SUN COMMUNITIES INCSUI
SUN COMMUNITIES INC Leases Disclosure
16. Leases
Lessee Accounting
We lease land under non-cancelable operating leases at certain properties expiring at various dates through 2100. The majority of the leases have terms requiring fixed payments plus additional rents based on a percentage of revenues at those properties. We also have other operating leases, primarily office space and equipment expiring at various dates through 2042.
Future minimum lease payments under non-cancellable leases as of December 31, 2025 where we are the lessee include (in millions):
| Maturity of Lease Liabilities | Finance Leases | Operating Leases | Total | |||||||||||||||||
| 2026 | $ | 0.9 | $ | 5.6 | $ | 6.5 | ||||||||||||||
| 2027 | 0.9 | 5.0 | 5.9 | |||||||||||||||||
| 2028 | 0.9 | 4.5 | 5.4 | |||||||||||||||||
| 2029 | 0.7 | 4.0 | 4.7 | |||||||||||||||||
| 2030 | 0.6 | 3.4 | 4.0 | |||||||||||||||||
| Thereafter | 37.3 | 75.2 | 112.5 | |||||||||||||||||
| Total Lease Payments | $ | 41.3 | $ | 97.7 | $ | 139.0 | ||||||||||||||
| Less: Imputed interest | (30.7) | (58.7) | (89.4) | |||||||||||||||||
| Present Value of Lease Liabilities | $ | 10.6 | $ | 39.0 | $ | 49.6 | ||||||||||||||
Right-of-use ("ROU") assets and lease liabilities for finance and operating leases as included in our Consolidated Balance Sheets are as follows (in millions):
| Financial Statement Classification | As of December 31, | |||||||||||||||||||
| Description | 2025 | 2024 | ||||||||||||||||||
| Lease Assets | ||||||||||||||||||||
| Finance lease, ROU asset, net of accumulated amortization | $ | 26.6 | $ | 31.3 | ||||||||||||||||
| Operating lease, ROU asset, net | $ | 59.9 | $ | 52.4 | ||||||||||||||||
| Lease Liabilities | ||||||||||||||||||||
| Finance lease liabilities | $ | 10.6 | $ | 14.2 | ||||||||||||||||
| Operating lease liabilities | $ | 39.0 | $ | 34.5 | ||||||||||||||||
The components of lease costs for finance and operating leases, as included in our Consolidated Statements of Operations are as follows (in millions):
Year Ended December 31, | ||||||||||||||||||||||||||
| Description | Financial Statement Classification | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Finance Lease Cost | ||||||||||||||||||||||||||
| Amortization of ROU assets | Depreciation and amortization | $ | 0.6 | $ | 0.8 | $ | 1.6 | |||||||||||||||||||
| Interest on lease liabilities | Interest expense | 0.3 | 0.5 | 0.6 | ||||||||||||||||||||||
| Operating lease cost | General and administrative expense, Property operating and maintenance, Depreciation and amortization | 5.0 | 2.9 | 6.1 | ||||||||||||||||||||||
| Variable lease cost | Property operating and maintenance | 1.6 | 1.5 | 1.6 | ||||||||||||||||||||||
| Total Lease Cost | $ | 7.5 | $ | 5.7 | $ | 9.9 | ||||||||||||||||||||
Lease term, discount rates and additional information for finance and operating leases are as follows:
As of December 31, | ||||||||||||||
| Lease Term and Discount Rate | 2025 | 2024 | ||||||||||||
| Weighted-average Remaining Lease Terms (years) | ||||||||||||||
| Finance lease | 64.60 | 33.79 | ||||||||||||
| Operating lease | 52.07 | 42.59 | ||||||||||||
| Weighted-average Discount Rate | ||||||||||||||
| Finance lease | 6.15 | % | 3.63 | % | ||||||||||
| Operating lease | 5.24 | % | 3.90 | % | ||||||||||
Year Ended December 31, | ||||||||||||||||||||
| Other Information (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Cash Paid for Amounts Included in the Measurement of Lease Liabilities | ||||||||||||||||||||
| Operating cash outflows for operating leases | $ | 3.4 | $ | 3.4 | $ | 4.8 | ||||||||||||||
| Financing cash outflows for finance leases | 4.3 | 0.8 | 0.8 | |||||||||||||||||
| Total Cash Paid on Lease Liabilities | $ | 7.7 | $ | 4.2 | $ | 5.6 | ||||||||||||||
Lessor Accounting
We are not the lessor for any finance leases at our properties as of December 31, 2025. Nearly all of our operating leases with our residents and customers at our properties where we are the lessor are for a time period not to exceed one year or month to month. As of December 31, 2025, future minimum lease payments with our residents or customers would not exceed 12 months.
Future minimum lease payments for operating leases with real estate operators at our properties were not material as of December 31, 2025.
Failed Sale Leaseback
In connection with our acquisition of Park Holidays, we assumed ground lease arrangements for certain UK properties that we concluded to be failed sale-leaseback transactions under ASC Topic 842, "Leases." As of December 31, 2024, we maintained these ground lease arrangements for 32 UK properties. The arrangements had maturities ranging from 2117 through 2197 with an option to repurchase for £1.00 at the end of the term. The obligation related to the underlying ground leases was recorded as a financial liability in Other Liabilities on the Consolidated Balance Sheets.
During the year ended December 31, 2025, we repurchased the titles to all 32 UK properties that were previously controlled via ground leases for total cash payments of $386.8 million, inclusive of fees and recoverable VAT taxes. In conjunction with the ground lease terminations, we recorded a gain of $51.8 million within Other income / (expense), net on the Consolidated Statements of Operations. The financial liability was $0.0 million and $355.9 million as of December 31, 2025 and December 31, 2024, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 18, 2021 | |
| 2019 | Feb 20, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.