Sun Communities (SUI 1.27%) recently announced that it plans to acquire a U.K.-based owner and operator of vacation communities, and the purchase is just the latest in a string of major deals for the REIT. In this Fool Live video clip, recorded on Nov. 16, Fool.com contributors Matt Frankel and Matt DiLallo, along with editors Deidre Woollard and Kayla Schorr, discuss the deal and what it could mean for Sun Communities' business. 

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Deidre Woollard: First one is Sun Communities buying Park Holidays. Sun Communities -- they have marinas, they have RV parks, they have manufactured homes. It's a REIT that a lot of us real estate investing Fools like, and see some long-term demographic trends on. What this deal gives them is -- it's a $1.3 billion deal for Park Holidays, which has holiday communities in the U.K., especially in seaside areas. So [it] gives Sun Community a chance to go international. Interesting deal for them. Also, the fact that the company locations are in seaside -- Sun Communities, I think, is really starting to move into marinas. It's a relatively large deal, and it gives them that international exposure. Guys, have any thoughts on this one?

Matt Frankel: I love Sun Communities' business, I love the markets they're in. It's a very tough REIT to value. The reason I say that is because it's essentially a ground lease play, other than the marinas. The mobile home communities and things like that -- they essentially lease the ground, and the homeowner owns the home. If you're not familiar, a ground lease is usually a 30-year lease.

Real estate prices have gone through the roof, especially in some of their markets, they're up 30% in the past year. But the rent they're getting doesn't reflect that because these tenants are on leases that started 10, 20 years ago. So on the surface, it looks like this is trading at a crazy valuation multiple. But it's really tough to value what their land is worth right now, what they could get on the open market right now for it if they were to re-lease all of it. It's a really frustrating REIT to try to value, I can tell you firsthand. But I do love this deal, I love that they're moving into marinas. I think that's a really untapped type of real estate. I can't name another REIT that has any type of focus in the marina business.

Kayla Schorr: I'm literally writing down for Fool.com content, "investing in marinas" as a topic, because that is super-interesting. Go ahead, sorry.

Frankel: From the real estate point of view, I think that list is one name long.

Schorr: But more about -- what is it about? How do you get involved? What would prompt one to want to invest in marinas? We've done content before on investing in golf courses, investing in gas stations. It just shows real estate is really everywhere, so it's very interesting when things like this come out.

Frankel: It's a really interesting type of lease because you're not even leasing land. It's really tough to value.

Schorr: Leasing the water.

Frankel: Yeah. You're leasing water. If you're leasing, say, a 40-foot boat slip, it's a few feet of decking is really what you are leasing -- the right to use the decking that you could pull up to. It's a really interesting type of lease. I have to imagine if you're good at it, the economics could be really favorable there.

Schorr: Well, I'd feel dealing with less space, maybe I'm speaking too soon, but I feel less could go wrong. But maybe marinas would be more subject to natural disasters than other types of real estate.

Woollard: I think a lot of the marinas -- some of them are long-term leases, but some of them are also short-term leases for people that are traveling and docking their boats and things like that. The RV and boat boom that happened during the pandemic has been a fascinating trend. I mean, who knows how long that's going to last, but that certainly became something where people could not find boats and RVs to buy -- used RVs, used boats went through the roof.

I like to think that some of that exploration of nature and outdoor activity is going to continue. I think the other factor, too, is the retirement aspect, and I think that's what makes Sun Communities interesting as well. They've got a lot of exposure in warm-weather areas, so they're betting on that trend as well, that we're going to get the snowbirds going to warm-weather locations.

Matt DiLallo: It's really a good demographic play because of what you mentioned with that, and also just how mobile we are, because you can RV and still work. There's just so much where they have an opportunity to grow because of that. There is Sunbelt migration too, and that's what makes it so interesting. They're doing so many interesting things. These are really good businesses. They're executing well, they have been one of the best-performing REITs.

It's just an interesting name and if you like really cool, different kinds of real estate. They're pretty much the only ones where you can get into all of these things like holiday parks in the U.K., marinas, RVs. It just gives you a different exposure to real estate, like the mobile home parks alone -- I know Sam Zell, they have Equity Lifestyle (ELS 1.91%) which is a competitor, and he's mentioned before that this is one of the best businesses to have because it's so resistant to economic disruption. The rental rates don't go down when there's a recession. That's one of the reasons why Sun Communities has done so well -- it's just a very good economic business. It's a name that I'm very interested in. I think it's just a cool business.