This Top-Performing Investment's Big Splash Is Paying Off via a $1.3 Billion Windfall Profit

Core Viewpoint - Sun Communities is selling Safe Harbor Marinas to Blackstone affiliates for $5.65 billion, resulting in a significant profit and allowing the company to refocus on its core manufactured housing and RV community business [2][3][10]. Financial Impact - The sale will generate approximately$5.5 billion in pre-tax proceeds after transaction costs, enhancing the company's investment-grade balance sheet [3]. - The transaction represents a 21 times multiple on the funds from operations (FFO) from Safe Harbor Marinas, indicating a strong valuation [3]. - The company expects to realize a $1.3 billion gain from the sale, having initially acquired Safe Harbor for about$2.1 billion [4][10]. Business Strategy - Post-sale, Sun Communities will concentrate on its core North American manufactured housing and RV portfolios, which are projected to contribute 90% of its net operating income (NOI) [7]. - The company has a history of positive same-property NOI growth for over 20 years, even during recessionary periods, showcasing the durability of its property types [8]. Growth Potential - The sale will provide Sun Communities with significant financial flexibility to ramp up acquisition activities and expand existing communities, positioning the company for future growth [9]. - The focus on manufactured home and RV communities is expected to create more shareholder value in the coming years [11].