Sun Communities Earnings: Higher Operating Expenses and Corporate Expenses Offset Revenue Growth

Third-quarter results for no-moat Sun Communities were mixed compared with our expectations. However, we don't see anything from the quarter that would materially change our $172 per share fair value estimate. Same-store occupancy for the manufactured housing segment increased 20 basis points sequentially to 96.9%, better than our estimate of flat growth, while rental rates were up 5.9%, above our estimate of 4.7% growth. As a result, Sun reported 6.4% same-store revenue growth for the manufactured housing segment, which is also better than our estimate of 5.8% same-store growth.