Sun Communities (SUI) 27 Jul 232023 Q2 Earnings call transcript

Good afternoon, ladies and gentlemen and thank you for standing by. Welcome to the Sun Communities Second Quarter 2023 Earnings Conference Call.

At this time, management would like me to inform you that certain statements made during this call, which are not historical facts, maybe deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. Factors and risks that could cause actual results to differ materially from expectations are detailed in yesterday’s press release and from time to time in the company’s periodic filings with the SEC. obligation events or date or release. no statements any of undertakes reflect to circumstances company to update advise forward-looking this The after the

said a Officer; and management Castro-Caratini, Chief to Shiffman, Having [Operator President call Fernando would Instructions] is Officer. today, recorded. As Chairman, Executive us this Gary introduce Chief and Financial I that, reminder, with like being

Chief may call now to Gary and turn begin. President you Shiffman, the over Executive will Mr. I Chairman, Officer. Shiffman,

joining our and for to Good discuss guidance. results afternoon you and quarter call our second thank XXXX updated

in results. to FFO the We Sun’s with X.X% and are pleased recurring share in growth in was share continued guidance, for EBITDA. strong $X.XX growth operating by strong NOI year-over-year Core of supported line per same-property quarter X.X%

the guidance cash demand teams Our streams supply, unparalleled compelling to shrinking with resilient durable when our the NOI Same-property customer services growth fundamentals high low growth cycles. flow of of which generate ongoing and solid successful by was combined and economic the basis throughout expense quarter historically properties the revenue implementation deliver, in share exceeded points driven of and high-end by management. the XXX

the quarter, resilience basis our end stream XXX a of adjusted demand annual the same-property growth which RVs, of reflects increase XX.X%, At driven to RV X.X% grew strong rental for residents, increases and our continued gains. and the of by MH reflected X.X% our transient year-over-year rate efficiencies. housing, compared into same-property revenue converting points and manufactured and In guests occupancy NOI our was properties. by for locations growth stable operational bolstered XXXX, In NOI on focus improved occupancy same-property of combined of

nearly by compared compared portfolio, NOI Additionally, premium to last revenue-producing over locations for fueled to sites. of represents increasingly we wet and year outperformance our growth X.X% year, sites unmatched Same-property expectations. network throughout slips during boulders prior across the offered grew new our brings year exceeding robust to and XX.X% dry in demand the storage X,XXX gains amenities Marina quarter, which total The was convenient our X,XXX the who total the Marinas. gained best-in-class from for discovered

XX-month long-term same-property is a powerful EBITDA of and engine embedded guests the preserve on in portfolio optimizing we total NOI for On our the and level value and and reinvesting By flow intend internally our generates properties and providing residents, property highest portfolio of customer basis, real to revenue increased focused growth. XX% ensure predictable a cash members trailing growth. growth. We our and remain help for service,

Portfolio In operations. a shared select to significant the dedication over of our GHG achievements, expansion including initiatives improving and and all responsible which optimization we resources Marinas completing the and our in reconfigurations live, goal to commitment enhance and of communities important case of achieving stock returns being May, stewards the communities. ESG X highlighting and toward expansion we to published across emissions. reinforce sites in serve. other cover In we to includes net-zero Board’s These and our inventory of our XXXX property XXX second Marinas the scale quarter, expansions property report, delivered property our to work, the UK

half like our of in team would in year. been Sun accomplishments I thank instrumental to have who members all the first the

our all realizing of that forward we and through platform I greater XXXX, As stakeholders. Sun’s to further to even will of look the deliver half second we the progress value achievements enhance

turn I will Fernando to the over now detail. to discuss our results call Fernando? more in

you, Gary. Thank

well revenue offset and line the corporate with expenses per efficiencies $X.XX interest Real guidance. performance, quarter, second as partially growth drove level quarter’s the expense. share property During of as in property core in FFO by was higher

our XXX for which demand points. guidance as in by solid same-property were the our to the outperformed compared strong. properties XXXX, of grew results Total basis quarter high-end remained same-property X.X% as NOI Our

same-property growth in grew Same-property expectations. utilities, and Total and broad-based revenues of year-over-year housing quarter, growth expense was during exceeding manufactured lower X.X% taxes realized payroll, increased growth moderate real with estate exceeded expense other the X.X% X%. The property expenses. NOI internal operating

reduction strong Our the in performance rate NOI over by transient bolstered resulted X.X% investments. growth quarter modest by X.X% operating gains increase the payroll X.X% in and partially efficiencies expense growth was offset increased year. rents same-property growth, X.X% and These expense in strong prior by year of revenue. We growth in for RV, driven RV occupancy X.X%. a rental the lower-than-expected prior weighted average that in expense a annual In achieved especially over

solid delivered weekend. the communities holiday X during results RV Our July

transient revenue compared transient Friday as by same-property to revenue on period, by even X.X%. year year, had the Monday fewer fell for we X transient X.X% whereas X.X% RV available. RV to still Same-property sites a this Adjusting last on a increased XXXX Monday. just fell increased Tuesday July it

we from levels. annual to mid-week increasing record While growth our property through annual revenues Strategically, to increased holiday site and moderate recent RV continues see remain weekend we continue during revenue stable conversions. transient demand transient strong on to periods, focused

decreasing conversions by in transient over expenses variable In margins increasing higher percent addition derived time guests. of the residents, higher from of revenues to the level with result associated annual NOI

total long-term to quarter, XXXX, X,XXX of to over portfolio, over to to to our second have we continue sites sites. intend we driving RV annual the transient X,XXX across XXX site nearly we start transient sites returns. the conversions half converted During optimize transient first Since and bringing converted annual conversions

same-property Marina most utilities stronger quarter, internal growth supply significant significantly our from and and expense overall second of benefits, repair. X.X% that by mid revenue for growth Lower expense the payroll surpassed demand in driven single-digit increase lower in was NOI a was X.X% and expense outperformance and expectations growth. This increased Marina XX.X%. In

on track America to achieve were are In expectations and sales, we terms in of home line our our with guidance. in North

$XXX,XXX by margins. homes Continued for an higher and is demonstrated demand average of new price

The continue Home in economic were prior headwinds home vacation below sales. homes below sold UK, expectations. our line approximately margins, XXX the NOI impact to second while sale with margins, X.X% remained X% In late longer quarter in the increase unexpected year the Inflation in of point its the June, interest our rate. implemented were XX UK Bank higher basis base for than in an anticipated. And England has expectations. in

home sales We time to on home home the under seen have margins purchasers vacation buy a take and those to pressure. the lengthen remain continue

to challenging successfully experienced Our and a on team with while continues optimizing margins this market environment persist. focus navigate these conditions volume UK

resident to side, of the retention remain higher we approaching seeing the for homeowners, higher Park years. We about tenure opportunity X in business. the property average On this rates Holiday growth enthusiastic are which real leads segment

at June XX, weighted a in average X% of debt and had or weighted X.X outstanding billion $X.X years As interest rate average to maturity of XXXX, our years. of

of on recycling was the anticipate operating Based leverage expectations target. remainder our potential Our trailing capital ratio flow XX-month cash year opportunities, we our leverage for the and X.Xx. deleveraging towards long-term

full As for a supplemental, guidance by are share FFO revising guidance per core to for of and third our detailed our range established year in $X.XX $X.XX the to revised quarter. we downward range X.X%

expected short-term primarily is interest in in the from our meaningfully. variable in lower business. Since revised rate Our expense have and reflective debt sales interest the predominantly higher UK funded guidance last year, of guidance April, expected rates our sterling-denominated flexible update the that the increased home second half UK of

refinance opportunities evaluating of and are half debt floating the the We pay-down second rate to year. over

point housing XX continued our X.X% basis range a moderated performance to expect by midpoint increasing driven same-property growth strong The of NOI Marinas We are and the X.X%. same-property manufactured and revised is by the increase for RV. in for same-property expectations total year outperformance to at

over also additional half second of We expect G&A the year. the savings

at growth decrease for housing, increase to for growth X.X% at the XXX decline the driver increase RV to from year, representing representing now forecasted a to Marina, midpoint. X% X% point Our representing year which transient largest midpoint. revenue, the for a The is a midpoint, X.X% X.X% X.X% XXX ranges for at to revised expectations the manufactured basis point the full XX the same-property revised point be NOI a for basis RV, X.X% is are for basis decrease

For to from the of for NOI a year a to prior approximate our revised X,XXX represents to range lowering are year, to forecast for between assumes we UK homes million decrease the midpoint The range full and at an guidance million. operations, our million volume we $XX.X X,XXX in $XX.X $XX.X full home decrease April sales sell expectations. XX%

For additional guidance, updated our supplemental see year our regarding details disclosures. please full

through and acquisitions quarter. the contract a to and reminder, of activity XX effect guidance dispositions disposition under includes a and markets third close during property expected that the July is our capital As

which activities, acquisitions, guidance or in not research analyst the of markets does Our prospective estimates. dispositions include maybe included impact capital

our This remarks. concludes prepared

call questions. the open up now We will Operator? for

America. [Operator with Please line Instructions] of comes question. first question Josh of proceed your the with Dennerlein Our from Bank

Thanks Yes. Hey, for guys. the time.

second down come to guidance this sales row how with walk time a So, profit? well. you’ve profits forecast us that sale is I What’s guess and in is this up bottom? kind taken as through of UK home the I can range say the and volumes think you And you home or the for that the

vacant lot homes and fact exercise how built be all from can that which be bottom to And include oversight, community at that at annual re-guide and the sites sites with home taking this account the convert about rental I’d really of to we the had sites, UK, but sales the to sell into forecast activity create able thinking a an before are on on, property built fleet expansion sites from look from up on. the really has fee delivered the completed that level. is sell to we we To Thanks. home have Josh. Sure, higher homes available underscore up to level,

really the ‘XX. results if lag of Our would they for major revised UK them. in certainly, remainder improvements the doesn’t understand see the think any decline of or balance market wouldn’t interest conditions And we rates we year, between as impact to range we those were assume this the incorporates and the year. them into for even in It changes inflation current

believe indicates consider our outcomes we scenario. So the likely the tend worse range and range a high catch what to outcome really case end to we end most low of of what our the would further is of that currently

much there since unexpected in but reduction, the mentioned rate the slower UK, met since As of point at have NAREIT, been increase then reduction does conditions XX CPI, Fernando was changed the on modest homes. in has our England’s some his and certainly, it of Bank although ramifications vacation basis remarks, have in the we buyers

that we we adjusted how can best guidance should thinking really range. done feel the be with job the we what came and see, we and through from that’s a good scenario So have a XXXX insight that through up

pay or lot finance then their homes? use And people – lien for Okay. for you how walk like do us through there of to a pay primary is Park on could their people it? second Holiday most And home a

Sure.

about XX% be our would So with to financing that U.S. channel homeowners in are purchasing the of financing Josh, here akin

we home, their XX% using home. it instances, are see they higher are primary other rates their to home cash. proceeds their rates The for Certainly, purchase primary In vacation right, refinancing are – order as from refinancing some in homes.

as the as So, of sales. equation volume far that’s expected going lower into

and And the single-family those their U.S., that period we buy the there. strong I Park vacation homes rate the mortgages the line, factor a Holidays a units, to platform potential thing in taking shorter to add so to years, probably in work home in rates here place the from a add that’s only location homebuyers to home the our primarily fixed are would reset that potential the to the they slower residential, of thing mortgage really through work experiencing of certainly, for of interesting changes properties, that as time is and But X X customers. a that UK, the continues put conversion from just in the Brexit, the the market seeing are I the would

but by activity, the real tourism, remains think So a it’s and high high experiencing definitely I homes, demand, sales, in there ramifications peso the is they property talk high high because usage the interest influenced about when still UK. still anecdotal financial we – slower are buying in

Markets. Please Our the Capital your comes next with Brad RBC question line from of proceed question. with Heffern

ASPs underlies UK Thank Sticking the rest with you. compared margins for terms what you in year? sales. the the guidance Yes. of of to about talk the Can last the year the and home

Sure.

expectations sales of have for our So Brad, between margin home X,XXX X,XXX and year to us a full NOI $XX,XXX $XX,XXX margin. the having

you As reported you see for see – as us. would it

basis. So on moderation we margin do have a expected a to year-to-date

a margin. about achieving We been have $XX,XXX

what the about improve? it Is that Okay. to business you And do you rates Got need Does think stabilize recover? long taking? how go do to And to down? UK economy needs then how to or happen it. about need for that potentially think just

think a hasn’t go we challenged you have now. Europe, taken earlier I to would but that ball. the crystal we Yes. right had through thought to assumptions, our UK start like would has place. improvement, economy look we And we when Clearly, if see most on some

that to in have of CPI, begun have steps the year some XX% a Bank England the think I right improvement taken been which show was around ago. by

As as to drop would little a recently while ago, X.X%.

time. to a it would we commensurate decreases So rate a we see that go. conjunction that But ways improvement, be there as still think would I with in over has expect

the XXXX, more sales. realization change look So into out one to go as back to we will we that’s see we that normalized in think we begin

Thank you.

the Instructions] question. comes Keegan next [Operator from proceed Wolfe of with question your Carl line Please with Our Research.

Difficulty] [Technical

so well. Doing

Just thinking the views Two, view And three, the seeing on long-term the forward? of capital platform. does on going what how underwriting harbor then allocation performance space? about you’re what safe curious, to one, your the long-term marina you’re

of X would XX Keegan, of question, to Can through. you did seconds not say repeat, just come your question seconds over. your the first start I X

Yes.

on on focusing outperformance just I be and think obviously, should business is So that. impressed, the focusing because marina people the really

it because then a So Safe trending the mean about And the one, you’re platform, versus allocation you what this? long-term How initial the from given your expectations? seeing are does forward? standpoint what how Harbor that going capital underwriting space thinking of is of in

occupancy small Safe out, Keegan passed strong. that for the medium, demand the all start really season from suggest very were to by storage I’ll strong dry to and outperformance just rental across was and Harbor and entire rate superior. increases driven way The slip through the the peak remained board

amenities includes for a an demand that slips as XX% of fuel it, membership, across noticed for use our best-in-class to locations Safe between of network the fuel per service unmatched we today then increased on do really and lot basis. such And the attribute Harbor Board. the that best-in-class passing about. seeing which of a We’re to talk like at facilities And up usage to we the gallon the basically we value there customer out members things cost, perks travel year-over-year and really on is

a intentionally a the to was So margin is impact more in some the which of of reward R&D, slip sacrifice that decision we important paying really made rental.

performance how very and So it Harbor we’re Marinas very, pleased Safe at in things are performing seen at after quarter. quarter we’ve

to outlook, With allocation the at capital is restricted think we have that today. regard long-term fairly you our I shared company with

very We’re on are our way marina as a very within portfolio disciplined capital focused in example. a internally using great our

right the slips. We and still others invested are four now the the And Of opportunities, on. three XX XX% get worked in construction taken to have place investment. opportunities reconfigurations a in process reconfigure XX under we being reconfiguring or XX marina on slips, seven identified when are to we we permitting are that about have XX% return about

marinas. that’s it to So a the to are be capital allocation. a effect situation marina, trying of Savannah, has If achieve the lot will that we accretive see looking opportunity will growth, [indiscernible] within where in to restricted benefit we’re where for a network a it strategically really we external like

if you that know add. questions. don’t I to So addresses have Hopefully, some anything

into way just business? called the is higher cap to Is that that the an because Fernando rate, recycle MH might fair to higher-return Can assets assume it? marina I and it Is just right about opportunity. think RV the some follow-up sell capital recycling you out capital

portfolio there ranking. when our of always that evaluate and tier force think look a bottom assets, as is I we at

looking to of will strategically So opportunities evaluate selectively we look towards of meeting likely any long-term we’re growth out for. profile will properties look all to capital And of use front the certainly, we and immediate But maybe aren’t that go today, in recycle some would deleveraging. us. that that

it. queue. Got into a back lot, Thanks

your comes next Eric of from the Please with Citi. question Our question. proceed Wolfe line with

things kind Thanks. over of I here. last acquisitions. volatile lot go And of a and I here a day, questions like recent really of seems Eric. Obviously, question probably guidance company But that at It’s back earlier. more Definitely we end part has from guidance think the to are the of from Joseph really kind of the results. XX forward the stability with about now. the missing actually think benefited guidance is if of Gary, calling Nick into the the it’s kind years, if

you volatility pains, needs forecast the think you Are of of is think outcomes the to and just back growing these as results cited. you that how the So the accurately? bit kind broader we guess, new it of UK side what a more change corporate given to with get some from macro or to And the traditionally range was maybe ultimately, do about I just businesses?

we you give from certainly contribution real so trying shared there. makes some to. all we guide to difficult. all, to complexity the XX% to that to things, look can it something forward. curve, all think have forward to in we And with steps use in the taking is we’re we in that get hard had when modeling regard challenges reguide, what to thoughts. meaning property can to time, we UK we’re we our guiding share at with with we’ve the very But is have stakeholders we Fernando when doubt have and everything forward simplification the guidance. Obviously, it the things thoughts possibly the caused whether the we can helping with back experiencing entire the of whether working and best regard on the economic his lot the a with But challenges There I think of that about that no tools about headwinds is be I’ll be how reduce that we’re assisting

lot do have we’re working on. work to UK of a that We in the

the we Fernando together been can Marina kind measure the of you lot can you I a be On put benefits side, marina to site going And there. things And modeling. know if don’t of to the hard worked disclosing of same supplemental I able simplify to anything that we’ve very have was from present in want data so working and that help that forward. very, to has a add lot know

XX very that has of through we So been aware years large both good on our focused to as company the stakeholders the modeling and very, in public we’re We’ve the around plus Marina and created as acquisitions, in step-by-step complexity as and been very the recently. complexity that the reducing attuned a forward that that’s possible. marketplace. part the very, are guiding And listened making UK and

kind complexity Maybe Thanks. What that reduce can somehow Is you the near, to you are on home follow-up just the in Is How about complexity? and medium of thinking it the actually selling it? it a longer-term, do right? business? UK reducing that. restructuring sale

certainly, very we that strategic fact the property contribution X-year strategically, focus the that the like very, in with we market margins was do the to long-term plan. deemphasize stickiness UK is sales kind of a from of shared U.S. and have real the Well, the goal contribution it was a piece on home one of and in our that

home we’re average think but as out side there. to the we’ve on a increased real percentage time. that years. down around the working period Ironically, UK up, over of sales We’re a in I already it long And X percentage stay is progress that with slowly making property

the to for to We’re years XX stay UK from XX licenses years. expanding properties our in –

to the to you that grow we XX look if years American and year, So X similar the in North more housing. will, continue manufactured expect to

parties. of to period over I that, think, on on a of taken the as we’ve deemphasized as to income over take some All will forward. from sales third profit Marina simplify in the things So SRDE similar look convert help as and home that and rental steps the focus we the to really real we time, accomplish going margins service and a contribution, side well out

Thank you.

Our comes question. with Powell next Anthony Barclays. line of your from question proceed the with Please

marina a Thanks. question Good RV, risk still of guess, calls to afternoon. normalization growth any seeing a these habits various on over adjacent the Do lot past and Marina, next revenues A COVID. of people necessarily will holidays, Transient impacting then the normalization I older been It’s has of been few pretty you in years I turn see guess, strong. not midweek. you’re transient few on, of in days. RV topic as more post And leisure businesses. maybe

on half normalization the that to X we’re the transient the XXXX. the Say, side, X record Anthony, think we’re XXXX from given RV over and second years, I years overall bump over seeing last into of

lot We are of to for properties. – demand our we continue a see

last with I stay over record of and a now which greatly time X,XXX choosing think are pandemic rental have to us period that year basis course our annual prior call a getting on were the on of conversions to a predictable it, and with that you converted about they average, years, – an we per from having standpoint. rental we transient the taking we’re increase X-year guest basis, for see and over sites X.X the on that what number averaging of outpaces the so

of would right, income our from on Marina first high not we’re demand growth the very rental transient half underwriting certainly of this side, coming that in item. On stakeholders, the seen line year, the transient. the for as double-digit we’ve percentage I’ll transient well side remind say, But

side, to On the it about rental income. smaller, X%, total Marina X% it’s is of much X%

seen we double-digit not the to line on course are item, mid underwriting over for have growth So long-term. outperformance of the but that

Thank Alright. you.

proceed Fargo. Wells Our Please with question. from line Jamie Feldman of next comes your question with the

you. Thank Great.

there that keep is balance plans where simplify Can credit appreciate to or Holidays refinance it think that. bring And Park you on down? then $XXX other guidance, you the how took your But visibility either along on about create commentary it about up and more million. lines, line your back So to you you if that simplifying. of above talk I do the down all areas and some same

Jamie. Thanks,

looking – the expectations the mentioned deemphasize property side. SRDE business parties service level. That the earlier, on we brought modestly is, at down to On are third marina side, over to time over especially on the as we, convert we us we that paying as Gary the rent

seeing we And So NOI time. real be not I will over pay parties members, then will received, third our that to ultimately and that that continue think rent at benefit we us property from properties income just our to but rental that service. provide that

to we various relates alternatives of that the our we’ve capital it last that assets the to debt. pay mentioned months, down As line of of credit, from would capital course have where that’s immediate over the – whether use couple of be strategic recycling pursuing operating –

as order markets will second well and into down of in capital be convert we think more transactions the and in are investments there you free target But as balances de-lever XXXX, in well moderation look that half evaluating as our I we being mid-Xs. flow towards will towards bring to the a in towards capital the deleveraging. those cash long-term

I could follow-up ask that. And on thank Okay, a you. just if

what that interest to more or the and would expected, was you they higher if the because used it reason thought didn’t credit you for use rates you that? did are So than because guidance expense than be? And you expect reduction, is line the

general, in basis On in of for I XX and are expectations up points about average from say would XX, would on both primarily where ending basis, year Sure. rates at curve, the forecast-to-forecast SONIA April. our forward end the – from SOFR forecast last a be the

Okay.

just it’s balanced. So, It really forecast. not was

Yes.

Okay. Alright. very you Thank much.

Thanks Jamie.

Please next Khanal question with question. comes Samir Our with from ISI. line Evercore your the of proceed

little side. Pricing rent inflation kind how is I of I into question Gary, moderating here? the on MH think the strong year of mean guess, a Thanks. afternoon. maybe gears next Good Yes. you with I end. on months. XX more switching still increases guess in that next the just on bit do a about

on to the a those our results, increases our fourth to But through board. in year-end there the February pressure. that suggest great the businesses, in annual, share will able occupancy solid through opportunity quarter with we will is inflationary be of a market with It’s we Certainly, rate providing XX.X% expectation last advance that rental everybody and did overall be makes rental we what forecast October in pass will share will guidance increases with across throughout and continue that question. pass to again Yes. October. I at we all the would

next question John with line Please Street. of your Our comes with from the proceed Green question. Pawlowski

where have Hi. wanted revolving the question. Thanks over well credit it’s time. facility I for been to follow-up heavily a guess I on Fernando, the year you the leaned on revolver.

should So, why lock your debt specifically expect term the and closely to out assets we more the properly wasn’t align you termed long when that ago duration of with to longer in financing?

our what our is maturities, of credit, the quarters of extend in what’s line not but look due from a John, you secured the coming just next will see standpoint. to course couple over us debt of

of as that’s – over us of those active expected our front multiple quarters. balances are it’s able rating far down, as to we bringing as transactions strategic that since something we bring actively working been down. being far on have we execute in as But alternatives that done and year, balances the XX be the continue our and couple have So, of billion course XXXX, the having transaction of towards. years and tenure. initial about of of of that X evaluating January back investment-grade have the bond really in would But years debt between next summer market in recent long-term to we most this was been in $X.X very And the

there, four we leaders the retired Investor operations And the Park from overseeing since over your Holidays, or leaders Okay. mothership senior question left here is in another Have Day or any then from properties senior Holidays. day-to-day five who on at States? Park left of with Sun toured

and Yes. as they economic really work single well-seasoned John, challenging everybody every there times. lever to pulling these is there still have on generally, is a team looking

other. there, are people talented of are group still that very and the we with So, pleased

you. Thank

the from Markets. of line proceed comes question. question your next with BMO Kim Capital Our with John Please

not on development afternoon. had a your a Ingenia. that term X-year am Good be venture question later joint this If I for renewal had up year. I would mistaken, initial

was is appetite source wondering to of going, what this So, I a be your potential or keep it funds? could

is think JV up we John, time X-year technically, end call it, of I the the at that question. of Sun-Ingenia, is as Great fact period November. the

assessing which had have you everyone, head always really JV, XX% a our to a is in remind will, And Ingenia Sun We performing. successful are businesses, owns stock. interest if we

and there kind We are happy are and the has although filling of break the JV X-year there, The about to are ground. COVID crept no developments, nicely. doubt, a the just with in phase two relationship in up two And are is Sun-Ingenia now they pandemic, other the fill-up four partnership plant. but

filled to we our recycling stabilizes. maximize that debt. all With they to sure do to will these results developments we expiring, the four the best we are that about as we relates also down those we forward, some and will think to to one moving that optionality JV of up can forward. review the But But moving how continue and reviewing are of capital once variable factors are rate the the options bring make that want we is opportunity have

how we does we keep through you period expected. continue think that we of as going to will the focus where So, advised to time on are

UK Okay. home I sales. just could And follow-up if on

UK number year. of been currently have homes the planned already of is in of quarter quarter for the article many FT how the is that all. third Out of that’s wondering three to third this lenders the am to sensitive couple quarter, crucial sold mortgage reducing that the largest mortgage factored hours given I a been of are was I how most in rates. negotiations? And ago rates. There just at you sell the Just an of wondering was on if or had the came

would benefits that Yes. like I we there the but sitting reduced to shared I are benefit think be of positive, that forward, will a anything would things that. we the a mortgage here start or going see do in rates before of anticipating lag as we that not the be definitely comments earlier, like say

in to range market the sold do kind the information know, now. about any the many our third our view X,XXX I right we X,XXX And talked on have the we that in underwriting the Fernando, for to year So, is don’t in downside quarter? how of unit

we we pick over heading the the course homes and back August, identified, will quarter will in the of any other the investor over into we weeks. provide updates next when potential do market busy holidays course period be up to updates. during able you But report a couple meet we the to are on of presentations the as John, we of and as sold are,

third Is little good Can I maybe roughly sales. more you The third rate on or the bit, forward home in a disclosure and clarity of seasonality shifted the more more squeeze question. just this but had seasonality each second in a UK provided a fold quarters? going one also or run of

standpoint. use Yes. The but to due changes volume, seasonality rate would primarily shift from seasonality best this in be the a say, to the we run yes, would

you. Thank Great. Okay.

your Our next Baird. with with question Wes line Golladay from Please comes of proceed question. the

everyone. charging, Can want few that next future. in rate, the expect few to you moving or years? same to book? address have over loan do that comment is you it are maybe I parts may the of you you of the Hey And the more size the rate the that Is fixed floating? on a maybe book mostly stay just the

joint call owned portfolio our finance of loans. residents a communities. in $XX their are we Wes, where payments are is residents a our no about rate, million partner, active have make venture repayment run million homes is we month as We $XX it, our per wholly million That on as to $X today. financing their notebook, where in underwriting do XX%

been is for an rate high fixed. financings. plus/minus they are, Those that uptick, end have Chattel at rates historically loan the range fixed are Those to XX% in haven’t it, been has today moved call significantly. of customers. There’ So, the the X% range. but

where I the reduction development most view is would always channel loan allocation suggest of which with in capital forward. go we is to a sites, as of usage probably a slowdown of new

from your proceed UBS. question. comes line Goldsmith the with Our Please Michael next question of with

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So, people the over pay their maybe tail you as get more a income regular little bit long rents?

price one UK that recently, and the it’s expect volume to update of on very fact, are homes in to move bit it. challenging home in And and team, sell as the economic on increases. we margins property with to and see we they us at fees. When put it time we ability monthly to And those fully they very, as right rental more strategy, about able calls to our little are a attuned with Yes. adjust pass the shared our now this on focused real management talked accelerated

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more getting And to near-term? on home are follow-up, then in it quantify as the you look balance the you of the and the Are a you to the cash are you getting navigate pressured that kind as kind flow, So, increase further? consumer offsetting able back you it of over careful is are time over back rents a the time losing like consisting navigate just pressure is part as you or sale? just the of what in a if

the think latter. Yes. At it’s I time, this

this period a with rent margin create be we very a we over a a of to to to believe First very time one at environment to and would it America, do of be communities home any at a get manufacturers adjusting there. are time. understanding less are sticky flow all, an that stakeholders because And for time, challenging soon just rent in as steady XX-plus-year conclusions North we the our obviously, generate and looking for we able over is to are housing a management uninterrupted on better of for annual cash does than generally X.X% XX-year, that that time. will it multiple drop But looking share of that of what low just in economic we our too period tend basis do and sell leasing of because period predictable homes

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are that. on we So, aligned

much. very you Thank

proceed line Securities. with with question. our Hau the Anthony of question your comes Truist And next Please from

guys. of that are holiday Can Thanks trends my heard for you rental taking talk the Hey that are seeing some in guys competitors the question. rates. the about I you guys the the side on lowering UK.

curious Just thing the as are doing same you if guys well.

Anthony, good question.

the capture open fairly from we rates down more actually seen market competition and segment. rates the to have seeing holding but are on We bringing share that market demand, our steady

the the that’s we so And That are conversations having outlook. is today. that

and opportunity like just if would Got over initiatives it. like guys great a and also Holiday the separate slip can of solar and you configurations. return. size go quantify And RV, arrays It expansion other opportunities you like such question, and potential the can the each current be Park AMH as

a looking of it of earlier, expansion of AMH, be we But Historically, what has in low or these – that the buckets XXXX buckets vary I expect home returns an from buckets, much, teens more RV, would of range, the expansion are been given XX% head in typically it, spend the in into converting we capital slightly of as we then cash be. flow mentioned any we will can think go in each usage a faster. potential, XX%. debt UK, Anthony, review a call the expansion as we free We opportunity through will higher would growth any higher spend solar projects period these any in, much ROIs in Any payback slightly carries deceleration and we case. can it, let’s on that and these those but investment ROI, as pays repayment, arrays towards the building of the unit, at that call the carry on mid-teens XX% back sale the typically can we to rental in standpoint. And would focus offline, detail for offline. from

Okay. Thank you.

the And end reached now remarks. closing we it have for back management over of question-and-answer I will to And session. turn the

the implementation on for our second appreciate call, into quarter everyone the speaking and sharing we viewing of increases joining operator. XXXX. to you, forward rental third also and we how So, us quarter going we look Thank are

today’s for conclude conference. in your remarks. Thank does participation today’s the you company’s – This

lines. You may your now disconnect