Sun Communities (NYSE:SUI) reported second-quarter 2026 Core FFO of $1.84 per share, exceeding the high end of its guidance range by $0.05, as strength in manufactured housing, resilient RV operations and expense management supported results.
Chief Executive Officer Charles Young said the company’s performance was above expectations and prompted an increase to its outlook for the core business. He said Sun continues to benefit from long-term housing affordability trends, limited new manufactured-housing supply and demand for value-oriented RV destinations.
Manufactured Housing Leads Same-Property Growth
North American same-property manufactured housing and RV net operating income increased 6% in the second quarter, exceeding the company’s guidance range. Manufactured housing same-property NOI rose 8.8%, with revenue up 6.2%, primarily due to site-rent growth. Occupancy in the manufactured housing portfolio remained above 98%.
President and Chief Operating Officer John McLaren said disciplined management of controllable expenses also contributed to the manufactured housing outperformance. Chief Financial Officer Fernando Castro-Caratini said revenue growth above disclosed rental-rate increases was driven partly by the company’s rental-home program and other fees.
RV same-property NOI was in line with guidance. McLaren said annual RV demand remained stable, while transient booking pace improved as the season progressed. The company expects the third quarter, its largest period of annual RV contribution, to benefit from the underlying trends, though management said it remains measured in its outlook.
Sun has been balancing annual and transient RV site usage on a community-by-community basis. McLaren said the company had converted more than 8,000 transient sites to annual sites beginning in 2020, helping create a more recurring revenue base, but management has since sought to avoid over-converting at individual properties and during certain parts of the year.
During the second quarter, Sun completed the deployment of technology and systems intended to provide enterprise-wide booking visibility. McLaren said the upgrades improve booking routing, customer interactions and the company’s ability to use data on booking patterns and market trends. He added that the company is capturing transient RV inquiries at its highest level to date, although he did not provide specific booking or pricing figures.
Guidance Raised as U.K. Sale Remains Pending
Sun raised its 2026 same-property NOI outlook. At the midpoint, the company now expects combined North American manufactured housing and RV same-property NOI growth of 4.9%, up 20 basis points from prior guidance. The outlook calls for 6.5% growth in manufactured housing NOI and 1% growth in RV NOI.
The updated Core FFO guidance midpoint is $7.02 per share and assumes a full-year contribution from the company’s U.K. operations. Sun said its guidance does not assume completion of the planned U.K. business sale or reflect the timing or use of its proceeds. The U.K. operation is now classified as held for sale and reported as discontinued operations under U.S. GAAP, with current and prior periods recast for comparability.
Young said the U.K. sale, announced in May, remains on track to close by year-end, subject to customary closing conditions and regulatory approvals. The transaction follows the company’s sale of its marina business and is intended to further simplify Sun’s portfolio around manufactured housing and RV operations.
Buybacks, Debt Repayments and Acquisition Discipline
Sun repurchased about $200 million of common stock during and after the second quarter. Year to date, it has repurchased approximately $260 million of stock. Since beginning the repurchase program last year, the company has bought back about 6.5 million shares, or roughly $800 million, representing 5.1% of shares outstanding when the program began.
About $800 million remained available under the current authorization. Young said there is no predetermined allocation for expected U.K. sale proceeds, and the company will weigh share repurchases, operating-platform investments, technology, infrastructure and potential acquisitions based on long-term risk-adjusted returns.
As of June 30, Sun had approximately $4.1 billion of debt, a weighted average interest rate of 3.3%, a weighted average maturity of 6.9 years and net debt to trailing 12-month recurring EBITDA of 3.9 times. The company repaid $178 million of mortgage loans during the quarter using cash and repaid another $258 million after quarter-end through a draw on its revolving credit facility.
Castro-Caratini said Sun has $56 million of mortgage maturities remaining in 2026, which it expects to repay in the fourth quarter. The company expects to use U.K. sale proceeds to repay any outstanding revolver balance. Management continues to target leverage of between 3.5 times and 4.5 times, and said it expects to be near the low end of that range once the U.K. transaction closes.
Executive Vice President and Chief Investment Officer Aaron Weiss said the acquisition pipeline remains robust, but Sun is maintaining a disciplined approach. He said institutional-grade manufactured housing assets continue to trade at low- to mid-4% initial yields, while the company evaluates long-term yield growth, operating synergies, capital needs and the alternative of repurchasing shares.
Housing Law and Leadership Update
Young also discussed the recently signed 21st Century Road to Housing Act, which includes provisions related to manufactured housing. He said the law preserves investment in the sector, provides manufacturers with more design flexibility and encourages state and local governments to accommodate additional manufactured homes.
McLaren said removal of a permanent-chassis requirement could create more flexibility in home specifications and development discussions with municipalities. Both executives said the effects would take time to develop.
Young said Sun appointed Ileana McAlary as general counsel last month. He added that the company’s search for a permanent chief financial officer is progressing, while Castro-Caratini and the finance organization continue to lead the function during the transition.
About Sun Communities (NYSE:SUI)
Sun Communities, Inc is a publicly traded real estate investment trust (REIT) that specializes in the acquisition, ownership and operation of manufactured housing communities, recreational vehicle (RV) resorts and marinas. The company’s portfolio spans more than 500 manufactured housing communities and over 160 RV resorts, offering affordable, long-term housing as well as short-stay recreational lodging. Through professional on-site management and amenity-rich community designs, Sun Communities serves a diverse customer base that includes retirees, workforce families and vacationers.
Founded in 1975 and headquartered in Southfield, Michigan, Sun Communities has grown organically and through strategic acquisitions to become one of the largest operators in its sector.
