Gary Shiffman - Chairman and Chief Executive Officer John McLaren - President and Chief Operating Officer Karen Dearing - Executive Vice President, Chief Financial Officer, Treasurer and Secretary

Nicholas Joseph - Citigroup Gwen Clark - Evercore ISI Drew Babin - Robert W. Baird & Co., Inc.

Joshua Dennerlein - Bank of America Merrill Lynch Neil Malkin - RBC Capital Markets Ryan Lumb - Green Street Advisors

Good morning, and thank you for joining us today. In the second quarter 2017, Sun continued to deliver on its successful growth and operating strategies, generating $0.96 of FFO per diluted share, representing a year-over-year increase of 12.9%.

Our proven operating playbook once again delivered solid results across the platform. From an organic growth perspective, same community NOI was up by 6.1% for the second quarter and 6.4% for the first-half of the year.

In the quarter, we added 752 revenue-producing sites in our total portfolio, a roughly 50% increase over a year ago and the highest number of revenue-producing sites added in the quarter in the company’s history. We increased our home sales by 6.8% to 801 homes this quarter as compared to 750 a year ago.

Of note, approximately 38% of those sales were to existing renters, demonstrating that the rental program remains an effective tool and excellent introduction to Sun Communities for prospective homeowners. Our expansion program remains intact as we continue to take advantage of the strong demand and limited supply of attractive, affordable housing.

In the quarter, we delivered approximately 375 expansion sites, bringing the year-to-date delivery to about 650 sites, and we are on track to deliver approximately 2,000 sites by the end of the year. On the acquisition front, we deployed approximately $31 million of capital into three acquisitions; two operating communities and a fully entitled and zoned parcel of land.

These acquisitions reflect various value-add strategies to help sustain growth through redevelopment, expansions and ground-up development that complements the acquisition of stabilized communities. In the quarter, we purchased a 458 site manufactured housing community just outside of Ann Arbor, Michigan; a 489-site RV resort located near the Quad Cities in Western Illinois; and closed on our previously discussed 176-acre parcel of land in Myrtle Beach, South Carolina that we will develop into a premier 775-site resort.

Our acquisition pipeline remains very active, and we are reviewing numerous opportunities across both the manufactured housing and RV resort landscapes. On the capital side, we had a very productive quarter and strengthened our balance sheet from both a debt and equity perspective through the amendment and upsizing of our credit facility and our May equity offering.

Our balance sheet is well-positioned to support our growth initiatives going forward. And while we have yet to deploy all the capital raise in the equity offering, we have great visibility into our acquisition pipeline, as well as opportunities within our capital structure.

We remain very optimistic about our outlook for the second-half of the year and looking into 2018. Through sustained rental rate growth, expected occupancy gains, conversions of transient sites to annual seasonal sites, a sizable expansion platform and an active acquisition pipeline, we expect to continue to drive attractive results.

I’ll now turn the call over to John McLaren to discuss our operating results in detail.

Thank you, Gary. Sun had a successful second quarter, marking the first anniversary of Carefree in the portfolio.

Total community revenues rose by 24.7% as compared to the same quarter in 2016, reflecting both the contribution at Carefree, as well as sustained strength across the multiple revenue streams of the company. Same community results continued their strong pace with 6.1% NOI growth for the second quarter, driven by an occupancy gain of 160 basis points and base rent growth of 3.4%.

Same community expenses increased by 6.3% for the second quarter, reflecting the impact of timing differences in supply and repair costs, as well as real estate tax expenses discussed on our first quarter earnings conference call. For the first-half of the year, same community revenue grew by 5.7%, while same community expenses were up 3.8%, resulting in 6.4% same community NOI growth, tracking within the guidance range for the full-year.

With respect to our RV segment, we have made a seasonal shift towards the Northern season. It has gone smoothly with same community RV revenue growth of 7.4% in the second quarter and 6.6% for the first-half of the year.

Same community transient RV revenues were up 8.6% for the quarter and 4.8% for the year. The third quarter is seasonally Sun’s highest quarter for revenue contribution from our RV resorts, and we are very pleased with our results so far.

Advanced bookings for the next three months look quite strong with 79% of budgeted revenue reserved as compared to 72% at this time last year. Additionally, we are pleased with the 4th of July holiday performance, which posted revenue growth of 5.2% year-over-year.

As Gary mentioned, we added 752 revenue-producing sites in the quarter, our highest quarterly revenue-producing site gained to date. Year-to-date, we have added 1,439 sites and are on track to meet our guidance range of 2,600 to 2,800 revenue-producing site additions for the year.

Our development activities at Cava Robles, Jellystone Larkspur and Ocean Breeze, Jensen Beach are on track and we are executing according to plan. With regard to our San Diego Bay development, the negotiation with the Port Authority on the land lease continues, and we will provide updates as things progress.

As we look to the second-half of the year, Sun remains on track to deliver same community NOI growth of 6.4% to 6.8% guidance range, and we look forward to sharing our progress on our expansion development initiatives for the coming quarters. I’ll now turn the call back over to Gary.

Karen is with us in the room today and available for Q&A, but is a little under the weather. Gary will share her prepared remarks.

Gary?

Thanks, John. FFO for the quarter ended June 30, 2017 was $0.96 per share, $0.02 ahead of the midpoint of our quarterly guidance due to strong performance across the platform.

We had a fairly active quarter for capital markets activities, which puts us in an excellent position to execute on additional acquisitions and potential capital structure refinements. As previously communicated, we completed the amendment to our line of credit, increasing total capacity by $200 million to $650 million.

We extended the maturity by two years, and we are able to tighten the spread over the reference rate. In addition, this quarter, we completed $77 million, 25-year secured borrowing at 4.16%.

We also repaid a $3.9 million mortgage loan that was scheduled to mature in August, taking care of our last remaining maturity for 2017. After consideration for these financings and repayments, as well as our equity transactions in the quarter, Sun ended the quarter with $3 billion in debt outstanding with a weighted average interest rate of 4.56% and a weighted average debt maturity of 8.7 years.

Near the end of May, Sun completed an underwritten equity offering, issuing roughly 4.8 million shares at a gross price of $86 per share. Proceeds of the oversubscribed offering were approximately $409 million after consideration for related expenses.

Prior to the marketed offering, we raised an additional $33.6 million at a weighted average price per share of $85.01 through our at-the-market equity sales program. Proceeds from our equity activities were used to pay down the outstanding balance on our line of credit and term loan facility, redeem certain preferred securities and to fund acquisitions.

The equity activities also enabled Sun to achieve targeted debt ratios ahead of schedule. Unrestricted cash on hand was nearly $242 million, and Sun’s net debt to trailing 12-month recurring EBITDA was six times.

In addition to the equity offering, we redeemed approximately 438,000 shares of our 6.5% Series A-4 cumulative convertible preferred stock and 200,000 of our Series A-4 preferred OP units for $24.7 million. Please refer to page six of the supplemental for a reconciliation and outline of our outstanding securities.

We also want to update the investment community on our revised guidance for 2017. We expect the dilutive impact from the equity offering to be roughly $0.12 per share, of which $0.02 was in the second quarter.

This dilution was offset by $0.06 per share of year-to-date portfolio outperformance and contribution from announced acquisitions. This brings us to a revised FFO per share guidance for the year of $4.12 to $4.18.

We are forecasting FFO per share of $1.11 to $1.14 for the third quarter and $0.95 to $0.98 for the fourth quarter. It’s important to remember that our guidance does not factor in any incremental acquisitions or capital markets activities.

With that, I’d like to open up the call for Q&A. Operator?

Thanks. Just first question on leverage.

Last quarter, you are already at the top-end of kind of your stated leverage of below seven times net debt to trailing 12-month recurring EBITDA, if we’re to drift it down naturally just given operating growth in the portfolio. So can you talk about the decision to raise equity and lower leverage even further and take the dilution in terms of per share growth this year?

Sure, Nick, it’s Gary. And just so everyone is aware, Karen is with us as well.

We were just saving her voice a little bit for the Q&A. I think the bottom line is that, we were able to raise capital at an attractive price, reducing leverage, as you just mentioned, creating flexibility with regard to other opportunities on our balance sheet.

We have a $80 million preferred and callable in October at a 7 1/8% rate.

7 1/8%.

7 1/8%, rate. As we just announced, we acquired just about $25 million of the A-4 convertible and preferred securities that were associated with the purchase of American Land Lease at a small discount to market.

The equity provided us working capital to grow what we believe is a highly profitable community expansion program and provides us capital to take advantage of acquisition opportunities, including opportunistic acquisitions that might have below market rents; lack of professional management; sometimes low-hanging fruit that we can – earn us very rapidly an expense savings or a revenue growth; occupancy opportunities, which John and his operations team take great advantage of; and of course, the potential for site expansion. So I think looking at both what we are able to do leverage-wise, what we are preparing for on our balance sheet, being able to be in a position to take advantage of a really strong acquisition pipeline that we have and grow the expansion and development aspects of our business is what caused us to want to move forward on that.

And of course, we were very pleased, looking at $0.12 dilution, knowing that we had covered, at least half of it through outperformance and a little bit of the performance to-date with our existing acquisitions, which was very pleasing. And our guidance does not provide for any additional FFO related to any acquisition we make do before now and year-end.

So hopefully that answered your question.

It does, thanks. And you mentioned acquisitions a few times during your prepared remarks.

Can you talk about the size of the pipeline today and what you expect to actually close on this year? And then also your interest in either of the larger portfolio deals that are currently being marketed?

Sure. We don’t talk specifically what our pipeline is, but we do share with the market that for each of the last three, four years, we have that acquisition goals of between $200 million and $300 million.

We’ve been pleased when we’ve been able to exceed that with the big portfolio purchases. But as we’ve all shared that most of the portfolios that the quality and interest of Sun have been acquired.

And most of what we’ll do will be onesies and twosies out there. And we still expect to be able to produce by year-end at that total level.

And with regard to the other portfolios out there, in one of the portfolios, we identified what I’ll call a handful of assets that we would be and are interested in. We were able to express that interest.

But because we are not looking for the entire portfolio, right now we are not in any process related to those portfolios.

Do you have a sense if those portfolios will end up being large portfolio deals or disaggregated into the individual properties?

Well, I can only speak from the standpoint of what we know, which is it appears that the portfolios have been bid on at, what we would consider aggressive pricing. So if the discussion and the feedback that we’ve had yields the type of outcome that’s been shared with us, I think they will be sold as entire portfolios.

Thanks.

Sure.

Hi, good afternoon. I was just wondering, can you guys talk about expenses throughout the end of the year and where you think you might see upside or downside?

Yes, Gwen, I can just talk to you a bit about expenses on the same community side. I assume that’s what you’re referring to.

Just like there are seasonality in our FFO, there’s definitely seasonality in our expenses throughout the portfolio within the quarters. And I think that we had some pretty low expenses in Q1, higher expenses in Q2.

Q3 is expected to have a little bit lower expense growth than where we have been – what we’ve achieved through June, Q4, that NOI. So that Q3 lower expense growth is going to drive a higher NOI growth in Q3 in the same community portfolio.

Q4 is expected to be a bit more normalized as far as NOI growth to be within the range of guidance where we have projected.

Okay, that’s helpful. And staying along the same lines, can you just walk us through the components of your same-store revenue growth and how you see each of those going throughout this past year?

Yes. So same community revenue growth.

If you look at the quarter and you broke it down, you have a 3.4% rent increase, 1.6% occupancy gain. You have contribution of about 60 basis points from transient revenues and another 60 basis points of contribution from other revenues.

Other revenues are primarily related to RV resorts, things such as extra vehicle fees, extra person fees. It also includes cable revenues and month-to-month fees, things like that.

Okay, that’s very helpful. Thank you.

Oh, sorry.

No, that’s okay.

All right. Well, that’s all.

Thank you.

Thanks, Gwen.

Good morning.

Good morning, Drew.

Good morning, Drew.

A follow-up on Gwen’s question on the fee contribution during the quarter. It seems a littler higher than it’s been in some other past years, and I was just wondering if there’s any kind of specific initiatives Sun’s undertaking to collect more fees from extra person fees, parking fees, things like that?

Is that the result of anything specific or just kind of a stronger transient RV season overall?

I think it’s the latter, Drew. It’s basically related to the RV resorts and those additional fees.

Transient revenues have been running a bit higher than what we had expected for the year. So primarily related to that.

Okay. And lastly, on the occupancy growth, obviously, there’s a lot of runway created by the expansion program and with about 160 basis points of occupancy gains this quarter.

Given the magnitude of expansions being created this year, especially in 4Q, do you see potential that under similar market conditions we are seeing this year, we might see quarterly occupancy gains of maybe 200 basis points or greater for that next year?

I think you had two things going on here. You have occupancy gains that are being created not only from the expansions, but our core portfolio still increasing in occupancy.

We are reaching that 97% or greater occupancy level at – I don’t know about 160 communities right now. So you could have some of those communities reaching full occupancy and then – and therefore, the addition of sites and expansions kind of creating the occupancy gain.

If you look at that MH portfolio overall, I think in the same community, if you looked at it, you split it out between MH and RV, it’s 96.5%, 97% occupied. So we still have a couple of percentage points of occupancy to gain there, and expansions definitely should add to it.

So it’s possible, but it’s sort of a mix of things going on there.

Okay, sure. All right.

Thanks a lot. That’s helpful.

Thank you.

Hey, good morning, guys.

Good morning, Joe.

For the $0.06 of outperformance year-to-date and acquisitions, what’s the breakdown between portfolio outperformance and then acquisitions?

Outperformance – in guidance the outperformance of $0.06 is really split between about $0.045 outperformance in the core portfolio and about $0.015 from the acquired properties to-date.

Okay, great. Thank you.

And on the acquisitions you acquired the Hillside and the Superior Township, could you guys disclose cap rates on those assets? And do you expect any upside through vacancies or expansion site opportunities?

So we did not disclose cap rates. But they generally probably averaged out to around a 7 cap rate range.

They are what we would determine as excellent opportunities in Arbor Woods outside of Ann Arbor, Michigan to take a really undermanaged and underperforming asset 15 minutes away from the University of Michigan and really very close to some of our largest and best-performing communities, including one called Scio Farms out there. And it has over 100 vacant sites.

So I know that the fact that it’s under our hands right now will give us great opportunity for what John’s team does best, which is to create occupancy and really generate some outsized FFO growth from that community. And what we look to do is to, and it’s kind of a follow-up also to what Drew said, is to also create occupancy, gain opportunity from our acquisitions.

And Arbor Woods certainly is one example of that and kind of balance that out with a more traditional stabilized communities that we can get and move forward on that. So cap rates in general have been unchanged.

They’ve generally been in the 5 to 6 cap rate range. Our focus has been on both the West Coast and the East Coast, as well as areas that we do already operate in.

Certainly, we’ve also seen and shared cap rate compression certainly on the West Coast, California and parts of Florida, where we are certainly seeing sub-5 cap rates. And in California, we’ve seen cap rates in the high 3s.

As we maintain a disciplined approach to our acquisition pipeline, we are looking for properties that are accretive on day one for us. But allow us the opportunity to create value through the expertise and certainly the – a system that John has developed in operations.

So we have not been interested or able to compete in that aggressive arena, but we do find plenty of opportunities through our relationships to buy on accretive basis. And then we look past the original cap rate and look at what the growth can be one, three and five years out.

So if we are accretive from the beginning and can get 25 or more basis point expansion in the cap rate each year, that’s one hurdle that we’ve got to hit in acquiring a property and a whole list of others.

Got it. Thank you, Gary.

Good morning, everyone.

Good morning.

Good morning, Neil.

First, I want to focus on the transient side. I’m not sure if you gave this, but what was the number of transient conversions this quarter and how that’s pacing versus last year year-to-date?

In the same community, I have that in front of me, transient conversions year-to-date are 193, trailing 12 was around 313.

Okay, that’s for same store. And what was total?

That’s for same store.

Total year-to-date was 542.

542. Okay.

Thank you.

Yes.

And then in terms of seasonality for the transient, how does – given the Carefree portfolio being a big part of that, how does occupancy sort of trend in the transient side through each quarter of the year?

Really, I mean, I was – it will – it’s different between Northern and Southern properties. You are going to see in the Northern properties, I mean, basically the resorts are generally open between April and, in many cases, the end of October.

So that will – it’s a little bit of a curve between those months, obviously picking up as we approach the Memorial Day weekend and starting to tail off a little bit as we hit Labor Day. Southern resorts are sort of the exact opposite, where the meat of the transient occupancy is going to happen in January through March.

A lot of what we do to assist and help in the growth that we’ve been able to enjoy in the transient side of the business is to really put our marketing efforts and our touch points with our guests and focus things on the shoulder months of those sort of core – the core time periods for the two portfolios. And we are very pleased with the performance of transient overall, especially with the success that we’ve had in the conversion of transient guests to annual seasonal guests and still being able to drive good growth in transient with fewer sites available.

Okay, great. And then given the strength of the sector, particularly, relative to some other real estate asset classes, are you seeing increasingly more people competing with you, maybe some newer players, more institutional capital?

Are you seeing anything along those lines occurring?

Yes, absolutely. In the acquisition market, we’ve seen a number of financial funds step in over the last two years with the YES!

portfolio and the Northstar portfolio. We had a sovereign actually enter into the asset group.

And I think that a lot of that is taking place within the two portfolios that are being marketed right now. I don’t have specific details.

But my understanding is those funds continue to express interest in the sector. And I think that we’ll know the outcome probably in short order of who acquired the portfolios, and that will give us a little bit more transparency into who is interested in the sector.

Okay. And then, I guess, last from me.

Given the cash you have on the balance sheet, if there are maybe a lack of opportunity just given, let’s say, aggressive pricing. Could you take out more of those preferred classes of OP units, or is there some sort of like tax or legal requirement that prevent you from doing so?

Well, that’s a great question. First, I’d say with the visibility currently and to our opportunities, we have a good accretive use for the capital in the acquisition pipeline.

But we would absolutely be interested in taking out more of those securities. The challenge for us and we were able to take out everything that was still being held in one of the Green Court funds, but the rest had been distributed down to the individual shareholders.

So there was no easy way to maneuver access anything beyond what was still held at the parent fund. So for now, I think we’ve acquired all that we are going to be able to acquire.

Thank you.

Thanks. Just wondering what the contribution to same-store results were for the quarter from the lease-up of expansion sites?

Yes. So lease-up of expansion sites, if I look at same community in Q2, I think, we filled on 121 expansion sites.

And it’s a – if you think about how the expansions go, we build them and then we fill them sort of in the following time period. So we built 650 last year that we are filling this year.

I think the contribution to same community is pretty minimal. I’d put it at maybe 20 basis points or something like that.

Okay. That’s helpful.

And then maybe just sort of as a measuring stick going forward, what would you say – there was 100 new sites this quarter and there’s about 20 basis points. Would you say that, that relationship probably 100 additional lease-up sites, we can expect 20 additional basis points on the same-store results?

Is that kind of relationship that you expect to hold going forward?

No. Actually, that’s a little aggressive.

If I actually do the calculation and do 500 expansion sites at $500, they are going to go on ratably over a year, they are probably going to contribute maybe $1.5 million. And that’s going to be likely 20 to 40 basis points over the whole year.

Okay, great. That’s helpful.

Thank you so much. That’s all for me.

I’d like to thank everybody for participating. And as I conclude this conference call, I just want to note to everybody that Karen, myself and John are available for any follow-up, and we look forward to reporting third quarter as soon as it’s over.

Thank you.