Prepared remarks
Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sun Communities Second 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 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; Fernando Castro-Caratini, Chief Financial Officer; and Aaron Weiss, Executive Vice President and Chief Investment Officer. 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. Thank you for joining us to discuss our second quarter 2026 earnings and outlook for the rest of the year. We are very pleased with our performance this quarter, achieving results above the high end of our guidance while executing on our strategic priorities. We delivered core FFO per share of $1.84, surpassing the high end of our guidance range, driven by sustained strength in our Manufactured Housing portfolio and the resilience of our RV portfolio and disciplined expense management throughout the organization. Based on our first half performance and continued confidence in the business, we are raising our outlook for the core business. These results, coupled with continued demand driven by long-term housing affordability trends, reinforce our confidence in our strategy and the compelling opportunities ahead. The fundamentals in our business remain strong across both Manufactured Housing and RV.
Manufactured Housing fulfills a critical need for attainable housing, offering residents an attractive value proposition, while limited new supply drives durable demand and long-term community value. Our RV platform offers a compelling value-oriented outdoor lifestyle for short- and long-term guests, supported by healthy demand and a limited supply of premier destinations. Across Manufactured Housing and RV, these attractive industry fundamentals, combined with the quality of Sun's portfolio, support high occupancy levels, resilient demand and durable cash flow generation across our platform. In May, we announced the sale of our UK business, an important milestone that further simplifies our portfolio and sharpens our focus on our core Manufactured Housing and RV platform. This transaction remains on track to close by the end of the year, subject to customary closing conditions and regulatory approvals.
Our positive performance remains anchored around the three core strategic priorities we introduced at the beginning of the year. Our first strategic priority is disciplined capital allocation. We focus on the highest return opportunities across organic growth, external investments, portfolio and community optimization, and shareholder returns to maximize long-term value creation. Our new $1 billion buyback program underscores our conviction in the underlying value of our company and our commitment to disciplined capital allocation while maintaining strategic and financial flexibility. Our second strategic priority is optimizing our operating platform. Our strong operating performance reflects the benefit of the initiatives implemented over the past year as we simplify processes, enhance transparency and improve productivity. These efforts strengthen our day-to-day operations, enhance the experience we provide to our residents, guests and team, and create a stronger foundation for sustainable long-term growth.
Our third strategic priority is investing in our people, technology and operating capabilities. We are improving Sun by investing in leadership, technology and the capabilities that will support our long-term growth strategy. Last month, we were excited to welcome our new General Counsel, Ileana McAlary. At the same time, we continue to invest in technology and automation initiatives aimed at improving productivity, increasing data visibility and enabling more informed decision-making across the enterprise. We believe these investments in our people and platform will drive greater operating efficiency while enhancing the resident and guest experience. Looking ahead, we believe the actions we have taken to simplify our portfolio, strengthen our balance sheet and invest in our people and systems position us well to deliver consistent long-term growth and increase shareholder value. Furthermore, I'd like to comment on the 21st Century ROAD to Housing Act, which was recently signed into law.
We are encouraged by Sun's positioning to help be a part of the solution to the country's housing affordability need. The law includes several provisions specific to manufactured housing that we view as constructive for our industry. Among other things, the law preserves investment in the sector, gives manufacturers more design flexibility and encourages state and local governments to open the door to more manufactured homes. While it will take time for these changes to play out, we see them as a positive step for affordable housing. I want to thank our team members for their continued dedication and commitment. Their hard work and execution continue to differentiate us, and these results are a direct reflection of the outstanding work taking place across our organization and in our communities every day. With that, I'll turn the call over to John and Fernando to discuss our operating results and financials in more detail.
Thank you, Charles. Performance was driven by solid revenue growth, disciplined expense management and the execution of the operational initiatives implemented across the business over the past year. North American same-property Manufactured Housing and RV NOI increased 6%, exceeding our guidance range with contributions from revenue growth and expense discipline. Within that, Manufactured Housing same-property NOI increased 8.8%, exceeding our expectations. Revenue increased 6.2%, primarily driven by segment growth while disciplined management of controllable expenses contributed to the outperformance. Demand across our Manufactured Housing communities remains exceptionally strong. Occupancy remained above 98%, supported by favorable industry fundamentals and the value proposition our high-quality communities provide to our residents. Within our RV portfolio, same-property NOI was in line with guidance.
Annual demand remained resilient and transient trends have been consistent with our expectations. As discussed last quarter, we manage our RV platform with a balanced and deliberate approach using demand, pricing and inventory data to optimize the bottom-line performance of our communities. The initiatives we implemented earlier this year are delivering results, providing greater visibility into demand and enabling more informed decision-making throughout the season. On the annual side, demand remains stable and continues to provide a durable base of recurring revenue. On the transient side, pacing has improved as the season has progressed, and we are encouraged by the direction of the business. The third quarter represents the greatest period of RV contribution annually, and while we remain appropriately measured, we are also optimistic about the underlying trends we are seeing. Our focus extends beyond near-term revenue performance to improving the customer journey across the RV platform.
During the quarter, we completed the deployment of technology and systems that provide better enterprise-wide booking visibility. This gives our teams a clear view of customer interactions, improves how bookings are routed and secured and helps deliver a more consistent experience from the initial inquiry through a guest stay. This exemplifies our deliberate approach with a focus on accountability, combined with investments we have discussed that are translating into better execution. It also creates a scalable foundation to build on as we continue optimizing our platform and enhancing the experience we provide our residents and guests. I want to thank our team for their continued dedication and execution. Their commitment to delivering exceptional service while operating our business efficiently was instrumental in delivering another strong quarter. With that, I'll turn the call over to Fernando to discuss our financial results and updated guidance.
Thank you, John. Our second quarter results reflect another period of strong operational execution with core FFO per share of $1.84, exceeding the high end of our guidance range by $0.05 per share. The outperformance was primarily driven by the strength in our Manufactured Housing portfolio, supported by disciplined expense management across the business. Our RV portfolio performed in line with guidance. From a capital allocation perspective, we again demonstrated our disciplined approach to deploying capital. During and subsequent to the second quarter, we repurchased approximately $200 million of common stock. Year-to-date, we have repurchased approximately $260 million of our common stock and have bought back approximately 6.5 million shares, or $800 million, since initiating our share repurchase program last year, representing approximately 5.1% of our common shares outstanding at the time the program began.
As of today, approximately $800 million is still available under our current share repurchase authorization. We remain a disciplined capital allocator, balancing strategic investments, portfolio optimization and return of capital while maintaining a strong and flexible balance sheet. Our balance sheet provides meaningful financial flexibility. As of June 30, Sun's debt balance was approximately $4.1 billion, with a weighted average interest rate of 3.3%, a weighted average maturity of 6.9 years and a net debt to trailing 12-month recurring EBITDA ratio of 3.9x. We believe our financial position provides the flexibility to continue executing our strategic priorities while creating long-term value for shareholders. As part of our continued focus on capital allocation and growing our unsecured capacity, during the quarter, we repaid $178 million of mortgage loans using cash on the balance sheet.
Subsequent to quarter end, we repaid an additional $258 million via draw on our revolving credit facility. Looking ahead, we have $56 million of mortgage maturities remaining in 2026, which we will repay in the fourth quarter. We expect to pay any outstanding balance on our line of credit using proceeds from the sale of the UK business. Turning to guidance. As detailed in yesterday's press release, we are raising our same-property NOI guidance for 2026 to reflect continued operating performance momentum and our strong second quarter results. We are increasing our same-property NOI outlook. At the midpoint, combined North America Manufactured Housing and RV same-property NOI is now expected to increase by 4.9%, up 20 basis points from our prior guidance, with Manufactured Housing increasing to 6.5% and RV increasing to 1% growth. This increase reflects the outperformance of our core business, driven by continued strength in Manufactured Housing, improving RV operating trends and disciplined expense management.
The $7.02 updated core FFO per share guidance midpoint assumes a full year contribution from our UK operations. While we expect to close the sale in the second half of the year, the company's guidance does not give effect to the completion of the sale, nor does it reflect any impacts from the sale, including timing and potential uses of proceeds. Our supplemental disclosure provides the expected full-year UK core FFO contribution of approximately $86 million at the midpoint, together with monthly FFO contribution from the UK embedded in our 2026 core FFO guidance range for the remainder of the year. Consistent with U.S. GAAP, the UK portfolio is now classified as held for sale, and is reported as discontinued operations within our financial statements. Accordingly, both the current and prior year periods have been recast to conform with this presentation, providing comparability across all reported periods.
All other key operating assumptions in our guidance remain substantially unchanged. Additional details regarding our outlook and the underlying assumptions can be found in our supplemental disclosures. As always, our guidance reflects acquisitions, dispositions and capital markets activity completed through July 27. Consistent with our prior practice, it does not assume future acquisitions or dispositions, additional share repurchase or other capital allocation activity beyond that date. With that, I'll turn the call back to Charles for a few closing remarks.
Thank you, Fernando. Before opening the line for questions, I'd like to thank all of our team members, including the Park Holidays team, for their dedication and outstanding execution. Their efforts delivered another strong quarter, while further strengthening the foundation for Sun's long-term success. With that, we look forward to your questions. Operator?
Questions and answers
Our first question comes from the line of Jana Galan with Bank of America.
Congratulations on a great quarter. A question for John on the transient RV performance in 2Q. Can you maybe talk about the positives and negatives relative to expectations and maybe the same for July as well?
Hi, Jana. I appreciate the question. Overall, I'd say the team is very pleased with our execution, not just in the second quarter, but through the first half of 2026 on the RV side. We are now getting ahead of renewals and improved retention earlier in the cycle, and then achieving close to 100 net conversions in the second quarter. On the transient side, we feel good and encouraged by what we're seeing in demand trends. As I said in the prepared remarks, demand is stable and solidly within our expectations. I thought I'd touch on just a bit of background — I have a history of close to 25 years here at Sun and have been around the RV business that entire time. We have continually refined our approach to maximize operational performance while delivering a compelling value proposition to our residents and guests. As you recall, starting in 2020, we proactively implemented a transient-to-annual conversion approach, ultimately converting over 8,000 sites to annual to improve the consistency of earnings and the durability of cash flows in the portfolio.
Following that record conversion activity and supported by the strong base of annual sites that we have, our focus in 2026, as I shared before, shifted towards maximizing performance across each community. We are leveraging technology, data analytics and enhanced operating discipline to drive greater accountability, transparency and more consistent results. So our focus remains on optimizing the transient-annual site mix, enhancing revenue management and controlling expenses. I think our scale and experience, combined with growing use of real-time data, provide deeper visibility into booking patterns, customer behavior and market trends, enabling faster, more informed decisions across the portfolio. And while significant opportunity remains ahead, we're really encouraged by the progress we're making. We believe these initiatives will position us well for long-term growth. And I think what you're seeing is this coming to fruition.
You've heard us talking for the last couple of years about data, about technology, about execution — all these things — and you're seeing it appear in our results. Speaking to the third quarter and the latter half of the year, I'll just reiterate again: we like the trends. We like the demand, we like the pacing, and the best part is we're executing better than we have before.
And if possible to ask one more, is there any update you could provide on the acquisition pipeline?
Good question. The acquisition pipeline remains robust. We continue to assess opportunities, as shown through our uses of capital in the second quarter. We remain incredibly disciplined and thoughtful in our acquisition approach. We're really focused on adding high-quality communities in markets with strong supply-demand dynamics. We also want to make sure we acquire assets in locations synergistic to our existing footprint that leverage the business that John oversees with the operational team and are accretive to our long-term growth and value of the portfolio. We've talked previously about initial yields in the market for institutional-grade Manufactured Housing being in the low- to mid-4% yields, and that's what we continue to see. The transactional market remains very active, but we remain incredibly disciplined and thoughtful in our approach.
Our next question comes from the line of Jamie Feldman with Wells Fargo.
Great. I guess just following up on capital allocation investments. We get a lot of questions just on how aggressive you would be on acquisitions. So maybe just a follow-up to Jana's question. Can you talk about some of the things you passed on and also give us your thoughts on IRRs versus going-in yields and how you talk about share buybacks on an IRR basis versus acquisitions done on IRR?
Jamie, we're having a hard time hearing you. You cut out.
Color on kind of where you're headed in terms of how much risk you're willing to take and how low of an initial yield you're willing to take?
Jamie, I don't know if you can hear us or the operator, we missed half the question.
I'm sorry about that. It was a follow-up question on the capital allocation piece. So we get a lot of questions on how low of a yield someone would be willing to take on investment. So can you just talk us through some of the things you've passed on and give your thoughts on IRRs versus going-in yields and share buybacks on an IRR basis versus acquisitions done on IRR?
Jamie, I'll start and perhaps Charles can jump in after. It's a good question. I think we continue to be active in thinking through the market more broadly. We think we have a good sense of the general backdrop in the M&A market. We reengaged in the market in early to mid-2025 after the closing of safe harbor. As you know, we've also been a seller into the market, approximately $200 million last year and a few more this year. So more broadly, stepping back, we're thoughtful holistically about our portfolio. We consider assets we want to own long term that can be accretive to the long-term growth and value of our portfolio. We assess and acquire assets in markets that make sense where we believe our operational expertise creates long-term synergies, and we focus on driving long-term yield accretion. So while we look at initial yields, we are focused on the long-term growth of that yield, and we risk adjust against, as you indicated, our ability to acquire shares in the open market, our ability to drive growth in the acquired assets, and, I think, most importantly, drive growth in our existing portfolio through thoughtful capital allocation across people, teams and technology.
So we look at deals and markets across the U.S. I would say we do not focus on deals and jurisdictions with which we don't operate today or assets that we believe may require capital in excess of our return targets. So we're going to remain judicious and thoughtful. We have proven the ability to acquire assets that are accretive, but in the last three to six months, we've been more muted in what we've transacted upon. We will remain active and thoughtful in the market and evaluate opportunities against repurchasing our shares or investing in our people and systems.
Jamie, I'll just zoom out a little bit. Aaron answered the question well. We have the financial flexibility to pursue multiple avenues of value creation given our balance sheet and liquidity. You've seen, as we demonstrated over the last two months, that we believe buying our shares at current levels is an attractive investment, reflected in our actions. That being said, we continue to evaluate acquisition opportunities where we believe they generate attractive long-term returns and further enhance the quality of our portfolio. We're being balanced and disciplined. What's great is we have the flexibility to look at all avenues, including investing in our people, technology and infrastructure. So we will continue to be balanced, thoughtful and disciplined around how we allocate capital.
Okay. And then I guess, Charles, as a follow-up, we're getting pretty soon we'll be talking about your one-year anniversary. Can you just talk about, at this point, what surprised you the most, the upside, the downside, and as you think about the next six to 12 months, what are the key areas we should continue to expect some change?
I appreciate the question. I'm at nine to ten months, but we're getting to our anniversary. It's been great. The team is fantastic. You've heard me talk about the culture and fundamentals of the business. Affordability is a huge need in America right now and Sun sits at the intersection of being a solution for some of the challenges around affordability. I'll highlight a couple of things. One, we're executing at a very high level across the business, and I still think we have meaningful opportunity to continue to improve. The work that we've done around simplifying the company, demonstrated with the sale of the Marinas as well as the announcement of the UK sale, is allowing us to sharpen our pencil and focus on our opportunities ahead and the strategic priorities I spoke about. We'll continue to focus on that. I talked about disciplined capital allocation in the opening remarks. Our ability to invest in our people, our systems and processes, and technology, while having the flexibility to be opportunistic, is important.
I think what you're going to see is more of that. We're going to continue to focus on the business, running it well, executing well, looking for opportunities to grow and making smart decisions with the allocation of capital. As we continue to do the work, we'll share more in the future. Right now, I like how we're going. We're executing well. We've been putting up some good quarters this year, and we continue to focus on executing for the second half of the year.
Our next question comes from the line of Eric Wolfe with Citi.
Last quarter, your annual RV growth produced something like 6.5% same-store revenue growth. This quarter, it was 3.8%. I was just curious what explains that quarter-over-quarter difference and what you're expecting in the back half of the year from the annual RV side?
Yes, Eric. I think that all speaks to what we've been sharing about the optimization of the portfolio as a whole and how the revenue gets balanced across RV. We've learned from experiences with conversions that we did, especially that record time when we converted a large number of sites. Frankly, at times we went a bit too far at certain properties in some seasons. The team has done a better job of balancing that out between the two revenue lines and ultimately achieving a better revenue mix in RV.
Okay. So it was fewer conversions that resulted in a lower growth rate, and that was an active choice because of profitability?
Correct. In Q1, we actually increased our net conversions by close to 100 in the second quarter.
Our next question comes from the line of Brad Heffern with RBC.
Post the safe harbor sale, leverage has been quite low. You paid off more mortgages post the quarter and then you have the UK proceeds coming in. I'm wondering if you expect to do another debt offering at some point? And would you consider using debt to conduct further repurchases and maybe add some leverage back? Or should we expect that leverage is likely to remain at these low levels?
Brad, we've stated publicly that our leverage target is somewhere between 3.5x to 4.5x. We are close to the midpoint today. Once the UK transaction closes, we will be near the low end of that range. So at this time, given current pricing levels, we're not currently contemplating an offering, but we'll continue to be thoughtful as it relates to how we manage the balance sheet and where ultimate leverage will go once we get the proceeds from the UK sale. It will be a work in progress.
Our next question comes from the line of Michael Goldsmith with UBS.
The RV base rent growth decelerated sequentially in the second quarter. Can you talk a little bit about why that is? And are you seeing some of the impact from the slower transient RV trends impacting the annual RV rate growth?
Michael, there was some sequential deceleration on a quarter-by-quarter basis on the RV side. That points to the balance and mix of annual across the portfolio given our more annual-focused properties and our more transient-focused properties. We're looking at the portfolio as a whole as it relates to the ultimate contribution from the portfolio itself with those properties that are more transient focused versus those that we're looking to continue to convert to annual.
Got it. And just as a follow-up, you highlighted the new housing legislation is a positive step for Manufactured Housing. Where do you see the greatest opportunity for Sun specifically? Is it higher home sales, expansion of existing communities, greenfield development, or easier zoning approvals? How soon could you start to see some of those benefits flow through?
Michael, I'll start high level and let John speak to specifics. The ROAD to Housing Act reinforces the recognition that the U.S. continues to have a significant affordable housing shortage. Manufactured Housing is uniquely positioned to help address that need by providing high-quality, attainable homeownership opportunities for a broad range of customers. Long term, we think the law is beneficial. It removes the permanent chassis requirement and encourages state and local zoning accommodation of manufactured homes. Long term, that's where we see the opportunity. In the short term, we'll have to see how it plays out. From a high level, we need to continue to reduce barriers to development and support long-term growth of manufactured housing communities. Right now, we know the demand is there; it shows up in the limited supply and the underlying demand for our product. Ultimately, we'd like to provide more of this housing, but it will take time as the law's intent plays out. John, if you want to speak to some specifics?
Michael, the chassis removal part of the law presents some interesting opportunities. We have a 30-year history in development, so we know that side of the business. It creates some optionality and could create more affordability in terms of what manufacturers build. That could be helpful in terms of the spec levels in homes. When municipalities evaluate developments, they want to see what the neighborhood will look like. Chassis removal presents new opportunities for added spec and affordable value for people and for municipalities seeking to serve their affordable housing needs. It will take some time for this to develop, but we have the experience and relationships to help progress that, which is where we'd hope to be involved because we sit right in the affordable housing space.
Our next question comes from the line of Steve Sakwa with Evercore ISI.
Charles, I was wondering if you could provide an update on the CFO search. And as you think about the C-suite and you mentioned the new General Counsel, do you feel like the team is largely in place that you see moving forward?
Thanks, Steve. The CFO search is progressing very well. We're pleased with how the process is advancing. Our focus remains on identifying the right long-term leader for the role. We're taking a thoughtful, disciplined approach. We're moving with urgency, while ensuring we have the right long-term partner. In the meantime, Fernando and the entire finance team have done a tremendous job providing financial leadership and continuing to deliver excellent execution and strong financial results throughout this transition. We have strong continuity within our overall finance organization. We'll provide an update when we have something appropriate to share, but it's progressing well. I'm really excited to have Ileana on the team. The team is rounding out. Parts of the organization are filling in and allowing us to run even faster. We have a long runway of what we can do to continue to evolve the company, and I like where we are given that we're less than a year in. The progress the team has made over the last couple of years has been outstanding, so I'm excited about the opportunities that lie ahead as we continue to execute, and we'll update you soon.
Our next question comes from the line of John Kim with BMO Capital Markets.
I have a two-part question on same-store revenue. On the Manufactured Housing side, you had 6.4% and that compares to your rate growth of 5% with occupancy relatively flat year over year. What drove that outperformance so far this year? And then on your overall real property same-store revenue guidance, you maintained the midpoint at 4.25% this quarter, and that compares to 4.8% year to date, which would imply a meaningful slowdown in the second half of the year to 3.7%. How realistic is that slowdown in the back half of the year?
Sure, John. I'll address your second question first. Any moderation over the full year and into the third quarter is simply a revenue mix change given that the third quarter is the largest contributor from an RV transient revenue perspective, with 46% to 47% of the revenue contribution for the year coming from transient. That explains the difference in total revenue growth for the portfolio. As it relates to the Manufactured Housing portfolio and that revenue growth, some of that is coming from our success in managing our rental program and other fees, but the majority is coming from the rental program.
Our next question comes from the line of Haendel St. Juste with Mizuho Securities.
Two parts. First, related to the updated FFO guide: you beat by a sizable amount last quarter and raised by a modest amount. You beat again this past quarter and raised a modest amount. So maybe help me square that. Is that primarily the drag you're expecting from the UK sale in the back half of the year? Is there something else we're perhaps not seeing in the second half?
No, we're very pleased with our second quarter and overall first half performance and are encouraged by the momentum we're seeing across both Manufactured Housing and RV heading into the back half of the year. Importantly, we increased our same-property growth expectations, reflecting the continued strength of the portfolio and confidence in our operating trends. We'll stay focused on execution. We feel good about the trajectory of the business and our ability to continue delivering strong operating performance that we've demonstrated not just over the first half of the year but going back into 2025 for the Manufactured Housing and RV portfolio.
Okay. Second piece: you removed the UK contribution from G&A as part of the updated guide. What does the annualized G&A run rate look like post the UK portfolio sale?
I wouldn't say we lowered guidance from a G&A perspective broadly. We're expecting at the midpoint a contribution of about $172 million from G&A for the core portfolio. The apparent reduction is really removal of the UK from total G&A. That $39 million to $40 million is now in discontinued operations in the form of the $86 million UK contribution mentioned in guidance.
Our next question comes from the line of Jason Wayne with Barclays.
Thanks. On expenses, they came in better than expected in the second quarter, especially payroll. Can you give color on where you captured those savings? And what's your expectation for RV and MH expense growth in the third quarter?
Thanks, Jason. Notable improvements in expense in the quarter related to payroll, but also utilities and taxes. A lot of this is the product of line of sight we have within the portfolio. We've gotten more efficient on the Manufactured Housing side in procurement and how we service the properties, which has allowed us to improve costs across payroll and utilities. From the RV side, we continue to optimize at a property-by-property level, balancing revenue and expense and rightsizing flex where appropriate. We've sharpened our execution greatly over the last couple of years, which has enabled these improvements.
And then one on updated guidance: there's higher income from unconsolidated JVs. Is that increase expected to be recurring or is it mostly related to properties that were sold in June?
The higher income is related to the performance of our Sun-Ingenia JV. That's leading to the higher expected figure.
Our next question comes from the line of Adam Kramer with Morgan Stanley.
Just wanted to ask about capital allocation. When you look at the buybacks done in the quarter, was that just excess cash flow from the quarter? Or should we think about any of that as a pull forward or prefunding of expected proceeds from the upcoming UK sale? I wanted to ask whether any of the buybacks in the quarter were prefunding or pre-usage of proceeds from the UK sale?
Adam, our actions are part of a holistic approach to capital allocation. We want to allocate capital where it generates the best long-term risk-adjusted returns for shareholders while maintaining the balance sheet. The repurchases you saw over the last couple of months reflect execution on that balanced discipline. We looked at where we were and the opportunity; liquidity allowed us to repurchase $200 million of common stock. Since initiating the repurchase program, we've repurchased approximately $800 million of common stock and we still have meaningful capacity for the future. Our actions underscore our conviction in the underlying value of the business. As we think about the UK proceeds coming, there's no pre-determined allocation. We'll be thoughtful and allocate proceeds as we think appropriate for long-term growth — investments in our operating platform, people, technology and infrastructure; potential acquisitions; and share repurchases as appropriate. So the recent buybacks reflect our balanced approach rather than a strict prefunding of the UK sale proceeds.
Great. Philosophically, what do you think the market is missing about the stock or the story right now, and what should be emphasized for the broader market?
I've been here less than a year. We put out our strategic priorities and have been clear about what we want to do and how we want to execute. What's becoming evident over the last two to three quarters is that we're doing what we said we'd do: being thoughtful and disciplined on capital allocation, executing at a high level, simplifying the company to focus on our core business with the most durable growth, and demonstrating improvement in our operating results. I think the market should take away that we have a long runway and flexibility to continue optimizing and creating value. We'll continue to execute and share progress as appropriate.
Our next question comes from the line of Wes Golladay with Baird.
I want to go back to the revenue-producing sites for RV. You mentioned shifting timing as you did the revenue management. Are you still expecting a big uptick in the second half?
Yes. We had close to 100 net conversions in the second quarter. I would see us continue to have growth in net conversions over the second half of the year, but we'll be really thoughtful in terms of striking the right revenue mix across Transient and Annual RV.
Our next question comes from the line of Peter Abramowitz with Deutsche Bank.
I noticed some property sales in the quarter; they were pretty small. Anything we should read into those sales in terms of how you're thinking about your exposure between Manufactured Housing and RV going forward post the UK sale? Are you comfortable with where you're at or is that something you might change going forward?
It's a great question. The optimization of our platform extends into active asset management and portfolio management. The properties sold were nonstrategic assets that required capital for development or repositioning. These sales were immaterial to the overall portfolio but part of a continuation of our plan to optimize the portfolio. On an overall basis, we are comfortable with the mix between RV and Manufactured Housing and our geographic footprint. We will continue to actively asset manage the business and execute on dispositions for assets that don't make strategic sense long term. Overall, we're very happy with the portfolio and I think you're seeing that in performance.
Our next question comes from the line of David Segall with Green Street.
Can you talk about why home sales volume is down year over year? Is that related to the expansion of the rental program over the past year?
David, specific to home sales, we have seen some delays earlier this year in new home closings, but we expect to pick much of that up over the course of the second half. Some of it is attributed to purchasing fewer pre-owned homes in 2026 because residents haven't wanted to sell — they want to stay. We've made up much of that ground on the broker side by facilitating transactions between a resident moving out and a resident moving in, which maintains a consistent revenue stream when that happens. It's important to note home sales contribution to FFO is not as material as it used to be years ago. The focus remains on optimizing the platform as a whole, inclusive of the rental program, which has been a great tool for decades because it generates traffic that leads to both rental leases and home sale transactions. These are the things we're focused on as part of our strategic pillars and optimizing overall revenue and NOI growth.
And with regard to the Annual RV business, have you seen an increase in move-outs in 2Q relative to last year?
No, we haven't seen a meaningful increase in move-outs. It's more about the front end and being purposeful about what we're allowing to come in as annuals and the timing of conversions. Again, it's about optimization and making sure we have the right sites as annual sites on a community-by-community basis.
Our next question comes from the line of Jesse Lederman with Zelman & Associates.
You mentioned property sales that might require higher CapEx. My question is on CapEx. It looks like recurring CapEx for MH and RV was up to almost $19 million, up roughly $6 million year over year. Can you talk more about that?
From a CapEx perspective, we continue to be disciplined and focused on projects that support long-term growth and attractive returns. Our priorities remain largely unchanged and include investments in our MH and RV operating platforms, technology initiatives and maintaining the quality of our communities and resorts. As we look to the balance of the year, we expect to continue deploying capital thoughtfully with a particular focus on projects where we have strong visibility into occupancy growth, NOI expansion and resident and guest experience enhancements. Given the current environment, our broader capital allocation priority is being selective while maintaining a healthy pipeline of opportunities.
Thanks. With more visibility into the transient business due to technological investments, can you provide any quantification on what you've seen quarter-to-date from that segment: future bookings, quantity, or pricing trends on those bookings?
Jesse, what we're seeing is embedded in the guidance we've provided. One of the biggest technological advancements earlier this year was our contact center and customer journey improvements, which has put us in a position to execute and capture the highest level of inquiries ever achieved by Sun on the transient RV side. That improvement in data intelligence allows us to enhance performance and build top-line growth into the future. These improvements contributed to our upward guidance adjustment overall, and we expect to continue growing from this base.
We have reached the end of the question-and-answer session. I will now turn the call back over to CEO Charles Young for closing comments.
Great. I want to thank everybody for joining us on the call today. I want to thank the collective Sun team, and we look forward to sharing more results in the future.
Thank you for your participation in today's conference. This concludes today's conference call. You may now disconnect your lines.