Sun, a REIT that owns and operates manufactured housing communities, says for the third quarter ended Sept. 30, total revenues increased to $43 million, compared with $40.3 million in the third quarter of 2002. Funds from operations of $17.3 million increased from $16.7 million in the third quarter 2002. On a diluted per share basis for the three months ended Sept. 30, 2003, FFO remained constant at $0.82 when compared to the same period in the prior year. Net income for the third quarter of 2003 was $6.4 million or $0.34 per diluted common share, compared with $5.8 million, or $0.32 per diluted common share for the same period in 2002.
Dilution attributed to the previously announced issuance of equity reduced FFO approximately $0.02 in the quarter and nine month periods.
For 109 communities owned throughout both years, total revenues increased 2.7% for the nine months ended Sept. 30, 2003 and expenses increased 9.1%, which caused net operating income (2) to increase by 0.5%. Same property occupancy in the manufactured housing sites decreased from 91.0% at June 30, 2003 to 90.1% at Sept. 30, 2003.
"Third quarter continues to reflect similar year-to-date results. Absorption of new development sites, previously built, continues at a slow steady pace of 31 residents per month, while the stabilized portfolio continues to experience the run off of the last significant wave of repossessions caused by previous lending practices," says Gary A. Shiffman, chairman and CEO.
"One bright spot has been the high credit quality of new residents moving into Sun communities. Average FICO scores for our Home Buying Made Easy program have been 740 for new homes and 686 for used homes. Average down payments of 13% coupled with these high FICO scores and 15-year amortization represents an entirely new resident credit profile which we believe will enhance performance," Shiffman adds.
During the third quarter, the company experienced a loss of 309 revenue producing sites or 0.8%. In addition, the company sold 148 homes and brokered 134 sales.
The company's line of credit to Origen Financial, LLC, was repaid shortly after Origen closed on its $150 million equity financing on Oct. 8, 2003. The company invested $50 million and agreed to sell Origen various interests in manufactured home loans previously acquired. Origen expects to be profitable immediately.
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