Q2 2020 Sun Communities Inc Earnings Call
[music].
At this time management would like to inform you that certain statements made during this conference call, which are not historical facts, maybe dean forward looking statements within the meeting of the private Securities litigation format of 1995, although the company believes the expectations reflected in at any forward looking statements are based on reasonable assumptions. The company can provide nowhere <unk>.
Oh this expectations will be achieved.
Doctors and risks that could cause actual results of different materially from expectations include the effects of the coke at 19 pandemic and other details others details in yesterday's press release, and some type of time and the company's periodic filings what are the F. C C.
The company undertakes no obligation to revise or update any forwardlooking statements to reflect events or circumstances. After the date of the release.
Having said this I'd like to introduce management with US today Scary shit man, Chairman and Chief Executive Officer, Tropic, Lauren President and Chief operating Officer, and Karen Deering, Chief Financial Officer. After the remarks, there'll be an opportunity to ask a question.
Although I'm sure they'll Florida, Gary Shipman, the Chairman Chief Executive Officer, Mr. Shifting. Please go ahead.
Thank you operator, good morning, and thank you for joining us today as we discuss her second quarter results and provide an update on how son is navigating the impact of Kobe 19.
[noise] hope that everyone is staying healthy and managing through this challenging time.
C N Pepsi it depend on like across the country continues to evolve.
And the environment has been challenging but I'm happy to report that all of our manufactured housing in our every properties are open for business and performing.
We have worked hard to keep our residents guess and team members safe.
From our customer service perspective, we remain focused on delivering the signature service that sounds resident thank god have come to expect across the portfolio.
We are pleased with their results for the second quarter and later the challenges presented by the virus.
The teams skilled execution of our operating and financial plan [laughter] is serve to mitigate the impact on our business.
For the second quarter, we realize the <unk> F F O impact of approximately $10.8 million below our original budget.
Which is better than our initial expectation of $15 million to $18 million [noise] provided during our first quarter relief.
[noise] crackers driving or performance.
[noise] included strong manufactured housing revenues rental program results and expense savings and personnel costs and variable operating expenses, primarily do the army resorts that we're not open.
Oh, that's the positive contributors and a quarter were largely due to the coven related restrictions on our transient RV business.
Despite obstacles related to the virus Ah reported court F O Cobras sure was $1.12 for the second quarter.
In addition.
Son communities generated pause the same community NOI growth of 1.4 per cent.
Just seeing for 900000 hours directly Cove at 19 related expenses NOI growth would've been two per cent.
As of June 30th 2020, all of our manufactured housing commute a as in the RV resorts are open with varying degrees of occupancy limitations uncertain of our amenities to comply with public health guidelines set by state and local government.
[noise] over 80 per cent of our furloughed team members have returned to work and based compensation for main office team members [noise] executive officers and the board has been restored to prior level.
From an operational perspective, we are seeing the resilience have sons unique platform in action.
Total portfolio occupancy in a second quarter rose 70 basis points here over here.
We added 851 revenue producing sites 827 per cent increase over last year.
[noise]. We also completed the construction of almost 500, they can expansion redevelopment and ground up development sites.
That's the country has reopened we've experienced steady incremental improvement in a reservation pays for July and August [noise].
Moreover are forward bookings for September and October have surpassed pre pandemic budgeted expectations.
Well the potential for local and state mandates could impact. This trend. We believe it's improved reservation pace reflects pent up demand and our ability to offer a vacation option cause it's perceived to be both safer and easier to control as compared to other alternatives.
R V travel is the preferred mode for families to get away. This summer.
Expected strong sales growth in June M B N.
Limited only by the amount of available inventory supports this thesis is discuss by major RV manufacturers like Winnebago <unk> industries.
[noise] articles on the araby lifestyle her trending and the New York Times and Wall Street Journal, among many other national and local media outlets.
We remain optimistic I'm forward booking trends.
Must be cognizant of the current situation related to cope with 19, and how it might affect travel in Lamont sad.
Yeah underlying strength of our business in the midst of the spend demick gave us the <unk> $633 million of equity M. A.
This raise allows us to act on a very active deal pipeline.
And resumed gross capital expenditure projects, such a site expansions in ground up development.
Well, we do not know the duration of the pandemic and it's ultimate financial impact on sounds business.
We do know that Sun isn't a position of strength operationally due to the high quality of our portfolio and the nature of our offerings.
As well as financially due to the strength of our balance sheet.
[noise], there's been a challenging ear, thus far and I come in each and every one of our team members for going above and beyond during these past few months.
The commitment to executing on sons core principles that's been exemplary.
<unk> well now discuss her operating results in more detail.
Thank you Gary.
Despite the challenges presented to our business by the pandemic, we're very pleased with our performance this quarter.
Quit implementation of our emergency preparedness plan cost containment efforts and better than I expected manufactured housing revenues mitigated the financial impact to our second quarter results.
[noise] from a total portfolio perspective regained 851 revenue producing sites 827 per cent increase over the second quarter 2019, boosting told occupancy to 97.3 per cent.
Moreover, the financial hardship program implement or for April may rent is now in the 12 months installment repayment period, and we're happy to report that over 17% of total deferred rent has already been collected and approximately 400 residents have paid their deferred rent in full.
Our same community portfolio demonstrated resilience and the second quarter N O I grew by 1.4%, resulting from a 1.8% decline in revenues and an 8% decline in expenses due to delayed seasonal opening a a number of RV resorts and portfolio wide measures taken at the property level to reduce very.
[noise] expensive.
Manufactured housing revenues increased by six per cent driven by a 3.9% weighted average rental rate increase year over year and occupancy games over the last 12 months.
And you'll R V revenues increased by 3.2% and transient RV revenue declined by 37% largely due to delete openings that are resorts during the quarter is discuss previously.
On the expense side, we experienced reductions cross payroll and health benefits driven by furloughs and delayed seasonal hiring utilities and certain maintenance items given restricted access to most amenities.
Variable expense savings realized and second quarter are expected to be lower than the second half of the year is furloughed and seasonal team members returned to work.
And entities that we're not accessible in the second quarter do the state and local restrictions are returned to service.
Same community occupancy improved 190 basis points to 98.7 per cent, reflecting almost 2300 revenue producing site games over the last 12 months.
Additionally, a rental program exhibited resilience with the 17% increase in applications to rent a home from Sun and an elevated rental home renewal rate of 68, two per cent and the quarter.
Total applications, where up almost five per cent year over year. This demonstrates that continues strike through our platform and the demand to live in a son community.
With regard to rent collection.
[noise] of hardship deferrals and prepaid balances manufactured housing collections average, 97% for the second quarter and or at 96% as of July 21st.
These collection percentages are in line with 2019 figures as of the same dates.
Additionally, over the second quarter collections hours, approximately 98% for annual RV site rent also online a second quarter of 2019.
These strong collection fingers across the portfolio are indicative of the resilience some predictability of our balanced portfolio of manufactured housing and RV communities.
Moving onto home sales and the second quarter, we sold 611 homes as compared to 927 homes last year.
Shelter in place restrictions and the inability to show homes physically contributed to the year over year decline.
[noise] Wow pre own home sales were down new home sales revenues grew 15% and our gross margin expanded by seven per cent and the quarter driven by the sale of 140 new homes.
Our average new home price increased 14% over last year two $137000.
We believe that are manufactured home price point and high quality communities are likely to make son and preferred provider of affordable detached housing today and then the postcode economy.
R. R V business, particularly or transient army business has shown steady improvement week. After week is travel restrictions were lifted throughout the quarter.
We have seen acceleration and website visits call volume and reservations for example memorial day weekend transient R. V revenues were down 39% as compared to last year, while transient RV revenues for the fourth of July weekend [noise], We're down just 5.5 per cent compared to last year.
In addition, Ford bookings for the month of September October or training greater than 10% growth over the same period last year.
Gary referred to the strong projected RV sales figures and training media coverage surrounding the growth and demand for the RV lifestyle with the past few months, we are a Polish on RV vacationing I've seen the follow through from our guests and our forward bookings.
We believe the most other travel options, including air travel on cruises could take longer to return to pre covid levels.
Given the breath and high quality of the resorts, we own we were well positioned to benefit from the increasing popularity of the RV lifestyle and vacation option.
We offer an excellent product and our resort performance. During this challenging time reinforces the importance of this business to our world platform.
We are resolute and our views a longterm viability of our mission and our business model.
Demick has highlighted the importance of affordable housing and the desirability competitively priced and say for vacation options for consumers.
Son in many ways has set the standard and we remain at the forefront providing a quality experienced to fulfill this neat.
I would know like the turn the call over to Karen to discuss our financial resolved some balance sheet preparedness.
Thank you John I'd like to begin by reviewing our financial resolved followed by a discussion of our balance sheet.
Sorry expectations for the third choir.
But a quarter ended June 30th 2020, [noise], we reported one dollar and 12 cents per share and car funds from operations as compared to one dollar and 18 cents last year.
The year over a year change reflects the previously mentioned 10.8 million dollar F. F L impact from cold at 19, which was better than our original expectations.
During and subsequent to corner and we acquired a manufactured home community in California, with 370 to get out sites.
And two already resort located in Oregon, and Florida, totalling 544 sites.
Alright here to date acquisition volume is $132 million [noise].
Additionally, we sold our only Montana community for $13 million.
[noise] and May we closed and underwritten public offering up nearly 5 million chairs, netting 633 million and proceeds.
We intend to use the proceeds to continue to find out growth initiatives, including acquisitions ground up development and expansion projects.
A quarter and we had 3.4 billion in that outstanding with a weighted average interest rate a 3.86 per cent and a weighted average maturity at 11.6 years.
Or not that to trailing 12 month recurring EBITA ratio at June 30th What's 4.8 times.
The pandemic and it's financial and operational implications continue to be a fluid situation.
Well, we have seen an improvement in our level a transient rd reservations. We also recognize the reason spike in new carpet 19 cases may I introduce unforeseen challenge isn't the third quarter and beyond which is why we will not be reinstating guidance.
[noise]. In addition, a number of the variable expense savings realized and the second quarter well not continue for the remainder of the year and all of our communities are not open.
[noise] based on our original budget the third quarter was expected to be our biggest contributor representing approximately 31% a bunch of did that that's all for the year.
With the information we have available today, our forecasted reduction two original budget for the third quarter, it's between 12 and $15 million.
This ranging cribs expected reductions to the original budget, Oh $9.5 million that income from real property across manufactured housing annual Harvey and transient alrighty.
$2.5 million, a night contribution from ancillary services and $2 million I've met contribution from home sales.
It also includes $650000 a additional expenses related to the acquisition of personal protective equipment and products for heightened cleaning protocols.
[laughter] the decisive accidents, we have taken ear to date provide sign with meaningful financial flexibility to react operational challenges. During this time [laughter]. We also believe that we are well positioned to respond opportunistically to acquisitions as they arise.
Thank you for joining US today. This concludes that prepared remarks, we would like to open the call now for questions operator.
Thank you and now we can go to your question and answer session, if you'd like to be place in the question can you. Please press star one on your telephone keypad, a confirmation told them will indicate your body's in the question Q.
He made pro start to if you'd like to move your question from the Q.
[noise] participants using speaker equipment, maybe necessary to pick up a headset before pressing star one one moment please pull for questions.
My first question today is coming from Nick Joseph from Citigroup reminders that lives.
Thanks current appreciate Ah the color into third quarter cause I'm not gonna have millionaire pack to the real property can you. Please break that down between the M. H annual Rping transient RV expectations.
Yeah sure Nick as you know we included a range is 12 $15 million.
Nine and a half of it on income from property M. M. H P is due to rent increase changes annual R. V. A shortened seasons and there's a small impact on transient R V. That's about $1.8 million [noise].
[noise] between nine and a half 808, and a half and 1.8 million I'm sorry, you can probably split between the too.
Categories M H and M O R V.
Okay cause that's helpful. And then pretty acquisition pipeline, you mentioned the equity that you're raising the second quarter and at the expectation to redeploy that so can you talk about where the pipeline is today and that made it yourself pricing, where where initial year olds are now and if you'd seen a change pretty cold it.
[noise] thinks that could scary I would share with everyone. That's a pipeline is very full with a lot of attractive opportunities for sun.
Inbound calls from owner operators looking to discuss potential transactions I've never been higher we have all the relationships built over the 30 plus years, let's state planning going on a lot of it directly driven by the pandemic.
And factors related to it to where the timing is just right to open up those discussions so.
We expect to continue strong piece of acquisitions and that was the results in the driving reason for the equity offering going into the year, we had discuss the target them about $150 million [noise].
And to date, we close at about 132 million and a second quarter and subsequent a second quarter.
Acquisitions close worry about 110 million. So we're beginning to drive up that clothing, right and we expect to continue to deploy a growth capital throughout the balance of the year.
We think that Heaven access the equity America place will allow us to take advantage of external growth opportunities and provide some outsized long-term girls for our shareholders.
When we look at cap rates I wasn't sure with everyone on the call. Today. This is where I had been somewhat surprised.
Having been focused on our industry both manufactured in her V resorts.
I had expected that there might be a little bit of relief I'm cap rates and I would sure that the opposite has actually.
Been our experienced Tuesday.
[noise], there's lots of available capital out there lower interest rates today and the continued recognition the fundamentals of both manufactured housing.
And the V platforms. They continued to push on cafe, it's more than I would've expected and both segments.
And we've seen a ladder lower quality less.
Well located communities, if you will trading in the low fours and sometimes a touch below.
And I would give some measure just in the interests of trying to be is helpful and transparent as we cannot son, we have looked at more than I have billions of dollars of transactions very very carefully <unk>.
Most of which would be contenders and you have not been willing to come down to the pricing where these transactions have been going.
That being said we have acquisition pipeline that allows me to say that we will be able to put the equity to work.
To give you some sense of we're we're thinking the three properties that what can I spoke about that we are closed on the acquisitions. We're in a range of a 4.7 cap right up to a 6.2 cap right range and we.
Will continue to be looking in that range as we move forward.
Thank you.
So my next question is coming from West holiday from RBC capital markets for line is that a lot.
Hey, good morning, everyone can you talk about what you're seen for annual R V Hamburger somebody the band perspective.
Sure.
It was John.
So I mean I will tell you that 2020 has been as you can see if the results of bit challenging on the read conversion standpoint.
And a lot of that's because you know the healthy respect that we've had for social distancing and we've had a temporarily we had to temporarily.
You know maybe not interact so much with our guest face to face, which is very much how we secure R V conversions.
Many of our southern conversions happen generally happen at the end of March mid April and northern conversions most of those happen in early in June and early July so the timing wasn't great as well, but that said.
The reason why I been so successful converting transient Daniel and it was because guess love coming to a resort. So I think once things settle down and we get closer normal again that conversion activity will resume.
Yeah.
Okay, and then let's see looking at the the your sites you. Thank you mentioned, they're all open and just curious or is that <unk>. All the RV transient sites open to all guess I've I know there was some restrictions earlier, if you've gotta say a certain length of period you. It was open but I just want to clarify that all the RV sites are open for everybody now [noise].
Every resort is open we do have some sites and Ontario that are still not available for transient guess and we've got [noise]. You know, we've just got a few communities out in California, where there. There's some limitations is the number of transient or short term guess that she can have at any given time. So we still got a little bit of that.
Going on right now.
Gotcha and my last one do you expect to start any developments later this year.
Well, we actually in the corridor, we actually add an additional sides to some other developments that we've done ground up that we'd open up last year I'm excited to say that larkspur, which isn't Colorado opened up their sides and the second quarter, which is a big thing for us cause it's very well located yourself.
South of Denver.
And we will look to add additional side deliveries for those ground ups and phases over the course of this year and we were solidly in the ground in fact I just saw it myself a week ago Kosta Vista in San Diego should be coming out of the ground early next year as far as openings.
[noise] concerned.
Okay. Thanks for taking the questions Yep.
[noise]. My next question today is coming from Joshua dinner line from Bank of America, you weren't as my life.
Hey, good morning, everyone.
Gary just kind of take a big picture.
And it unemployment benefits or I go to expire soon unless congress kind of an accident still legislation. How are you thinking about M. H O M. H all age I can see kind of going forward. If if there was run out secret longterm probably benefit.
[noise] affordable nature I get it just kinda near term.
Yeah. This is Gary and then.
John you can feel free to add anything in here, but I mean I can only gave you that perspective of what we have talked about for a long period of time and after being in the business for 30 plus years I think manufactured housing is as resilient of an asset class is I V.
<unk> in real estate, that's affordable housing.
We typically sure with everyone, we're not recession proof, but when we look particularly in the balance of our portfolio. It's designed intentionally.
With age restricted communities and all age communities because over the long period of time.
We find that our growth is best.
With that balance and so when you're just look at the age restricted communities, we do get more turnover when there are a.
Very challenging periods of economic all H O H, I'm, sorry, Oh H economic.
[noise] downturns, but it's more than made up by the increased desire for affordable housing. So when we look through all the various economic downturns, the great financial crisis, others some of our strongest Grove.
[noise] posts those economic downturn, so again not.
<unk> recession proof, but very very resilient and a great opportunity I think like other unlike other asset classes to bounce back pretty strong.
And then when we talk about things that we look at like bed desk.
We look back 18 years, which we did recently and the range. There's a averaged bad that is average or around 100 basis going to 110 basis points from a low of about 60 basis points to a high of 140 basis points annually.
During that 18 year period of time, and if I can go back in my notes, that's pretty somewhere to how it goes so John you might want to add some color to what you're saying.
You know in Colorado, Gerry is just that you know sort of on the overwhelming side, meaning the number of people that are coming to our communities. Josh I mean, we're already seeing it for the application counts that we've gotten for the second quarter haven't total laps up five per cent in the midst of this quarter over quarter as well as rental.
Home applications being up 17% are off the <unk> off the street sales applications are up 22% and so you know like Erie Sad recession resistance, a good way to characterize it because you know in the N. They're gonna be people that maybe or in different forms of housing, okay that come into our product them over.
Seen over time cause yeah, we lose a few people marginally from an occupancy standpoint, but we overwhelmingly offset it with the number of people that are coming into our product. That's that's been the experienced over that period of time to 18 years scary is talking about and you know so it's you know we feel pretty optimistic about what the future holds for.
In that respect and why did we choose 18 years, because John Mclaren or chief operating officers started here 18 years ago.
[laughter] from the moment he walked in the door.
My teeth and collections on this business.
Awesome.
And then maybe it just one more for me.
You mentioned I I I think you said 80 per cent at the furlough Tomatoes have come back.
[noise] sensitive how payroll and benefits your Saint community will kind of transfer three two like they were they all that was that 80 per cent holy back at the start of the quarter or that just happened recently.
No. They they were pretty much back by the started the first Ah quarter, Josh. So we're not really expecting any any real reductions in and payroll.
From that perspective for the third quarter.
Okay.
<unk> B, a decent run right to use for three Q for that one item then.
Well, it's tough to say cause the seasonality yeah, you've got three you've got it's got a R V, which has a higher level of.
T members alright in it yeah. So.
I'd have to take a look backing probably follow up with Fernando on that Josh, but I I I can't make that comparison right now.
Okay. Thank you thank everyone.
Yep.
[noise] take my next question is coming from John Kim That'd be M O capital markets reminders now alive.
Thanks, Good morning, I realized transient Z as picked up since the second quarter.
But I was wondering if if he could sure what the occupancy rate was for the transient or besides that and the second quarter and today.
He says the same periods last year.
I actually jonna. Unfortunately, I don't have that figure right in front of me. It's something we can follow back up with you on after the call I apologize for that.
Okay.
And your <unk> prepared remark it sounded like transient R V with <unk>.
Training ahead of last year, excluding the July 4th weekend is that correct.
Yeah, I mean, it's it's been I I would characterize as over the course of the quarter. If I look at you know the revenue and what we've done between April May and June it has consistently been picking up and that's been a result of the lifting of the stay at home orders and the those limitations that we've had and I think it speaks to it.
What Gary said, a lot of many times, which is the pent up demand that's out there for people to get out and we clearly see that looking at sequentially each of them months, so without having the actual figure I know the occupancy is picked up and I see that in the revenue, but we can against circle back on those on those figures for Ya.
You know this might be helpful. Because try and your question is you know a question. We're studying all the time is we look at our business platform and how we're approaching it but one thing we've discovered when we talk about resilience that two downturns in the economy.
Gas prices that had been approaching $5 a gallon those of you can remember that far back I can.
Swings an R V annual sales.
Those measures.
We look back historically revenues have grown an R V communities on an average of 90 to 100 basis going is greater.
That are manufactured housing business over you know at 10, 15, 20 year period of time.
So I think that while we're not brushing aside the impact of the pandemic.
Fundamentally is John use the word bullish were really Ah proponents of how resilient. The RV business is going to be both annual and transient is a strong demand comes back and we're saying that boat here.
[noise] an airport folio and then our investment over in Australia, whereas pretty much.
Forward reservations in Australia, which I review, the other day or up 24% for the forward 12 month period of time and they struggle also through closures their internal borders travel restrictions and stay at home.
Mandate so.
I think that we feel very very good about how are R. V transient N annual business will perform.
Subject to the uncertainty of governmental actions and things like that as a pandemic goes forward and we're also cognizant of the changing environment daily or what's going on with a virus. So.
But it and you're not in a half million dollar with Dutson verses budget two grilled property. Some of that was transient R. V. As is caren mentioned is that purely from the July 4th weekend are you begging and some conservative in the back up the quarter.
Yeah, there's a there's a little bit of conservatism. There obviously, we don't know what's going on that that reduction.
To transient R V represents like 97 eight per cent.
What our.
Budget is so it's pretty pretty small amount of conservatism there.
Okay on the expansion front you'd deliberate 851 revenue producing types of course, this quarter or something like that would perhaps would probably have to lay from first quarter, but how close it says to run wait quarterly figure for the rest of the year.
Do you need for revenue producing science channel.
Mhm Yep.
Well I think that puts us for the year, it roughly 1100, and 50, plus or minus yeah, well actually 1100, and 51 sites that we've gained year to date.
So I think our original guidance was somewhere I think it was about 2600, that's what we had an original guidance. So.
I guess the way I to answer a question as some of it's going to be we had a really good second quarter.
P S front and gaming sites it was higher than last year as we shared in the remarks.
I think that you know some of it is just dependent upon.
You know is Gerry mentioned everything subject to what happens going forward the pandemic, but based on the application counts.
Yeah, It's it's difficult for me to give you really sort of like guidance number of what it would be at this time.
You know, but I think that yeah. It's it's just I I think it's it's still a little bit early giant.
To provide that right now, but you know I am pleased with where we're at it is <unk>.
Close to where we where it's I think it's about 100 and sites shorter than where we were last year at this time. So we're in striking distance of.
Being in the range.
Thank you.
Uh-huh.
Thank you. The next question, it's coming from John Polaski from Green Street Advisors Goodbye.
[laughter]. Thanks.
[noise] taken my question I wanted to circle back on there to collections conversation from earlier, the 110 minutes Ah an average bad that over the last 18 years and a high as I believe 140 850, you. What you referenced <unk> is that is that high watermark a reasonable that in line.
<unk> is he's coming years from everything you see on the ground a day cause the portfolio. You know is better situated today, just geographically and quality, but unemployment's pretty darn high right now so just everything you see in terms of the.
Strain on your consumer today is that 140, 850 that Ah kind of bad that <unk> that numbers reasonable bogey.
Well [noise] do.
Do you use the word bet we don't.
Tangela bed, a little bit we like to be as precise as we possibly can and it's difficult to have clarity, okay and environment, that's pretty unprecedented.
<unk> is M. A scary by the way, but I can't share with you though is.
Post Ah.
2008.
We.
Didn't see a spike beyond that range.
And for the period of time, we've been operating in that range I think that carrying can share with you. Some of the metrics because we have thought through a little bit of reserve and accruing for bad death, but I don't think that it's anything that far out of that.
[noise] range.
Okay. So yeah, they just as far as the Gary thing that that that's really been on par uhm that being said, we with you and certainly D. We have including hardship repayments, we did conservatively accrue an additional 2 million.
A bad debt and cute too so.
You too bad that is about 100 that says the revenue without that $2 million 60, I think 64 bps.
Okay.
With with unemployment Romain elevated is there I mean is there a chance that you have to reinstate the deferral program or our consumers comedy or a renters come and do you still asking for real easy even though you.
Cut it up or you stopped it in June.
Yeah. This is John so we actually that we cut it off in June, but we have not had a lot a request for the program and part of the reason why we did and it and juno's because those are trailed off significantly. So I you know at this point in time.
[noise] again, it's hard to say, but at this point in time, we don't have any expectations that we would have to reengage that program.
Yeah.
It is very fluid, but we can share with you because we do discuss this.
And like all of you were wondering what's gonna happen with the stimulus package, what's gonna happen with unemployment.
<unk> there is nothing that we're seeing out of what we've shared with you.
Where we could.
Gusmao some vulnerability if you will other than you know the small piece that Karen shared to be conservative and on the unemployment side, there's nothing on.
Collections in fact, there was somewhat unusual for us to receive the request that we received for [noise].
Prepayment and for the rent deferral, John what was the percentage of that.
17th 17 per cent, whereby they had 12 months to really pay this back so interesting enough. It's almost as if there's some conservatism by some of our residents who want to know apparently that they can pay back that the pearl that gives us a little bit.
Comfort, if you will and how we're going to navigate these on certain times I think it's also important just again kind of going back in history to look at what we shared in terms of the resilience of the business Yeah I mean.
They were they were fairly tough times in the early two thousands and that we went through stone brew are tough times through the global financial crisis, We still group.
And so it's again it goes back to the fact of what is it we have we have affordable vacation. We are affordable housing we have a product.
Is needed and all economic cycles, Okay, and so it's just a matter of it doesn't.
To us it's resistant because it doesn't really matter what the economic cycle is the need is always there and we're seeing that come through with our application counts and all the other things that we shared along the way to John.
Okay. Okay, no I I appreciate all the all the thoughts maybe it's just one last one for me certainly back. The next first question on the roughly $10 million impact on real property income, so they're coming quarter and I I didn't care and you mentioned roughly half split between M. H N N U R V and yeah, they're transient so.
The not increasing wrenched on the annual armies or M. H is there a you know have you come up with a date on when you're going to start increasing wrench again or is it is it a month by month process.
Yeah. This is John so we've already implemented the rent increase process again John.
One of the things that we've always said is that the most important.
The best revenue producing site you can gain is the one you never lose and so we've been very thoughtful very careful in terms of the rent increase for 2020 with the goal doing what's right for all of sudden stakeholder, so, but we have engaged that process.
And just as a reminder, about 50% of our 2020 rent increases we're in place and prior to mid March though after that 33, and a half month halt in raising rentz.
[noise] implementing them now we thank the adjustment to our 2020 with that adjustment to our 2020 rent increases are weighted average Ah MH rent increases expect it to be around 3% rather than four per cent that we'd have originally got it too by the end of the year.
Great. Thanks very much.
Yep.
[noise] [noise] My next question space coming from Samir Canal from Evercore ISI. Your line is now lives.
Hey, Gary sorry, if I missed this earlier, but but what's the timing of that appointment of that time, it or melon out all that great raise is that more of the bulk of those acquisitions that more of.
This year story or is it are you looking at more into 21 further here.
Well generally we don't forecast acquisition volume mother, then to refer to what we've done in the previous years.
[noise] well ahead of pays where are we expected to be based on last year.
Acquisitions with the exception exception of the Johnson portfolio.
And I would simply stay with $132 million closed on so far this year.
We should be able to significantly significantly exceed that with what we close this year and for anything overlaps into next year, we'll be glad to share this but.
For right now I can only say that are pipeline is extremely for we're very pleased that we will be able to match up the equity growth capital that we raised to the potential acquisitions in the timing is really hard to forecast.
And I guess my second question is just can you provide an update on your Australia and JV, maybe address how that business has been holding up through sorta cooled at 19 year.
Sure I referenced it a little bit with how similar.
There are V business has been but despite take restrictions over in Australia, and certainly within their internal borders ingenious really has continued to perform really well during these challenging times.
Last quarter, they announced that total year to date home sales.
Where 240 with another 30 expected to close prior to their yearend, which was June 30th.
So I'd say clothes those around.
270 home sales.
Should've closed on the son ingenious development joint venture, we've been slower to deploy R. Capital over there then original goal, but we continued away for some delayed entitlement approval.
That a delayed and some power to the coded situation there as well.
First project freshwater in a place called Burping, Gary we've clothes seven new homes are generating gross proceeds about two and a half million dollars and.
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With an additional 15 homes under contract and deposit now which are being constructed some delay again through cove, it but on track to deliver the kind of results and returns that we hope for on that development.
And then I mentioned RV a few comments.
Before similar to what we've experienced in the U S, but looking forward.
Now that everything is open to travel restrictions I have been lifted with the exception of what area 12 months bookings are strong in there indicating of revenue increase year over year of just over 24%, so they're continuing to perform well, they're getting ready to.
To report on there a year and results.
And I'm looking forward to.
Seeing them is much of the market us.
Extra that Yep mhm.
Thank you we've reached the end of our question answer session I'd like to turn the floor back over to Gary thing further at closing comments.
Well, we Wanna. Thank all of your for taking the time out to join US today, We believe sons actions in response to this unprecedented.
Period of time ensure that our business is strong through and on the other side of this pandemic. So we look forward to speaking to you at the end of next quarter and there's always going to conclude Fernando John myself, and Karen always available for any follow up questions.
Thank you operator.
Thank you. It does include today's teleconference. You may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.
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