The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and the notes thereto, along with the Company's 2008 Annual Report. Capitalized terms are used as defined elsewhere in this Form 10-Q.

OVERVIEW

We are a self-administered and self-managed real estate investment trust, or REIT. We own, operate, and develop manufactured housing communities concentrated in the midwestern, southern, and southeastern United States. We are fully integrated real estate companies which, together with our affiliates and predecessors, have been in the business of acquiring, operating, and expanding manufactured housing communities since 1975. As of March 31, 2009, we owned and operated a portfolio of 136 properties located in 18 states (the "Properties" or "Property"), including 124 manufactured housing communities, 4 recreational vehicle communities, and 8 properties containing both manufactured housing and recreational vehicle sites. As of March 31, 2009, the Properties contained an aggregate of 47,605 developed sites comprised of 42,297 developed manufactured home sites and 5,308 recreational vehicle sites and an additional 6,081 manufactured home sites suitable for development. We lease individual parcels of land ("sites") with utility access for placement of manufactured homes ("MHs") and recreational vehicles ("RVs") to our customers. The Properties are designed to offer affordable housing to individuals and families, while also providing certain amenities.

We are engaged through a taxable subsidiary, SHS, in the marketing, selling, and leasing of new and pre-owned homes to current and future residents in our communities. The operations of SHS support and enhance the Company's occupancy levels, property performance, and cash flows.

SIGNIFICANT ACCOUNTING POLICIES

The Company has identified significant accounting policies that, as a result of the judgments, uncertainties, and complexities of the underlying accounting standards and operations involved, could result in material changes to its financial condition or results of operations under different conditions or using different assumptions. Details regarding significant accounting policies are described fully in the Company's 2008 Annual Report.

Recent Accounting Pronouncements

The Company adopted several new accounting standards in the year beginning January 1, 2009. The adoption of the accounting standards that had an impact on the Company's results of operations and financial condition is discussed below:

The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 160, Noncontrolling Interests in Consolidated Financial Statements ("SFAS 160") and FASB Staff Position Emerging Issues Task Force ("EITF") No. 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities" ("FSP EITF 03-6-1") in the first quarter of 2009 which required reclassification and adjustments to prior period financial information.

The adoption of SFAS 160 resulted in the presentation of noncontrolling interest, previously referred to as minority interest, be reported as a separate component of equity in the Consolidated Financial Statements, and that losses be allocated to the noncontrolling interest even if the allocation resulted in a deficit balance. See Note 14 in the Notes to Consolidated Financial Information for additional information regarding the impact of adopting SFAS 160 on the Company's results of operations and financial position.

The adoption of FSP EITF 03-6-1 did not have a significant impact on the Company's results of operations or financial condition, but resulted in a change to the calculation of basic and diluted earnings (loss) per share. See Note 15 in the Notes to Consolidated Financial Information for additional information regarding the impact of adopting FSP EITF 03-6-1 on the calculation of earnings
(loss) per share.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED

SUPPLEMENTAL MEASURES

In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP), we have provided information regarding Net Operating Income ("NOI") in the following tables. NOI is derived from revenues (determined in accordance with GAAP) minus property operating expenses and real estate taxes (determined in accordance with GAAP). We use NOI as the primary basis to evaluate the performance of our operations. A reconciliation of NOI to net income (loss) attributable to Sun Communities, Inc. is included in "Results of Operations" below.

The Company believes that NOI is helpful to investors and analysts as a measure of operating performance because it is an indicator of the return on property investment, and provides a method of comparing property performance over time. The Company uses NOI as a key management tool when evaluating performance and growth of particular properties and/or groups of properties. The principal limitation of NOI is that it excludes depreciation, amortization, interest expense, and non-property specific expenses such as general and administrative expenses, all of which are significant costs, and therefore, NOI is a measure of the operating performance of the properties of the Company rather than of the Company overall. The Company believes that these costs included in net income
(loss) often have no effect on the market value of a property and therefore limit its use as a performance measure. In addition, such expenses are often incurred at a parent company level and therefore are not necessarily linked to the performance of a real estate asset.

NOI should not be considered a substitute for the reported results prepared in accordance with GAAP. NOI should not be considered as an alternative to net income (loss) as an indicator of our financial performance, or to cash flows as a measure of liquidity; nor is it indicative of funds available for the Company's cash needs, including its ability to make cash distributions. NOI, as determined and presented by the Company, may not be comparable to related or similarly titled measures reported by other companies.

The Company also provides information regarding Funds From Operations ("FFO"). A definition of FFO and a reconciliation of net income (loss) attributable to Sun Communities, Inc. to FFO are included in the presentation of FFO in "Results of Operations" following the "Comparison of the Three Months ended March 31, 2009 and 2008".

RESULTS OF OPERATIONS

The Company reports operating results under two segments: Real Property Operations and Home Sales and Rentals. The Real Property Operations segment owns, operates, and develops manufactured housing communities concentrated in the midwestern, southern, and southeastern United States and is in the business of acquiring, operating, and expanding manufactured housing communities. The Home Sales and Rentals segment offers manufactured home sales and leasing services to tenants and prospective tenants of our communities. The Company evaluates segment operating performance based on NOI.

The accounting policies of the segments are the same as those applied in the consolidated financial statements, except for the use of NOI. The Company may allocate certain common costs, primarily corporate functions, between the segments differently than the Company would for stand alone financial information prepared in accordance with GAAP. These allocated costs include expenses for shared services such as information technology, finance, communications, legal, and human resources. The Company does not allocate interest expense and certain other corporate costs not directly associated with the segments' NOI.

ITEM 2.                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED



COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008



REAL PROPERTY OPERATIONS - TOTAL PORTFOLIO



The following tables reflect certain financial and statistical information for
all properties owned and operated during the three months ended March 31, 2009
and 2008:



                                             Three Months Ended March 31,
Financial Information (in thousands)     2009       2008      Change    % Change
Income from real property              $ 50,999   $ 50,349   $    650        1.3 %
Property operating expenses:
Payroll and benefits                      3,693      3,721        (28 )     -0.8 %
Legal, taxes, & insurance                   774        649        125       19.3 %
Utilities                                 6,050      5,818        232        4.0 %
Supplies and repair                       1,194      1,145         49        4.3 %
Other                                       894        741        153       20.6 %
Real estate taxes                         4,184      4,169         15        0.4 %
Property operating expenses              16,789     16,243        546        3.4 %
Real property net operating income     $ 34,210   $ 34,106   $    104        0.3 %

                                                 Three Months Ended March 31,
Statistical Information                         2009           2008       Change
Number of properties                                 136            136         -
Developed sites                                   47,605         47,611        (6 )
Occupied sites (1)                                37,877         37,780        97
Occupancy % (2)                                     82.2 %         82.2 %     0.0 %
Weighted average monthly rent per site (2)   $       397    $       385   $    12
Sites available for development                    6,081          6,581      (500 )

(1) Occupied sites include manufactured housing and permanent recreational vehicle sites, and exclude seasonal recreational vehicle sites.

(2) Occupancy % and weighted average rent relates only to manufactured housing sites, and excludes permanent and seasonal recreational vehicle sites.

NOI increased by $0.1 million from $34.1 million to $34.2 million, or 0.3 percent. The growth in income from real property of $0.7 million is due to a weighted average rental rate increase of 3.0 percent that resulted from increased manufactured home rental income (net of vacancies and rent discounts). Income from our recreational vehicle portfolio and miscellaneous other property revenues remained constant. Miscellaneous other property revenues primarily consist of revenues from the re-billing of various utility costs to residents, late fees, and returned check fees.

The growth in real property operating expenses of $0.6 million was due to several factors. Property and casualty insurance increased by $0.1 million due to an increase in reserves for current claims. Utility costs, primarily related to water and electricity charges, increased $0.2 million (both of which are partially re-billed to the resident). Supply and repair costs related to community maintenance increased by $0.1 million. Legal fees related to delinquency, bad debt expense, and other property matters increased by $0.1 million. Other expenses related to administrative costs such as postage and advertising increased by $0.1 million.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED

REAL PROPERTY OPERATIONS - SAME SITE

A key management tool the Company uses when evaluating performance and growth of particular properties is a comparison of Same Site communities. The Same Site data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions, or unique situations. The following tables reflect certain financial and statistical information for particular properties owned and operated for the same period in both years for the three months ended March 31, 2009 and 2008:

                                             Three Months Ended March 31,
Financial Information (in thousands)     2009       2008      Change    % Change
Income from real property, net         $ 48,149   $ 47,656   $    493        1.0 %
Property operating expenses:
Payroll and benefits                      3,694      3,721        (27 )     -0.7 %
Legal, taxes, & insurance                   774        649        125       19.3 %
Utilities, net                            3,508      3,388        120        3.5 %
Supplies and repair                       1,194      1,145         49        4.3 %
Other                                       576        469        107       22.8 %
Real estate taxes                         4,184      4,169         15        0.4 %
Property operating expenses              13,930     13,541        389        2.9 %
Real property net operating income     $ 34,219   $ 34,115   $    104        0.3 %




                                                 Three Months Ended March 31,
Statistical Information                         2009           2008       Change
Number of properties                                 136            136         -
Developed sites                                   47,605         47,611        (6 )
Occupied sites (1)                                37,877         37,780        97
Occupancy % (2)                                     82.2 %         82.2 %     0.0 %
Weighted average monthly rent per site (2)   $       397    $       385   $    12
Sites available for development                    5,583          6,083      (500 )

(1) Occupied sites include manufactured housing and permanent recreational vehicle sites, and exclude seasonal recreational vehicle sites.

(2) Occupancy % and weighted average rent relates only to manufactured housing sites, and excludes permanent and seasonal recreational vehicle sites.

As indicated above this is an analytical measure used by management to determine the growth of our communities on a year over year basis that may have items classified differently than our GAAP statements.

The primary differences between our total portfolio and same site portfolio are the reclassification of water and sewer revenues from income from real property to utilities to reflect the expenses, net of recovery; and the exclusion of certain corporate items from the same site portfolio.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED

HOME SALES AND RENTALS

The Company acquires repossessed manufactured homes (generally, that are within its communities) from lenders at substantial discounts. The Company leases or sells these value priced homes to current and prospective residents. The Company also purchases new homes to lease and sell to current and prospective residents. The programs the Company has established for its customers to lease or buy new and preowned homes have helped to prevent additional occupancy loss.

The following table reflects certain financial and statistical information for the Company's Rental Program for the three months ended March 31, 2009 and 2008 (in thousands, except for certain statistical marked with *):

                                                    Three Months Ended March 31,
Financial Information                          2009        2008       Change    % Change
Rental home revenue                          $   5,200   $   4,996   $    204        4.1 %
Site rent from Rental Program (1)                6,450       5,981        469        7.8 %
Rental Program revenue                          11,650      10,977        673        6.1 %
Expenses
Payroll and commissions                            783         523        260       49.7 %
Repairs and refurbishment                        1,991       1,523        468       30.7 %
Taxes and insurance                                770         691         79       11.4 %
Marketing and other                                993         729        264       36.2 %
Rental Program operating and maintenance         4,537       3,466      1,071       30.9 %
Net operating income                         $   7,113   $   7,511   $   (398 )     -5.3 %

Statistical Information
Number of occupied rentals, end of period*       5,698       5,442        256        4.7 %
Investment in occupied rental homes          $ 177,755   $ 164,712   $ 13,043        7.9 %
Number of sold rental homes*                       168         136         32       23.5 %
Weighted average monthly rental rate*        $     730   $     722   $      8        1.1 %

(1) The renter's monthly payment includes the site rent and an amount attributable to the leasing of the home. The site rent is reflected in the Real Property Operations segment. For purposes of management analysis, the site rent is included in the Rental Program revenue to evaluate the growth and performance of the Rental Program.

Net operating income from the Rental Program decreased $0.4 million from $7.5 million to $7.1 million, or 5.3 percent as a result of a $0.7 million increase in revenue offset by a $1.1 million increase in expenses. Revenues increased due to the increase in the number of leased homes in the Company's Rental Program and due to the increase in average rental rates (as indicated in the table above). Commissions increased by $0.3 million due an increase in the number of new and renewed leases on which commissions were paid. Total repair and refurbishment costs increased by $0.5 million due to an increase in the number of homes and moveouts in the Rental Program. Taxes and insurance expenses increased by $0.1 million as these costs generally increase as the number of homes in the Rental Program increase. Marketing and other costs increased by $0.2 million primarily due to advertising and promotion costs.

The Rental Program has proven to be an effective response to the adverse factors that the Company faced during the industry downturn and now draws more than 14,000 applications per year to live in our communities. The Rental Program has replaced the independent dealer network, a majority of which were forced to go out of business during the early part of the decade, which formerly directed potential residents to our communities.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED

The following table reflects certain financial and statistical information for the Company's Home Sales Program for the three months ended March 31, 2009 and 2008 (in thousands, except for statistical information):

                                           Three Months Ended March 31,
Financial Information                  2009      2008      Change    % Change
New home sales                        $ 1,288   $ 2,404   $ (1,116 )    -46.4 %
Pre-owned home sales                    6,173     5,099      1,074       21.1 %
Revenue from homes sales                7,461     7,503        (42 )     -0.6 %

New home cost of sales                  1,116     2,034       (918 )    -45.1 %
Pre-owned home cost of sales            4,307     3,805        502       13.2 %
Cost of home sales                      5,423     5,839       (416 )     -7.1 %

Net operating income / gross profit     2,038     1,664        374       22.5 %

Gross profit - new homes                  172       370       (198 )
Gross margin % - new homes               13.4 %    15.4 %                -2.0 %

Gross profit - pre-owned homes          1,866     1,294        572
Gross margin % - pre-owned homes         30.2 %    25.4 %                 4.8 %

Statistical Information
Home sales volume:
New home sales                             19        30        (11 )    -36.7 %
Pre-owned home sales                      229       197         32       16.2 %
Total homes sold                          248       227         21        9.3 %

Gross profit from home sales increased by $0.4 million, or 22.5 percent, as the Company sold 21 more homes in the first quarter of 2009 than during the same period in 2008. Gross profit from pre-owned home sales increased by $0.6 million while gross profit from new home sales declined by $0.2 million.

Pre-owned home sales include the sale of homes that have been utilized in the Company's Rental Program. The cost basis of a rental home is depreciated and therefore, the gross profit margin on the sale of these homes increases the longer the home has been in the Rental Program. An increase in the volume of rental home sales is the primary reason for the overall increase in pre-owned home sales and therefore the principal contributor to the increase in gross profit on pre-owned home sales.

The decline in new home sales profit was due to a 36.7 percent decline in sales volume and a 15.4 percent decline in average selling price primarily in our Florida market.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED

OTHER INCOME STATEMENT ITEMS

Other revenues include other income (loss), interest income, and ancillary revenues, net. Other revenues decreased by $0.3 million, from $1.9 million to $1.6 million, or 15.8 percent. This decrease was due to reduced income realized from a gain on sale of land and other assets of $0.7 million that occurred in the prior year, along with reduced commission and ancillary revenue of $0.1 million, offset by increased interest income of $0.5 million. The increase in interest income was primarily due to the additional installment notes receivable recognized in association with the transfer of financial assets that are recorded as collateralized receivables in the consolidated balance sheet. The interest income on these collateralized receivables is offset by the same amount of interest expense recognized on the secured debt recorded in association with this transaction. See Note 4 - Secured Borrowing and Collateralized Receivables for additional information.

General and administrative costs increased by $0.2 million, from $5.8 million to $6.0 million, or 3.4 percent due to increased salary, benefit, and other compensation costs of $0.3 million and increased advertising costs of $0.1 million, partially offset by a decrease in legal expenses of $0.2 million.

Depreciation and amortization costs increased by $0.3 million, from $15.9 million to $16.2 million, or 1.9 percent primarily due to the additional homes added to the Company's investment property for use in the Company's Rental Program.

Interest expense on debt, including interest on mandatorily redeemable debt, decreased by $1.1 million, from $16.2 million to $15.1 million, or 6.8 percent due to a reduction in expense related to lower interest rates charged on variable rate debt, partially offset by an increase in fixed rate debt interest expense. The increase in fixed rate debt expense is primarily due to the Company's additional secured debt recognized in association with the transfer of financial assets that was recorded as a secured borrowing in the Consolidated Balance Sheets (and is offset by the same amount of interest income recorded on collateralized receivables in relation to this transaction). See Note 4 - Secured Borrowing and Collateralized Receivables in the Company's Notes to Consolidated Financial Statements included herein.

Equity income (loss) from affiliates, net decreased by $4.8 million, from a loss of $4.8 million to income of a nominal amount. The Company's affiliate, Origen, reported losses in the first quarter of 2008 which included charges for impairment, loan loss reserves, and loss on sale of loan portfolio.

Benefit (provision) for state income taxes changed by $0.3 million, from a benefit of $0.2 million to an expense of $0.1 million, due to a change in the effective tax rate used to calculate the deferred tax liability related to the Michigan Business Tax which reduced tax expense in 2008.

                             SUN COMMUNITIES, INC.



ITEM 2.                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED



The following is a summary of the Company's consolidated financial results which
were discussed in more detail in the preceding paragraphs (in thousands):



                                                                      Three Months Ended
                                                                          March 31,
                                                                      2009          2008
Revenues                                                          $     63,660   $    62,848
Operating expenses/Cost of sales                                        26,749        25,548
Net operating income/gross profit                                       36,911        37,300
Adjustments to arrive at net income (loss):
Other revenues                                                           1,624         1,902
General and administrative                                              (5,992 )      (5,770 )
Depreciation and amortization                                          (16,204 )     (15,861 )
Interest expense                                                       (15,080 )     (16,224 )
Equity income (loss) from affiliates, net                                   27        (4,830 )
Benefit (provision) for state income taxes                                (133 )         235
Income (loss) from continuing operations                                 1,153        (3,248 )
Loss from discontinued operations                                         (172 )        (241 )
Net income (loss)                                                          981        (3,489 )
Less: Net income (loss) attributable to noncontrolling interest            104          (394 )
Net income (loss) attributable to Sun Communities, Inc.           $        877   $    (3,095 )

The Company provides information regarding FFO as a supplemental measure of operating performance. FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as net income (computed in accordance GAAP), excluding gains (or losses) from sales of depreciable operating property, plus real estate-related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Due to the variety among owners of identical assets in similar condition (based on historical cost accounting and useful life estimates), the Company believes excluding gains and losses related to sales of previously depreciated operating real estate assets, and . . .