SOUTHFIELD, Mich., Nov. 7 /PRNewswire-FirstCall/ -- Sun Communities, Inc. (NYSE: SUI) (the 'Company'), a real estate investment trust (REIT) that owns and operates manufactured housing communities, today reported third quarter results.

During the quarter ended September 30, 2008, total revenues increased 7.0 percent to $61.4 million, compared with $57.4 million in the third quarter of 2007. Net loss for the third quarter of 2008 was $(5.5) million or $(0.30) per diluted common share, compared with a net loss of $(4.4) million, or $(0.24) per diluted common share for the same period in 2007. Funds from operations (FFO)(1) were $11.3 million or $0.55 per diluted share/OP Unit in the third quarter of 2008 as compared to $11.8 million or $0.58 per diluted share/OP Unit in the third quarter of 2007.

For the nine months ended September 30, 2008, total revenues increased 8.6 percent to $191.9 million, as compared to $176.7 million for the same period in 2007. Net loss was $(16.0) million as compared to $(6.5) million for the nine months ended September 30, 2008 and 2007, respectively. FFO(1) was $27.1 million, or $1.32 per diluted share/OP Unit, for the nine months ended September 30, 2008, compared to $41.0 million, or $2.02 per diluted share/OP Unit, for the same period in 2007.

Included in net loss for the three and nine months ended September 30, 2008 is equity loss from the Company's affiliate, Origen Financial, Inc. ('Origen'), of $1.5 million and $14.1 million, respectively, which include negative adjustments to the carrying value of the Company's investment in Origen of $1.3 million and $8.1 million, respectively. Excluding these equity losses, FFO(1) would have been $12.8 million, or $0.62 per diluted share/OP unit and $41.2 million, or $2.01 per diluted share/OP Unit, for the three and nine month periods ended September 30, 2008, respectively, as compared to $11.8 million, or $0.58 per diluted share/OP unit and $41.0 million, or $2.02 per diluted share/OP unit for the comparable periods in 2007. The results for the nine months ended September 30, 2008 also include severance costs of approximately $0.04 of FFO per diluted share/OP unit related to the retirement of one of the Company's officers.

For 135 communities owned throughout 2008 and 2007, total revenues increased 2.5 percent for the quarter ended September 30, 2008, and total expenses decreased 3.0 percent, resulting in an increase in net operating income(2) of 5.0 percent, as compared to an increase in net operating income(2) of 1.6 percent for the same period in 2007. For the nine months ended September 30, 2008, total revenues increased 2.2 percent and total expenses increased 1.0 percent, resulting in an increase in net operating income(2) of 2.7 percent, as compared to an increase in net operating income(2) of 2.0 percent for the same period in 2007. Same property occupancy in the manufactured housing sites was 82.4 percent at September 30, 2008 and December 31, 2007.

Manufactured housing revenue producing sites for the third quarter of 2008 decreased by 48 sites, as compared to a decrease of 160 sites during the third quarter of 2007. For the nine months ended September 30, 2008, manufactured housing revenue producing sites increased by 50 as compared to a loss of 65 sites during the same 2007 period. This represents a year over year improvement of 112 and 115 sites, for the three and nine months ended September 30, 2008, respectively, in comparison to the same periods during 2007.

During the third quarter of 2008, 251 new and pre-owned homes were sold, bringing the total of homes sold year to date to 742, an increase of 31.3 percent from the 565 homes sold during the comparable nine months of 2007. Rental home sales, included in total new and pre-owned home sales above, totaled 151 and 443 for the three and nine months ended September 30, 2008, respectively, as compared to sales of 90 and 281 during the same periods in 2007.

'Both new and pre-owned home sales are ahead of results for the same period in 2007 pointing to the affordability of manufactured housing during economic downturns,' said Gary A. Shiffman, Chairman and Chief Executive Officer. 'The First Time Home Buyers Tax Credit, which provides for a 10% refundable tax credit on the purchase of a home, may further assist home sales as we are actively promoting this opportunity to our customers, many of whom are first time buyers,' Shiffman added.

The Company's rental program has increased by a net 121 homes since December 31, 2007, bringing the total number of occupied rentals to 5,449 at September 30, 2008, as reflected in the accompanying table. For the first time in the program's history, rental home sales have exceeded net leases causing occupancy in the program to decline by 31 sites in the third quarter of 2008.

'The Company continues to effectively execute on its core business objectives through extraordinary economic times in the broader marketplace. The business of providing affordable housing has historically been somewhat recession resistant and, to a certain extent, countercyclical,' said Shiffman. 'This is borne out by the strength in the net operating income of our communities, growth in home sales and the annual rate of 16,000 plus applications to live in our communities,' Shiffman added.

During the third quarter, the Company invested $0.5 million in a newly created limited liability company, Origen Financial Services, LLC (the 'LLC'). The LLC purchased the origination platform of Origen. The LLC will provide origination services for sellers of manufactured homes, including the Company and other members of the LLC.

As previously announced, on July 1, 2008, the Company completed a transaction involving its installment note portfolio resulting in proceeds of $25.6 million. The notes were valued at par with certain recourse provisions requiring the Company to purchase the underlying homes securing the installment notes upon the event of default of an installment note and subsequent repossession of the home. The Company has recorded the transaction as a transfer of financial assets. The transferred assets have been classified as collateralized receivables and the cash received from this transaction has been classified as a secured borrowing in the consolidated balance sheet. The proceeds from the transaction were used to pay down the Company's unsecured line of credit.

A conference call to discuss third quarter operating results will be held on November 7, 2008, at 11:00 A.M. Eastern Time. To participate, call toll-free 877-407-9039. Callers outside the U.S. or Canada can access the call at 201-689-8470. A replay will be available following the call through November 21, 2008, and can be accessed by dialing 877-660-6853 from the U.S. or 201-612-7415 outside the U.S. or Canada. The account number for the replay is 3055 and the ID number is 300583. The conference call will be available live on Sun Communities website www.suncommunities.com. Replay will also be available on the website.

Sun Communities, Inc.