S&P gives Sun Communities BBB

S&P said it gave Sun Communities Inc. a BBB issuer rating.

“Sun's track record of strong operating performance highlights its portfolio resiliency. Over the past several years, Sun's strong operating performance included sustained high occupancy rates (averaging 95% over the last five years and 90% over the last 20), sustained rental rate growth (3.7% compound annual growth rate over the past 20 years), and positive NOI (averaging 6.9% over the last five years and 4.8% over the last 20). We think this compares favorably to rated residential REITs,” the agency said in a press release.

The outlook is stable. “We expect Sun's debt to EBITDA to hover in the low- to mid-5x area during the next couple of years. Debt to EBITDA was 7.2x as of year-end 2020, following the acquisition of Safe Harbor for $2.11 billion. Pro forma for a full calendar year of EBITDA from Safe Harbor and the $1.08 billion of equity raised during the first quarter of 2021, we estimate adjusted debt to EBITDA will decline to the low-5x area by year-end,” S&P said.

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