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Rule 424(b)(3)
Registration Statement No. 333-54718
PROSPECTUS
64,186 SHARES
SUN COMMUNITIES, INC.
COMMON STOCK
This prospectus covers the sale of up to 64,186 shares of Sun
Communities, Inc. common stock by certain stockholders. We will not receive any
proceeds from the sale of the shares by the stockholders.
The common stock is listed on the New York Stock Exchange under the
symbol "SUI." The last reported sale price of the common stock as reported on
the New York Stock Exchange on February 15, 2001, was $31.17 per share.
SEE "RISK FACTORS" ON PAGE 4 FOR CERTAIN FACTORS RELATING TO AN
INVESTMENT IN THE SHARES.
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These securities have not been approved or disapproved by the
Securities and Exchange Commission or any state securities
commission nor has the Securities and Exchange Commission
or any state securities commission passed upon the
accuracy or adequacy of this prospectus. Any
representation to the contrary is a
criminal offense.
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The Attorney General of the State of New York has not passed
on or endorsed the merits of this offering. Any
representation to the contrary is unlawful.
The date of this Prospectus is February 16, 2001
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Sun
Communities, Inc., a Maryland corporation (hereinafter sometimes referred to as
"we", "us", or the "Company") filed with the Securities and Exchange Commission
(the "SEC") utilizing a "shelf" registration process. Under this shelf process,
the selling stockholders may, from time to time, sell the common stock described
in this prospectus. We may prepare a prospectus supplement at any time to add,
update or change information contained in this prospectus. Except for those
instances in which a specific date is referenced, the information in this
prospectus is accurate as of February 16, 2001. You should read both this
prospectus and any prospectus supplement together with additional information
described under the heading "Where You Can Find More Information".
We believe that we have included or incorporated by reference all
information material to investors in this prospectus, but certain details that
may be important for specific investment purposes have not been included. To see
more detail, you should read the exhibits filed with or incorporated by
reference into the registration statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information
with the SEC. You may read and copy any document we file at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the SEC's
public reference rooms. Our SEC filings are also available to the public over
the Internet at the SEC's web site at http://www.sec.gov. In addition, our
common stock is listed on the New York Stock Exchange and such reports, proxy
statements and other information concerning the Company can be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the following documents we filed with the SEC and our
future filings with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we or any underwriters sell all of the
securities:
1. Our Annual Report on Form 10-K for the year ended December 31,
1999, filed with the Commission on March 21, 2000, as amended.
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000, filed with the Commission on May 12, 2000.
3. Our Quarterly Report on Form 10-Q for the quarter ended June 30,
2000, filed with the Commission on August 4, 2000.
4. Our Quarterly Report on Form 10-Q for the quarter ended September
30, 2000, filed with the Commission on November 13, 2000.
5. The description of our common stock contained in our Registration
Statement on Form 8-A dated November 23, 1993.
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6. The description of rights to purchase our Junior Participating
Preferred Stock contained in our Registration Statement on Form
8-A dated May 27, 1998.
You may request a copy of these filings at no cost, by writing or calling us at
the following address:
Sun Communities, Inc.
31700 Middlebelt Road
Suite 145
Farmington Hills, MI 48334
Attn: Corporate Secretary
(248) 932-3100
You should rely only on the information incorporated by reference or provided in
this prospectus and any supplement. We have not authorized anyone else to
provide you with different information.
THE COMPANY
As used in this prospectus, the term "Company" includes Sun
Communities, Inc., a Maryland corporation, and one or more of its subsidiaries
(including the Operating Partnership (as defined below) and Sun Home Services,
Inc.).
We own and operate manufactured housing communities concentrated in the
midwestern and southeastern United States. We are a fully integrated real estate
company which, together with our affiliates and predecessors, has been in the
business of acquiring, operating, and expanding manufactured housing communities
since 1975. As of December 31, 2000, we owned, managed, and/or financed a
portfolio of 107 communities (the "Properties") located in 15 states containing
an aggregate of approximately 37,500 developed sites and approximately 4,125
sites suitable for development. We are also in the process of developing an
additional five communities that we estimate will contain approximately 2,300
sites in the aggregate.
We are the sole general partner of, and, as of December 31, 2000, held
approximately 87% of the interests (not including preferred limited partnership
interests) in, Sun Communities Operating Limited Partnership, a Michigan limited
partnership (the "Operating Partnership"). Substantially all of our assets are
held by or through the Operating Partnership. The ownership and management of
the Properties is allocated among our subsidiaries. However, subject to the tax
and other risks discussed in the section entitled "Risk Factors", our
stockholders achieve substantially the same economic benefits as direct
ownership, operation, and management of the Properties, except that 5% of the
cash flow from operating activities of Sun Home Services, Inc., a Michigan
corporation ("Home Services"), will be distributed to Gary A. Shiffman (current
Chairman of the Board of the Company), the estate of Milton M. Shiffman (former
Chairman of the Board of the Company), and Jeffrey P. Jorissen, as the holders
of all the common stock of Home Services. As sole general partner of the
Operating Partnership, we have the exclusive power to manage and conduct the
business of the Operating Partnership, subject to certain limited exceptions.
Our executive and principal property management office is located at
31700 Middlebelt Road, Suite 145, Farmington Hills, Michigan 48334, and
telephone number is (248) 932-3100. We have regional property management offices
in Elkhart, Indiana and Tampa, Florida.
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RISK FACTORS
You should consider carefully the following information, together with
the other information contained in or incorporated by reference in this
prospectus, in considering whether to purchase the common stock described in
this prospectus.
CONFLICTS OF INTEREST
Failure to Enforce Terms of Home Services Agreement. Gary A. Shiffman,
President, Chief Executive Officer and Chairman of the Board of Directors of the
Company, the estate of Milton M. Shiffman (former Chairman of the Board of the
Company), and Jeffrey P. Jorissen, Senior Vice President, Treasurer, Chief
Financial Officer and Secretary of the Company, are the owners of all of the
outstanding common stock of Home Services, and as such are entitled to 5% of the
cash flow from the operating activities of Home Services (the Operating
Partnership is entitled to 95% of such cash flow). Home Services has entered
into an agreement with the Operating Partnership for sales, brokerage, and
leasing services that was not negotiated on an arm's length basis. Thus, Messrs.
Shiffman and Jorissen will have a conflict of interest with respect to their
obligations as officers and/or directors of the Company to enforce the terms of
this services agreement due to their right to receive a portion of the cash flow
from the operating activities of Home Services. The failure to enforce the
material terms of this agreement could have an adverse effect on the Company.
Tax Consequences Upon Sale of Properties. Gary A. Shiffman, President,
Chief Executive Officer and Chairman of the Board of Directors of the Company,
holds limited partnership interests in the Operating Partnership ("Common OP
Units") which were received in connection with the sale of 24 Properties the
Company acquired from partnerships previously affiliated with him (the "Sun
Partnerships"). Prior to any redemption of Common OP Units for our common stock
(the "Common Stock"), Mr. Shiffman will have tax consequences different from
those of the Company and its public stockholders on the sale of any of the Sun
Partnerships. Therefore, Mr. Shiffman and the Company, as partners in the
Operating Partnership, may have different objectives regarding the appropriate
pricing and timing of any sale of those Properties. Consequently, Mr. Shiffman
may influence the Company not to sell those Properties even though such sale
might otherwise be financially advantageous to the Company.
ADVERSE CONSEQUENCES OF BEING A LENDER
We provide financing to Bingham Financial Services Corporation
("Bingham"). Gary A. Shiffman, our Chairman of the Board and President and Chief
Executive Officer, is a director and officer of Bingham, and Arthur A. Weiss,
one of our directors, is a director of Bingham. The financing consists of three
separate facilities: a $4.0 million subordinated term loan, bearing interest at
the rate of 9.75% per annum (the "Term Loan"); a $10.0 million subordinated
demand line of credit, bearing interest at a rate of 235 basis points over LIBOR
(the "$10 Million Line"); and a $50.0 million subordinated demand line of
credit, bearing interest at a rate of 235 basis points over LIBOR (the "$50
Million Line" and, together with the Term Loan and $10 Million Line, the
"Subordinated Debt Facilities"). The Term Loan matures on September 30, 2004. As
of December 31, 2000 there was $4.0 million outstanding under the Term Loan, no
borrowings under the $10 Million Line, and $35.8 million outstanding under the
$50 Million Line. We have a subordinate security interest in the assets of
Bingham to secure Bingham's obligations under the Subordinated Debt Facilities.
The Subordinated Debt Facilities subject the Company to the risks of
being a lender. These risks include the risks relating to borrower delinquency
and default and the adequacy of the collateral for such loans. Because the
Subordinated Debt Facilities are subordinated to certain senior debt of Bingham,
in the event Bingham was unable to meet its obligations under the senior debt
facility, our right to receive amounts owed to us under the Subordinated Debt
Facilities would be suspended pending payment of the amounts owing under the
senior debt facility. In addition, because the security interest securing
Bingham's obligations under the Subordinated Debt Facilities is subordinate to
the security interest of certain senior debt of Bingham, in the event of a
bankruptcy of Bingham, our right to access Bingham's assets to satisfy the
amounts outstanding under the Subordinated Debt Facilities would be subject to
the senior debtor's prior rights to the same collateral.
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ADVERSE CONSEQUENCES OF DEBT FINANCING
We are subject to the risks normally associated with debt financing,
including the following risks:
- our cash flow will be insufficient to meet required payments of
principal and interest;
- existing indebtedness will not be able to be refinanced;
- the terms of such refinancing will not be as favorable as the
terms of such existing indebtedness; and
- necessary capital expenditures for such purposes as renovations
and other improvements will not be able to be financed on
favorable terms or at all.
If a property is mortgaged to secure payment of indebtedness and the Company is
unable to meet mortgage payments, the property could be transferred to the
mortgagee with a consequent loss of income and asset value to the Company.
As of December 31, 2000, we had outstanding $66.4 million of
indebtedness that is collateralized by mortgage liens on sixteen of the
Properties (the "Mortgage Debt"). In addition, as of December 31, 2000, we had
entered into four capitalized lease obligations having an aggregate value of $36
million. Each capitalized lease obligation involves a lease for a manufactured
housing community providing that we will lease the community for a certain
number of years and then have the option to purchase the community at or prior
to the end of the lease term. In each case, if we fail to exercise our purchase
right, the landlord has the right to require us to buy the property at the same
price for which we had the purchase option. If we fail to meet our obligations
under the Mortgage Debt, the lender would be entitled to foreclose on all or
some of the Properties securing such debt. If we fail to satisfy our lease
obligations or an obligation to purchase the property, the landlord/seller would
be entitled to evict us from the property. In each event, this could have a
material adverse effect on us and our ability to make expected distributions,
and could threaten our continued viability.
CHANGES IN INVESTMENT AND FINANCING POLICIES WITHOUT STOCKHOLDER APPROVAL
Our investment and financing policies, and our policies with respect to
certain other activities, including our growth, debt, capitalization,
distributions, real estate investment trust ("REIT") status, and operating
policies, are determined by our Board of Directors. Although the Board of
Directors has no present intention to do so, these policies may be amended or
revised from time to time at the discretion of the Board of Directors without
notice to or a vote of our stockholders. Accordingly, stockholders may not have
control over changes in our policies and changes in our policies may not fully
serve the interests of all stockholders.
DEPENDENCE ON KEY PERSONNEL
We are dependent on the efforts of our executive officers, particularly
Messrs. Shiffman and Jorissen (together, the "Senior Officers"). While we
believe that we could find replacements for these key personnel, the loss of
their services could have a temporary adverse effect on our operations. We do
not currently maintain or contemplate obtaining any "key-man" life insurance on
the Senior Officers.
OWNERSHIP LIMIT AND LIMITS ON CHANGES IN CONTROL
9.8% Ownership Limit. In order to qualify and maintain our
qualification as a REIT, not more than 50% of the outstanding shares of our
capital stock may be owned, directly or indirectly, by five or fewer
individuals. Thus, ownership of more than 9.8% of our outstanding shares of
common stock by any single stockholder has been
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restricted, with certain exceptions, for the purpose of maintaining our
qualification as a REIT under the Internal Revenue Code of 1986, as amended (the
"Code"). Such restrictions in our charter do not apply to Mr. Shiffman, the
estate of Milton M. Shiffman and Robert B. Bayer, a former director and officer
of the Company.
The 9.8% ownership limit, as well as our ability to issue additional
shares of Common Stock or shares of other stock (which may have rights and
preferences over the Common Stock), may discourage a change of control of the
Company and may also: (1) deter tender offers for the Common Stock, which offers
may be advantageous to stockholders; and (2) limit the opportunity for
stockholders to receive a premium for their Common Stock that might otherwise
exist if an investor were attempting to assemble a block of Common Stock in
excess of 9.8% of the outstanding shares of the Company or otherwise effect a
change of control of the Company.
Staggered Board. Our Board of Directors has been divided into three
classes of directors. The term of one class will expire each year. Directors for
each class will be chosen for a three-year term upon the expiration of such
class's term, and the directors in the other two classes will continue in
office. The staggered terms for directors may affect the stockholders' ability
to change control of the Company even if a change in control were in the
stockholders' interest.
Preferred Stock. Our charter authorizes the Board of Directors to issue
up to 10,000,000 shares of preferred stock and to establish the preferences and
rights (including the right to vote and the right to convert into shares of
Common Stock) of any shares issued. The power to issue preferred stock could
have the effect of delaying or preventing a change in control of the Company
even if a change in control were in the stockholders' interest.
Rights Plan. We adopted a stockholders rights plan in 1998 that
provides that our stockholders (other than a stockholder attempting to acquire a
15% or greater interest in the Company) will have the right to purchase stock in
the Company at a discount in the event any person attempts to acquire a 15% or
greater interest in the Company. Because this plan could make it more expensive
for a person to acquire a controlling interest in the Company, it could have the
effect of delaying or preventing a change in control of the Company even if a
change in control were in the stockholders' interest.
REAL ESTATE INVESTMENT CONSIDERATIONS
General. Income from real property investments, and our resulting
ability to make expected distributions to stockholders, may be adversely
affected by:
- the general economic climate;
- local conditions such as oversupply of manufactured housing sites or a
reduction in demand for manufactured housing sites in an area;
- the attractiveness of the Properties to tenants;
- zoning or other regulatory restrictions;
- competition from other available manufactured housing sites and
alternative forms of housing (such as apartment buildings and
site-built single-family homes); or
- our ability to provide adequate maintenance and insurance, and
increased operating costs (including insurance premiums and real
estate taxes).
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Our income would also be adversely affected if tenants were unable to
pay rent or sites were unable to be rented on favorable terms. If we were unable
to promptly relet or renew the leases for a significant number of the sites, or
if the rental rates upon such renewal or reletting were significantly lower than
expected rates, then our funds from operations and ability to make expected
distributions to stockholders could be adversely affected. In addition, certain
expenditures associated with each equity investment (such as real estate taxes
and maintenance costs) generally are not reduced when circumstances cause a
reduction in income from the investment. Furthermore, real estate investments
are relatively illiquid and, therefore, will tend to limit our ability to vary
our portfolio promptly in response to changes in economic or other conditions.
Competition. All of the Properties are located in developed areas that
include other manufactured housing community properties. The number of
competitive manufactured housing community properties in a particular area could
have a material effect on our ability to lease sites and on rents charged at the
Properties or at any newly acquired properties. We may be competing with others
with greater resources and whose officers and directors have more experience
than our officers and directors. In addition, other forms of multi-family
residential properties, such as private and federally funded or assisted
multi-family housing projects and single-family housing, provide housing
alternatives to potential tenants of manufactured housing communities.
Changes in Laws. Costs resulting from changes in real estate tax laws
generally may be passed through to tenants and will not affect us. Increases in
income, service or other taxes, however, generally are not passed through to
tenants under leases and may adversely affect our funds from operations and our
ability to make distributions to stockholders. Similarly, changes in laws
increasing the potential liability for environmental conditions existing on
properties or increasing the restrictions on discharges or other conditions may
result in significant unanticipated expenditures, which would adversely affect
our funds from operations and our ability to make distributions to stockholders.
Investments in Real Estate and Installment Loans. As of December 31,
2000, we had an investment of approximately $43.6 million in real estate loans
to several entities and Properties which are secured by a first lien on the
underlying property. We hold subordinated notes for approximately $8.8 million
which are secured by a lien on the underlying real estate subordinate to the
lien held by the primary lender. Also, as of December 31, 2000, we had
outstanding approximately $32 million in installment loans to owners of
manufactured homes. These installment loans are collateralized by the
manufactured homes. In addition, we may invest in additional mortgages and
installment loans in the future. By virtue of our investment in the mortgages
and the loans, we are subject to the following risks of such investment:
- the borrowers may not be able to make debt service payments or
pay principal when due;
- the value of property securing the mortgages and loans may be
less than the amounts owed; and
- interest rates payable on the mortgages and loans may be lower
than our cost of funds.
If any of the above occurred, funds from operations and our ability to make
expected distributions to stockholders could be adversely affected.
Development of New Communities. We are engaged in the development of
new communities. The manufactured housing community development business
involves significant risks in addition to those involved in the ownership and
operation of established manufactured housing communities, including the
following risks:
- financing may not be available on favorable terms for development
projects;
- construction and lease-up may not be completed on schedule
resulting in increased debt service expense and construction
costs;
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- long-term financing may not be available upon completion of
construction; and
- sites may not be leased on profitable terms.
If any of the above occurred, our ability to make expected distributions to
stockholders could be adversely affected.
Rent Control Legislation. State and local rent control laws in certain
jurisdictions may limit our ability to increase rents and to recover increases
in operating expenses and the costs of capital improvements. Enactment of such
laws has been considered from time to time in other jurisdictions. Certain
Properties are located, and the Company may purchase additional properties, in
markets that are either subject to rent control or in which rent-limiting
legislation exists or may be enacted.
Environmental Matters. Under various Federal, state and local laws,
ordinances and regulations, an owner of real estate is liable for the costs of
removal or remediation of certain hazardous or toxic substances on or in such
property. Such laws often impose such liability without regard to whether the
owner knew of, or was responsible for, the presence of such hazardous or toxic
substances. The presence of such substances, or the failure to properly
remediate such substances, may adversely affect the owner's ability to sell or
rent such property or to borrow using such property as collateral. Persons who
arrange for the disposal or treatment of hazardous or toxic substances may also
be liable for the costs of removal or remediation of such substances at a
disposal or treatment facility, whether or not such facility is owned or
operated by such person. Certain environmental laws impose liability for release
of asbestos-containing materials ("ACMs") into the air and third parties may
seek recovery from owners or operators of real properties for personal injury
associated with ACMs. In connection with the ownership (direct or indirect),
operation, management, and development of real properties, we may be considered
an owner or operator of such properties or as having arranged for the disposal
or treatment of hazardous or toxic substances and, therefore, are potentially
liable for removal or remediation costs, as well as certain other related costs,
including governmental fines and injuries to persons and property.
All of the Properties have been subject to a Phase I or similar
environmental audit (which involves general inspections without soil sampling or
ground water analysis) completed by independent environmental consultants. These
environmental audits have not revealed any significant environmental liability
that would have a material adverse effect on our business. No assurances can be
given that existing environmental studies of the Properties reveal all
environmental liabilities, that any prior owner of a Property did not create any
material environmental condition not known to us, or that a material
environmental condition does not otherwise exist as to any one or more
Properties.
Uninsured Loss. We maintain comprehensive liability, fire, flood (where
appropriate), extended coverage, and rental loss insurance on the Properties
with policy specifications, limits, and deductibles customarily carried for
similar properties. Certain types of losses, however, may be either uninsurable
or not economically insurable, such as losses due to earthquakes, riots, or acts
of war. Should an uninsured loss occur, we could lose both our investment in and
anticipated profits and cash flow from the affected property.
ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT
Taxation as a Corporation. We expect to qualify and have made an
election to be taxed as a REIT under the Code, commencing with the calendar year
beginning January 1, 1994. Although we believe that we are organized and will
operate in such a manner, no assurance can be given that we are organized or
will be able to operate in a manner so as to qualify or remain so qualified.
Qualification as a REIT involves the satisfaction of numerous requirements (some
on an annual and quarterly basis) established under highly technical and complex
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Code provisions for which there are only limited judicial or administrative
interpretations, and involves the determination of various factual matters and
circumstances not entirely within our control.
If we were to fail to qualify as a REIT in any taxable year, we would
be subject to Federal income tax (including any applicable alternative minimum
tax) on our taxable income at corporate rates. Moreover, unless entitled to
relief under certain statutory provisions, we also would be disqualified from
treatment as a REIT for the four taxable years following the year during which
qualification is lost. This treatment would reduce our net earnings available
for investment or distribution to stockholders because of the additional tax
liability to us for the years involved. In addition, distributions to
stockholders would no longer be required to be made.
Other Tax Liabilities. Even though we qualify as a REIT, we are subject
to certain Federal, state and local taxes on our income and property. In
addition, our sales operations, which are conducted through Home Services,
generally will be subject to Federal income tax at regular corporate rates.
ADVERSE EFFECT OF DISTRIBUTION REQUIREMENTS
We may be required from time to time, under certain circumstances, to
accrue as income for tax purposes interest and rent earned, but not yet
received. In such event, we could have taxable income without sufficient cash to
enable us to meet the distribution requirements of a REIT. Accordingly, we could
be required to borrow funds or liquidate investments on adverse terms in order
to meet such distribution requirements.
ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A PARTNERSHIP
We believe that the Operating Partnership and other various Company
subsidiary partnerships have each been organized as partnerships and will
qualify for treatment as such under the Code. If the Operating Partnership and
such other partnerships fail to qualify for such treatment under the Code, we
would cease to qualify as a REIT, and the Operating Partnership and such other
partnerships would be subject to Federal income tax (including any alternative
minimum tax) on their income at corporate rates.
ADVERSE EFFECT ON PRICE OF SHARES AVAILABLE FOR FUTURE SALE
Sales of a substantial number of shares of Common Stock, or the
perception that such sales could occur, could adversely affect prevailing market
prices for shares. As of December 31, 2000, up to 4,091,889 shares of Common
Stock may be issued in the future to the limited partners of the Operating
Partnership (both Common and Preferred OP Units). The limited partners may sell
such shares pursuant to registration rights or an available exemption from
registration. Also, Water Oak, Ltd., a former owner of one of the Properties,
will be issued Common OP Units with a value of approximately $1,000,000 annually
through 2009. In addition, as of December 31, 2000, 2,119,514 shares have been
reserved for issuance pursuant to our 1993 Employee Stock Option Plan and 1993
Non-Employee Director Stock Option Plan (the "Plans"). Under the Plans options
for 553,378 shares have been exercised, and 188,750 shares of restricted stock
have been issued as of December 31, 2000. Mr. Shiffman's employment agreement
provides for incentive compensation payable in shares of Common Stock. We have
also reserved 240,000 shares of Common Stock for issuance commencing January 31,
2002 pursuant to our Long Term Incentive Plan which is for the benefit of all of
our salaried employees other than our officers. No prediction can be made
regarding the effect that future sales of shares of Common Stock will have on
the market price of shares.
ADVERSE EFFECT OF MARKET INTEREST RATES ON PRICE OF COMMON STOCK
One of the factors that may influence the price of the Common Stock in
the public market will be the annual distributions to stockholders relative to
the prevailing market price of the Common Stock. An increase in market interest
rates may tend to make the Common Stock less attractive relative to other
investments, which could adversely affect the market price of Common Stock.
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SELLING STOCKHOLDERS
The Selling Stockholders may use this prospectus for the resale of
shares of Common Stock being registered by this prospectus, although no Selling
Stockholder is obligated to sell any such shares. Each of the Selling
Stockholders is a holder of Common OP Units and/or shares of Common Stock. We
are the sole general partner of the Operating Partnership. Under the terms of
the Operating Partnership's Second Amended and Restated Limited Partnership
Agreement (the "Partnership Agreement"), the Common OP Units are redeemable for
shares of Common Stock. As of the date of this prospectus, the redemption ratio
is one share for each Common OP Unit redeemed, but such redemption ratio is
subject to adjustment in certain events pursuant to anti-dilution provisions
contained in the Partnership Agreement. The Common Stock offered by this
prospectus has been or will be issued to the Selling Stockholders in redemption
of Common OP Units held by the Selling Stockholders (the "Shares"). The Selling
Stockholders are not required to convert Common OP Units to Common Stock. None
of the Selling Stockholders is an affiliate of the Company.
The following table sets forth certain information regarding the
Selling Stockholders and the shares of Common Stock beneficially owned by each
of them:
---------------------------------- ------------------------ --------------------- ------------------------------
Shares Beneficially
Owned After
Shares of Common Completion of
Stock Beneficially Number of the Offering (2)(3)
Owned Prior to the Shares ----------------------
Selling Stockholder Offering (1) Being Offered Number Percent
------------------- ------------ ------------- ------ -------
---------------------------------- ------------------------ --------------------- ---------------- ------------
---------------------------------- ------------------------ --------------------- ---------------- ------------
Jewish Communal Fund 23,000 23,000 0 *
---------------------------------- ------------------------ --------------------- ---------------- ------------
Louis Benson, Trustee
of the Louis Benson 26,931 3,000 23,931 *
Revocable Trust 3/18/93
---------------------------------- ------------------------ --------------------- ---------------- ------------
Steven Ureel 3,254 3,254 0 *
---------------------------------- ------------------------ --------------------- ---------------- ------------
Kelly Karr 5,672 5,672 0 *
---------------------------------- ------------------------ --------------------- ---------------- ------------
Water Oak, Ltd. 38,148 29,260 8,888 *
---------------------------------- ------------------------ --------------------- ---------------- ------------
TOTAL 97,005 64,186 32,819
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(1) The number set forth in this column is the number of shares of Common
Stock held by each such Selling Stockholder and/or the number of shares of
Common Stock that would be received upon a conversion of Common OP Units
held by each such Selling Stockholder.
(2) Assumes that all shares of Common Stock being offered and registered
hereunder are sold, although no Selling Stockholder is obliged to sell any
such shares.
(3) Based upon 17,509,516 shares of Common Stock outstanding as of December
31, 2000.
* Less than one percent (1%).
USE OF PROCEEDS
We will not receive any of the proceeds of any sale by the Selling
Stockholders.
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PLAN OF DISTRIBUTION
The Company is registering the Shares on behalf of the Selling
Stockholders. As used herein, "Selling Stockholders" includes pledgees, donees,
transferees or other successors in interest (collectively with the Selling
Stockholders, the "Sellers") selling shares received from a Selling Stockholder
after the date of this prospectus. The Sellers, directly or through brokers,
dealers, underwriters, agents or market makers, may sell some or all of the
Shares. Any broker, dealer, underwriter, agent or market maker participating in
a transaction involving the Shares may receive a commission from the Sellers.
Usual and customary commissions may be paid by the Sellers. The broker, dealer,
underwriter or market maker may agree to sell a specified number of the Shares
at a stipulated price per Share and, to the extent that such person is unable to
do so acting as an agent for the Sellers, to purchase as principal any of the
Shares remaining unsold at a price per Share required to fulfill the person's
commitment to the Sellers.
A broker, dealer, underwriter or market maker who acquires the Shares
from the Sellers as a principal for its own account may thereafter resell such
Shares from time to time in transactions (which may involve block or cross
transactions and which may also involve sales to or through another broker,
dealer, underwriter, agent or market maker, including transactions of the nature
described above) on the New York Stock Exchange, in negotiated transactions or
otherwise, at market prices prevailing at the time of the sale, or at negotiated
prices. In connection with such resales, the broker, dealer, underwriter, agent
or market maker may pay commissions to, or receive commissions from, the
purchasers of the Shares. The Sellers also may sell some or all of the Shares
directly to purchasers without the assistance of a broker, dealer, underwriter,
agent or market maker and without the payment of any commissions.
Other than any commissions or discounts paid or allowed by the Selling
Stockholders to underwriters, dealers, brokers or agents, all expenses incurred
in connection with this offering are being borne by us.
Pursuant to the registration rights granted to the Selling Stockholders
in connection with the issuance of Common OP Units to the Selling Stockholders,
we have agreed to indemnify the Selling Stockholders and any person who controls
a Selling Stockholder against certain liabilities and expenses arising out of,
or based upon the information set forth in, or incorporated by reference in,
this prospectus, and the registration statement of which this prospectus is a
part, including liabilities under the Securities Act. Any commissions paid or
any discounts or concessions allowed to any broker, dealer, underwriter, agent
or market maker and, if any such broker, dealer, underwriter, agent or market
maker purchases any of the Shares as principal, any profits received on the
resale of such Shares, may be deemed to be underwriting commissions or discounts
under the Securities Act.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon by
Jaffe, Raitt, Heuer & Weiss, Professional Corporation, Detroit, Michigan. Arthur
A. Weiss, who is a director of the Company, is a shareholder of Jaffe, Raitt,
Heuer & Weiss, P.C. In addition, as of January 31, 2001 certain shareholders of
Jaffe, Raitt, Heuer & Weiss, P.C. beneficially owned approximately 55,299 shares
of our Common Stock.
EXPERTS
The financial statements incorporated in this Registration Statement by
reference to our Annual Report on Form 10-K for the year ended December 31, 1999
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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No dealer, salesperson or other individual has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this prospectus in connection with any offering to be made by the
prospectus. If given or made, such information or representations must not be
relied upon as having been authorized by the Company. This prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the
securities, in any jurisdiction where, or to any person to whom, it is unlawful
to make such offer or solicitation. Neither the delivery of this prospectus nor
any offer or sale made hereunder shall, under any circumstance, create an
implication that there has been no change in the facts set forth in this
prospectus or in the affairs of the Company since the date hereof.
TABLE OF CONTENTS
PROSPECTUS
PAGE
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About This Prospectus 2
Where You Can Find More Information 2
The Company 3
Risk Factors 4
Selling Stockholders 10
Use of Proceeds 10
Plan of Distribution 11
Legal Matters 11
Experts 11
64,186 SHARES
SUN COMMUNITIES, INC.
COMMON STOCK
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PROSPECTUS
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FEBRUARY 16, 2001
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