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Real Estate Acquisitions
 3 Months Ended
Mar. 31, 2012
Business Combinations [Abstract]  
Real Estate Acquisitions
Real Estate Acquisitions

In May 2011, we acquired Orange City RV Resort (“Orange City”), a Florida recreational vehicle community comprising 525 developed sites.  In June 2011, we closed on the acquisition of Kentland Communities (“Kentland”), comprising 17 manufactured home communities and one recreational vehicle community.  The 18 communities acquired are located in western Michigan and comprise 5,434 developed sites.  In November 2011, we acquired Cider Mill Crossings (“Cider Mill”), a Michigan manufactured home community comprising 262 developed sites through an auction. In December 2011, we acquired three Florida RV communities, Club Naples RV Resort, Kountree RV Resort, and North Lake RV Resort (collectively the “Florida Properties”), two of which are in Naples, Florida and one of which is in Moore Haven, Florida, comprised of 740 developed sites. These acquisitions complement our existing portfolio and create both short-term and long-term growth opportunities.

In February 2012, we acquired three additional Florida RV communities, Three Lakes RV Resort, Blueberry Hill RV Resort and Grand Lake Estates (collectively, the “Additional Florida Properties”), one of which is located in Hudson, Florida, one of which is located in Bushnell, Florida and one of which is located in Orange Lake, Florida, comprised of 1,114 RV sites in the aggregate. We believe this portfolio provides for growth from both rental increases and through improved seasonal occupancy.

Acquisition related costs of approximately $0.2 million have been incurred for the three months ended March 31, 2012 and 2011 and are presented as “Acquisition related costs” in our Consolidated Statements of Operations.

During the third quarter of 2011, we completed the purchase price allocation for Kentland and Orange City.

Some of the amounts previously estimated have changed during the measurement period. The changes in estimates included a decrease in other assets of $0.8 million and a decrease in cash consideration of $0.8 million for the Florida Properties. The measurement period adjustments represent updates made to the purchase price allocation based on the escrow amount required for the Additional Florida Properties which is reflected in the purchase price allocation for the Additional Florida Properties. There were no significant adjustments to our Consolidated Statements of Operations.

The purchase price allocation for Cider Mill, the Florida Properties, and the Additional Florida Properties is preliminary and may be adjusted as final costs and final valuations are determined.





2.      Real Estate Acquisitions, continued

The following table summarizes the amounts of the assets acquired and liabilities assumed recognized at the acquisition dates and the consideration paid for Kentland, Orange City, Cider Mill, the Florida Properties, and the Additional Florida Properties (in thousands):

At Acquisition Date
 
Kentland
 
Orange City
 
Cider Mill
 
Florida Properties
 
Addtl Florida Properties
 
Total
Investment in property
 
$
131,228

 
$
6,460

 
$
2,088

 
$
24,027

 
$
25,384

 
$
189,187

Inventory of manufactured homes
 
1,150

 
—

 
—

 
36

 
112

 
1,298

Notes
 
3,542

 
—

 
—

 
—

 
—

 
3,542

In-place leases
 
9,200

 
10

 
—

 
190

 
180

 
9,580

Other assets
 
1,269

 
—

 
—

 
97

 
—

 
1,366

Other liabilities
 
(2,067
)
 
—

 
(1,678
)
 
(1,237
)
 
(1,194
)
 
(6,176
)
Assumed debt
 
(52,398
)
 
—

 
—

 
—

 
—

 
(52,398
)
 
 
 

 
 

 
 

 
 

 
 

 
 

Total identifiable assets and liabilities assumed
 
$
91,924

 
$
6,470

 
$
410

 
$
23,113

 
$
24,482

 
$
146,399

 
 
 

 
 

 
 

 
 

 
 

 
 

 
 
 

 
 

 
 

 
 

 
 

 
 

 Consideration
 
 

 
 

 
 

 
 

 
 

 
 

 
 
 

 
 

 
 

 
 

 
 

 
 

Cash (1)
 
$
27,383

 
$
2,533

 
$
410

 
$
6,113

 
$
24,482

 
$
60,921

Preferred OP units
 
45,548

 
—

 
—

 
—

 
—

 
45,548

New debt proceeds
 
18,993

 
3,937

 
—

 
17,000

 
—

 
39,930

 
 
 

 
 

 
 

 
 

 
 

 
 

Fair value of total consideration transferred
 
$
91,924

 
$
6,470

 
$
410

 
$
23,113

 
$
24,482

 
$
146,399



(1) Subsequent to the acquisition, on March 30, 2012, the Additional Florida Properties were encumbered with a $19.0 million loan through Bank of America and The PrivateBank (See Note 8).

As of March 31, 2012, the total residual value of the acquired in-place leases above is $8.6 million. The amortization period is 7 years.

The results of operations of Kentland, Orange City, Cider Mill, the Florida Properties, and the Additional Florida Properties are included in the Consolidated Statements of Operations beginning on their acquisition dates of June 2011, May 2011, November 2011, December 2011, and February 2012, respectively. The following unaudited pro forma financial information presents the results of our operations for the three months ended March 31, 2012 and 2011 as if the properties were acquired on January 1, 2011. The unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of either the results of operations that would have actually occurred had these transactions occurred on January 1, 2011 or the future results of operations (in thousands, except per-share data) (1).
 
Three Months Ended March 31,
 
(unaudited)
 
2012
 
2011
Total revenues
$
83,619

 
$
76,802

Net income attributable to Sun Communities, Inc. shareholders
$
5,746

 
$
2,602

Net income per share attributable to Sun Communities, Inc. shareholders - basic
0.22

 
0.13

Net income per share attributable to Sun Communities, Inc. shareholders - diluted
0.22

 
0.13



(1) Below are nonrecurring expenses that have been adjusted for the pro forma results above:
(a) The sellers had management fees of $0.4 million for the three months ended March 31, 2011 that have been excluded from above as these fees will not continue going forward.
(b) Transaction costs related to the acquisitions are not expected to have a continuing impact and therefore have been excluded from 2012 and included in 2011.
2.      Real Estate Acquisitions, continued

The amount of Kentland's, Orange City's, Cider Mill's, the Florida Properties', and the Additional Florida Properties' revenue and net income included in the Consolidated Statements of Operations for the three months ended March 31, 2012 is set forth in the following table (in thousands):

 
Revenue
 
Net Income
Three Months Ended March 31, 2012
$
8,175

 
$
1,680