Communities (NYSE:SUI) stock climbed 5.4% in early Monday trading after the REIT agreed to sell its Safe Harbor marinas business to private equity giant Blackstone (NYSE:BX) for $5.65B in an all-cash transaction. Blackstone (NYSE:BX) stock dipped 1.4%.
The sale of Safe Harbors, which provides marina and superyacht services, allows Sun 
Communities (NYSE:SUI) to focus on its core manufactured housing and RV segments and enhances SUI’s leverage profile and financial flexibility, it said.
For Blackstone (BX), the acquisition diversifies its infrastructure portfolio, which has grown ~40% Y/Y since its inception, into an attractive business. “Marinas benefit from key long-term thematic tailwinds including the growth of travel and leisure as well as population inflows into coastal cities,” said Heidi Boyd, senior managing director in Blackstone’s infrastructure business.
The base purchase price of $5.65B, subject to certain post-closing adjustments, represents an ~21x multiple on the estimated 2024 FFO of the Safe Harbor business. The transaction is expected to generate ~$5.5B of pretax proceeds after transaction costs, which will strengthen Sun’s balance sheet.
Sun Communities expects to book an estimated gain of ~$1.3B from its four-year ownership of Safe Harbor. The REIT’s net debt to trailing 12-month EBITDA, on a pro forma basis, is expected to drop to 2.5x-3.0x at closing from ~6.0x.
Blackstone is the world’s largest alternative asset manager, with more than $1 trillion in assets under management. The company serves institutional and individual investors by building strong businesses that deliver lasting value. The company’s scale–with12,600 real estate assets and 250 portfolio companies–enables its team of professions to invest in dynamic sectors positioned for long-term growth.
