Sun Communities Inc. REIT Releases Q3 Results
Sun Communities Inc., a Southfield, Mich.-based real estate investment trust (REIT) that owns and operates manufactured housing communities and permanent recreational vehicle revenue producing sites, has reported higher revenues and a smaller loss for the third quarter.
During the quarter ended Sept. 30, total revenues increased to $63.4 million compared to $61.3 million in the third quarter of 2008. Net loss for the third quarter was $2 million, compared with a net loss of $5.5 million for the same period in 2008. Funds from operations increased to $12.5 million in the third quarter compared to $11.3 million in the third quarter of 2008.
Included in net loss for the third quarter is equity loss from affiliate of $800,000 from Origen Financial Inc. and losses due to flood damage of $800,000 at one property near Atlanta, Ga. The company continues to work with its insurer to determine deductible amounts and covered damages.
For the nine months ended Sept. 30, total revenues increased to $191.9 million, compared to $188 million for the same period in 2008, excluding $3.3 million in revenues from gain on sales of vacant land. Net loss for the nine months was $3.4 million, compared to $16 million for the nine months ended Sept. 30,2008.
FFO increased to $41.3 million for the nine months ended Sept. 30, compared to $27.1 million for the same period in 2008.
“Except for rain and reserves, we are happy with our third-quarter results which allow us to affirm guidance for the year,” said Gary A. Shiffman, chairman and CEO. “Efforts to repair the flood damage at our property are occurring swiftly and we commend our staff for their quick response to help our displaced residents. While we battled rain, our affiliate, Origen, battled increasing mark to market loan loss reserves causing them to post a $4.3 million loss for the third quarter. Although reserves have increased, Origen continues to report positive cash flow results as the reserves have no impact on cash flow.”
For 136 communities owned throughout 2009 and 2008, total revenues increased 1.4% for the nine months ended Sept. 30, 2009, and total expenses increased 3.3%, resulting in an increase in net operating income of 0.6%. Same property occupancy in manufactured housing sites was 82.3% at Sept. 30, 2009, compared to 82.2% at Sept. 30, 2008.
For the nine months ended Sept. 30, 2009 and 2008, manufactured housing and permanent recreational vehicle revenue producing sites increased by 243 and 88 sites, respectively, an increase of 155 sites period over the period. Manufactured housing and permanent recreational vehicle revenue producing sites decreased by 46 for the third quarter of 2009, compared to a decrease of 37 sites during the third quarter of 2008. The company rented an additional 232 homes in the first nine months of 2009 bringing the total number of occupied rentals to 5,749.