Sun Communities' Strategic Shift: Selling Marinas Business to Blackstone for $5.65 Billion

Sun Communities, Inc. (NYSE: SUI), a real estate investment trust (REIT) specializing in manufactured housing (MH) and recreational vehicle (RV) communities, has announced a definitive agreement to sell its 100% interest in Safe Harbor Marinas, the largest marina and superyacht servicing business in the United States, to affiliates of Blackstone Infrastructure for $5.65 billion in cash. This strategic move aims to refocus Sun on its core MH and RV segments, enhancing its financial flexibility and improving its margin and cash flow profile.

The transaction, expected to close in the second quarter of 2025, is subject to customary closing conditions. Upon closing, Blackstone will purchase Safe Harbor from Sun for an all-cash purchase price of $5.65 billion, representing an approximate 21x multiple on the estimated 2024 Funds From Operations (FFO) of the Safe Harbor business. The base purchase price is subject to certain post-closing adjustments.

The sale is expected to produce approximately $5.5 billion of pre-tax proceeds after transaction costs, which will strengthen Sun's balance sheet. Proceeds are anticipated to be used to support a combination of debt reduction, distributions to shareholders, and reinvestment in Sun's core businesses.

Gary Shiffman, Chairman and CEO of Sun, commented on the transaction: "We are very pleased with this transaction which further accelerates Sun’s strategy to improve the Company’s leverage profile and refocus on our core segments. On behalf of everyone at Sun, I would like to thank the Safe Harbor team for their dedication and hard work throughout our over four-year partnership. We are incredibly pleased with the performance of Safe Harbor and with the outcome of this highly successful sale process. We anticipate that Blackstone will further Safe Harbor’s position as the leading marina and superyacht servicing business in the U.S."

Jeff Blau, Chair of Sun's Capital Allocation Committee, added: "This transaction allows Sun to focus on our core businesses which operate at high margins and produce durable income streams, and we are confident they will continue to deliver strong, consistent long-term growth. Safe Harbor has been an outstanding performer for Sun, and this sale allows us to realize substantial value from our investment, while positioning the Company for future growth and enhanced return opportunities for our stakeholders."

The transaction benefits Sun Communities in several ways:

1. Refocuses Business Strategy: Post-transaction, Sun's North America MH and RV portfolio is expected to account for approximately 90% of the Company's Net Operating Income (NOI), streamlining its strategic focus as a pure-play MH and RV owner and operator.
2. Enhances Financial and Strategic Flexibility: The transaction is expected to meaningfully de-leverage Sun's balance sheet, reducing its net debt to trailing 12 months EBITDA from approximately 6.0x to between 2.5x and 3.0x at closing.
3. Reinforces Focus on Durable, Annual Income Streams: The transaction is expected to reduce the Company's exposure to Service, Retail, Dining and Entertainment (SRD&E) and other non-annual income streams while positively impacting the Company's financial metrics, including its margin profile, overhead efficiency, capital expenditure requirements, and revenue-to-cash flow conversion.
4. Realizes Substantial Gain: The transaction is expected to monetize a successful investment, generating strong returns for shareholders, including an estimated book gain of approximately $1.3 billion from Sun's approximately four-year ownership of Safe Harbor.



In conclusion, Sun Communities' decision to sell its Safe Harbor Marinas business to Blackstone Infrastructure for $5.65 billion aligns with its long-term strategic goals of refocusing on its core MH and RV segments and enhancing its financial flexibility. The transaction is expected to produce significant benefits for the company and its shareholders, including improved financial metrics, reduced leverage, and a substantial gain from the sale. As Sun Communities continues to execute its strategic plan, investors will closely monitor the company's progress in achieving its goals and the potential impact on its market position and financial performance.