"While we looked for a year of industry transition, manufactured housing conditions never reversed, but did seem to stabilize during 2004," says chief executive officer Gary A. Shiffman. "Home shipments, repossessions, finance company recoveries and delinquencies ended the year at similar or slightly improved levels over 2003. The first half of the year reflected strongly improving occupancy statistics in the company's portfolio, the second half suffered from another surge of repossessed homes, depressing overall occupancy. Performance of the same site portfolio was one bright spot in an otherwise difficult manufactured home environment."

For the 108 communities Sun owned throughout both years, total revenues increased 4% percent for 2004 and expenses increased 3.4%, resulting in an increase in net operating income of 4.25%. Same-property occupancy in the manufactured housing sites decreased from 88.4% as of Sept. 30 to 87.4% as of Dec. 31.

"This past year marks many significant accomplishments that position the company to regain positive year-over-year FFO growth," Shiffman adds. "Putting both the refinancing and implementation of an entirely new software system in both accounting and operations behind us, management is focused on its leasing and sales efforts, as well as acquisition opportunities. While it remains early, the overall portfolio has had a net gain of 61 sites so far this year."