Real Estate Acquisitions and Dispositions

3 Months Ended

Mar. 31, 2023

Business Combinations [Abstract]

Real Estate Acquisitions and Dispositions

3. Real Estate Acquisitions and Dispositions

2023 Acquisitions

During the three months ended March 31, 2023, we acquired the following properties:

Community Name	Type	Sites, Wet Slips and Dry Storage Spaces	Development Sites	State, Province or Country	Month Acquired
Fox Run	MH: asset acquisition	68	72	MI	January
Savannah Yacht Center	Marina: asset acquisition	24	—	GA	March
	Total	92	72

The following table summarizes the amount of assets acquired, net of liabilities assumed at the acquisition date and the consideration paid for the acquisitions completed during the three months ended March 31, 2023 (in millions):

	At Acquisition Date								Consideration
	Investment in property		Inventory of manufactured homes, boat parts and retail related items		Other assets, net		Total identifiable assets acquired net of liabilities assumed		Cash and escrow		Temporary and permanent equity(1)		Total consideration
Asset Acquisition
Fox Run(2)(3)	$	7.0	$	0.2	$	—	$	7.2	$	2.7	$	4.5	$	7.2
Savannah Yacht Center(2)(4)	100.0		—		4.5		104.5		4.5		100.0		104.5
Total	$	107.0	$	0.2	$	4.5	$	111.7	$	7.2	$	104.5	$	111.7

(1) Refer to Note 9, "Equity and Temporary Equity," for additional detail.

(2) The above allocations are estimates pending purchase price allocations.

(3) In conjunction with the acquisition, the Operating Partnership issued 31,289 common OP units valued at $4.5 million.

(4) In conjunction with the acquisition, the Operating Partnership issued one million Series K preferred OP units valued at $100.0 million.

As of March 31, 2023, we have incurred and capitalized $2.6 million of transaction costs, which have been allocated among various fixed asset categories for purchases that meet the asset acquisition criteria. During the three months ended March 31, 2023, we recognized $2.8 million of business combination expenses in connection with transactions completed during 2022.

2023 Development and Expansion Activities

During the three months ended March 31, 2023, we acquired three land parcels located in the United States ("U.S.") and United Kingdom ("UK") for an aggregate purchase price of $34.9 million.

2023 Dispositions

In February 2023, we sold two parcels of land in the UK for total consideration of $111.5 million, which primarily consisted of $108.8 million in the form of an operator note receivable that was added to an existing facility with a weighted average interest rate of 11.9% per annum, due May 31, 2023. On the date of sale, the carrying value of the note receivable approximates its fair value due to its short term nature. The dispositions resulted in a loss on sale totaling $1.6 million, net of the release of foreign currency translation losses from Accumulated other comprehensive income of $11.9 million. The total loss on sale was recorded in Gain / (loss) on dispositions of properties on the Consolidated Statements of Operations.

Real Estate Held For Sale

We periodically classify real estate as "held for sale." An asset is classified as held for sale after an active program to sell an asset has commenced and when the sale is probable. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded.

In February 2023, we reached an agreement to sell an operating MH community in the UK with 730 developed sites for approximately $240.0 million in the form of a note receivable. As a result, the carrying value of total assets of $262.2 million and total liabilities of $64.0 million were reclassified to held for sale as of March 31, 2023. The held for sale assets primarily consist of Land and Land improvements and buildings and are recorded within Other assets, net on the Consolidated Balance Sheets. The held for sale liabilities primarily consist of Deferred tax liabilities and are recorded within Other liabilities on the Consolidated Balance Sheets.

2022 Acquisitions

For the year ended December 31, 2022, we acquired the following properties:

Property Name(1)	Type	Sites, Wet Slips and Dry Storage Spaces	Development Sites	State, Province or Country	Month Acquired
Harrison Yacht Yard(2)	Marina: asset acquisition	21	—	MD	January
Outer Banks	Marina: asset acquisition	196	—	NC	January
Jarrett Bay Boatworks	Marina: business combination	12	—	NC	February
Tower Marine	Marina: asset acquisition	446	—	MI	March
Sandy Bay	MH: asset acquisition	730	456	UK	March
Park Holidays(3)	MH: business combination	15,906	608	UK	April
Christies Parks(2)	MH: asset acquisition	249	—	UK	April
Bluewater	Marina: asset acquisition	200	—	Multiple	April
Bluewater Yacht Sales(2)	Marina: business combination	—	—	Multiple	April
Bodmin Holiday Park	MH: asset acquisition	69	—	UK	April
Kittery Point	Marina: asset acquisition	62	—	ME	May
Spanish Trails MHC	MH: asset acquisition	195	6	AZ	June
Pine Acre Trails	MH: asset acquisition	251	603	TX	June
Bel Air Estates & Sunrise Estates(4)	MH: asset acquisition	379	—	CA	June
Park Leisure(5)	MH: business combination	2,914	123	UK	June
Montauk Yacht Club	Marina: business combination	232	—	NY	July
Callaly Leisure(6)	MH: asset acquisition	380	823	UK	September
Newhaven	MH: asset acquisition	224	14	UK	October
Bayfront Marina	Marina: asset acquisition	583	—	CA	November
Marina Bay Yacht Harbor	Marina: asset acquisition	800	—	CA	December
Jellystone Lincoln	RV: asset acquisition	267	—	DE	December
Norway Commons	MH: asset acquisition	231	22	ME	December
	Total	24,347	2,655

(1) Property names are subject to changes subsequent to acquisition.

(2) Combined with an existing property.

(3) Includes 40 owned and two managed properties.

(4) Includes two properties.

(5) Includes 11 properties.

(6) Includes one development property.

The following table summarizes the amounts of assets acquired, net of liabilities assumed at the acquisition date and the consideration paid for the acquisitions completed in 2022 (in millions):

	At Acquisition Date										Consideration
	Investment in property		Inventory of manufactured homes, boat parts and retail related items		In-place leases, goodwill and other intangible assets(1)		Other assets / (liabilities), net		Total identifiable assets acquired net of liabilities assumed		Cash and escrow		Temporary and permanent equity		Total consideration
Asset Acquisition
Harrison Yacht Yard(4)	$	5.8	$	—	$	—	$	—	$	5.8	$	5.8	$	—	$	5.8
Outer Banks	5.2		—		—		(0.4)		4.8		4.8		—		4.8
Tower Marine	20.2		—		0.2		(2.1)		18.3		18.3		—		18.3
Sandy Bay	247.9		9.4		2.1		(68.3)		191.1		191.1		—		191.1
Christies Parks(4)	10.1		—		—		2.1		12.2		12.2		—		12.2
Bluewater	25.3		1.3		0.1		1.3		28.0		28.0		—		28.0
Bodmin Holiday Park	13.1		—		—		—		13.1		13.1		—		13.1
Kittery Point	8.0		0.1		—		(0.1)		8.0		7.0		1.0		8.0
Spanish Trails MHC	20.6		1.8		—		—		22.4		22.4		—		22.4
Pine Acre Trails	29.7		—		—		—		29.7		29.7		—		29.7
Bel Air Estates & Sunrise Estates	39.3		—		0.7		—		40.0		40.0		—		40.0
Callaly Leisure	23.8		0.1		—		(0.3)		23.6		23.6		—		23.6
Newhaven	6.2		—		—		—		6.2		6.2		—		6.2
Bayfront Marina	11.3		—		0.9		(0.5)		11.7		11.7		—		11.7
Marina Bay Yacht Harbor	16.2		—		0.2		(0.7)		15.7		15.7		—		15.7
Jellystone Lincoln(5)	17.0		—		—		1.2		18.2		18.2		—		18.2
Norway Commons	15.1		0.4		0.3		—		15.8		15.8		—		15.8
Business Combination
Jarrett Bay Boatworks(6)	21.3		1.4		47.5		1.0		71.2		68.4		2.8		71.2
Park Holidays(7)	1,254.7		29.5		574.5		(624.9)		1,233.8		1,199.9		33.9		1,233.8
Park Leisure(8)	259.5		0.7		77.5		(111.9)		225.8		225.8		—		225.8
Montauk Yacht Club	163.6		0.3		26.3		0.3		190.5		190.5		—		190.5
Total	$	2,213.9	$	45.0	$	730.3	$	(803.3)	$	2,185.9	$	2,148.2	$	37.7	$	2,185.9

(1) Refer to Note 5, "Goodwill and Other Intangible Assets," for additional detail on goodwill and other intangible assets.

(2) Refer to Note 9, "Equity and Temporary Equity," for additional detail.

(3) Property names are subject to changes subsequent to acquisition.

(4) Combined with an existing property.

(5) In December 2020, we entered into a loan agreement pursuant to which we extended credit to Blue Water to finance the construction of Jellystone Lincoln (the "RV Park"). In December 2022, we entered into a purchase and sale agreement pursuant to which we purchased the RV Park for cash consideration of $5.0 million, which was applied toward the existing Blue Water loan balance of $12.9 million, and the remaining loan balance of $7.9 million was forgiven. Upon acquisition of the RV Park, we agreed to loan Blue Water an amount equal to $3.7 million, accounted as consideration based on the loan forgiveness terms. Additional consideration for vacation rental units of $0.4 million, resulted in a total purchase price of $17.0 million. In addition, we entered into a lease agreement pursuant to which Blue Water will pay rent to us and continue to operate the park.

(6) The balance includes the marina acquired in February and the yacht sales business acquired in April of which $0.1 million was recorded in Investment property, $17.6 million in Goodwill and other intangible assets, and $0.4 million in Other assets / (liabilities), net.

(7) Includes acquired intangible assets subject to amortization of $70.2 million with a weighted average amortization period of 14.6 years, consisting of trademarks and trade names, customer relationships and other intangible assets.

(8) The purchase price allocation is preliminary as of December 31, 2022, subject to revision based on the final purchase price allocations to be finalized one year from the acquisition date.

As of December 31, 2022, we incurred $19.2 million of transaction costs, which were capitalized and allocated among the various fixed asset categories for purchases that meet the asset acquisition criteria. As of December 31, 2022, we also incurred $24.7 million of business combination expenses, which were expensed for acquisitions deemed to be business combinations.

Total revenues and Net income included in the Consolidated Statements of Operations for the year ended December 31, 2022 related to business combinations completed in 2022 are set forth in the following table (in millions):

	Year Ended
	December 31, 2022
Total revenues	$	353.6
Net income	$	13.8

The following unaudited pro forma financial information presents the results of our operations for the year ended December 31, 2022, as if the properties combined through business combinations in 2022 had been acquired on January 1, 2021. The unaudited pro forma results reflect certain adjustments for items that are not expected to have a continuing impact, such as adjustments for transaction costs incurred, management fees and acquisition accounting.

The information presented below has been prepared for comparative purposes only and does not purport to be indicative of either future results of operations or the results of operations that would have actually occurred had the acquisitions been consummated on January 1, 2021 (in millions, except for per share data):

	Year Ended (unaudited)
	December 31, 2022
Total revenues	$	3,091.3
Net income attributable to SUI common shareholders	$	241.2
Net income per share attributable to SUI common shareholders - basic	$	1.99
Net income per share attributable to SUI common shareholders - diluted	$	1.99

2022 Development and Expansion Activities

During the year ended December 31, 2022, we acquired six land parcels located in the U.S. and the UK for an aggregate purchase price of $26.2 million and two buildings and land parcels related to our marinas located in the U.S. for an aggregate purchase price of $13.9 million.

2022 Dispositions

During the three months ended September 30, 2022, we sold an RV community containing 514 sites located in California for $15.0 million. The disposition resulted in a loss on sale of $0.8 million, inclusive of selling costs.

During the three months ended March 31, 2022, we sold two MH communities and one community containing MH and RV sites, each located in Florida, with a total of 323 sites for $29.5 million. The gain from the sale of the properties was $13.3 million.