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SOUTHFIELD, MI-Sun Communities, Inc., says total revenues increased 1.2% to $48.9 million in the second quarter. But, the REIT adds, funds from operations swung to a loss in the quarter.

Southfield-based Sun, which owns and operates manufactured housing communities, says FFO decreased from $17.3 million in the second quarter 2003 to a loss of $42.3 million in the second quarter 2004. The second quarter results reflect a charge of $51.6 million for prepayment costs, fees and related expenses and $5.6 million of deferred financing costs associated with the repurchase of $345 million of unsecured debt. Second quarter 2004 FFO excluding these one-time costs were $14.9 million or $0.70 per share and net income of $9.3 million or $0.50 per share.

For 108 communities owned throughout both years, total revenues increased 3.5% for the first six months of 2004 and expenses increased 2.4%, resulting in an increase in net operating income of 4.0%. Same property occupancy in the manufactured housing sites decreased from 89.3% on March 31, to 89.1% on June 30.

Sun reports various property acquisitions, worth a total of $164 million, are in advanced stages of negotiation at a weighted average capitalization rate of approximately 7.5%. It offered no timetable on when those acquisitions might be executed.

“Management remains focused on daily operations while seeking opportunistic acquisitions to lever the Company’s existing expertise,” says chairman and chief executive officer Gary Shiffman.

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