Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Sun Communities Third Quarter 2026 Earnings Conference Call. The press release and supplemental financial information can be found on the investor relations section of the company's website. At this time, management would like me to inform you that certain statements made during this call, which are not historical facts, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. During today's call, management may discuss certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable to GAAP measures are included in the press release and supplemental financial information.
Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. Factors and risks that could cause actual results to differ materially from expectations are detailed in today's press release and from time to time in the company's periodic filings with the SEC. The company undertakes no obligation to advise or update any forward-looking statements to reflect events or circumstances after the date of this call.
Having said that, I would like to introduce management with us today. Charles Young, Chief Executive Officer. John McLaren, President and Chief Operating Officer. Bob Garechana, Chief Financial Officer, and Aaron Weiss, Executive Vice President and Chief Investment Officer. After their remarks, there will be an opportunity to ask questions. For those who would like to participate in the question and answer session, management asks that you limit yourselves to one question so everyone who would like to participate has ample opportunity. As a reminder, this call is being recorded.
I'll now turn the call over to Charles Young, Chief Executive Officer. Mr. Young, you may begin.
Good morning, and thank you for joining us to discuss our third quarter 2026 results and our outlook for the remainder of the year. We delivered another strong quarter. Core FFO per share was $2.35, $0.02 Above the high end of our guidance. This marks the third consecutive quarter of exceeding our expectations this year, reflecting the consistency of execution we are seeing across the organization. Earlier this month marked my one-year anniversary at Sun, and I want to take a few minutes this morning to step back and reflect on the year. When I joined Sun, I knew I was joining a company with a rich history, exceptional communities, and a strong culture. What I did not fully appreciate was the depth of talent across the organization and a genuine pride of ownership within our communities. A year in, that initial conviction has only deepened.
In September, we completed the sale of our U.K. business, marking the culmination of a multi-year simplification effort. Today, Sun is a focused, pure-play North American manufactured housing and RV company in resilient, supply-constrained sectors with a strong balance sheet and significant financial flexibility. Earlier in the year, we established three strategic priorities: allocating capital with discipline, optimizing our operating platform, and investing in our people, technology, and operating capabilities. Let me share how we have delivered against each. First, allocating capital with discipline. We have been deliberate in deploying capital, guided by a consistent set of principles, maintaining a strong and flexible balance sheet, returning capital to shareholders, and investing in high-quality MH and RV communities where we can drive attractive long-term returns.
With the roughly $1 billion of U.K. proceeds, we returned capital through approximately $544 million of share repurchases year to date, paid down nearly $450 million of debt, and continued to pursue internal and external growth opportunities. We have continued with our proactive approach to portfolio management. During the third quarter, we sold three RV communities in Fort Myers, Florida for $127 million, realizing compelling value. We remain selective on acquisitions and are pleased with our purchase of two manufactured housing communities in the Pacific Northwest that closed earlier this month. Second, optimizing the operating platform. Our teams are collaborating more effectively, using better data to make decisions, and becoming more disciplined in how we allocate time and resources. You can see it in the results. Manufactured housing continues to deliver strong same-property growth on very high occupancy.
Our annual RV communities continue to grow, and transient RV results are stabilizing. As John will discuss, our 2027 rental rate increases are coming in above 2026 levels for both MH and annual RV. Third, investing in our people, technology, and operating capabilities. We have strengthened and broadened the skills of our leadership team, and we continue to build on our foundation with investments in technology and data to improve operating efficiency, revenue management, pricing, and procurement. A key addition to the team is Bob Garechana, who joined us as Chief Financial Officer in September. Bob brings more than two decades of REIT experience, including roughly a decade as CFO of a large residential REIT, and we are glad to have him.
I also want to thank Fernando Castro-Caratini for his many contributions to Sun over his 10 years with the company, including his leadership as CFO and his partnership in ensuring a seamless transition. We wish him the best in his next chapter. I am pleased with our progress over the past year, and I am encouraged by our outlook. Sun is a more focused company with a clear path to long-term value creation. We are strategically positioned around the themes that define our business: housing affordability, attainable vacationing, and demographic tailwinds behind both.
The entire team is focused on consistent execution quarter after quarter, year after year. None of this happens without our people who turn properties into communities. I want to thank every one of our team members for their dedication, discipline, and focus on serving our residents and guests.
With that, I will turn the call over to John and Bob to discuss our operating results and financials in more detail.
Thank you, Charles. I could not be more pleased with how the team executed this quarter. In the third quarter, our same property MH and RV NOI increased 3.6%, with strong performance from manufactured housing and occupancy of approximately 98%. In manufactured housing, same property NOI increased 6.9% for the quarter, driven by 5.8% revenue growth and a 2.8% increase in expenses. As Charles mentioned, the demographic tailwinds behind our business are something we see on the ground every day. Manufactured housing is part of the solution for housing affordability and demand for our communities remains very strong. That demand is illustrated at the top of the funnel with traffic to our MH website in the third quarter up approximately 50% versus last year, which translates to over 20 applications on average we receive for every available site.
The work we are doing to optimize our operating platform, including how we market our communities and convert that demand, is showing up in our occupancy and rental rate growth while continuing to execute solid expense discipline. We expect our 2027 full year rental rate increases for MH to average approximately 5.4%. Through the end of September, about half of our MH residents have received their 2027 rent increase notices. Turning to RV, same property NOI decreased 1.3% for the quarter. Revenue was in line with our expectations, supported by resilient annual demand and transient performance consistent with our outlook. Annual RV continues to provide a durable base of recurring revenue, with same property annual RV revenue up 2.4% for the quarter. Our work optimizing the RV platform is producing results.
Enhanced revenue management and the real-time data we now have on booking patterns and market trends are enabling us to be more disciplined in how we price and manage our RV portfolio. We have also improved the guest journey with technology initiatives that have expanded our booking channels, enhanced digital self-service, and helped drive approximately 40% improvement in response rates. We also continue to see strong demand and retention across our annual RV portfolio. For 2027, annual RV rental rates are being set with estimated annual average increases of approximately 4.4%. We are performing at a high level, and I want to take a moment to thank our entire team for the discipline and dedication they bring to achieving our goals and positioning us for continued success.
Their commitment to service and operational excellence enables us to deliver these strong results. We are long-term stewards of our communities, and we remain committed to investing in them while preserving quality, attainable housing options for residents.
I'll turn the call over to Bob to discuss our financial results and updated guidance. Bob?
Thank you, John, and good morning, everyone. Before getting to the numbers, I want to take a moment to say how glad I am to be here. I want to thank the entire Sun team for an incredibly warm and generous welcome. In my first couple of months, I've had the opportunity to visit a number of our manufactured housing and RV communities. The consistent theme is our high-quality, affordable communities, but even more so, our great people who are passionate, dedicated, and focused on serving our residents and guests. Having spent my career in residential real estate, I would tell you that the fundamentals supporting our business and the opportunities ahead for Sun are compelling, and I'm very excited to be here.
Now to the numbers. This morning, I'll walk through our third quarter results, our capital deployment and balance sheet, and our updated 2026 guidance. I'll then finish with a few items to keep in mind as you think about 2027. Starting with the quarter, Core FFO per share of $2.35 exceeded the high end of the guidance range by $0.02, driven primarily by higher same property NOI in manufactured housing, as John discussed, as well as higher interest income and a lower share count from our share repurchases. Turning to capital deployment. In September, we closed on the sale of our U.K. business with net proceeds of approximately $1 billion and completed the disposition of three RV properties in Fort Myers for $127 million. We've deployed those proceeds in line with the priorities Charles just outlined.
First, via share repurchases mentioned earlier, by reducing debt, including the repayment of approximately $267 million of mortgage loans during the quarter and nearly $450 million year to date, and through the highly selective acquisitions completed after quarter end. We expect to deploy the remaining cash against similar priorities subject to market conditions. This leaves our balance sheet very well positioned. As of September 30th, Sun's debt balance was approximately $3.8 billion, with a weighted average interest rate of 3.3% and a weighted average maturity of 7.1 years. We have ample liquidity, no floating rate debt, and no meaningful debt maturities until 2028. Now let's pivot to our updated 2026 guidance. As we have disclosed, our prior Core FFO guidance assumed a full year contribution from the U.K. Now that it is sold, we've updated our guidance to remove the U.K. business after the September 22nd closing date.
As a result, the change in our range is not an apples to apples comparison to the prior range, and I'll walk through the bridge in a moment. On same property, we are raising our manufactured housing NOI growth guidance, reflecting continued outperformance in the business. For RV, we are narrowing our growth range, primarily reflecting higher than expected expense growth from property-specific utility costs. Taken together, we are raising our combined MH and RV same property NOI growth guidance. On Core FFO, our updated full year guidance range is $6.97-$7.05 per share. The change in our range is primarily driven by the following. First, the U.K. sale reduces Core FFO, reflecting the loss of contribution from the closing date through year-end. Second, the increase in our same property NOI expectations I already described as additive, as is the net impact of interest income and interest expense.
Third, share repurchases and new acquisitions are additive as well. Finally, the Fort Myers sale reduces Core FFO as we will no longer recognize the business interruption income related to Hurricane Ian that was previously included in our original guidance. As a reminder, our guidance reflects acquisitions, dispositions, and capital markets activity completed through October 26. Consistent with our prior practice, it does not assume future acquisitions or dispositions, additional share repurchases, or other capital allocation activity beyond that date. Looking ahead, while we will provide full year 2027 guidance with our fourth quarter results in February, there are a few items worth highlighting now as you begin to think about the next year.
First, our core business. Our 2027 average rent increases at approximately 5.4% for manufactured housing and 4.4% for annual RV are both above last year's levels, provide a solid foundation for organic growth, and we will continue to focus on optimization, identifying opportunities to drive NOI and FFO growth across the platform. Second, 2027 will reflect our first full year without the U.K. business, compared to roughly nine months of contribution in 2026. We have partially offset those earnings through the share repurchases and debt reduction funded with the proceeds. Third, Fort Myers. These communities were not in our same property pool, so same property results are not affected. However, as I mentioned, they contributed approximately $10 million of business interruption income in 2026 in our brokerage and other income line, which along with their NOI, will not recur in 2027 given the sale.
The redeployment of the sales proceeds only partially offsets this lost income. Finally, our Sungenia manufactured housing development joint venture in Australia that was entered into in 2018, while a small part of our business, has contributed to FFO through income from non-consolidated affiliates, primarily through home sales. With three of the JV's four communities now largely filled, we expect fewer home sales in 2027, and the joint venture's contribution will therefore be lower. We look forward to sharing our full year 2027 outlook in February.
With that, I'll turn the call back to Charles for a few closing remarks.
Thank you, Bob. We have simplified the business, strengthened our foundation, and are generating real momentum. Our focus is clear: Finish 2026 strong and position Sun for long-term growth and value creation for all of our stakeholders. Thank you for your continued support of Sun. Operator, please open the line for questions.
Thank you. We will now be conducting a question and answer session. As a reminder, for those of you who would like to participate in the question and answer session, management asks that you limit yourselves to one question so everyone who would like to participate has ample opportunity. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. The first question is from Jamie Feldman from Wells Fargo. Please go ahead.
Great. Thank you. Appreciate the commentary on what took down the RV outlook on property specific utility costs. Can you just talk bigger picture about what's going on in the RV business and maybe more on the revenue side, but also on the expense side, just to get a sense of is it bottoming. How should we be thinking about what it looks like now, what it's going to look like next year. Just some bigger picture thoughts on the line items and driving it and just kind of the outlook.
Yeah. Hey, Jamie, it's John. Appreciate the question. I think the first thing I'll share is we're really pleased with the execution through 2026 thus far. On the RV annual side, we got ahead of renewals, like I've talked about before, improved retention earlier in the cycle, and we achieved close to 150 net conversions over the last six months. On the transient side, we feel good. We're encouraged by what we're seeing. Demand trends are stable. Pacing is solidly within our expectations. As you know, we have well-located, high-quality resorts and a service-oriented team that provides great experience for our guests.
I think, backing up a little bit, I've operated communities and resorts at Sun for nearly 25 years. During that time, we've continually refined our approach to maximize operational performance while delivering compelling value proposition to our residents and guests. For example, and you know this, starting in 2020, we proactively implemented our successful annual conversion approach, ultimately converting over 8,000 sites. To annual, improving the consistency of earnings and durable cash flows across the RV portfolio.
Following that record conversion activity and supported by the strong base of annual sites that we have now, our focus in 2026 shifts toward maximizing performance across each communities. We are leveraging technology, data analytics, and enhanced operating discipline to drive greater accountability, transparency, and more consistent results. Our focus will remain on site optimization, enhancing revenue management, and controlling expenses. I think our scale, experience, and growing use of real-time data provides deeper visibility into those booking patterns we have, customer behavior, market trends, and that enables faster, more informed decision-making across the portfolio.
I think, said a little bit differently, we really, over the last several years, employed a deliberate strategy to convert to annual and built that solid base and revenue optimization. What we're doing now is unlocking that as we balance between the site mix across the portfolio. Like I said, pacing is solid within our expectations, and trends are stable.
Do you expect an inflection next year?
Jamie, I think it's the same as I said before. I think that the question that comes up often is, are we stabilizing, I think is what you're asking. I like where we sit right now. I like what we see, and we'll obviously get a little bit more into it when we get to our guidance for next year.
Okay. All right. Thank you.
The next question is from Michael Goldsmith from UBS. Please go ahead.
Good morning. Thanks a lot for taking my question. The MH guidance moved higher and materially higher, I guess, from 6.1%- 6.9% before to 6.9%- 7.2%. I think you just mentioned that it was just outperformance. So what's driving that? That was also pretty materially higher than the preliminary rent growth that you provided at the beginning of this year. Given that the preliminary rent growth for 2027 is higher, should we expect kind of similar highish numbers, going forward in the MH business? Thanks.
Hey, Michael, it's Bob. I'll start and John may augment as we go through. As it relates to the guidance change related to 2026 and MH, we had a great quarter. We've had a great year-to-date performance. A lot of the driver of that was some on revenue, on some other income items, but also largely on the expense line items. W e reduced our expense expectations in driving the NOI improvement. A lot of that came from real estate taxes specifically, as it relates to Q4. As you think about kind of revenue growth in the aggregate and into 2027, the rental rate guidance that we gave is really solid. It's 40 basis points above where we were last year, which is amazing. It is one, albeit large input in total revenue, but there are other factors that help drive revenue in the aggregate.
It is one input, but there are other levers, not dissimilar to other residential spaces around occupancy, other income, the rental program, et cetera, that will lead to overall outcomes. When we give you 2027 guidance for same property, in February, we will give you more color around those other areas.
Thank you very much.
The next question is from Brad Heffern from RBC Capital Markets. Please go ahead.
Yeah. Hey, everybody. Thanks. You obviously sold some RV assets in the quarter. You acquired some MH assets as well. Should we expect going forward that you would try and scale down the RV business in favor of the MH business? Or is that just sort of random transaction activity and does not necessarily represent a strategy?
Hey, Brad, it's Charles. Look, we're always going to be thoughtful and kind of opportunistic as we think about the overall portfolio, and I would look at this as more of a one-off. We saw an opportunity. It made sense to try to create compelling value. We had a history with that site, and so we saw the opportunity, and we took it, and you'll see us just be thoughtful on more one-offs and broader kind of approach that you had in the first part of your question.
Okay, got it. Thanks for that. Bob, you talked about a lot of moving pieces for 2027 from U.K. sale to repurchases to the loss of the BI, Australia. Understand, you're not going to give guidance at this point, but can you talk in broad terms about should we expect growth in 2027? It's just a lot of moving pieces to try and figure out how it shakes out.
Yeah, we're not going to give guidance yet, and I think it's a little bit too early to talk about the overall proposition. The good news is that our core business is very durable and growing really well, and I think that's the big headline, which is you heard from on the rental revenue or the rental rate growth that John gave and the 40 basis points incremental that we saw. You've seen the team execute really well as it relates to expense management and other items. T he core business is growing very positively. There is some noise just with the portfolio transformation, and we're trying to be very clear and credible and transparent with you to provide you with that detail.
But the great thing, and I'm very appreciative of it being new in the seat, is just how wonderful the core business is here and what a great setup that is as we go into 2027.
Okay. Thank you.
The next question is from Steve Sakwa from Evercore ISI. Please go ahead.
Yeah, thanks. I was just curious, how did you go about thinking about rent increases for 2027? Was that an inflation-adjusted kind of COLA factor? I guess, what decisions go into that rent increase?
Hey, Steve, it's John. Thanks. Great question. Frankly, our approach to setting rents is balanced and thoughtful, is what we like to say. It's led to long-term durable growth for decades. Our expected increase of 5.4% on the MH side is, like we said earlier, above the 2026 level and in line with the spread CPI we've historically achieved. We set rents community by community. It's not a single formula or index. We consider a multitude of factors, including occupancy, retention, resident satisfaction, demand for our product, the value our communities provide, local regional markets, and the corresponding comp set. Each one is a factor, not the factor.
So really, it's about appropriately balancing our revenue strategy between occupancy and rate while continuing to reinvest in our communities, ensuring our residents are satisfied so that they continue to be advocates of and a sales force for Sun. That's why our residents stay with us an average of 10 years or longer and why our cash flows have generated consistent NOI growth over multiple decades.
Great. Thanks.
The next question is from Eric Wolfe from Citi. Please go ahead.
Thanks. It's Nick Joseph here with Eric. Just going back to the acquisitions, I was hoping you could walk through the rationale for them versus other uses of the capital, including obviously the buybacks that you've been doing. What's the going-in cap rate on those deals, and then what's the return to Sun, just given the low costs preferred, and financing structure of them?
Eric, Charles here. I will start on just the broader capital allocation priorities, then I will hand it over to Aaron to go into some of the details. As we have talked about all year, we have looked at capital allocation through the lens of maximizing long-term shareholder value. We will continue to be thoughtful, disciplined, opportunistic. Our actions so far this year, I believe, demonstrate that discipline. Year to date, we have been active with buybacks, $544 million, and pay down of debt of about $450 million. We still have meaningful capacity, allowing for future flexibility. That is the great news. To your question, if there are buckets out there, here is how we are thinking about those buckets, if you will. Again, we have demonstrated this on the share buybacks.
Right now, we have leaned in. We talked about that over our last investor meetings, and that is kind of top of the list. It underscores the conviction that we have in underlying business, and we have plenty of capacity. The other buckets that we are looking at are kind of growth CapEx, investing back in our business. Expansions. We will be thoughtful and more targeted on that side of the business, and we can get into that, but those are opportunities that I think grow us long term and allow us to get into that kind of reinvesting in the business, if you will. You asked specifically between buybacks and acquisitions.
Acquisitions, we are going to continue to be selective. We are always evaluating. You will see that we are in the market. We want to know what is out there. But we are going to be targeted and selective on what we do and discerning, if you will. The last on the list right now, which we are just giving kind of low priority, is debt payback. Given we have a healthy balance sheet, we are well balanced, and no maturities or maturities addressed through 2028, that is lower down on the list. All of that is to say we are constantly keeping our eye on the market. We are going to be opportunistic, thoughtful, and we are going to weigh our options against our leverage levels.
Those are the high level, and then I will turn it over to Aaron for the other part of your question.
Yes. Eric, great question. Just following on what Charles was saying, once we identify the strategic opportunities, we move forward to the extent the math works, we are able to structure attractive deals. In the Pacific Northwest specifically, we went into 2025 with three communities with the benefit of an acquisition we made in 2025. These acquisitions, we now have a 1,600 site area where we can operate them efficiently with John's existing team with minimal incremental staffing to deliver outsized returns over time. We believe these communities will deliver outsized growth and deliver yield on cost improvements, which is consistent with what we shared with the market a bit earlier. The going-in yields on these were in the low to mid- 4s, and again, we do expect that to grow.
We shared with the market earlier, we're seeing over 50 basis points of yield on cost improvement on an annual basis for the acquisitions we closed on in 2025. In terms of the structure of the transaction, historically, Sun has a long track record of structuring deals compelling for private, non-institutional sellers to defer tax. Those can include low current yields as well as high conversion premiums, which ultimately brings, excuse me, up the effective cap rate to us and lowers our cost of capital for the transaction. We will effectively use those going forward as we have in the past, and that could widen the opportunity set despite the low cap rate environment we continue to see in the space.
Thanks. Maybe just on that point, low cap rate environment. Are you seeing any movement in cap rates just broadly in the transaction market given the changes to the debt financing?
Aaron, again, that's a great question. We obviously are active in the market. We are not yet seeing a material move in underlying valuation expectations from sellers. What you are starting to see is probably lower volume as there becomes a bid-ask price discovery period through this higher rate environment. Given the sector we're in and what you've heard from Charles, John, and Bob earlier, it is a highly compelling, ultimately one of the most attractive, if not the most attractive residential asset class. We continue to see valuations in that range. We'll continue to monitor the market, leverage our balance sheet, leverage our OP unit structure to potentially effectuate some transactions to the extent they are compelling, and again, we'll weigh them against our other capital allocation options.
Thank you.
The next question is from Jana Galan from Bank of America. Please go ahead.
Thank you. Good morning. Following up on Steve's question on the MH rental increases next year, can you talk if there's a spread between all age communities and age-restricted rent increases, and then any details on kind of mark-to-market when bringing new residents into an MH community?
Hey, Jana. This is John. Thanks for the question. First off, I'll say our goal is to maintain high-quality occupied communities with satisfied residents. This leads to the durable cash flows that I talk about, and have generated consistent NOI growth over multiple decades. Is there a spread between all age and age restricted? Yes, there is. From the mark-to-market perspective, when a home does turn over, we will of course take the opportunity to bring that site up to market based on demand. Our residents stay an average of 10 years or longer, so turnover is very low, retention is very high.
Once again, that means those opportunities don't come up often and don't move the overall number much. But like I said, we have very durable business and our realized rent growth generally tracks in line with our initial increase, but we may see some modest increase above that as the year plays out.
Thanks, John.
Yep.
The next question is from Jason Wayne from Barclays. Please go ahead.
Good morning. Thanks for the question. You mentioned you are looking at some targeted growth CapEx and maybe some expansion projects. Can you just give some more color on where you are seeing opportunities there and what kind of underwriting you would target for expansions?
Yeah. This is Charles. I will start, and maybe we will go to Aaron. I will lean in on the growth CapEx, really. This is part of our overall strategic priorities that I have outlined at the start of the year, which is around capital allocation, but also optimizing our operating platform, investing in our people and technology operating capabilities. That is really what I am speaking to, is where are there opportunities to invest in our platform, in our people, or our technology, or our infrastructure, either within our corporate environment or out in our communities. Over time, we are going to underwrite those to certain hurdles that make sense. Some of them that ultimately may enable our rent growth over time.
We believe these investments will improve our operating efficiency, enhance the resident and guest experience, and position the company for that long-term earnings growth. That is why it is kind of higher up on our priorities as more of a targeted piece. It is community by community. Sometimes it can be small, sometimes it can be large. When you aggregate them, it really does make a difference across our communities.
The hurdle rates, Aaron, I do not know if you wanted to go a little bit into that.
It is a great question. Consistent with the commentary on the acquisition pipeline, we are very focused on opportunities and being really thoughtful on a granular level as it relates to expansions, proven track record with John and the team over a long period of time. That said, we are focused on a couple of very specific opportunities that deliver returns in excess of our cost of capital. The expansion is lower risk given that we already have a view as to how the asset is performing, the occupancy levels and the rates as it relates to some of those specific growth projects.
They are very much asset level, and they feed into the data and technology dialogue and strategy Charles outlined, including automated meter readers and things like that, which again, not large nominal dollar numbers, but can deliver very meaningful opportunities and growth across the portfolio. Highly targeted, highly granular, and in our current structure and framework, with 100% focus on MH and RV. We look forward to executing those into 2027 and beyond.
Got it. Thank you.
The next question is from John Kim from BMO Capital Markets. Please go ahead.
Thank you. Bob, good to hear from you on this call. I wanted to ask on annual and seasonal RVs, it slowed in terms of growth to 2.4%, and that's decelerated from the last two quarters. I'm wondering if that's a seasonal impact at all or if you're seeing weaker pricing or retention. I know the sites went down a little bit as well. Just any commentary on how this performed and where you see it going forward.
Yeah. Hey, John. Appreciate the question. I'll start with on annual RV, retention is very strong. I like how we started out the year with our retention, and I'm excited about the fact that we've grown it over the last six months by another 150 annuals that we have. This comes back to the focus that I mentioned earlier on optimization of site mix. Enhancing revenue management and controlling expenses. I think our scale experience, the growing use of real-time data, providing deeper visibility into booking patterns and the customer behavior, all the things I talked about earlier. This is about looking at the RV portfolio in total.
That's why you've heard me say Everybody's heard me say so many times over the years that the best revenue-producing site you can gain is the one you never lose. That's the same thing on the RV side. The retention piece is solid, and because we have that base, it gives us this opportunity to really look at the portfolio again in total from an optimization of site mix perspective. That's what we're doing. That's what we'll continue to do.
Thank you.
The next question is from Adam Kramer from Morgan Stanley. Please go ahead.
Hey, thanks for the time. Wanted to ask about capital allocation and maybe frame it a little bit differently, which is, I think you bought back $293 million or so of stock in 3Q, I think another $80 million or so subsequent to quarter end. So maybe keeping those numbers in mind, and then thinking about the sort of billion or so of U.K. sales proceeds, how much of that U.K. sales proceeds, how much of that billion remains unallocated, and could be used potentially for repurchases? Again, recognizing you may use it for repurchases or acquisitions or something else. But just trying to think about how much of the year-to-date quarter purchases already sort of have used that U.K. proceeds versus it's coming from a different bucket.
Yeah. Hey, Adam, it's Bob. I'll start, and the team may adjust. Cash is fungible at the end of the day, so there are different moving pieces. But, as Charles mentioned, we've acquired year to date $540 million or so of stock. We used the line of credit in order to do so in advance of the U.K. sale. We repaid the line of credit in Q3 period with the proceeds from the U.K., and we have about $600 million of cash or a little bit more sitting on the balance sheet at the end of Q3. And that cash is available for our capital allocation priorities, which Charles outlined. So more than half of the proceeds have already been effectively deployed against share repurchases, which is part of our allocation component.
The way I look at it from a transaction standpoint is, to be honest with you, is the Fort Myers sale funded the acquisitions subsequent to quarter end. I think of that as a net transaction component. We are still a net seller even outside the U.K. We are in a great spot from a balance sheet standpoint. We have effectively no maturities until 2028. We have a big cash position on the balance sheet, and you have heard about our capital deployment priorities from the team.
Great. Thank you.
The next question is from Peter Abramowitz from Deutsche Bank. Please go ahead.
Yeah. Thank you for taking the question. Just kind of a high-level one. We have had a couple of months now since the ROAD to Housing Act passed. Just kind of wanted to get your latest thoughts and maybe hear how you are feeling about the change in legislation overall. Just any changes you are anticipating, whether it be things that could affect how you run the company or changes to the industry overall. Curious for your latest thoughts on that.
Yeah, great. Thanks, Peter. It's Charles. We've talked about this before, but overall, we see the Housing Act as a really positive sign, recognition that the manufactured housing is being seen as part of the solution, and we're uniquely positioned to address the need by providing high-quality, unsubsidized, attainable housing broadly. The pieces that were in the ROAD to Housing Act that highlight the removal of chassis, it pushes energy into the states and cities to rethink manufactured housing. Many of those changes, though, in terms of the chassis specifically, need to be kind of worked through the manufacturers and then ultimately kind of rule making that goes with it. We don't see any immediate change other than the dialogue around manufactured housing as part of the answer to the affordable challenges.
As we think about the business longer term, we think there are opportunities to continue to have dialogue about what can be done creatively with not having a chassis there, the flexibility that comes with innovation around how a house is designed, and other pieces like that. But it's going to take time to kind of work through, and we're in those dialogues now. We're having meetings that try to think through, can we be part of providing more supply of manufactured housing long term and what it might look like. There's no immediate answer other than we're excited about the dialogue that's coming, and we're going to be standing tall in the middle of those conversations trying to get more housing units to Americans, especially in the product that we help provide.
The next question is from John Pawlowski from Green Street. Please go ahead.
Thanks. I have a couple questions around the growing share of rental homes in the MH portfolio. So rentals as a percentage of total occupied sites are up from, call it 9% in 2022 to now north of 13%. Has there been an intentional shift to increase rentals, or it's just more of a reflection of you're taking what the market gives you and inbound demand from renters is a lot higher than owners right now?
Hey, John, this is Charles. I'll start, and if John wants to fill in any gaps, he can. This is not an intentional focus. The rental program historically at Sun has been a tool to lease up communities as we've had expansions or developments, and then the goal over time is to convert many of those renters into home ownership over time. It's been a smart tool. The core benefit is there's less economic downtime, which translates to higher occupancy. As a tool, it supports stronger overall revenue growth. That said, we're at about 98% occupancy, and so we see ourselves as being a highly occupied, healthy place to be, gives pricing power and other things that go with that. So I don't expect our occupancy to climb much further from here.
The program has ebbed and flowed over years, and this is where John can speak to it. We're always going to be looking to optimize the mix and performance. The view of this program has been a smart lever, but we're going to continue to evaluate it. What I would say is, and people ask me, "Hey, you came from your background, how do you see things?" Bob coming from multi-family. Given our background, I see the rental program as a natural area for further optimization as we go into 2027. When we think about optimizing the portfolio, this is something that we'll continue to spend time thinking about. But right now, it's been a healthy tool that we've used to drive overall revenue growth.
When you say optimize it, Charles, should we assume our rental sites are going to decline over the next couple of years, hold steady or increase further?
We'll come back with more. This will be the kind of work that we'll do, but the reality is we want that site producing revenue. We have hundreds of communities that have different demand levers. They're here or there, and we'll make sure that we're trying to put the right balance to that. It's ebbed and flowed in the past, and it could ebb and flow. I'm not going to be able to tell you what we're looking at for 2027. This is where I want Bob to get some time, and as a team, kind of me bringing my outside perspective, Bob as well, working with John and the rest of the team. We'll put our head on this and really think through what is our approach going into 2027. Right now, we're using it to make sure we're driving top-line revenue.
Okay. Thank you.
Thank you.
The next question is from Wes Golladay from Baird. Please go ahead.
Hey, everyone. Can you talk about MH demand, your outlook for that? Revenue-producing site growth has been more modest this year, but you also highlighted the accelerated rent growth and traffic is up. Is this a function of fewer expansions?
Hey, Wes, it's John. One of the things I'd tell you is that, here's the bottom line. High occupancy means high retention, ultimately durable cash flows. This is what it means. As far as demand for MH, even today, we said it, I think, in the prepared remarks. We take 20 applications for every site that we have available in the portfolio. What we seek now, as we talked a lot about optimization across the portfolio, is we're focused on growing NOI and margins, and occupancy is just one piece of the equation. We have very low turnover. As I mentioned, high retention. Our residents stay an average 10 years, which gives us that durable, continuous revenue stream.
I think unlocking our data, improving our tech, coupled with focus on the strategic pillars that we've talked about a number of times, has led to solid operating improvements at our core this year, is quicker inventory turn times, better expense performance, improved results from our procurement platform, higher renewal rates, higher conversion rates in all of our transaction funnels. These are the things that we're going to be seeking to do, as we always have, as we optimize and grow margin.
Okay. One quick question on the assets that had BI this year. Are those largely stabilized right now?
Real quick, Wes, I think you said question on the assets that have BI. The only assets that had material amounts of BI are the Fort Myers assets that we sold. They were not stabilized. Now that the assets have sold, there will no longer be any BI.
Okay. I appreciate that. Thank you.
This concludes the question and answer session. I would like to hand the floor back over to Charles Young for closing comments.
Thank you for the questions. Look forward to seeing everyone soon. Take care.
Thank you for your participation in today's conference. This concludes today's conference call. You may now disconnect your lines.