Sun Communities (SUI) Stock: Dividend vs Core FFO, UK Sale

The dividend, quarter by quarter: the ratio moves with the summer

Sun declares one regular distribution a quarter. It raised the rate from $0.94 to $1.04 in 2025 and, in its February 24, 2026 release, to $1.12 a quarter, “an increase of $0.08, or approximately 8%,” an annual rate of $4.48. Its 2025 Form 10-K also records a one-time special distribution of $4.00 a share, $521.3 million, paid on May 22, 2025 in connection with the sale of the Safe Harbor marinas.

Source: distribution tables in the 2025 Form 10-K and the June 30, 2026 Form 10-Q; Core FFO per share from the Q1 and Q2 2026 earnings releases (Forms 8-K). Core FFO is the company's own measure of FFO adjusted for items it calls non-recurring; per share it assumes full conversion of OP units.

Two things stand out. First, a single quarter is a poor test: Q1 2026 at 80.0% and Q3 2025 at 45.6% are the same $1.04 to $1.12 dividend against the winter and the summer. Second, Sun does not report AFFO in the documents we reviewed. Core FFO is before recurring capital spending, which was $29.7 million in the first half of 2026. Taking the UK business out of Core FFO ($35.7 million in the half) and then recurring capex, the $280.7 million of declared distributions is 80.7% of what is left (our arithmetic, our own view and not a company measure).

We found no 8-K announcing a Q3 2026 declaration. The Q3 10-Q will carry the table of record and payment dates, as the June 30 one does for the first two quarters.

What Core FFO includes: a UK business that is gone

Sun now reports the UK as discontinued operations, but its FFO and Core FFO still include it. The footnote to the Q2 release says Core FFO includes discontinued operations of $30.0 million, or $0.24 a share, in the quarter and $35.7 million, or $0.28, in the half. Without it, Core FFO was about $1.60 for Q2 and $2.96 for the half (our arithmetic). The same footnote shows how much the base has been rebuilt twice in 18 months: the marinas contributed $2.05 of the $6.81 of 2024 Core FFO and $0.58 of the $6.68 for 2025.

Source: guidance tables in the Q4 2025, Q1 2026 and Q2 2026 earnings releases (Forms 8-K). The July guidance “does not give effect to the completion of the Park Holidays Sale, or potential use of transaction proceeds.” The last two rows are our arithmetic and ignore interest saved or earned on the $1.03 billion of proceeds.

This is not a forecast of the new Core FFO. It is the size of what leaves: about $13.8 million of the 2026 UK contribution, 16% of it, was scheduled for October to December (our arithmetic). What comes back depends on how the proceeds are used. The company said on September 22 it will update its 2026 outlook “on its third quarter 2026 earnings call.”

The $1.1 billion charge: non-cash, but the book value moved

On May 21, 2026 Sun agreed to sell Park Holidays to an affiliate of Aermont Capital at an enterprise value of £768 million, about $1.03 billion, and warned of non-cash charges of $1.0 billion to $1.1 billion. In the second quarter it recorded a “non-cash valuation allowance charge of $1.1 billion,” $1,077.2 million in the FFO reconciliation. Net income from continuing operations was $42.3 million, or $0.32 a share; the loss to common shareholders was $992.7 million, or $8.08.

Source: Forms 8-K filed May 21 and September 23, 2026 (including the pro forma financial statements in Exhibit 99.2) and the Q2 2026 earnings release. The pro forma cash is before any use of proceeds.

For a dividend holder the charge does not touch the FFO-based cover, because FFO adds it back. It does show the sale price is close to what the UK was carried at after the write-down, and that book value moved sharply while FFO did not. Distributions in excess of accumulated earnings widened from $2,634.7 million to $3,971.7 million in the half.

Cash returned: dividends, buybacks and a new preferred unit

Source: earnings releases for Q4 2025, Q1 and Q2 2026 and the Form 8-K of September 22, 2026.

A $1.0 billion repurchase program runs through May 27, 2027; $888.9 million was left at June 30, and by our arithmetic about $635 million was left after the repurchases reported through September 21. Those 3.5 million shares are 2.8% of the 123.2 million outstanding on February 17, 2026 (our arithmetic). In the first half, declared distributions plus buybacks were 109.4% of Core FFO (our arithmetic). Cash and restricted cash fell from $606.7 million to $165.2 million over the same six months.

On the other side, on October 1, 2026 Sun's operating partnership issued 283,126 Series M Preferred Units at $100 each, $28.3 million, in exchange for contributed assets. They pay 3.2% in the first year, 3.4% in the second and 3.6% after, are redeemable at $100 from October 1, 2027 and are exchangeable into common stock at $174.00 a share. At that price the issue converts into about 162,700 shares (our arithmetic), small against 126.9 million diluted shares and units.

Debt: low, fixed and one block in 2028

At June 30, 2026 total debt was $4,052.2 million at a 3.35% weighted average rate and 6.9 years' average maturity, with no floating-rate debt. Net debt was 3.9 times trailing twelve-month recurring EBITDA (3.4 times at December 31, 2025), against a stated long-term target of 3.5 to 4.5 times. Ratings are S&P BBB+ and Moody's Baa2, both stable. The $2.0 billion revolver, which matures in January 2030, had no borrowings. Interest expense from continuing operations was $38.1 million in Q2 against $54.4 million a year earlier.

Source: debt maturity and debt analysis pages of the Q2 2026 earnings release (Form 8-K), and the Q2 2026 Form 10-Q.

The cheap paper is the thing to watch over time: the three series of senior notes carry 2.29%, 2.70% and 3.61%, against a 3.35% average on the whole book. Nothing is due soon, but any debt that reprices will do so at today's rates. Pro forma cash of $1,198.0 million, before the July repayments, is more than the $1,033.6 million due from 2026 through 2028 (our arithmetic: 331.2 + 35.8 + 666.6).

Operations, and where the sites are

Same-property NOI for the 434 North American properties grew 6.0% in Q2 2026, with manufactured housing (MH) up 8.8% and RV down 0.7%. Same-property MH rent was $766 a site a month, up 4.9%, and adjusted blended occupancy was 98.8%, 10 basis points lower than a year earlier. Full-year guidance is 4.5% to 5.3% for North American same-property NOI, but the third quarter is guided to 2.0% to 3.5%. Home sales were weaker: 326 homes sold against 480 and home-sales revenue of $27.8 million against $41.8 million. Transient RV revenue was $60.6 million, down 4.7%.

Source: Q2 2026 earnings release, financial and operating highlights. Quarterly figures are for continuing operations.

Concentration is geographic more than by tenant, since residents are individuals. At June 30, 2026 the continuing portfolio had 455 properties and 156,130 sites. Florida had 125 properties and 47,220 sites (30.2%), Michigan 90 and 34,930 (22.4%), Texas 28 and 10,740 and California 36 and 8,760. Florida and Michigan together are 52.6% of sites (our arithmetic). Another 22,760 sites, 14.6%, are transient RV sites that rent by the night rather than the year (our arithmetic). The Florida share was 26.4% at December 31, 2025 when the UK was still in the base, so the sale made the portfolio more Florida-heavy. For the manufactured housing numbers across both listed owners and the private offerings, see our mobile home park investing report.

Other changes in the filings

• Auditor. On March 23, 2026 the audit committee appointed Deloitte & Touche and dismissed Grant Thornton, effective with the Q1 2026 10-Q. The 8-K reports no disagreements and notes a material weakness in internal control as of December 31, 2024, “remediated in 2025.”
• Management. The chief executive joined in the fourth quarter of 2025; a new chief financial officer, previously CFO of Equity Residential, was appointed on August 24 and started on September 8, 2026.

The next filing

The Q3 2026 10-Q is not on file as of October 19, 2026. The latest 10-Q is the one for June 30, filed July 28, and the latest filing of any kind is the October 1 8-K on the Series M units, filed October 2. Last year Sun released results on October 29 and filed the 10-Q on October 30; this year it released Q2 on July 27 and filed on July 28. We did not find a published date for the Q3 call. When it arrives, the numbers to check against this page are: Core FFO per share against the $2.23 to $2.33 guided for Q3, the new full-year outlook with the UK out and the proceeds in, the Q3 declaration, the buyback total after September 21 and the debt actually repaid.

What a holder can do with this

Read the dividend against Core FFO over four quarters, not one, and then against Core FFO without the UK. On the first test the cover is about 62%; on the second it is closer to 71% for 2026, before the proceeds are put to work. Watch the Q3 call for the new base rather than the old guidance.

A listed stock is priced daily and can be sold the same day; a non-traded vehicle is priced by a NAV and sold through redemption windows, as our analysis of non-traded REIT listing discounts shows. For other listed residential REITs read the same way, see American Homes 4 Rent and Equity Residential. This is analysis of public documents, not investment, legal or tax advice.

Frequently asked questions

Sources: Sun Communities, Inc. (CIK 912593) Form 10-K for 2025, Form 10-Q for the quarter ended June 30, 2026, earnings releases of February 24, April 27 and July 27, 2026, Forms 8-K of May 21, May 28 (8-K/A), September 23 and October 2, 2026, the March 27 auditor 8-K and the investor presentation of September 9, 2026. Primary-source cutoff: October 19, 2026. All sources are saved with the downloadable dataset; ratios marked “our arithmetic” are ours.