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Glut of Repossessions Hurting Sun's Bottom Line

SOUTHFIELD, MI-Sun Communities says a glut of repossessed homes is expected to ease in 2004, improving the vacancy rate in its manufactured homes communities. Vacancy rates in its 150 communities have risen nearly three percentage points.

By Dan Heaton | Updated on March 17, 2004

SOUTHFIELD, MI-A Michigan-based manufactured housing REIT says a glut of repossessed homes is having an impact on its vacancy rate. Southfield-based Sun Communities, Inc., which operates more than 150 manufactured home communities in 15 states, says in a SEC filing that it has been experiencing increased vacancies due primarily to the glut of repossessed homes caused by lax credit standards in the mid- to late-1990s.

“As lenders recognize their problems and repossess homes, the company’s vacancies rise,” Sun says in the statement.

In 2003, the company’s occupancy rate on its developed properties slipped to 89.1%, compared to 92.0% in 2002, based on same property comparisons. Sun says, however, that its average rents on those properties increased to $328 per month from $315 the previous year.

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