | 6,346 | 22.5 | % | ||||||||||
Gain on disposition of properties, net | — | 18,190 | (18,190 | ) | (100.0 | )% | |||||||||
Income from affiliate transactions | 500 | — | 500 | 100.0 | % | ||||||||||
Preferred stock redemption costs | — | 4,328 | (4,328 | ) | (100.0 | )% |
Nine Months Ended September 30, | |||||||||
2016 | 2015 | ||||||||
Real Property NOI | $ | 296,081 | $ | 254,438 | |||||
Rental Program NOI | 64,223 | 62,805 | |||||||
Home Sales NOI/Gross profit | 23,184 | 14,914 | |||||||
Ancillary NOI/Gross profit | 11,194 | 7,325 | |||||||
Site rent from Rental Program (included in Real Property NOI) | (46,164 | ) | (46,440 | ) | |||||
NOI/Gross profit | 348,518 | 293,042 | |||||||
Adjustments to arrive at net income: | |||||||||
Other revenues | 15,459 | 13,592 | |||||||
Home selling expenses | (8,689 | ) | (5,397 | ) | |||||
General and administrative | (46,910 | ) | (36,944 | ) | |||||
Transaction costs | (27,891 | ) | (13,150 | ) | |||||
Depreciation and amortization | (159,565 | ) | (130,107 | ) | |||||
Extinguishment of debt | — | (2,800 | ) | ||||||
Interest expense | (90,885 | ) | (82,022 | ) | |||||
Gain on disposition of properties, net | — | 26,946 | |||||||
Provision for income taxes | (567 | ) | (229 | ) | |||||
Income from affiliate transactions | 500 | 7,500 | |||||||
Net income | 29,970 | 70,431 | |||||||
Less: Preferred return to preferred OP units | 3,793 | 3,692 | |||||||
Less: Amounts attributable to noncontrolling interests | 460 | 3,132 | |||||||
Net income attributable to Sun Communities, Inc. | 25,717 | 63,607 | |||||||
Less: Series A preferred stock distributions | 6,748 | 11,353 | |||||||
Less: Preferred stock redemption costs | — | — | 4,328 | ||||||
Net income attributable to Sun Communities, Inc. common stockholders | $ | 18,969 | $ | 47,926 |
Nine Months Ended September 30, | |||||||||||||||
Financial Information (in thousands) | 2016 | 2015 | Change | % Change | |||||||||||
Income from Real Property | $ | 453,560 | $ | 382,906 | $ | 70,654 | 18.5 | % | |||||||
Property operating expenses: | |||||||||||||||
Payroll and benefits | 40,572 | 30,149 | 10,423 | 34.6 | % | ||||||||||
Legal, taxes, and insurance | 4,387 | 5,682 | (1,295 | ) | (22.8 | )% | |||||||||
Utilities | 48,841 | 40,629 | 8,212 | 20.2 | % | ||||||||||
Supplies and repair | 15,074 | 13,856 | 1,218 | 8.8 | % | ||||||||||
Other | 16,483 | 12,121 | 4,362 | 36.0 | % | ||||||||||
Real estate taxes | 32,122 | 26,031 | 6,091 | 23.4 | % | ||||||||||
Property operating expenses | 157,479 | 128,468 | 29,011 | 22.6 | % | ||||||||||
Real Property NOI | $ | 296,081 | $ | 254,438 | $ | 41,643 | 16.4 | % |
As of September 30, | ||||||||||||
Other Information | 2016 | 2015 | Change | |||||||||
Number of properties | 339 | 251 | 88 | |||||||||
Overall occupancy (1) | 96.2 | % | 93.7 | % | 2.5 | % | ||||||
Sites available for development | 10,504 | 7,749 | 2,755 | |||||||||
Weighted average monthly site rent - MH | $ | 511 | $ | 480 | $ | 31 | ||||||
Weighted average monthly site rent - RV (2) | $ | 414 | $ | 418 | $ | (4 | ) | |||||
Weighted average monthly site rent - Total | $ | 491 | $ | 473 | $ | 18 |
(1) | Overall occupancy (%) includes MH and annual RV sites, and excludes transient RV sites. |
(2) | Weighted average rent pertains to annual and seasonal RV sites and excludes transient RV sites. |
Nine Months Ended September 30, | |||||||||||||||
Financial Information (in thousands) | 2016 | 2015 | Change | % Change | |||||||||||
Income from Real Property | $ | 353,083 | $ | 332,978 | $ | 20,105 | 6.0 | % | |||||||
Property operating expenses: | |||||||||||||||
Payroll and benefits | 29,879 | 27,521 | 2,358 | 8.6 | % | ||||||||||
Legal, taxes, and insurance | 4,174 | 5,221 | (1,047 | ) | (20.1 | )% | |||||||||
Utilities | 20,400 | 19,716 | 684 | 3.5 | % | ||||||||||
Supplies and repair (1) | 12,733 | 12,503 | 230 | 1.8 | % | ||||||||||
Other | 9,662 | 9,490 | 172 | 1.8 | % | ||||||||||
Real estate taxes | 26,303 | 23,683 | 2,620 | 11.1 | % | ||||||||||
Property operating expenses | 103,151 | 98,134 | 5,017 | 5.1 | % | ||||||||||
Real Property NOI | $ | 249,932 | $ | 234,844 | $ | 15,088 | 6.4 | % |
As of September 30, | ||||||||||||
Other Information | 2016 | 2015 | Change | |||||||||
Number of properties | 219 | 219 | — | |||||||||
Overall occupancy (2) (3) | 96.4 | % | 94.2 | % | 2.2 | % | ||||||
Sites available for development | 6,608 | 6,174 | 434 | |||||||||
Weighted average monthly site rent - MH | $ | 495 | $ | 478 | $ | 17 | ||||||
Weighted average monthly site rent - RV (4) | $ | 432 | $ | 417 | $ | 15 | ||||||
Weighted average monthly site rent - Total | $ | 487 | $ | 470 | $ | 17 |
(1) | Nine months ended September 30, 2015 excludes $1.7 million of first year expenses for properties acquired in late 2014 and 2015 incurred to bring the properties up to Sun's operating standards. These costs did not meet the Company's capitalization policy. |
(2) | Overall occupancy (%) includes MH and annual/seasonal RV sites, and excludes recently completed but vacant expansion sites and transient RV sites. |
(3) | Overall occupancy (%) for 2015 has been adjusted to reflect incremental growth year over year from filled expansion sites and the conversion of transient RV sites to annual/seasonal RV sites. |
(4) | Monthly base rent pertains to annual and seasonal RV sites and excludes transient RV sites. |
Nine Months Ended September 30, | |||||||||||||||
Financial Information | 2016 | 2015 | Change | % Change | |||||||||||
Rental home revenue | $ | 35,696 | $ | 34,480 | $ | 1,216 | 3.5 | % | |||||||
Site rent from Rental Program (1) | 46,164 | 46,440 | (276 | ) | (0.6 | )% | |||||||||
Rental Program revenue | 81,860 | 80,920 | 940 | 1.2 | % | ||||||||||
Expenses | |||||||||||||||
Commissions | 1,710 | 2,441 | (731 | ) | (30.0 | )% | |||||||||
Repairs and refurbishment | 9,288 | 8,127 | 1,161 | 14.3 | % | ||||||||||
Taxes and insurance | 4,178 | 4,665 | (487 | ) | (10.4 | )% | |||||||||
Marketing and other | 2,461 | 2,882 | (421 | ) | (14.6 | )% | |||||||||
Rental Program operating and maintenance | 17,637 | 18,115 | (478 | ) | (2.6 | )% | |||||||||
Rental Program NOI | $ | 64,223 | $ | 62,805 | $ | 1,418 | 2.3 | % | |||||||
Other Information | |||||||||||||||
Number of occupied rentals, end of period | 10,797 | 11,443 | (646 | ) | (5.6 | )% | |||||||||
Investment in occupied rental homes, end of period | $ | 453,521 | $ | 456,027 | $ | (2,506 | ) | (0.6 | )% | ||||||
Number of sold rental homes | 858 | 611 | 247 | 40.4 | % | ||||||||||
Weighted average monthly rental rate, end of period | $ | 879 | $ | 843 | $ | 36 | 4.3 | % |
(1) | The renter’s monthly payment includes the site rent and an amount attributable to the leasing of the home. The site rent is reflected in the Real Property Operations segment. For purposes of management analysis, the site rent is included in the Rental Program revenue to evaluate the incremental revenue gains associated with implementation of the Rental Program, and assess the overall growth and performance of the Rental Program and financial impact to our operations. |
Nine Months Ended September 30, | |||||||||||||||
Financial Information | 2016 | 2015 | Change | % Change | |||||||||||
New home sales | $ | 20,472 | $ | 14,890 | $ | 5,582 | 37.5 | % | |||||||
Pre-owned home sales | 61,515 | 39,669 | 21,846 | 55.1 | % | ||||||||||
Revenue from homes sales | 81,987 | 54,559 | 27,428 | 50.3 | % | ||||||||||
New home cost of sales | 17,513 | 12,348 | 5,165 | 41.8 | % | ||||||||||
Pre-owned home cost of sales | 41,290 | 27,297 | 13,993 | 51.3 | % | ||||||||||
Cost of home sales | 58,803 | 39,645 | 19,158 | 48.3 | % | ||||||||||
NOI / Gross profit | $ | 23,184 | $ | 14,914 | $ | 8,270 | 55.5 | % | |||||||
Gross profit – new homes | $ | 2,959 | $ | 2,542 | $ | 417 | 16.4 | % | |||||||
Gross margin % – new homes | 14.5 | % | 17.1 | % | (2.6 | )% | |||||||||
Average selling price – new homes | $ | 89,397 | $ | 77,958 | $ | 11,439 | 14.7 | % | |||||||
Gross profit – pre-owned homes | $ | 20,225 | $ | 12,372 | $ | 7,853 | 63.5 | % | |||||||
Gross margin % – pre-owned homes | 32.9 | % | 31.2 | % | 1.7 | % | |||||||||
Average selling price – pre-owned homes | $ | 28,205 | $ | 25,527 | $ | 2,678 | 10.5 | % | |||||||
Statistical Information | |||||||||||||||
Home sales volume: | |||||||||||||||
New home sales | 229 | 191 | 38 | 19.9 | % | ||||||||||
Pre-owned home sales | 2,181 | 1,554 | 627 | 40.3 | % | ||||||||||
Total homes sold | 2,410 | 1,745 | 665 | 38.1 | % |
Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | Change | % Change | ||||||||||||
Ancillary revenues, net | $ | 11,194 | $ | 7,325 | $ | 3,869 | 52.8 | % | |||||||
Interest income | 13,322 | 11,864 | 1,458 | 12.3 | % | ||||||||||
Brokerage commissions and other revenues | 2,137 | 1,728 | 409 | 23.7 | % | ||||||||||
Home selling expenses | 8,689 | 5,397 | 3,292 | 61.0 | % | ||||||||||
General and administrative expenses | 46,910 | 36,944 | 9,966 | 27.0 | % | ||||||||||
Transaction costs | 27,891 | 13,150 | 14,741 | 112.1 | % | ||||||||||
Depreciation and amortization | 159,565 | 130,107 | 29,458 | 22.6 | % | ||||||||||
Extinguishment of debt | — | 2,800 | (2,800 | ) | (100.0 | )% | |||||||||
Interest expense | 90,885 | 82,022 | 8,863 | 10.8 | % | ||||||||||
Gain on disposition of properties, net | — | 26,946 | (26,946 | ) | (100.0 | )% | |||||||||
Income from affiliate transactions | 500 | 7,500 | (7,000 | ) | (93.3 | )% | |||||||||
Preferred stock redemption costs | — | 4,328 | (4,328 | ) | (100.0 | )% |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income attributable to Sun Communities, Inc. common stockholders | $ | 18,897 | $ | 28,763 | $ | 18,969 | $ | 47,926 | |||||||
Adjustments: | |||||||||||||||
Preferred return to preferred OP units | 616 | — | 1,858 | — | |||||||||||
Amounts attributable to noncontrolling interests | 685 | 1,174 | 255 | 1,554 | |||||||||||
Preferred distribution to Series A-4 Preferred Stock | 683 | 1,666 | — | — | |||||||||||
Depreciation and amortization | 61,809 | 45,014 | 159,225 | 130,247 | |||||||||||
Gain on disposition of properties, net | — | (18,190 | ) | — | (26,946 | ) | |||||||||
Gain on disposition of assets | (4,667 | ) | (2,937 | ) | (12,226 | ) | (7,065 | ) | |||||||
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) | 78,023 | 55,490 | 168,081 | 145,716 | |||||||||||
Adjustments: | |||||||||||||||
Transaction costs | 4,191 | 1,664 | 27,891 | 13,150 | |||||||||||
Other acquisition related costs(2) | 1,467 | — | 1,467 | — | |||||||||||
Income from affiliate transactions | (500 | ) | — | (500 | ) | (7,500 | ) | ||||||||
Preferred stock redemption costs | — | 4,328 | — | 4,328 | |||||||||||
Extinguishment of debt | — | — | — | 2,800 | |||||||||||
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities excluding certain items (1) | $ | 83,181 | $ | 61,482 | $ | 196,939 | $ | 158,494 | |||||||
Weighted average common shares outstanding: | 68,655 | 53,220 | 63,716 | 52,855 | |||||||||||
Add: | |||||||||||||||
Common stock issuable upon conversion of stock options | 8 | 14 | 10 | 16 | |||||||||||
Restricted stock | 406 | 431 | 437 | 400 | |||||||||||
Common stock issuable upon conversion of Series A-4 preferred stock | 747 | 1,826 | — | — | |||||||||||
Common OP units | 2,856 | 2,874 | 2,861 | 2,783 | |||||||||||
Common stock issuable upon conversion of Series A-1 preferred OP units | 920 | — | 932 | — | |||||||||||
Common stock issuable upon conversion of Series A-3 preferred OP units | 75 | — | 75 | — | |||||||||||
Weighted average common shares outstanding - fully diluted | 73,667 | 58,365 | 68,031 | 56,054 | |||||||||||
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per Share - fully diluted | $ | 1.06 | $ | 0.95 | $ | 2.47 | $ | 2.60 | |||||||
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per Share excluding certain items - fully diluted | $ | 1.13 | $ | 1.05 | $ | 2.89 | $ | 2.83 |
(2) | These costs represent first year expenses incurred to bring acquired properties up to the Company's operating standards, including items such as tree trimming and painting costs that did not meet the Company's capitalization policy. The Company incurred $0.5 million and $1.7 million of these first year expenses in the three and nine months ended September 30, 2015, respectively. These costs are expected to become more significant in connection with the size of our acquisitions, and are therefore included as an FFO adjustment in the nine months ended September 30, 2016. Had a similar adjustment been made, FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per share excluding certain items would have been $1.06 and $2.86 for the three and nine months ended September 30, 2015, respectively. |
Nine Months Ended September 30, | ||||||||
2016 | 2015 | |||||||
Net Cash Provided by Operating Activities | $ | 190,279 | $ | 146,778 | ||||
Net Cash Used for Investing Activities | $ | (1,540,899 | ) | $ | (403,205 | ) | ||
Net Cash Provided by Financing Activities | $ | 1,375,470 | $ | 196,885 |
Covenant | Must Be | As of September 30, 2016 | ||
Maximum Leverage Ratio | <65.0% | 39.9% | ||
Minimum Fixed Charge Coverage Ratio | >1.40 | 2.49 | ||
Minimum Tangible Net Worth | >2,474,269 | 3,445,820 | ||
Maximum Dividend Payout Ratio | <95.0% | 69.8% |
• | changes in general economic conditions, the real estate industry, and the markets in which we operate; |
• | difficulties in our ability to evaluate, finance, complete and integrate acquisitions, developments and expansions successfully; |
• | our liquidity and refinancing demands; |
• | our ability to obtain or refinance maturing debt; |
• | our ability to maintain compliance with covenants contained in our debt facilities; |
• | availability of capital; |
• | our ability to maintain rental rates and occupancy levels; |
• | our failure to maintain effective internal control over financial reporting and disclosure controls and procedures; |
• | increases in interest rates and operating costs, including insurance premiums and real property taxes; |
• | risks related to natural disasters; |
• | general volatility of the capital markets and the market price of shares of our capital stock; |
• | our failure to maintain our status as a REIT; |
• | changes in real estate and zoning laws and regulations; |
• | legislative or regulatory changes, including changes to laws governing the taxation of REITs; |
• | litigation, judgments or settlements; |
• | competitive market forces; |
• | the ability of manufactured home buyers to obtain financing; and |
• | the level of repossessions by manufactured home lenders. |
Exhibit No. | Description | Method of Filing |
31.1 | Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith |
31.2 | Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith |
32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Filed herewith |
101.INS | XBRL Instance Document | Filed herewith |
101.SCH | XBRL Taxonomy Extension Schema Document | Filed herewith |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | Filed herewith |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith |
Dated: November 1, 2016 | By: | /s/ Karen J. Dearing |
Karen J. Dearing, Chief Financial Officer and Secretary (Duly authorized officer and principal financial officer) |
Exhibit No. | Description | Method of Filing |
31.1 | Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith |
31.2 | Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith |
32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Filed herewith |
101.INS | XBRL Instance Document | Filed herewith |
101.SCH | XBRL Taxonomy Extension Schema Document | Filed herewith |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | Filed herewith |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith |
1. | I have reviewed this quarterly report on Form 10-Q of Sun Communities, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: November 1, 2016 | /s/ Gary A. Shiffman |
Gary A. Shiffman, Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Sun Communities, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: November 1, 2016 | /s/ Karen J. Dearing |
Karen J. Dearing, Chief Financial Officer |
Signature | Date |
/s/ Gary A. Shiffman | November 1, 2016 |
Gary A. Shiffman, Chief Executive Officer | |
/s/ Karen J. Dearing | November 1, 2016 |
Karen J. Dearing, Chief Financial Officer |
Document And Entity Information |
9 Months Ended |
---|---|
Sep. 30, 2016
shares
| |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2016 |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q3 |
Trading Symbol | SUI |
Entity Registrant Name | SUN COMMUNITIES INC |
Entity Central Index Key | 0000912593 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 73,026,504 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Investment property, net | $ 5,412,838 | $ 3,721,115 |
Secured debt | 2,854,831 | 2,125,267 |
Other Liabilities | $ 275,650 | $ 184,859 |
Series A Preferred Stock, Par Value | $ 0.01 | $ 0.01 |
Series A Preferred Stock, Shares Issued | 3,400 | 3,400 |
Series A Preferred Stock, Shares Outstanding | 3,400 | 3,400 |
Common Stock, Par Value | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 180,000 | 90,000 |
Common Stock, Shares Issued | 54,546 | 48,573 |
Common Stock, Shares Outstanding | 54,546 | 48,573 |
Series A-4 Preferred Stock [Member] | ||
Series A-4 Preferred Stock, Par Value | $ 0.01 | $ 0.01 |
Series A-4 Preferred Stock, Shares Issued | 2,298 | 483 |
Series A-4 Preferred Stock, Shares Outstanding | 2,298 | 483 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Investment property, net | $ 89,772 | $ 92,009 |
Secured debt | 62,567 | 64,082 |
Other Liabilities | $ 4,180 | $ 4,091 |
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
REVENUES | ||||
Income from real property | $ 184,324 | $ 137,548 | $ 453,560 | $ 382,906 |
Revenue from home sales | 31,211 | 18,991 | 81,987 | 54,559 |
Rental home revenue | 12,031 | 11,856 | 35,696 | 34,480 |
Ancillary revenues | 16,446 | 12,511 | 28,442 | 20,956 |
Interest | 4,705 | 3,987 | 13,322 | 11,864 |
Brokerage commissions and other income, net | 984 | 462 | 2,137 | 1,728 |
Total revenues | 249,701 | 185,355 | 615,144 | 506,493 |
COSTS AND EXPENSES | ||||
Property operating and maintenance | 57,089 | 38,716 | 125,357 | 102,437 |
Real estate taxes | 12,384 | 8,520 | 32,122 | 26,031 |
Cost of home sales | 21,935 | 13,386 | 58,803 | 39,645 |
Rental home operating and maintenance | 6,350 | 7,031 | 17,637 | 18,115 |
Ancillary expenses | 8,539 | 6,936 | 17,248 | 13,631 |
Home selling expenses | 3,553 | 1,910 | 8,689 | 5,397 |
General and administrative | 16,575 | 12,670 | 46,910 | 36,944 |
Transaction costs | 4,191 | 1,664 | 27,891 | 13,150 |
Depreciation and amortization | 61,483 | 44,695 | 159,565 | 130,107 |
Repayments of Debt | 0 | 0 | 0 | 2,800 |
Interest | 33,800 | 27,453 | 88,522 | 79,593 |
Interest on mandatorily redeemable preferred OP units | 789 | 790 | 2,363 | 2,429 |
Total expenses | 226,688 | 163,771 | 585,107 | 470,279 |
Income before other items | 23,013 | 21,584 | 30,037 | 36,214 |
Gain on disposition of properties, net | 0 | 18,190 | 0 | 26,946 |
Provision for income taxes | (283) | (77) | (567) | (229) |
Distributions from affiliate | 500 | 0 | 500 | 7,500 |
Net income | 23,230 | 39,697 | 29,970 | 70,431 |
Less: Preferred return to preferred OP units | 1,257 | 1,302 | 3,793 | 3,692 |
Less: Amounts attributable to noncontrolling interests | 879 | 2,125 | 460 | 3,132 |
Net income attributable to Sun Communities, Inc. | 21,094 | 36,270 | 25,717 | 63,607 |
Less: Preferred stock distributions | 2,197 | 3,179 | 6,748 | 11,353 |
Preferred Stock Redemption Costs | 0 | 4,328 | 0 | 4,328 |
Net income attributable to Sun Communities, Inc. common stockholders | $ 18,897 | $ 28,763 | $ 18,969 | $ 47,926 |
Weighted average common shares outstanding: | ||||
Basic | 68,655 | 53,220 | 63,716 | 52,855 |
Diluted | 69,069 | 53,665 | 64,146 | 53,271 |
Earnings per share: | ||||
Basic | $ 0.27 | $ 0.53 | $ 0.30 | $ 0.90 |
Diluted | $ 0.27 | $ 0.53 | $ 0.30 | $ 0.90 |
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Net income / comprehensive income | $ 23,230 | $ 39,697 | $ 29,970 | $ 70,431 |
Foreign currency translation adjustment | (5,227) | 0 | (5,226) | 0 |
Total comprehensive income | 18,003 | 39,697 | 24,744 | 70,431 |
Less: Comprehensive income attributable to the noncontrolling interests | 553 | 2,125 | 110 | 3,132 |
Comprehensive income attributable to Sun Communities, Inc. | $ 17,450 | $ 37,572 | $ 24,634 | $ 67,299 |
Consolidated Statement Of Stockholders' Equity (Deficit) - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands |
Total |
Common Stock |
Additional Paid-in Capital |
Distributions in Excess of Accumulated Earnings |
Accumulated other comprehensive income |
Noncontrolling Interests |
Series A Preferred Stock [Member] |
---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2015 | $ 1,536,581 | $ 584 | $ 2,319,314 | $ (864,122) | $ 80,771 | $ 34 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock from exercise of options, net | 149 | 0 | 149 | 0 | 0 | 0 | |
Issuance, conversion of OP units and associated costs of common stock, net | 974,301 | 144 | 975,850 | 0 | (1,693) | 0 | |
Conversion of Series A-4 preferred stock | 11,503 | 0 | 11,503 | 0 | 0 | 0 | |
Share-based compensation - amortization and forfeitures | 7,278 | 2 | 7,089 | 187 | 0 | 0 | |
Foreign currency exchange | (5,226) | $ (4,876) | (350) | ||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest and Returns from Preferred Stock | 29,874 | 0 | 0 | 29,510 | 364 | 0 | |
Distributions | (149,630) | 0 | 0 | (141,086) | (8,544) | 0 | |
Balance at Sep. 30, 2016 | $ 2,404,830 | $ 730 | $ 3,313,905 | $ (975,511) | $ (4,876) | $ 70,548 | $ 34 |
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Sun Communities, Inc., a Maryland corporation, and all wholly-owned or majority-owned and controlled subsidiaries, including Sun Communities Operating Limited Partnership (the “Operating Partnership”) and Sun Home Services, Inc. (“SHS”) are referred to herein as the "Company," "us," "we," and "our". We follow accounting standards set by the Financial Accounting Standards Board ("FASB"). FASB sets generally accepted accounting principles ("GAAP"), which we follow to ensure that we consistently report our financial condition, results of operations, and cash flows. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification. These unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information and in accordance with GAAP. Pursuant to the SEC rules and regulations we present interim disclosures and certain information and footnote disclosures as required. Accordingly, the unaudited Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited Consolidated Financial Statements reflect, in the opinion of management, all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of the interim financial statements. All intercompany transactions have been eliminated in consolidation. Certain reclassifications have been made to prior periods' financial statements in order to conform to current period presentation. The results of operations for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015 as filed with the SEC on February 23, 2016 (the “2015 Annual Report”). These statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our 2015 Annual Report. |
Real Estate Acquisitions and Dispositions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Acquisitions and Dispositions | Real Estate Acquisitions Carefree Acquisition On June 9, 2016, pursuant to a Stock Purchase Agreement dated March 22, 2016, the Company through the Operating Partnership acquired from Carefree Communities Intermediate Holdings, L.L.C. (the "Seller") all of the issued and outstanding shares of common stock of Carefree Communities Inc. ("Carefree Communities") or ("Carefree"). Carefree Communities directly or indirectly owned 103 manufactured home (“MH”) and recreational vehicle (“RV”) communities, comprising over 27,000 sites. The aggregate purchase price for the acquisition was $1.68 billion. At the closing, the Company issued the Seller 3,329,880 shares of its common stock (the "Acquisition Shares") at an issuance price of $67.57 per share (or $225.0 million in common stock), and the Operating Partnership paid the balance of the purchase price, or $1.455 billion, in cash. Approximately $1.0 billion of the cash payment was applied simultaneously to pay off debt on the properties owned by Carefree Communities. The Operating Partnership funded the cash portion of the purchase price in part with the proceeds of the Fannie Mae financing and the Northwestern Mutual Life Insurance Company financing described in Note 8, "Debt and Lines of Credit". On March 30, 2016, we closed on an underwritten public offering of 6,037,500 shares of common stock at a price of $66.50 per share. The net proceeds from the offering of $385.4 million were used to fund a portion of the purchase price for the acquisition of the Carefree Communities. During the three months ended September 30, 2016, the Company allocated the "investment in property" balances for Carefree Communities to the respective balance sheet line items upon preliminary completion of a purchase price allocation in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 805 - Business Combinations.
(1) The purchase price allocations for Carefree is preliminary and will be adjusted as final costs and final valuations are determined. The amount of revenue and net income included in the Consolidated Statements of Operations for the three and nine months ended September 30, 2016 related to the Carefree acquisition completed in 2016 is set forth in the following table (in thousands):
Other Acquisitions In September 2016, we acquired Petoskey RV Resort ("Petoskey"), a RV resort with 78 sites located in Petoskey, Michigan. In August 2016, we acquired Sunset Beach Resort ("Sunset Beach") in Cape Charles, Virginia. The sellers of Sunset Beach were engaged by the Company to continue to operate and maintain the property. Beginning January 1, 2022, the Company has the option to remove the sellers as operators via a payment based on certain operating performance metrics. Accordingly, total consideration of $27.8 million as of September 30, 2016 includes a contingent consideration liability of $9.8 million. The contingent consideration liability represents the present value of the contingent payment estimated at acquisition closing, based on projected future operating performance metrics. The contingent payment is formula-driven, and not capped. The contingent consideration liability will be re-measured at each reporting date, with changes in fair value adjusted through earnings, until the contingency is resolved. The final contingent payment could be materially different from the initial estimate. In June 2016, we acquired Pecan Park RV Resort ("Pecan Park"), a RV resort with 183 sites located in Jacksonville, Florida. In March 2016, we acquired Hill Country Cottage and RV Resort ("Hill Country"), a RV resort with 353 sites located in New Braunfels, Texas. In March 2016, we acquired Kimberly Estates, a MH community with 387 sites located in Frenchtown Township, Michigan. The following tables summarize the amounts of the assets acquired and liabilities assumed at the acquisition dates and the consideration paid for the acquisition completed in 2016 (in thousands):
(2) The purchase price allocations for Petoskey, Sunset Beach, Pecan Park, Hill Country, and Kimberly Estates are preliminary and may be adjusted as final costs and final valuations are determined. (3) Sunset Beach consideration includes a $9.8 million contingent consideration liability. The amount of revenue and net income included in the Consolidated Statements of Operations for the three and nine months ended September 30, 2016 related to the acquisitions other than Carefree completed in 2016 is set forth in the following table (in thousands):
The following unaudited pro forma financial information presents the results of our operations for the three and nine months ended September 30, 2016 and 2015 as if the properties were acquired on January 1, 2015. The unaudited pro forma results reflect certain adjustments for items that are not expected to have a continuing impact, such as adjustments for transaction costs incurred, management fees, and purchase accounting. The information presented below has been prepared for comparative purposes only and does not purport to be indicative of either future results of operations or the results of operations that would have actually occurred had the acquisitions been consummated on January 1, 2015 (in thousands, except per-share data).
Transaction costs of $27.9 million and $13.2 million have been incurred for the nine months ended September 30, 2016 and 2015, respectively, and are presented as “Transaction costs” in our Consolidated Statements of Operations. |
Collateralized Receivables and Transfers of Financial Assets |
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Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers Of Financial Assets | Transfers of Financial Assets We completed various transactions with an unrelated entity involving our notes receivable under which we received cash proceeds in exchange for relinquishing our right, title, and interest in certain notes receivable. We have no further obligations or rights with respect to the control, management, administration, servicing, or collection of the installment notes receivable. However, we are subject to certain recourse provisions requiring us to purchase the underlying homes collateralizing such notes, in the event of a note default and subsequent repossession of the home by the unrelated entity. The recourse provisions are considered to be a form of continuing involvement, and therefore these transferred loans did not meet the requirements for sale accounting. We continue to recognize these transferred loans on our balance sheet and refer to them as collateralized receivables. The proceeds from the transfer have been recognized as a secured borrowing. In the event of a note default and subsequent repossession of a manufactured home by the unrelated entity, the terms of the agreement require us to repurchase the manufactured home. Default is defined as the failure to repay the installment note receivable according to contractual terms. The repurchase price is calculated as a percentage of the outstanding principal balance of the collateralized receivable, plus any outstanding late fees, accrued interest, legal fees, and escrow advances associated with the installment note receivable. The percentage used to determine the repurchase price of the outstanding principal balance on the installment note receivable is based on the number of payments made on the note. In general, the repurchase price is determined as follows:
The transferred assets have been classified as "Collateralized receivables, net" and the cash proceeds received from these transactions have been classified as "Secured borrowings on collateralized receivables" within the Consolidated Balance Sheets. The balance of the collateralized receivables was $143.9 million (net of allowance of $0.6 million) and $139.8 million (net of allowance of $0.7 million) as of September 30, 2016 and December 31, 2015, respectively. The receivables have a weighted average interest rate and maturity of 10.1% and 15.8 years as of September 30, 2016, and 10.2% and 15.6 years as of December 31, 2015. The outstanding balance on the secured borrowing was $144.5 million and $140.4 million as of September 30, 2016 and December 31, 2015, respectively. The collateralized receivables earn interest income, and the secured borrowings accrue interest expense at the same interest rates. The amount of interest income and expense recognized was $3.5 million and $3.3 million for the three months ended September 30, 2016 and 2015, respectively, and $10.3 million and $9.6 million for the nine months ended September 30, 2016 and 2015, respectively. The balances of the collateralized receivables and secured borrowings fluctuate. The balances increase as additional notes receivable are transferred and exchanged for cash proceeds. The balances are reduced as the related collateralized receivables are collected from the customers, or as the underlying collateral is repurchased. The change in the aggregate gross principal balance of the collateralized receivables is as follows (in thousands):
The following table sets forth the allowance for the collateralized receivables as of September 30, 2016 (in thousands):
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Notes And Other Receivables |
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Long-term Notes and Loans, by Type, Current and Noncurrent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes And Other Receivables | Notes and Other Receivables The following table sets forth certain information regarding notes and other receivables (in thousands):
Installment Notes Receivable on Manufactured Homes The installment notes of $51.3 million (net of allowance of $0.2 million) and $20.4 million (net of allowance of $0.2 million) as of September 30, 2016 and December 31, 2015, respectively, are collateralized by manufactured homes. The notes represent financing provided by us to purchasers of manufactured homes primarily located in our communities and require monthly principal and interest payments. The notes have a net weighted average interest rate (net of servicing costs) and maturity of 9.3% and 15.7 years as of September 30, 2016, and 8.6% and 10.0 years as of December 31, 2015. The increase in weighted average maturity from 10.0 years to 15.7 years is the result of a shift to longer maturities in our financed sales of manufactured homes in 2016, as well as our acquired notes having longer maturities than our previous average. The change in the aggregate gross principal balance of the installment notes receivable is as follows (in thousands):
Allowance for Losses for Installment Notes Receivable The following table sets forth the allowance change for the installment notes receivable as follows (in thousands):
Other Receivables As of September 30, 2016, other receivables were comprised of amounts due from: residents for rent, and water and sewer usage of $5.9 million (net of allowance of $1.6 million); home sale proceeds of $17.0 million; insurance receivables of $0.8 million; rebates and other receivables of $5.5 million; and promissory notes receivable of $7.3 million. The promissory notes receivable have maturities on or before December 31, 2016. As of December 31, 2015, other receivables were comprised of amounts due from: residents for rent, and water and sewer usage of $4.7 million (net of allowance of $0.9 million); home sale proceeds of $10.5 million; insurance receivables of $1.2 million; insurance settlement of $3.7 million; rebates and other receivables of $5.3 million; and a promissory note receivable of $2.2 million. |
Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Disclosure [Text Block] | Intangible Assets Our intangible assets include ground leases and in-place leases from acquisitions, franchise fees, and other intangible assets. These intangible assets are recorded in "Other assets, net" on the Consolidated Balance Sheets. During the third quarter, as part of the Carefree acquisition purchase price allocation, we recorded $38.0 million of intangible assets associated with ground leases. These ground leases relate to 5 communities where contractual base rents are below market rents and therefore give rise to future economic benefits over the remaining lease terms. The gross carrying amounts, and accumulated amortization are as follows (in thousands):
The aggregate net amortization expenses related to the intangible assets are as follows (in thousands):
Based on the gross carrying amount of intangible assets as of September 30, 2016, the estimated future amortization expense for the next five years was as follows (in thousands):
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Investment In Affiliates |
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Equity Method Investments and Joint Ventures [Abstract] | |
Investment In Affiliates | Investment in Affiliates Origen Financial Services, LLC (“OFS LLC”) At September 30, 2016 and December 31, 2015, we had a 22.9% ownership interest in OFS LLC, an entity formed to originate manufactured housing installment contracts. We have suspended equity accounting as the carrying value of our investment is zero. Origen Financial, Inc. (“Origen”) Through Sun OFI, LLC, a taxable REIT subsidiary, we owned 5,000,000 shares of common stock in Origen, which approximated an ownership interest of 19.3%. We had suspended equity accounting for this investment as the carrying value of our investment was zero. In January 2015, Origen completed the sale of substantially all of its assets to an affiliate of GoldenTree Asset Management, LP and announced its intention to dissolve and liquidate. During the second quarter of 2015, and as disclosed in a press release on March 30, 2015, Origen made an initial distribution of $1.50 per share to its stockholders of record as of April 13, 2015. During the second quarter of 2015, we received an initial distribution of $7.5 million from Origen. During the third quarter of 2016, we sold all 5,000,000 shares of common stock in Origen to an unrelated party for aggregate proceeds of $0.5 million. |
Consolidated Variable Interest Entities |
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DisclosureofVariableInterestEntities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Variable Interest Entities | Consolidated Variable Interest Entities In 2016, the Company adopted Accounting Standards Update (“ASU”) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The Company evaluated the application of ASU No. 2015-02 and concluded that no change was required to its accounting of its interests in less than wholly owned joint ventures, however, the Operating Partnership now meets the criteria as a variable interest entity ("VIE"). The Company’s significant asset is its investment in the Operating Partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership. Other VIEs that are consolidated include: Rudgate Village SPE, LLC; Rudgate Clinton SPE, LLC; Rudgate Clinton Estates SPE, LLC (the “Rudgate Borrowers”); and Wildwood Village Mobile Home Park ("Wildwood"). We evaluated our arrangements with these properties under the guidance set forth in FASB Accounting Standard Codification ("ASC") ASC Topic 810 "Consolidation". We concluded that the Rudgate Borrowers and Wildwood qualify as VIEs as we are the primary beneficiary and hold controlling financial interests in these entities due to our power to direct the activities that most significantly impact the economic performance of the entities, as well as our obligation to absorb the most significant losses and our rights to receive significant benefits from these entities. As such, the transactions and accounts of these VIEs are included in the accompanying Consolidated Financial Statements. The following table summarizes the assets and liabilities included in our Consolidated Balance Sheets after appropriate eliminations have been made (in thousands):
Investment property, net and other assets related to the consolidated VIEs comprised approximately 1.6% and 2.3% of our consolidated total assets at September 30, 2016 and December 31, 2015, respectively. Debt and other liabilities comprised approximately 1.9% and 2.5% of our consolidated total liabilities at September 30, 2016 and December 31, 2015, respectively. Noncontrolling interests related to the consolidated VIEs comprised less than 1.0% of our consolidated total equity at September 30, 2016 and December 31, 2015. |
Debt And Lines Of Credit |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Text Block] | Debt and Lines of Credit The following table sets forth certain information regarding debt (in thousands):
As of September 30, 2016, the aggregate annual contractual maturities and principal amortization of our debt and lines of credit were as follows (in thousands):
Collateralized Term Loans In September 2016, 15 subsidiaries of the Operating Partnership entered into 15 different promissory notes totaling $139.0 million with PNC Bank, as lender (the "Freddie Mac Financing"). Five of the loans totaling $70.2 million bear interest at a rate of 3.930% and have ten-year terms. The remaining ten loans totaling $68.8 million bear interest at a rate of 3.750% and have seven-year terms. The Freddie Mac Financing provides for principal and interest payments to be amortized over 30 years. In September 2016, proceeds from the Freddie Mac Financing described above and the underwritten registered public equity offering described in Note 9, "Equity and Mezzanine Securities" were utilized to repay $62.1 million in mortgage loans and $300.0 million on our revolving loan under our senior revolving credit facility. In June 2016, 17 subsidiaries of the Operating Partnership entered into a Master Credit Facility Agreement (the "Fannie Mae Credit Agreement") with Regions Bank, as lender. Pursuant to the Fannie Mae Credit Agreement, Regions Bank loaned a total of $338.0 million under a senior secured credit facility, comprised of two ten-year term loans in the amount of $300.0 million and $38.0 million, respectively (collectively the "Fannie Mae Financing"). The $300.0 million term loan bears interest at 3.69% per year and the $38.0 million term loan bears interest at 3.67% per year for a blended rate of 3.69% per year. The Fannie Mae Financing provides for principal and interest payments to be amortized over 30 years. The Fannie Mae Financing is secured by mortgages encumbering 17 MH communities comprised of real and personal property owned by the borrowers. Additionally, the Company and the Operating Partnership have provided a guaranty of the non-recourse carve-out obligations of the borrowers under the Fannie Mae Financing. Additionally, in June 2016, three subsidiaries of the Operating Partnership entered into mortgage loan documents (the "NML Loan Documents") with The Northwestern Mutual Life Insurance Company ("NML"). Pursuant to the NML Loan Documents, NML made three portfolio loans to the subsidiary borrowers in the aggregate amount of $405.0 million. NML loaned $162.0 million under a ten-year term loan to two of the subsidiary borrowers (the "Portfolio A Loan"). The Portfolio A Loan bears interest at 3.53% per year and is secured by deeds of trust encumbering seven MH communities and one RV community. NML also loaned $163.0 million under a 12-year term loan (the "Portfolio B Loan") to one subsidiary which is also a borrower under the Portfolio A Loan. The Portfolio B Loan bears interest at 3.71% per year and is secured by deeds of trust and a ground lease encumbering eight MH communities. NML also loaned $80.0 million under a 12-year term loan (the "Portfolio C Loan" and, collectively, with the Portfolio A Loan and the Portfolio B Loan, the "NML Financing") to one subsidiary borrower. The Portfolio C Loan bears interest at 3.71% per year and is secured by a mortgage encumbering one RV community. All of the MH and RV communities that secure the NML Financing were acquired as part of the Carefree Communities acquisition (See Note 2). The NML Financing is generally non-recourse, however, the borrowers under the NML Financing and the Operating Partnership are responsible for certain customary non-recourse carveouts. In addition, the NML Financing will be fully recourse to the subsidiary borrowers and the Operating Partnership if: (a) the borrowers violate the prohibition on transfer covenants set forth in the loan documents; or (b) a voluntary bankruptcy proceedings is commenced by the borrowers or an involuntary bankruptcy, liquidation, receivership or similar proceeding has commenced against the borrowers and remains undismissed for a period of 90 days. In March 2015, in relation to the acquisition of Meadowlands, we assumed a $6.3 million mortgage with an interest rate of 6.5% and a remaining term of 6.5 years. Also, in relation to this acquisition, we entered into a note payable with the seller for $2.4 million that bears no interest but is payable in three equal yearly installments beginning in March 2016. During the first half of 2016, we paid the first of the yearly installments of $0.8 million. The collateralized term loans totaling $2.9 billion as of September 30, 2016, are secured by 202 properties comprised of 79,369 sites representing approximately $3.5 billion of net book value. Secured Borrowing See Note 3, "Collateralized Receivables and Transfers of Financial Assets", for additional information regarding our collateralized receivables and secured borrowing transactions. Preferred OP Units Included in preferred OP units is $34.7 million of Aspen preferred OP units issued by the Operating Partnership which, as of September 30, 2016, are convertible indirectly into 482,265 shares of our common stock. Subject to certain limitations, at any time prior to January 1, 2024, the holder of each Aspen preferred OP unit at its option may convert such Aspen preferred OP unit into: (a) if the market price of our common stock is $68.00 per share or less, 0.397 common OP units; or (b) if the market price of our common stock is greater than $68.00 per share, the number of common OP units is determined by dividing (i) the sum of (A) $27.00 plus (B) 25% of the amount by which the market price of our common stock exceeds $68.00 per share, by (ii) the per-share market price of our common stock. The current preferred distribution rate is 6.5%. On January 2, 2024, we are required to redeem all Aspen preferred OP units that have not been converted to common OP units. Lines of Credit In August, 2015, we amended and restated our senior revolving credit facility with Citibank, N.A. and certain other lenders in the amount of $450.0 million, comprised of a $392.0 million revolving loan and a $58.0 million term loan (the "Facility"). The Facility has a four year term ending August 19, 2019, which can be extended for two additional six-month periods at our option, subject to the satisfaction of certain conditions as defined in the credit agreement. The credit agreement also provides for, subject to the satisfaction of certain conditions, additional commitments in an amount not to exceed $300.0 million. If additional borrowings are made pursuant to any such additional commitments, the aggregate borrowing limit under the Facility may be increased up to $750.0 million. The Facility bears interest at a floating rate based on the Eurodollar rate plus a margin that is determined based on our leverage ratio calculated in accordance with the credit agreement, which can range from 1.40% to 2.25% for the revolving loan and 1.35% to 2.20% for the term loan. As of September 30, 2016, the margin on our leverage ratio was 1.40% and 1.35% on the revolving and term loans, respectively. We had no borrowings on the revolving loan and $58.0 million on the term loan totaling$58.0 million in borrowings as of September 30, 2016, with a weighted average interest rate of 1.93%. As of December 31, 2015 we had no borrowings on the revolving loan and $25.0 million in borrowings on the term loan totaling $25.0 million in borrowings. The Facility provides us with the ability to issue letters of credit. Our issuance of letters of credit does not increase our borrowings outstanding under our line of credit, but does reduce the borrowing amount available. At September 30, 2016 and December 31, 2015, approximately $3.6 million and $3.4 million, respectively, of availability was used to back standby letters of credit. We have a $12.0 million manufactured home floor plan facility renewable indefinitely until our lender provides us at least a twelve month notice of their intent to terminate the agreement. The interest rate is 100 basis points over the greater of the prime rate as quoted in the Wall Street Journal on the first business day of each month or 6.0%. At September 30, 2016, the effective interest rate was 7.0%. At September 30, 2016 and December 31, 2015, there was no outstanding balance. Covenants Pursuant to the terms of the Facility, we are subject to various financial and other covenants. The most restrictive of our debt agreements place limitations on secured borrowings and contain minimum fixed charge coverage, leverage, distribution, and net worth requirements. At September 30, 2016, we were in compliance with all covenants. |
Equity Transactions |
9 Months Ended |
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Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Equity Transactions | Equity and Mezzanine Securities In September 2016, we closed an underwritten registered public offering of 3,737,500 shares of common stock at a net price of $75.89 per share. Proceeds from the offering were approximately $283.6 million after deducting expenses related to the offering, which were used to repay borrowings outstanding under the revolving loan under our senior revolving credit facility. In June 2015, we entered into an At the Market Offering Sales Agreement (the "Sales Agreement") with BMO Capital Markets Corp., Merrill Lynch, Pierce, Fenner and Smith Incorporated and Citigroup Global Markets Inc. (collectively, the "Sales Agents"). Pursuant to the Sales Agreement, we may offer and sell shares of our common stock, having an aggregate offering price of up to $250.0 million, from time to time through the Sales Agents. Each Sales Agent is entitled to compensation in an agreed amount not to exceed 2.0% of the gross price per share for any shares sold through it from time to time under the Sales Agreement. During the third quarter of 2016, 620,828 shares of common stock were issued under the Sales Agreement at the prevailing market price of our common stock at the time of each sale with a weighted average sales price of $76.81 per share. We received net proceeds totaling $47.1 million. During the nine months ended September 30, 2016, 1,105,828 shares were issued under the Sales Agreement at a weighted average share price of $74.64 per share for net proceeds totaling $81.5 million. In June 2016, at the closing of the Carefree acquisition, the Company issued the Seller 3,329,880 shares of its common stock at an issuance price of $67.57 per share or $225.0 million in common stock. Refer to Note 2, "Real Estate Acquisitions". In March 2016, we closed an underwritten registered public offering of 6,037,500 shares of common stock at a price of $66.50 per share. Net proceeds from the offering were approximately $385.4 million after deducting discounts and expenses related to the offering, which we used to fund a portion of the purchase price for the acquisition of Carefree Communities. If certain change of control transactions occur or if our common stock ceases to be listed or quoted on an exchange or quotation system, then at any time after November 26, 2019, we or the holders of shares of Series A-4 Preferred Stock and Series A-4 preferred OP units may cause all or any of those shares or units to be redeemed for cash at a redemption price equal to the sum of (i) the greater of (x) the amount that the redeemed shares of Series A-4 Preferred Stock and Series A-4 preferred OP units would have received in such transaction if they had been converted into shares of our common stock immediately prior to such transaction, or (y) $25.00 per share, plus (ii) any accrued and unpaid distributions thereon to, but not including, the redemption date. In November 2004, our Board of Directors authorized us to repurchase up to 1,000,000 shares of our common stock. We have 400,000 common shares remaining in the repurchase program. No common shares were repurchased under this buyback program during the nine months ended September 30, 2016 or 2015. There is no expiration date specified for the buyback program. Subject to certain limitations, common OP unit holders can convert their common OP units into an equivalent number of shares of common stock at any time. During the nine months ended September 30, 2016 and 2015, there were 24,896 and 99,406 common OP units converted to shares of common stock, respectively. Subject to certain limitations, Series A-1 preferred OP unit holders may convert each Series A-1 preferred OP units to approximately 2.439 shares of our common stock at any time. During the nine months ended September 30, 2016 and 2015, holders of Series A-1 preferred OP units converted 11,490 units into 28,021 shares of common stock, and 39,817 units into 97,109 shares of common stock, respectively. Subject to certain limitations, Series A-4 preferred OP unit holders may convert each Series A-4 preferred OP units to approximately 0.444 shares of our common stock at any time. During the nine months ended September 30, 2016, and 2015 holders of Series A-4 preferred OP units converted 12,389 units into 5,505 shares of common stock, and 109,414 units into 48,627 shares of common stock, respectively. Subject to certain limitations, Series C preferred OP unit holders may convert each Series C preferred OP units to 1.11 shares of our common stock at any time. During the nine months ended September 30, 2016 holders of Series C preferred OP units converted 7,000 units into 7,768 shares of common stock. There were no conversions of Series C preferred OP units during the nine months ended September 30, 2015. Cash distributions of $0.65 per share were declared for the quarter ended September 30, 2016. On October 17, 2016, cash payments of approximately $49.3 million for aggregate distributions were made to common stockholders, common OP unit holders and restricted stockholders of record as of September 30, 2016. Cash distributions of $0.45 per share were declared on our Series A cumulative redeemable preferred stock for the quarter ended September 30, 2016. On October 17, 2016, cash payments of approximately $1.5 million for aggregate distributions were made to Series A cumulative redeemable preferred stockholders of record as of September 30, 2016. In addition, cash distributions of $0.41 per share were declared on our Series A-4 Preferred Stock for the quarter ended September 30, 2016. On September 30, 2016, cash payments of approximately $0.7 million were made to Series A-4 Preferred Stock stockholders of record as of September 16, 2016. |
Share-Based Compensation |
9 Months Ended |
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Sep. 30, 2016 | |
Share-based Compensation [Abstract] | |
Share-Based Compensation | Share-Based Compensation During the three months ended June 30, 2016, we granted 76,000 shares of restricted stock to key employees under the Sun Communities Inc. 2015 Equity Incentive Plan. The shares had a fair value of $69.53 per share and will vest as follows: April 18, 2019: 35%; April 18, 2020: 35%; April 18, 2021: 20%; April 18, 2022: 5%; and April 18, 2023: 5%. The fair value of issued grants was determined by using the closing price of our common stock on the date the shares were issued. During the three months ended March 31, 2016, we granted 16,800 shares of restricted stock to our non-employee directors under our First Amended and Restated 2004 Non-Employee Director Option Plan. The awards vest on March 15, 2019, and had a fair value of $69.45 per share. The fair value was determined by using the closing share price of our common stock on the date the shares were issued. During the three months ended March 31, 2016, we granted 130,000 shares of restricted stock to our executive officers under the Sun Communities, Inc. 2015 Equity Incentive Plan. The shares had a fair value of $69.25 per share. Half of the shares will vest as follows: March 20, 2019: 20%; March 20, 2020, 30%; March 20, 2021, 35%; March 20, 2022, 10%; and March 20, 2023, 5%. The remaining 65,000 shares are subject to market and performance conditions with multiple tranches that vest through March 2022. Share-based compensation for restricted stock awards with performance conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. During the nine months ended September 30, 2016 and 2015, 9,349 and 4,084 shares of common stock, respectively, were issued in connection with the exercise of stock options, and the net proceeds received during both periods was $0.1 million. The vesting requirements for 158,340 restricted shares granted to our executives and employees were satisfied during the nine months ended September 30, 2016. |
Segment Reporting |
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Segment Reporting | Segment Reporting We group our operating segments into reportable segments that provide similar products and services. Each operating segment has discrete financial information evaluated regularly by our chief operating decision maker in evaluating and assessing performance. We have two reportable segments: (i) Real Property Operations and (ii) Home Sales and Rentals. The Real Property Operations segment owns, operates, and develops MH communities and RV communities and is in the business of acquiring, operating, and expanding MH and RV communities. The Home Sales and Rentals segment offers manufactured home sales and leasing services to tenants and prospective tenants of our communities. Transactions between our segments are eliminated in consolidation. Transient RV revenue is included in the Real Property Operations segment revenues and is expected to approximate $59.2 million annually. In 2016, we recognized 17.1%, 18.4%, and 44.4% during the first, second, and third quarters, respectively. We expect to recognize 20.1% during the fourth quarter of 2016. In 2015, transient revenue was $39.7 million. We recognized 22.5% in the first quarter, 17.7% in the second quarter, 45.2% in the third quarter, and 14.6% in the fourth quarter. A presentation of segment financial information is summarized as follows (amounts in thousands):
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Income Taxes |
9 Months Ended |
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Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We have each elected to be taxed as a real estate investment trust (“REIT”) pursuant to Section 856(c) of the Internal Revenue Code of 1986 (“Code”), as amended. In order for us to qualify as a REIT, at least 95% of our gross income in any year must be derived from qualifying sources. In addition, a REIT must distribute annually at least 90% of its REIT ordinary taxable income to its stockholders and meet other tests. Qualification as a REIT involves the satisfaction of numerous requirements (some on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. In addition, frequent changes occur in the area of REIT taxation which requires us to continually monitor our tax status. We analyzed the various REIT tests and confirmed that we continued to qualify as a REIT for the quarter ended September 30, 2016. As a REIT, we generally will not be subject to United States ("U.S.") federal income taxes at the corporate level on the ordinary taxable income we distribute to our stockholders as dividends. If we fail to qualify as a REIT in any taxable year, our taxable income could be subject to U.S. federal income tax at regular corporate rates (including any applicable alternative minimum tax). Even if we qualify as a REIT, we may be subject to certain state and local income taxes, U.S. federal income taxes and excise taxes on our undistributed income. Our various taxable REIT subsidiaries are subject to U.S. federal income taxes. Due to the Carefree acquisition, certain of our properties are also subject to Canadian income taxes. Our deferred tax assets and liabilities reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and the bases of such assets and liabilities as measured by tax laws. Deferred tax assets are reduced, if necessary, by a valuation allowance to the amount where realization is more likely than not assured after considering all available evidence. Our temporary differences primarily relate to net operating loss carryforwards and depreciation. Full valuation allowances are generally recorded against all U.S. federal deferred tax assets. For Canadian purposes, a minimal amount of deferred tax asset is recorded in relation to a corporate entity and included in “Other assets, net” in our Consolidated Balance Sheets as of September 30, 2016. No federal deferred tax asset is included in "Other assets, net," in our Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015. We had no unrecognized tax benefits as of September 30, 2016 and 2015. We expect no significant increases or decreases in unrecognized tax benefits due to changes in tax positions within one year of September 30, 2016. We recorded a provision for federal, state, and Canadian income taxes of approximately $0.3 million and $0.1 million for the three months ended September 30, 2016, and 2015, respectively, and $0.6 million and $0.2 million for the nine months ended September 30, 2016 and 2015, respectively. |
Earnings Per Share |
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Earnings Per Share | Earnings Per Share We have outstanding stock options, unvested restricted common shares, Series A Preferred Stock, and Series A-4 Preferred Stock, and our Operating Partnership has: outstanding common OP units; Series A-1 preferred OP units; Series A-3 preferred OP units; Series A-4 preferred OP units; Series C preferred OP units; and Aspen preferred OP Units, which, if converted or exercised, may impact dilution. Computations of basic and diluted earnings per share were as follows (in thousands, except per share data):
We excluded certain securities from the computation of diluted earnings per share because the inclusion of these securities would have been anti-dilutive for the periods presented. The following table presents the outstanding securities that were excluded from the computation of diluted earnings per share as of September 30, 2016 and 2015 (amounts in thousands):
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Derivative Instruments And Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments And Hedging Activities | Derivative Instruments and Hedging Activities Our objective in using interest rate derivatives is to manage exposure to interest rate movements thereby minimizing the effect of interest rate changes and the effect it could have on future cash flows. Interest rate caps are used to accomplish this objective. We do not enter into derivative instruments for speculative purposes nor do we have any swaps in a hedging arrangement. The following table provides the terms of our interest rate derivative contracts that were in effect as of September 30, 2016:
In accordance with ASC Topic 815, "Derivatives and Hedging" ("ASC 815"), derivative instruments are recorded at fair value in "Other assets, net" or "Other liabilities" on the Consolidated Balance Sheet. As of September 30, 2016 and December 31, 2015, the fair value of the derivatives was zero. |
Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Financial Instruments | Fair Value of Financial Instruments Our financial instruments consist primarily of cash and cash equivalents, accounts and notes receivable, accounts payable, derivative instruments, and debt. ASC Topic 820 "Fair Value Measurements and Disclosures" ("ASC 820"), requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy under which these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumption. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair value hierarchy: Level 1—Quoted unadjusted prices for identical instruments in active markets; Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The following methods and assumptions were used in order to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Derivative Instruments The derivative instruments held by us are interest rate cap agreements for which quoted market prices are indirectly available. For those derivatives, we use model-derived valuations in which all significant inputs and significant value drivers are observable in active markets provided by brokers or dealers to determine the fair value of derivative instruments on a recurring basis (Level 2). See Note 14, "Derivative Instruments and Hedging Activities". Installment Notes Receivable on Manufactured Homes The net carrying value of the installment notes receivable on manufactured homes estimates the fair value as the interest rates in the portfolio are comparable to current prevailing market rates (Level 2). Refer to Note 4, "Notes and Other Receivables". Long-Term Debt and Lines of Credit The fair value of long-term debt (excluding the secured borrowing) is based on the estimates of management and on rates currently quoted, rates currently prevailing for comparable loans, and instruments of comparable maturities (Level 2). Refer to Note 8, "Debt and Lines of Credit". Collateralized Receivables and Secured Borrowings The fair value of these financial instruments offset each other as our collateralized receivables represent a transfer of financial assets and the cash proceeds received from these transactions have been classified as a secured borrowing on the Consolidated Balance Sheets. The net carrying value of the collateralized receivables estimates the fair value as the interest rates in the portfolio are comparable to current prevailing market rates (Level 2). See Note 3, "Collateralized Receivables and Transfers of Financial Assets". Financial Liabilities We estimate the fair value of our contingent consideration liability based on discounting of future cash flows using market interest rates and adjusting for non-performance risk over the remaining term of the liability (Level 2). Other Financial Instruments The carrying values of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair market values due to the short-term nature of these instruments. The table below sets forth our financial assets and liabilities that required disclosure of their fair values on a recurring basis as of September 30, 2016. The table presents the carrying values and fair values of our financial instruments as of September 30, 2016 and December 31, 2015 that were measured using the valuation techniques described above (in thousands). The table excludes other financial instruments such as cash and cash equivalents, accounts receivable, and accounts payable because the carrying values associated with these instruments approximate fair value since their maturities are less than one year.
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Recent Accounting Pronouncements |
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Sep. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In October 2016, the FASB issued ASU 2016-16 "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory". This update requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year. The Company is currently evaluating the impact of the adoption of this ASU. In August 2016, the FASB issued ASU 2016-15 "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments". This update addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. The guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year. The Company is currently evaluating the impact of the adoption of this ASU. In June 2016, the FASB issued ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments". This update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this ASU. In March 2016, the FASB issued ASU 2016-09 "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting". The amendments in this update are intended to simplify several aspects of the accounting for share-based payments. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within that year. The Company is currently evaluating the impact of the adoption of this ASU. In February 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)". The core principle of this update is that a lessee should recognize the assets and liabilities that arise from leases while the accounting by a lessor is largely unchanged from that applied under previous GAAP. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this ASU. In April 2015, the FASB issued ASU 2015-03 "Interest - Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs". This amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15 "Interest - Imputation of Interest (Subtopic 835-30) Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" ("ASU 2015-15"). ASU 2015-15 provides commentary that the SEC staff would not object to an entity deferring and presenting costs associated with line of credit arrangements as an asset and subsequently amortizing them ratably over the term of the revolving debt arrangement. We adopted these amendments retrospectively for all periods presented as of January 1, 2016. The adoption resulted in reclassifications of deferred financing costs of $8.4 million and $0.3 million from "Other assets, net" to "Mortgage loans payable" and "Lines of credit," respectively, on the Consolidated Balance Sheets as of December 31, 2015. The debt issuance costs of $0.3 million related to our $58.0 million term loan, whereas debt issuance costs related to our revolving loan remain classified as an asset on the Consolidated Balance Sheets. In February 2015, the FASB issued ASU No. 2015-02 "Consolidation (Topic 810) Amendments to the Consolidation Analysis" ("ASU 2015-02") which modified the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities. All entities are subject to reevaluation under the revised consolidation model. The Company is the sole general partner in a limited partnership, and as such, the Company has complete control in conducting all business activities associated with the Partnership. Limited partners do not have kick-out rights or participating rights. The Company adopted ASU 2015-02 as of January 1, 2016 and fully consolidates the activities of the Operating Partnership within its Consolidated Financial Statements under the variable interest entity model as it is the primary beneficiary. There was no impact to the Consolidated Financial Statements as the Company previously consolidated under the voting interest entity model. In May 2014, the FASB issued ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09"). The objective of this amendment is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying this amendment, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. This amendment applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. An entity should apply the amendments using either the full retrospective approach or retrospectively with a cumulative effect of initially applying the amendments recognized at the date of initial application. In July 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 by one year to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We are currently evaluating the methods of adoption and the impact that ASU 2014-09 will have on our Consolidated Financial Statements. |
Commitments And Contingencies |
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Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | Commitments and Contingencies We are involved in various legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material adverse impact on our results of operations or financial condition. |
Subsequent Event |
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Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events During October 2016, certain of our coastal communities in Florida, Georgia, North Carolina, South Carolina, and Virginia were impacted by Hurricane Matthew. The hurricane did not cause material damage. Efforts following the hurricane were primarily limited to removal of damaged trees and debris cleanup. During October 2016, the Company borrowed $58.5 million under a promissory note. The note requires payment of interest only until maturity, bears interest at a fixed rate of 3.33% and has a seven-year term. During October 2016, the Company acquired two RV communities in Colorado and New York for total consideration of $9.7 million. |
Real Estate Acquisitions and Dispositions (Tables) |
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation | During the three months ended September 30, 2016, the Company allocated the "investment in property" balances for Carefree Communities to the respective balance sheet line items upon preliminary completion of a purchase price allocation in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 805 - Business Combinations.
The following tables summarize the amounts of the assets acquired and liabilities assumed at the acquisition dates and the consideration paid for the acquisition completed in 2016 (in thousands):
(2) The purchase price allocations for Petoskey, Sunset Beach, Pecan Park, Hill Country, and Kimberly Estates are preliminary and may be adjusted as final costs and final valuations are determined. (3) Sunset Beach consideration includes a $9.8 million contingent consideration liability. |
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Schedule of Revenue and Net Income from Acquisitions | The amount of revenue and net income included in the Consolidated Statements of Operations for the three and nine months ended September 30, 2016 related to the acquisitions other than Carefree completed in 2016 is set forth in the following table (in thousands):
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Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information presents the results of our operations for the three and nine months ended September 30, 2016 and 2015 as if the properties were acquired on January 1, 2015. The unaudited pro forma results reflect certain adjustments for items that are not expected to have a continuing impact, such as adjustments for transaction costs incurred, management fees, and purchase accounting. The information presented below has been prepared for comparative purposes only and does not purport to be indicative of either future results of operations or the results of operations that would have actually occurred had the acquisitions been consummated on January 1, 2015 (in thousands, except per-share data).
The amount of revenue and net income included in the Consolidated Statements of Operations for the three and nine months ended September 30, 2016 related to the Carefree acquisition completed in 2016 is set forth in the following table (in thousands):
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Collateralized Receivables and Transfers of Financial Assets (Tables) |
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Repurchase price percentage | In general, the repurchase price is determined as follows:
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Schedule of collateralized loans | The change in the aggregate gross principal balance of the collateralized receivables is as follows (in thousands):
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Allowance for collateralized and installment notes receivable | The following table sets forth the allowance for the collateralized receivables as of September 30, 2016 (in thousands):
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Notes And Other Receivables (Tables) |
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Schedule of notes and other receivables | The following table sets forth certain information regarding notes and other receivables (in thousands):
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Schedule of Installment Notes Receivable | The change in the aggregate gross principal balance of the installment notes receivable is as follows (in thousands):
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Allowance for collateralized and installment notes receivable | The following table sets forth the allowance change for the installment notes receivable as follows (in thousands):
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Intangible Assets Intangible Assets (Tables) |
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Schedule of Finite-Lived Intangible Assets | The gross carrying amounts, and accumulated amortization are as follows (in thousands):
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Schedule of Intangible Assets Amortization Expense | The aggregate net amortization expenses related to the intangible assets are as follows (in thousands):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Based on the gross carrying amount of intangible assets as of September 30, 2016, the estimated future amortization expense for the next five years was as follows (in thousands):
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Consolidated Variable Interest Entities (Tables) |
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Schedule of Variable Interest Entities | The following table summarizes the assets and liabilities included in our Consolidated Balance Sheets after appropriate eliminations have been made (in thousands):
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Debt And Lines Of Credit (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt and lines of credit [Table Text Block] | The following table sets forth certain information regarding debt (in thousands):
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Schedule of Maturities of Long-term Debt [Table Text Block] | As of September 30, 2016, the aggregate annual contractual maturities and principal amortization of our debt and lines of credit were as follows (in thousands):
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Segment Reporting (Tables) |
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Segment Reporting, Asset Reconciling Item [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Assets from Segment to Consolidated [Table Text Block] |
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Schedule of Segment Reporting Information, by Segment [Table Text Block] | A presentation of segment financial information is summarized as follows (amounts in thousands):
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share [Table Text Block] | Computations of basic and diluted earnings per share were as follows (in thousands, except per share data):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | as of September 30, 2016 and 2015 (amounts in thousands):
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Derivative Instruments And Hedging Activities (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments [Table Text Block] | The following table provides the terms of our interest rate derivative contracts that were in effect as of September 30, 2016:
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Fair Value of Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping | The table below sets forth our financial assets and liabilities that required disclosure of their fair values on a recurring basis as of September 30, 2016. The table presents the carrying values and fair values of our financial instruments as of September 30, 2016 and December 31, 2015 that were measured using the valuation techniques described above (in thousands). The table excludes other financial instruments such as cash and cash equivalents, accounts receivable, and accounts payable because the carrying values associated with these instruments approximate fair value since their maturities are less than one year.
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Real Estate Acquisitions, Schedule of Revenue and Net Income from acquisitions (Details) - Series of Individually Immaterial Business Acquisitions [Member] - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2016 |
|
Business Combination, Results of Operations [Line Items] | ||
Revenue | $ 2,616 | $ 5,119 |
Net income | $ 893 | $ 1,621 |
Real Estate Acquisitions , Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Business Acquisition [Line Items] | ||||
Total revenues | $ 250,096 | $ 228,221 | $ 689,878 | $ 635,092 |
Net income attributable to Sun Communities, Inc. common stockholders (4) | $ 18,790 | $ 43,061 | $ 39,576 | $ 90,821 |
Net income per share attributable to Sun Communities, Inc. common stockholders - basic | $ 0.27 | $ 0.81 | $ 0.62 | $ 1.72 |
Net income per share attributable to Sun Communities, Inc. common stockholders - diluted | $ 0.27 | $ 0.80 | $ 0.62 | $ 1.70 |
Carefree Communities | ||||
Business Acquisition [Line Items] | ||||
Total revenues | $ 39,960 | $ 49,067 | ||
Net income attributable to Sun Communities, Inc. common stockholders (4) | $ 6,183 | $ 10,968 |
Collateralized Receivables and Transfers of Financial Assets, Repurchase price percentage (Details) - Collateralized Receivables [Member] |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Less than or equal to 15 [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Repurchase Percentage | 100.00% |
Greater than 15 but less than 64 [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Repurchase Percentage | 90.00% |
Equal to or greater than 64 but less than 120 [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Repurchase Percentage | 65.00% |
120 or more [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Repurchase Percentage | 50.00% |
Collateralized Receivables and Transfers of Financial Assets, Schedule of collateralized loans (Details) - Collateralized Receivables [Member] $ in Thousands |
9 Months Ended |
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Sep. 30, 2016
USD ($)
| |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Beginning balance | $ 140,440 |
Financed sales of manufactured homes | 18,800 |
Principal payments and payoffs from our customers | (9,185) |
Principal reduction from repurchased homes | (5,533) |
Total activity | 4,082 |
Ending balance | $ 144,522 |
Collateralized Receivables and Transfers of Financial Assets Collateralized Receivables and Transfers of Financial Assets, Allowance for Collateralized Receivables (Details) - Collateralized Receivables [Member] $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Allowance for Loan and Lease Losses [Roll Forward] | |
Beginning balance | $ (672) |
Lower of cost or market write-downs | 470 |
Increase to reserve balance | (432) |
Total activity | 38 |
Ending balance | $ (634) |
Notes and Other Receivables, Schedule of notes and other receivables (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total notes and other receivables, net | $ 87,856 | $ 47,972 |
Other receivables, net [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total notes and other receivables, net | 36,605 | 27,554 |
Carrying Value [Member] | Installment notes receivable on manufactured homes, net [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total notes and other receivables, net | 51,251 | 20,418 |
Carrying Value [Member] | Collateralized Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total notes and other receivables, net | $ 143,888 | $ 139,768 |
Notes And Other Receivables Notes and Other Receivables, Installment notes receivable on manufactured homes - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and Notes Receivable, Net | $ 87,856 | $ 47,972 |
Installment notes receivable on manufactured homes, net [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans and Leases Receivable, Allowance | $ 200 | $ 200 |
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 9.30% | 8.60% |
Receivable With Imputed Interest, Term | 15 years 8 months 12 days | 9 years 11 months 27 days |
Carrying Value [Member] | Installment notes receivable on manufactured homes, net [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and Notes Receivable, Net | $ 51,251 | $ 20,418 |
Notes and Other Receivables, Schedule of installment notes receivable (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Collateralized receivables, net and Installment Notes Receivables on Manufactured Homes [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Increase to reserve balance | $ (7) |
Installment notes receivable on manufactured homes, gross [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Beginning balance | 20,610 |
Financed sales of manufactured homes | 31,775 |
Acquired notes | 3,521 |
Principal payments and payoffs from our customers | (3,466) |
Principal reduction from repossessed homes | (1,038) |
Total activity | 30,792 |
Ending balance | $ 51,402 |
Notes and Other Receivables, Allowance for installment notes receivable (Details) - Collateralized receivables, net and Installment Notes Receivables on Manufactured Homes [Member] $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Allowance for Loan and Lease Losses [Roll Forward] | |
Beginning balance | $ (192) |
Lower of cost or market write-downs | 48 |
Increase to reserve balance | (7) |
Total activity | 41 |
Ending balance | $ (151) |
Notes And Other Receivables Notes and Other Receivables, Other receivables - Narrative (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Other receivables for rent, water, sewer usage | $ 5.9 | $ 4.7 |
Allowance for rent, water, sewer usage receivables | (1.6) | (0.9) |
Home sale proceeds | 17.0 | 10.5 |
Insurance receivables | 0.8 | 1.2 |
Insurance Settlements Receivable | 3.7 | |
Premiums and Other Receivables, Net | 5.3 | |
Miscellaneous note receivable | 7.3 | $ 2.2 |
Other Receivables | $ 5.5 |
Intangible Assets Intangible Assets, Schedule of Intangible Asset Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of Intangible Assets | $ 4,321 | $ 2,470 | $ 8,897 | $ 6,407 |
Ground Leases [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of Intangible Assets | 368 | 0 | 368 | 0 |
Leases, Acquired-in-Place [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of Intangible Assets | 3,824 | 2,341 | 8,142 | 6,020 |
Franchise Rights [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of Intangible Assets | $ 129 | $ 129 | $ 387 | $ 387 |
Intangible Assets, Intangibles Future Amortization Expense (Details) $ in Thousands |
Sep. 30, 2016
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2016 | $ 3,856 |
2017 | 15,200 |
2018 | 14,322 |
2019 | 13,405 |
2020 | $ 11,678 |
Investment In Affiliates , Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jul. 22, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Schedule of Equity Method Investments [Line Items] | |||||||
Distributions from affiliate | $ 500,000 | $ 0 | $ 7,500,000 | $ 500,000 | $ 7,500,000 | ||
Origen Financial Services [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership percentage | 22.90% | 22.90% | 22.90% | ||||
Investment carrying value | $ 0 | $ 0 | |||||
Origen Financial [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership percentage | 19.30% | 19.30% | |||||
Equity Method Investment, Net Sales Proceeds | $ 500,000 | ||||||
Investment carrying value | $ 0 | $ 0 | |||||
Investment owned (in shares) | 5,000,000 | 5,000,000 | |||||
Distribution per share | $ 1.50 | $ 1.50 |
Debt And Lines Of Credit , Narrative - Aspen Preferred OP Units and Series B-3 preferred OP units (Details) - Preferred OP units [Member] - Convertible debt - Aspen Preferred OP Units January 2024 [Member] $ / shares in Units, $ in Millions |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2016
USD ($)
shares
Rate
|
Dec. 31, 2014
$ / shares
shares
|
Dec. 31, 2015
$ / shares
|
|
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ | $ 34.7 | ||
Convertible units to shares (in shares) | 482,265 | ||
Debt Instrument, Interest Rate During Period | Rate | 6.50% | ||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 68.00 | $ 27.00 | |
Conversion of Stock, Shares Converted | 0.397 |
Debt And Lines Of Credit Debt And Lines of Credit, Maturities and Amortization of Debt and Lines of Credit (Details) $ in Thousands |
Sep. 30, 2016
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Remainder of 2016 | $ 16,426 |
2017 | 153,955 |
2018 | 108,753 |
2019 | 125,187 |
2020 | 178,112 |
2021 and thereafter | $ 2,498,470 |
Segment Reporting Segment Reporting, Seasonality (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016
USD ($)
|
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015
USD ($)
|
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Sep. 30, 2016
USD ($)
segment
|
|
Segment Reporting Information [Line Items] | |||||||||
Number of Reportable Segments | segment | 2 | ||||||||
Real Property Operations Segment [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Expected Annual Transient RV Revenue | $ | $ 59.2 | $ 39.7 | $ 59.2 | ||||||
Transient RV Rental Revenue Recognized, Percentage | 44.40% | 18.40% | 17.10% | 14.60% | 45.20% | 17.70% | 22.50% | ||
Scenario, Forecast [Member] | Real Property Operations Segment [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Transient RV Rental Revenue Recognized, Percentage | 20.10% |
Income Taxes , Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Minimum Percent of Income From Qualifying Sources to Allow For Real Estate Investment Trust Classification | 95.00% | |||
Required Minimum Percent of Taxable Income Distributed to Stock Holders | 90.00% | |||
Provision for state income taxes | $ 0.3 | $ 0.1 | $ 0.6 | $ 0.2 |
Derivative Instruments And Hedging Activities , Derivative Contracts (Details) - Interest Rate Cap [Member] $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Derivative maturing 2018 [Member] | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative, Type | Cap |
Derivative, Purpose | Cap Floating Rate |
Derivative, Effective Date | Apr. 01, 2015 |
Derivative, Maturity Date | Apr. 01, 2018 |
Notional Amount of Derivatives | $ 150.1 |
Derivative, Variable Rate | 2.524% |
Derivative, Fixed Rate | 9.00% |
Derivative, Spread on Variable Rate | 0.00% |
Derivative Maturing 2016 [Member] | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative, Type | Cap |
Derivative, Purpose | Cap Floating Rate |
Derivative, Effective Date | Oct. 03, 2011 |
Derivative, Maturity Date | Oct. 03, 2016 |
Notional Amount of Derivatives | $ 10.0 |
Derivative, Variable Rate | 3.324% |
Derivative, Fixed Rate | 11.02% |
Derivative, Spread on Variable Rate | 0.00% |
Subsequent Event (Details) - Secured Debt [Member] - Subsequent Event [Member] $ in Millions |
1 Months Ended |
---|---|
Oct. 31, 2016
USD ($)
| |
Subsequent Event [Line Items] | |
Debt instrument, face amount | $ 58.5 |
Interest rate | 3.33% |
Debt instrument term | 7 years |
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