Sun Communities is selling its superyacht service business for $5.65bn in cash. The real estate investment trust wants to focus on core segments and reduce its debt. This has sent its shares up by more than 5%.

According to the companies, they expect the sale of Safe Harbor Marinas by REIT to Blackstone Infrastructure to be completed in the second half 2025. Blackstone Infrastructure is an investment fund that is managed by Blackstone, the world's biggest alternative asset manager.

Sun, which operates recreational vehicle communities, manufactured housing (MH) and marinas across the U.S.A. and Canada announced plans to reduce costs and increase revenue from its core high-margin units.

We think investors will see this sale positively. Michael Goldsmith, UBS analyst said: "It reinforces SUI’s focus on core MH/RV and removes some earning variability. It also reduces leverage."

The Southfield, Michigan-based REIT expects that its North America MH & RV portfolio will account for approximately 90% of its net income after the transaction.

Sun Communities' marinas division accounted for 20% of the same-property operating net income in 2023, and it grew by 11.7% over that period.

The growth in travel and leisure, as well as the influx of people into coastal cities, are all factors that benefit marinas. Heidi Boyd is the senior managing director of Blackstone Infrastructure.

Blackstone invests primarily in infrastructure assets in North America.

Lazard Freres & Co. is the financial adviser to Sun Communities, and Wells Fargo to Blackstone Infrastructure. (Reporting and additional reporting by Abhinav Paramar, editing by Shilpa Majumdar.)

(source: Reuters)