Sun FFO Goes Down Despite Revenue Increase

SOUTHFIELD, MI-Sun Communities, Inc., says total revenues increased 1.2% to $48.9 million in the second quarter. But, the REIT adds, funds from operations swung to a loss in the quarter.

Southfield-based Sun, which owns and operates manufactured housing communities, says FFO decreased from $17.3 million in the second quarter 2003 to a loss of $42.3 million in the second quarter 2004. The second quarter results reflect a charge of $51.6 million for prepayment costs, fees and related expenses and $5.6 million of deferred financing costs associated with the repurchase of $345 million of unsecured debt. Second quarter 2004 FFO excluding these one-time costs were $14.9 million or $0.70 per share and net income of $9.3 million or $0.50 per share.

For 108 communities owned throughout both years, total revenues increased 3.5% for the first six months of 2004 and expenses increased 2.4%, resulting in an increase in net operating income of 4.0%. Same property occupancy in the manufactured housing sites decreased from 89.3% on March 31, to 89.1% on June 30.