Equity LifeStyle Properties, Inc. Stock

Good afternoon. Welcome to Bank of America's 2026 Global Real Estate Conference. I'm Jana Galan, BofA's residential REIT analyst. We're pleased to have with us Equity LifeStyle's CEO, Marguerite Nader; President and COO, Patrick Waite; CFO, Paul Seavey.

Marguerite will start with a few opening remarks, and then we can jump into Q&A.

Sure. Thank you very much, Jana. Thank you for the opportunity to present today. So at this conference, we've been focused on a couple of highlights that are in our investor presentation. One on Page 5, our performance update, which shows that we're tracking in line with our guidance for the quarter and for the year. And Page 4 of our presentation shows our core NOI and normalized FFO, both significantly outpacing the REIT industry average. We think that's important to highlight and continue to show you that as it grows.

And then Page 6 of our presentation shows that ELS significantly outpaces the REIT industry in normalized FFO growth, dividend growth and exposure to floating rate debt. So those are some of the key items that we're talking about and making sure that investors are focused on during this conference.

Great. Maybe starting very big picture. How do you view the long-term demand outlook for manufactured housing given the ongoing affordability challenges and then also the demographic tailwinds for your portfolio?

Yes. We've been talking about the baby boomers since we went public in February of 1993. We're at the tail end, next, I think, 5 years or so of the baby boomers, 10,000 of them turning 65 every day. We get a question a lot about what comes after. Well, what comes after is Gen X and the millennials. Just to put those in perspective, baby boomers are about 70 million, Gen X about 65 million. Millennials are 75 million. So relatively consistent trend and millennials are going to start retiring in about 20 or 25 years.

As we see these cohorts age into our core demographic, this early mid-60s, they tend to behave very similarly. And I'd like to put in context, not too long ago, we were talking about millennials always wanting to be in a 24-hour city, not moving into suburbs, not buying single-family homes. While the millennials are moving into suburbs, they are buying single-family homes. You are seeing family formation, household formation. It's just that it was delayed a few years behind the cohorts that came before them.

So we feel very good about the long-term demographic trends and the tailwinds with respect to our portfolio and particularly with respect to where our portfolio is located, our high-quality locations, predominantly in the Sunbelt and coastal locations, highly correlated with retirement destinations. The value proposition that we have, the lifestyle that we offer at our properties is really unmatched in each one of the submarkets where we do business. So I think if you look at the demographics and then the locations of our portfolio, we're very well positioned to deliver results for decades to come.

Great. And then you touched on some of your operational updates. Can you maybe talk a little bit more about the trends across your MH and RV communities you saw this summer and kind of your visibility into fall? It looked like from the August update that both MH and annual RV are exceeding the midpoint of guidance.

Yes. So as we think about the rental revenue streams, MH rent and RV and marina annual, they represent about 85% of our overall revenue. And the core MH rent year-to-date through August is showing 5.8% growth. The RV and marina annual is a 5% growth. Both of those on a year-to-date basis are slightly ahead of our guidance for the third quarter. Everything is performing in line with our expectations in the quarter. So...

Is there anything you can maybe share on the summer season for RV, Labor Day weekend wrap-up and kind of the outlook for the fall?

Yes. Just broadly, we -- when we provided our guidance update in July, we adjusted our expectations for seasonal transient based on the reservation pacing that we saw at that time, and the season has developed as expected. So it's right in line with our expectations. No surprises from the seasonal transient business based on what we've seen.

And then maybe just touching on the Canadian customer that kind of passed on some of the vacations in the snowbird season last year. Just kind of thoughts around lapping that -- those comps and maybe the marketing and outreach effort to either that cohort or other groups?

Sure, sure. Since the end of the winter season, kind of those that made their early bird reservations in the summer season, we haven't seen a lot of activity, and we didn't really expect a lot of activity. The customers over the summer months aren't -- they're not thinking yet about their reservations for the winter. What we've seen in the past is that booking window for that seasonal customer is about 60 days in advance. During this time, we have been contacting our customers.

Our employees at the properties are reaching out to those that have visited the properties in the past, engaging with them. We have marketing campaigns that remind them of the memories that they made at the properties in past winter seasons. And anecdotally, the sentiment has been favorable. People remember the good times. They want to come back to Florida and enjoy the time with their friends in the warmth and in the sunshine of the winter.

I just ask a high-level question, thinking about, again, the demographics, the changing demographics. And I asked the question on the last call. I could have asked it better. But I was -- the intent of the question was that you have this tremendous expertise in managing, operating, leasing to the 55-year-old plus. You have this great brand within that community. How can you grow -- are there other avenues of growth outside of the age-restricted MH, or is that still the path?

I think I had something around like -- because you kept mentioning the 55-plus expertise and every -- all these articles around housing from the homebuilders, right, that 55-plus community, the demand is super strong. So I wasn't sure if there was something that you guys could lean into or do to leverage all that you've created for the last 30 years.

Right. Well, when you think about like the single-family rental portfolios, we've had a single-family rental portfolio inside of our portfolio for 25, 30 years. So that already exists. And we do that, and you'll see us lean into that program sometimes and sometimes we'll focus on the sales a little bit more. So that opportunity, I think, is inside of our portfolio at any given point in time. We have -- our occupancy level is 95%. We have an additional 5% that we have flex to be able to increase that single-family rental inside of our community.

I think the other thing that you're seeing in the industry is the build-to-rent. We also effectively do that in that we put manufactured homes in our communities with -- we will decide that we want to rent them and then convert them to an owner. So we essentially are building them, although we're not the builder, but we have those inside of our communities already. And I think the thing that is important to note about our communities is what happens at the community. It's a home that a person has in the community, but it's about what happens. It's about all the social interactions.

And that is really what we focus on. And we haven't been able to figure out how to duplicate that in another setting. Difficult to do that in the multifamily setting when you go through the door, you close the door and you're in your apartment and you don't see other people in the way you do in our communities. It's really different, and it's a really unique kind of magic that we have that we haven't really been able to figure out a way to replicate.

Okay. So it will stay within the MH. And while I think as a team, we kind of think of rentals for all ages as a bit of a risk, the rentals with the 55-plus is strong.

Right. And the rentals on the 55-plus, you've seen us grow from sub-2%, 3% before the great financial crisis, then we started to increase our rental pool. We got up to about 8% to 9%. And then we said, we think we have an opportunity here where we can do more sales. So we did that, and we drove the rentals down, and now we're at 3%. That's just a nice thing to have for a rainy day. It's a nice thing to be able to flex that up and be able to take advantage of that as just another lever to increase occupancy.

It's difficult to do if you hadn't made the cuts along the way because then you're going from a 9% up to 15% plus. So I think we're in a really good position to be able to do that. Additionally, what we've seen during these times is our ability to convert a renter to an owner is really, really good because of our lifestyle. And people come to our properties, they like the ability to come in and try it for a year because that doesn't seem like a really big obstacle for them.

They come in, they try it for a year, and they still have their home up north. And then all of a sudden, they realize this is pretty neat, and they will either buy the home they're in or maybe just buy the home across the street or down the street, but they want to be part of that community. So that conversion program has been really good for us and good for us to experience and see it and then be able to build off that as we go into the future.

How does the rents for SFR, if you will, compare to an MHC rent and compare to the cost of the home that they're in?

Sure. So maybe, Patrick, you could walk through just how we set rates because that's all part of it.

Yes. As we go through our annual budgeting process, we have about 40 regional managers. They all meet with their general managers in the MH properties. They review the comp set, obviously focused on competitive manufactured housing, but we also look at trends in multifamily and in single-family as well because it's indicative of the housing market for -- in each one of our properties. We then review that. My team, the revenue management team and our FP&A team review the recommendations from the property operations teams and we set rates for the upcoming year.

The comparison to single-family rental, it's not unusual for us to be renting what Marguerite referenced is renting a home in one of our communities. That's typically in the $1,500 to $1,700 a month range. And if you look at single-family rental in the same submarkets, it's not unusual for it to be double that.

So just one follow-up on the build-to-rent. Again, I know your expertise is a 55 plus. A lot of the banks have come out with goals to spend on future development. Maybe that's more entry-level homes, I'm not sure. But I guess, has anything come out of that, that is something that ELS could lean into and do, or?

We've certainly looked at those opportunities. I think, again, it's about that community that we're not seeing in some of those -- in a lot of the build-to-rent communities. You're not seeing that clubhouse, the features that we have and the things that are driving our customers to those properties. It's more about just a place to live, which is not what we have. That's not what we really offer. That's not what we focus on. And it's not what drives people back to the property. It's about that, that sense of community. And we're not -- we don't really see that inside of the build-to-rent, currently.

So does it mean though that then you could push harder on the expansions? Like, I don't know how hard you're already pushing, but...

I think that -- as you know, about 90% of our expansion opportunities are on the RV side. So to the extent we have opportunities on the MH side, we are pushing hard at those. And the great thing about those opportunities are, we're able to expand sites and use our existing amenity footprint. So it is really cost-efficient. The customers -- the residents like it to bring in new homes, it has a little bit of something new in the community. And to the extent that it makes sense, we may put a smaller amenity package depending on how large the expansion is, but we will definitely continue to lean into those expansion efforts on the MH side. They've been very good to us over the years. We have a couple of slides in our presentation that highlight that.

Just on the expansion efforts and just more, maybe more broadly, could you elucidate your strategic priorities? What's taking up management time and attention and overlay that with the fact that maybe compared to expectations, things are progressing in line, maybe slightly better. How might execution on those priorities accelerate that trajectory, not just this year, but kind of next year and beyond?

Sure. So at the -- in October, we generally released our increases, our rate increases for the year. And I think consistent with past practice, we will be doing that. So that will give you an insight into where we are for '27 for rates, both for RV annual and MH annual. And that's a really good marker, I would say, as to what that means for '27 for the rest of '27. I think you've seen us do a really good job of controlling expenses where we see anything, where we see some volatility in revenue, we are adjusting.

We are operating really efficiently to be able to reduce expenses where we see any shortfalls in revenue. I think one of the main drivers as I look into '27, maybe Patrick can talk about it a little bit is just the MH occupancy number and growing that number. It's our largest line item and the ability to grow that number is very important.

Yes. So year-to-date, our occupancy has increased 70 occupied sites. Now we came off of the prior year with some hurricane impacts that are behind us, and we're rebuilding occupancy in those properties as well. As Marguerite touched on both home renter and homebuyer demand, we see good demand on both fronts and leaning into some rental, particularly when we're looking at expansion sites. We have an expansion that was recently completed in Florida. It's 200 sites. It's an expansion on a 900-site base.

As Marguerite mentioned, there's an additional satellite amenity section in that expansion to help not only provide a level of service to the customers who have been with us a long time, but to drive traffic into the new expansion. I think about leasing up that section, we'll focus on both rentals and sales. It wouldn't be unusual for us to have something 20% or 30% of the original touches on those sites being occupied to be renters, which is relatively high compared to the balance of the portfolio, particularly when you consider that we're maintaining occupancy now with our rental load at about 3%.

Then over time, we'll convert those renters to homeowners. And that's something that I think as we move into 2027, we'll be focused on particularly with our expansion sections. So alongside of the rate growth that Marguerite highlighted, occupancy growth is a place where, to your question, where management is spending its time.

Just kind of switching gears to next year. What -- where do you anticipate sending out renewal letters for the core MH in the fall?

We're in the process of doing that right now. And so we'll be releasing those numbers at the end of October. But as you can see in our presentation, we show how we've compared to COLA increases over time. And so we're waiting for some of the COLA CPI numbers to come out to be able to have some more definitive numbers.

Can I ask one more follow-up on the expansions. I guess tying into some of the government's initiatives, are you seeing any municipalities change their view on expanding your MH communities, like where they're now looking to do more MH?

So there's been a lot of discussion on the ROAD to Housing at the national level, but it really hasn't made its way down to the states and the local municipalities. We haven't seen any changes on their views on whether or not they want a manufactured home community next door to them or not. That just -- it just hasn't changed. Patrick is the Chair of the Manufactured Housing Institute. So it's been a good year for him to be part of that as the ROAD to Housing has taken place. We're very pleased that he was at the helm during this because there's a lot going on. Maybe, Patrick, you could touch a little bit on that. Again, it's not translating down to the state level, but I think it's helpful to talk about.

Yes. And I think it's also early in the process was just with respect to the impact of road to housing. I'll focus -- we get a lot of questions on chassis removal and the spec of homes. So I'll just touch on that briefly. The typical manufactured home is built on a chassis. The home is then transported by the equivalent of a semi-tractor trailer. So the tractor part is transporting this home section to a community. Our communities are full of multi-section homes, so it ends up being 2 trucks and 2 sections. That home is really only mobile in the sense that it's built in a factory, it's transported to a site.

Construction is completed and it's there for the rest of its useful life. The useful life to today's standards, a well-maintained home, 50, 60, 70 years, you maintain the home, it will be there for decades and decades. The -- at the level of the consumer, and I'll focus on land lease manufactured housing. We don't expect a significant change with respect to the spec of the home. There will be an aesthetic where it's much more like a traditional site-built single-family home. And that's really driven by the fact that it's not supported on a chassis. When it's supported on a chassis, the home is set at a higher grade. If you're going to set it without a chassis, you can set a lower grade, there'll be typically some sort of a perimeter support.

We think that, that aesthetic will be better received by the local planning commission, zoning boards who we speak to with respect to expanding certain of our properties. I think Marguerite touched on it that in addition to the land that we already own adjacent to our properties, we frequently are looking for opportunities to expand by acquiring adjacent land. And that's when we come into situations where we're seeking to change zoning and achieve the entitlements to expand the property. We have a development slide, I think it's Slide 27. But the picture of the property that was expanded there. It's about an 800 site property. We did 2 expansions.

We acquired 2 individual single-family lots or zoned single-family lots on different sides of the property, went through the process of securing new entitlements, developed one, filled it up. That was about 40 sites, developed the second one, and we're in the middle of filling it up. That's the picture in the slide deck. And in both those instances, we were successful with traditional HUD housing, but it's an example of us acquiring adjacent land and getting the entitlements. We're pretty good at working our way through that process. We think the additional spec, the changes with respect to the removal of the chassis can act as a tailwind for us to have the conversations about how this housing is very, very similar to the site-built single-family housing in the immediate neighborhoods.

There's also an effort as in ROAD for states to recognize the need for more affordable housing, particularly factory-built housing. And we've seen 4, maybe 5 states now go through the process of updating their laws in order to comply with the ROAD to Housing Bill. That's a process that's going to play out across the country. Simple things like licensing, titling, how transactions occur in a home without a chassis needs to be clarified at the state level. Several of those states also include a requirement that factory-built housing, HUD manufactured housing be considered adjacent to traditional site-built single-family housing and just as a construct in the zoning code.

That still has to translate down to the local jurisdictions where those decisions are made. But just with respect to the spec and the aesthetic of the home, we think that's helpful. And with respect to the dialogue, including manufactured housing on addressing affordability, we think that's helpful for us to continue to expand our properties.

Besides the adjacent land expansion that we've been discussing, how is the team thinking about net new land developments?

Net new land development broadly in the market?

Yes.

I think that many of the challenges remain. And in the context of demand coming to our properties and what the competitive set looks like for our portfolio, in our locations, maybe I'll start here. Our portfolio, very high quality, age-qualified properties, predominantly in the Sunbelt and coastal locations, developed in the '70s, '80s, '90s. Economic development has occurred around our portfolio for decades. There really aren't large parcels in order to develop competing housing stock at the value proposition that we have.

So we're in a unique position where competitive supply is limited in the submarkets where we own our typical property. Might there be an opportunity with some of the elements that I described earlier to address affordable housing in broader markets where they're not competing directly against us given the quality of our locations? Yes, I mean, that's a very real prospect for the factory-built housing industry.

And if you look at Page 18 of our presentation, it just highlights that it is a supply-constrained asset class. And I think that we'll continue to be able to have this in our presentation for a long period of time because there's just not a lot of activity. You're talking about 1 to 2 kind of manufactured home communities being built. So that will continue.

The RV and core RV and the marine business. Arguably very different demand drivers and significantly different operating expertise required. From a governance perspective, why is there this ongoing reluctance to provide disclosure between...

Between the 2 segments of RV and...

RV and marina, together.

Right. Well, the marina segment is such a small piece of our business. We've highlighted that it is -- it acts very similar to the RV annual piece. Their marina slips are all annual. So it's basically -- it's very similar to it. We have highlighted over the last couple of calls about a marina in our core portfolio that was offline. And what we've been discussing during this conference is to let everyone know that those -- that marina is back online. So that created a little bit of noise earlier in the year, but we're back on track on that. But that's the reality is that it's a very small piece of our business.

So it's small, it doesn't really address my question.

Well, that's the reason that we haven't broken out like that. It's very similar to the RV annual. It acts exactly like the RV annual. And so that's why we group them together.

What's -- do you want to provide the percent?

Sure, it's 3%, 3% or 4%. So it's a very small piece of the overall.

And then maybe just this -- marina that's back online, that happened in 3Q?

Yes, it's coming online in 3Q and then through the balance of the year. As we went through reconstruction following damage from a hurricane, I referenced on a couple of previous calls some delays that we experienced. The last of those is really behind us, and it was the construction time line on custom-fabricated concrete floating docks, which are all on site and installed and really, really nice. And all of our boaters are very excited to have the marina back at full capacity. So we'll see rebuilding occupancy through Q4 and into 2027.

What were the assumptions on guidance related to that particular issue?

Yes. We had an assumption for generation of revenue. It was about $1 million in 2026.

And we talked about that on the first quarter call that, that was the reason for some of the volatility of the $1 million.

And so those coming on in Q3, is that even a positive?

It will be a contributor in the third and the fourth quarter, a few hundred thousand dollars. It's not a significant contributor given the timing of the recovery.

High level, do you want to keep the marinas? Do you want to stay in that business?

Yes. The marina business, we got into the marina business several years ago because we thought and still believe that it acted an awful lot like our RV annual business, and it was just another way for us to invest capital. We've done that. The marinas have performed in line with our expectations. It's also good to have a marker out there. There's been some deals that have traded. It's good to be able to look at what we have and appreciate what we think the value is of it. But the marinas operate very nicely alongside our existing portfolio. They're in our existing areas of operation, and they're handled by our existing personnel. So -- and again, it's a very small piece of our business.

Just to close the loop on marinas real quick. It's still negative supply growth overall for the industry, correct?

Right. There's not really any new.

Yes. And then there's like a handful that get decommissioned every year.

Right. Right.

Is it a growth opportunity to get -- to grow the...

Yes. When we got into the business, we looked at it and we said there are certain things that we want to make certain that we do. We wanted to be -- look as close to an RV annual property as possible, which means it has to be highly annualized. We want to make sure that it's not on a ground lease that we own the land and we own -- not having to deal with the lease renewal and that there's not a lot of a high amount of ancillary food and beverage restaurant kind of business. Well, once you do that, you take your opportunities in marinas and you really reduce them -- reduce it down significantly.

So I don't think it's something that -- I said this from the beginning, it's not something that we would -- you see it growing any more than where we're at right now. You might see onesie-twosie kind of acquisitions, but not something at a grand scale because it's difficult to get those parameters. It's difficult to be in a place where you don't have to deal with the lease renewal. You don't have to worry about whether or not someone is going to buy a certain amount of food and beverage in order for you to make your quarter. We're really focused on that highly annualized base.

And switching gears a little. How do higher gas and diesel prices impact your businesses?

So gas prices, we've looked at it over time on the RV front as to whether or not as rising gas -- as gas prices are rising, is there going to be some indication of less demand at the properties. And the reality, if you consider year-over-year, you've got about $1 increase from last summer to this summer in gas prices. And our RV customer, their RV is loaded up, the kids are ready to go. And the -- the differential in that dollar gas price because they're only traveling about 90 miles is about $25 for the weekend. Now $25 is a lot. They don't want to spend the $25. But the kids are already in the RV. They're going.

And so we haven't seen a big change. Of course, we've always talked about that the change that we see in demand is weather-related. But when they already own the RV, they've already told the kids they're going to take the weekend. We see them going out and not being impacted. I think where you may see some impact if you had prolonged gas prices is more at the RV dealer and you see that where they're saying, "How much does it cost to fill this tank?" But we're not seeing it kind of downstream.

And then maybe on expenses, they've trended better than expected year-to-date. How much more room do you have? Historically, you've been very good at flexing expenses. How do you kind of see that playing out and any headwinds for '27?

Yes. I think the most important thing to remember, 2/3 of our expenses are in 3 categories. It's utility expense, payroll and repairs and maintenance. Generally, we see those trending in line with CPI, maybe slightly ahead on some of the line items, but overall, in line. I think that we have highlighted on past earnings calls and in conferences, a correlation that we see and some of the savings that you mentioned driven by fluctuations in the transient business.

And as we look ahead to the extent that we see greater demand, we see that RV business dynamic changing, more use of the property naturally leads to some higher utility expense and higher payroll expense, somewhat offsetting that accelerated revenue growth that we might see into the future. But that's kind of the main way to think about it is those -- the revenue and the expense kind of moves in concert with each other.

And then maybe going back to the point on the MH rental program being kind of sub-3% now for your portfolio. Would you consider increasing the size? And then maybe curious to kind of hammer on this point at what kind of percentage do you think it changes your operating expense and maybe CapEx profile?

Sure. Why don't I take the first part and then maybe Paul can talk a little bit about the expenses. But growing that rental program is really something that we look at on a property-by-property basis. It's important to understand what's happening at the property and making certain that we have the quality of ownership -- quality of homeownership on a property-by-property basis. And we also look to, as I mentioned earlier, this conversion, the ability to convert from a renter to an owner.

If we have a property, we have a property manager, we have a sales manager who's really good at being able to do that, we will be more free with our capital to say, let's put some more homes here because we know that this particular salesperson is doing a really good job of converting or this area, North Fort Myers, for instance, really good area to convert people. So we're comfortable with saying you're going to come in for a year and then you're going to buy it or buy that home or buy the home kind of across the street.

So it's really on a property-by-property basis. But we have -- this is a long-term plan for us as we were thinking about reducing the rental program, knowing that it was a tool for us to be able to increase it should we find in certain areas where it makes sense for us to do that and then be able to convert to owners. But we're in a really good spot to be able to do that. And then relative to the expenses.

Sure. On the expenses, I mean, generally, what we see in the rental business is activating a new site as a rental. The rental revenue for the incremental piece, which is renting the home, generally is offset by the expense that's generated with maintaining the home across the portfolio. So for us, a big motivator to convert those customers to owners is there's not a lot that we're generating incrementally on the NOI line from that rented site as compared to the owned site.

So it goes back to your earlier discussion where you said roughly $1,500, $1,700 a month for rental and you said it's as much as half as competitive SFR down the road. You appear to be offering a lot more in terms of community amenities. Why isn't your rent a lot higher if that's your competition?

Yes. I mean we look at that as a way to -- an entry point for you to get that to come in as a renter and then convert to a sale. So there's opportunities to increase that, but it's also -- it's experiencing this lifestyle, this new lifestyle. We want to make sure people appreciate what it is. They come in and then they make their decisions as to what to buy.

What is the tenure, the turnover of the rental?

So right now, it's about 18 months, the average length of stay on rental.

And what roughly is the percentage of turnover into?

So it's about 30%, 30% turnover into sales.

Unfortunately, we're out of time, but I have 3 rapid-fire questions we're asking all the REITs at the conference. As long-term rates stay higher for longer, which has the biggest impact on your sector's earnings? Higher refinancing costs, lower transaction activity or less new supply?

Lower transaction activity.

Over the next 3 years, will third-party capital become a more important source of growth for public REITs than balance sheet capital? Yes or no.

No.

For your sector, will 2027 same-store NOI growth be higher, the same or lower than 2026?

For our sector, I would say it's higher.

Thank you.

Thank you. Thank you all very much.

Good day, everyone, and thank you all for joining us to discuss Equity LifeStyle Properties Second Quarter 2026 results. Our featured speakers today are Marguerite Nader, our Vice Chairman and CEO; Patrick Waite, our President and CEO; and Paul Seavey, our Executive Vice President and CFO.

In advance of today's call, management released earnings. Today's call will consist of opening remarks and question-and-answer session with management relating to the company's earnings release. [Operator Instructions] As a reminder, this call is being recorded.

Certain matters discussed during this conference call may contain forward-looking statements in the meanings of federal securities laws. Our forward-looking statements are subject to certain economic risks and uncertainty. The company assumes no obligation to update or supplement any statements that become untrue because of subsequent events.

In addition, during today's call, we will discuss non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release, our supplemental information and our historical SEC filings.

At this time. I would like to turn the call over to Marguerite Nader, our Vice Chairman and CEO.

Good morning, and thank you for joining us today. I am pleased to discuss our operating results. For the quarter, our NOI increased 6.5% as compared to last year. We focus on translating NOI growth to normalized FFO growth driven by continued strength in our annual revenue streams and managed expenses throughout our portfolio. Our normalized per share FFO growth for the quarter is 7.7%. The strength of our portfolio allows us to raise our full year guidance for normalized FFO per share. Our MH and RV portfolio benefits from powerful long-term demographic tailwinds, including the aging of the population and the fact that approximately 70% of our MH communities are senior lifestyle oriented. These demand drivers help support the stability of our business and position us well for continued outperformance even in an environment of broader market uncertainty.

Our MH core portfolio represents approximately 60% of our total revenue with occupancy of 94%. We've increased our MH occupancy for 2 consecutive quarters and have raised guidance for the rest of the year for our largest revenue line item. Our properties are in demand and the teams are executing on our strategy to increase occupancy. The manufactured housing community model benefits from stability, driven by long-term residency and high occupancy levels. Once communities achieve strong occupancy, they tend to remain highly occupied over time. Our portfolio is further differentiated by our resident base with 97% of MH residents owning their home and choosing our communities as their retirement destination. Beyond housing, our communities foster a strong sense of connection and purpose through resident-led clubs and activities. The activities at our properties promote wellness, creativity, lifelong learning and social engagement, creating neighborhoods where residents can build relationships and remain active and involved.

Annual RV and marina revenue grew 4.8% year-to-date, driven by strong retention across our RV sites, park models, resort cottages and other RV accommodations. We saw decreased attrition from our customer base as compared to last year and a strong level of engagement from new customers. Our annual RV customer base is split between winter and summer seasons. Approximately 70% of our annual revenue is generated from Sunbelt properties, serving active adult customers. Like our MH residents, they value community, lifestyle and quality amenities. The remaining 30% of revenue is generated from seasonal properties that primarily serve families who return year after year for recreation traditions and the unique community experience our properties offer.

During the quarter, the Thousand Trails portfolio delivered strong performance with membership growth of approximately 800 members and subscription revenue increasing by 11%. The strength of our membership platform continues to resonate with customers as more guests recognize the value and flexibility it provides. I want to thank our team members for their commitment to our customers and communities.

I will now turn the call over to Patrick to provide further details on our financial performance.

Thanks, Marguerite. Stable annual revenue streams for MH residents, RV and marina annual guests and Thousand Trail members have always been the focus of our business, accounting for more than 90% of our core revenue. Over the last 5 years, our core MH revenue growth has averaged 5.8%, while our core RV revenue growth has averaged 5.7%, led by long-term annual RV revenue, which makes up more than 70% of total core RV revenue. I'm pleased with the build back of annual customers in our northern markets over the last year.

Occupancy across our MH portfolio remains strong at 94%, supported by demand from our 55-plus customer to purchase and rent homes in our communities. Year-to-date growth of our MH occupancy has come from both sales and rentals. We also typically see approximately 20% of our home sales are to existing renters who choose to become a long-term homeowner and current homeowners who want to upgrade or downsize from their existing home.

Our Florida markets continue to support long-term occupancy growth with our major submarkets of West Palm Beach, Fort Lauderdale, Tampa St. Pete and Ocala Daytona, all meeting demand for the value that residents find at our active lifestyle 55-plus communities, particularly given the cost of alternative housing in those markets. We also continue to see steady demand across our highly occupied California and Arizona markets, while the Northern U.S. submarkets in the Midwest, Northeast and Mid-Atlantic are in the middle of the summer home selling season, where we see demand contributing to 40% of new home sales in the quarter.

Property expansions are key elements of our MH occupancy growth strategy as we recognize the substantial demand for affordable 55-plus communities.

In Florida, we will add occupancy through sales and rentals across 4 recent development projects with close to 500 sites. At another age-qualified expansion project in the Phoenix market, we added more than 20 units of occupancy, growing the occupancy of the property by 4% year-over-year. The much anticipated 21st Century ROAD to Housing Bill became law earlier this month. Over the last 10 years, through the work of the Manufactured Housing Institute and members of the industry, manufactured housing has been increasingly recognized at the federal and state levels as a source to address the need for more affordable housing in the U.S. and manufactured housing is specifically addressed in the ROAD legislation. A few key points to mention. First, manufactured housing is exempt from the Institutional Investor provision in the Act, which preserves investment in the asset class.

Second, HUD Code homes will not be required to have a permanent chassis, which allows manufacturers greater flexibility in home design. They will expand the market for manufactured housing by offering homes that include design similar to traditional site-built homes as well as 2-story configurations.

And third, zoning and land use best practices encourage state and local governments to accommodate HUD Code manufactured homes in more locations and developments. The practical implications for ELS will take some time to materialize, but they include more diversity in the homes we can place in our communities and some further support to secure entitlements as we pursue expansion projects. We completed the launch of our new Thousand Trails subscription memberships a little over a year ago. Since offering these memberships, we've seen strong demand with more than 9,000 Thousand Trails memberships sold, including almost 7,000 over the last 12 months.

Our 12th annual 100DaysofCamping campaign is in full swing across our RV portfolio. The social media campaign celebrates the roughly 100 days between Memorial Day and Labor Day and has 33 million views across the social media channel so far this year. Campers across the country are using their hashtag and sharing photos posing with their campaign rally towel at 100daysofcamping.com.

Now I'll turn it over to Paul.

Thanks, Patrick, and good morning, everyone. I will highlight some takeaways from our second quarter and June year-to-date results, review our guidance assumptions for the third quarter and full year 2026 and close with a discussion of our balance sheet.

Second quarter normalized FFO was $0.74 per share. Strong core portfolio performance generated 6.5% NOI growth in the quarter compared to the same quarter last year, 120 basis points higher than guidance.

Core community-based rental income increased 5.8% for the second quarter and 5.7% for the June year-to-date period, each compared to the same periods in 2025.

In the second quarter, we generated rate growth of 5.8% as a result of noticed increases to renewing residents and market rent paid by new residents after resident turnover. In the first 6 months of 2026, occupied sites increased by 67. During that same period, we added 140 expansion sites, resulting in occupancy of 93.7% as of the end of June. Our RV and marina platform offers products with differing features that allow our customers to enjoy our properties. These include annual, seasonal and transient retail stays as well as our Thousand Trails membership. In aggregate, the growth rates from our core portfolio, RV and marina base rent, combined with our annual membership subscriptions were 3.1% and 1.6% for the second quarter and year-to-date periods, respectively.

Core RV and marina annual base rental income, which represents over 70% of total RV and marina-based rental income increased 5.4% and 4.8% in the second quarter and year-to-date periods, respectively, compared to prior year. Seasonal and transient rent was 170 basis points lower than guidance as a result of lower-than-expected transient rent in the quarter, mainly in June. We continue to realize offsetting expense savings. The net contribution from our total membership business consists of annual subscription and upgrade revenues, offset by sales and marketing expenses. The membership business contributed $17.1 million and $34.4 million net for the second quarter and June year-to-date periods respectively, compared to the same periods last year. The year-to-date growth of 9.6% is mainly attributed to rate growth in our subscription revenue. Year-to-date, approximately 2,600 upgrade subscriptions were originated by new and existing members.

Core utility and other income increased 6% for the June year-to-date period compared to prior year. Our utility income recovery percentage was 50.4% year-to-date in 2026, about 220 basis points higher than the same period in 2025. June year-to-date core operating expenses increased 2.3% compared to the same period in 2025. Expense growth was 120 basis points lower than guidance in the second quarter, mainly resulting from savings in utility and real estate tax expenses, following resolution of appeals at properties in Texas.

Second quarter core property operating revenues increased 4.9%, while core property operating expenses increased 2.9%, resulting in growth in core NOI before property management of 6.5%. For the year-to-date period, core NOI before property management increased 5.7%. Income from property operations generated by our noncore portfolio was $2.9 million in the quarter and $5.9 million year-to-date. The press release and supplemental package provide an overview of 2026 third quarter and full year earnings guidance. The following remarks are intended to provide context for our current estimate of future results. All growth rate ranges and revenue and expense projections are qualified by the risk factors included in our press release and supplemental package.

Our guidance for 2026 full year normalized FFO is $3.18 per share at the midpoint of our guidance range of $3.13 to $3.23. We project core portfolio property operating income growth of 6% at the midpoint of our range of 5.5% to 6.5%. We project the noncore properties will generate between $8.7 million and $12.7 million of NOI during 2026.

Our property management and G&A expense guidance range is $119.7 million to $125.7 million. In the core portfolio, we project the following full year growth rate ranges: 3.9% to 4.9% for core revenues; 1.6% to 2.6% for core expenses; and 5.5% to 6.5% for core NOI. Full year guidance assumes core MH rent growth in the range of 5.2% to 6.2%. Full year guidance for combined RV and marina rent growth is 1.1% to 2.1%. Annual RV and marina rent represents approximately 75% of the full year RV and marina rent, and we expect 4.8% growth in rental income from annuals at the midpoint of our guidance range. Our assumptions for full year RV and marina rent growth reflect current seasonal and transient reservation pacing for the third quarter. Our fourth quarter guidance assumes no growth in transient rent compared to prior year. Consistent with our historical practice, we make no assumption for the impact of a material storm event that may occur.

Our third quarter guidance assumes normalized FFO per share in the range of $0.76 to $0.82. Core property operating income growth is projected to be in the range of 6.3% to 6.9% for the third quarter. Third quarter growth in MH rent is 5.6% at the midpoint of our guidance range. We project third quarter annual RV and marina rent growth to be approximately 4.9% at the midpoint of our guidance range. Third quarter growth in core property operating expenses is projected to be 1% at the midpoint of our guidance range.

I'll now provide some comments on our balance sheet and the financing market. Our balance sheet is insulated from refinance and rate risk and is well positioned to execute on capital allocation opportunities. Our floating rate exposure is limited to balances on our line of credit. Our debt-to-EBITDAre is 4.4x, and interest coverage is 5.6x. We have access to approximately $1.2 billion of capital from our combined line of credit and ATM programs. We continue to place high importance on balance sheet flexibility, and we believe we have multiple sources of capital available to us. Current secured debt terms vary depending on many factors, including lender, borrower sponsor and asset type and quality. Current 10-year loans are quoted between 5.25% and 5.75%, 55% to 70% loan-to-value and 1.45 to 1.65x debt service coverage. We continue to see solid interest from life companies and GSEs to lend for 10-year terms. High-quality age-qualified MH assets continue to command best financing terms.

Now we would like to open it up for questions.

[Operator Instructions] And our first question comes from the line of Michael Goldsmith of UBS.

Two questions on transient RV and seasonal, I guess. You've updated the guidance there. And so we've got good visibility into third quarter and what's implied for the fourth quarter. So maybe you can kind of walk through your expectations for the rest of the year. Clearly, seasonal transient has been under a little bit of pressure. And so is that the expectation for the third quarter?

And then also just given you're lapping some of the disruption from Canada, maybe in the fourth quarter on the seasonal side, maybe you can kind of walk through the overall assumptions that you've baked in for the back half?

Sure. Happy to do that, Michael. So we've raised our full year normalized FFO per share guidance that reflects our year-to-date outperformance and the changes to guidance in various line items for the remainder of 2026. The main contributor of the change is core NOI improvement of 30 basis points that is mainly from expenses. We also included changes to our MH rent, our membership subscriptions in addition to the expenses. With respect to RV and marina-based rental income growth, we adjusted that down and at the same time, raised our annual growth 10 basis points. The change from our prior guidance reflects our transient expectations for third quarter, and that's based on current reservation pace, and we reduced fourth quarter year-over-year growth in transient, and that's flat year-over-year.

And our next question comes from the line of Steve Sakwa of Evercore ISI.

Marguerite, could you just maybe talk about the -- I guess, the prospects for building occupancy. If I look at Page 9 and just look at the core portfolio, you're sitting at around 93.8%. And I know on past calls, you've talked about some of the storm issues that you've had that kind of knocked some of the units offline. But maybe just walk us through your confidence level of building occupancy back towards 95%. And what do you think the right time frame is to get that portfolio back to 95%?

Sure. Thanks, Steve. I think Patrick is going to walk you through how we're thinking about growing occupancy. And just to point out that we did grow occupancy. I mentioned it in my opening remarks for the last 2 quarters, but maybe, Patrick, you could walk through it.

Yes, Steve. So over the last 2 quarters, we're up about 70 units. And I guess I'd raise a couple of points. One is over the last 4 quarters, the combined new and used home sales have both been increasing. We increased rentals year-over-year by about 140. So we're meeting demand on both home sales and on rentals. And I see that as an opportunity to continue to grow in future quarters. On the path back to 95% occupancy, we're taking it a quarter at a time. And I would expect that over the next few quarters that we'll be putting up occupancy growth that's been favorable to the last few quarters. As you pointed out, we came through a transition year where we had some impact from storms. That requires some recovery, putting inventory into those communities and broadly across the portfolio. We feel good about demand and feel good about occupancy growth in the back half of the year.

And Steve, I would just remind you that over 50% of our properties are 98% occupied and really have been for a number of years. And that is really sustainable due to the investment that customers is making when they're picking out a community. They make a long-term commitment and generally a long-term commitment for us and for the home. So -- and our customers are paying cash for their home, which means they really have a strong incentive to keep up the resale value. So that contributes to our positive outlook on growing occupancy.

And our next question comes from the line of Jamie Feldman of Wells Fargo.

I know in the third quarter, you start to send out renewal rates for the following year. Can you talk through for your annual business lines, what those are starting to look like or what you're asking? And if you have any responses yet?

Yes, Jamie, it's Patrick. As we get really move through the third quarter into the fourth and we're going through, our annual budget will start very soon. That happens to occur alongside of us coming up with our MH rates for the upcoming year. And just as a reminder, the majority of those occur in the first quarter. And with 60 days, 90 days notice, we'll be sending those out as we approach the fourth quarter and into the fourth quarter. So we're going through that process right now. I'd say from a from the perspective of a range, we'll be in a position to do that maybe in the next call.

And Jamie, one thing to keep in mind as we think about those increases, a couple of metrics that we look to are indications of COLA, which typically comes out a bit later in the year as well as the CPI that's released in August as well as September.

Our next question comes from the line of Jeffrey Spector of Bank of America Securities.

Just listening to the opening comments and discussion around the 55-plus customer, given you have the expertise, you have the strong brand serving that 55-plus customer, how are you thinking about 55-plus build-to-rent communities? I've seen some articles in that. It seems to be an emerging niche area within resi.

Sure. So we have -- within our portfolio, we obviously have rental properties, rental communities. And as we look to opportunities to grow, we'll look at those types of assets, but really focused in on our MH portfolio, and we'll continue to look at opportunities to grow inside the MH business.

Our next question comes from the line of Eric Wolfe of Citi.

I just want to go back to your guidance increase for a second. You beat your second quarter by $0.02. And if I look at the components of your guidance, you raised your core income, as you mentioned earlier, but you also raised your noncore income. I mean it looks like there's some increase in income from other investments as well. So I was just curious what's the offset to all that? I guess I would have thought maybe a little bit larger of a guidance increase. And then could you also talk about what's in the income from other investments and if that's sort of one-time or more recurring in nature?

Sure. Thanks, Eric. As you mentioned, we were $0.02 ahead of our guidance. The core portfolio did outperform, and that's the main contributor. It's really the result of the lower expenses that we saw in the second quarter. There are a number of things that happened kind of below the line, so to speak. And that includes income from other investments as well as the consolidation of the joint venture that we mentioned. The pickup in the noncore, when you run that through to the bottom line is effectively offset by shifts in our expectations for JV income and certain other line items. So on a net basis, that pickup in noncore is offset. And then with respect to what's included in the income from other investments, net, we have some of our subsidiary businesses there. We also report certain income related to corporate and other matters that may come from time to time. During the quarter, we did recognize income from a settlement of a dispute. We had some income from prior business interruption flow through there. But at the end of the day, kind of as we've worked through all of it, the core portfolio is really what drove the outperformance.

Our next question comes from the line of Brad Heffern of RBC.

On seasonal transient, you obviously mentioned the weak June and you've clearly adjusted things for a slower booking pace. Can you talk through just what you think is driving that? I know sometimes it's weather. I would think at the same time, like the Canadian customer comps are getting easier. So just any of the dynamics there would be great.

Yes, sure. It's Patrick. On the transient front, I would just highlight that it continues to reflect volatility. As we work our way through the summer season, we have experienced some challenges with weather that's had a persistent impact on transient results over our tenure in the industry. Looking at the seasonal business, as we mentioned, we wouldn't expect to really get better visibility there for several weeks as we get late into the third quarter and into the fourth quarter as people are considering booking a reservation for their winter stay in the Sunbelt start to be more active. I've been in Florida over the last few weeks. I've been on site with our property teams. They are consistently reaching out to seasonal guests who chose not to book with us last year or seasonal guests that were with us last year and chose not to book the early bird reservation. There's certainly indications that many are considering a return, and we are booking some reservations now. But that activity is really not anticipated to pick up for the next several weeks. And as we work our way through that, we'll just have better visibility and can share some more insight.

Our next question comes from the line of John Kim of BMO Capital Markets.

I wanted to ask about the expansion sites in MH and if that's having a direct impact to MH occupancy. So my question is, are these harder to lease up given they require a new, more expensive home? Or are they easier to lease up because they're in more established communities?

And I also wanted to know how you price expansion sites versus a comparable existing site within the community.

Yes, John, it's Patrick. I guess first, I'd point out that we completed an expansion in Florida, 140 MH sites. That's an expansion on an age-qualified property, and it's got a history of expansion. We acquired the property. It's 900 sites. It's in the Greater Tampa, St. Pete MSA. When we acquired it at 900 sites, we expanded by 40 sites in 2019, having acquired the property in 2016. We acquired an adjacent parcel, the one we just completed for development in 2019, and we just brought that online. So just using that as an example, the site rents on the expansion sections reflect to the extent the sites are on water or have a particularly good view or site configuration, they'll reflect a premium rent compared to a standard site even within the expansion section in the original property. So the expansion sites can typically join or typically carry a higher rent, but it really depends on the configuration of the community that you're expanding. And then just with respect to the nature of the homes that we place in our expansion sections, they're going to reflect kind of, the scope of price points that we put into the broader community that we're expanding. So as we're building occupancy, we may have higher-end homes in that expansion, but it's also going to reflect a standard site plan as well.

Our next question comes from the line of Haendel St. Juste of Mizuho Securities.

I was hoping you could share a bit more color on the cadence of RV bookings throughout 2Q and early 3Q. At NAREIT, I think you mentioned that Memorial Day was a bit light, but within your range of expectations. So I was hoping to get some more color on how the Juneteenth and July 4 holiday weekends were versus prior year and versus your expectations? And did you see any benefit from the World Cup?

Yes. I think with respect to the holiday weekends, they were down slightly to last year. I think that what happened, as the June developed, there were some fairly significant weather events that occurred. And then as we headed into the 4th of July and early July season, what we saw with reservation pacing was weather, but also the smoke from the Canadian wildfires having some impact over the weekend as well. So a couple of different factors.

And then with respect to the World Cup, I don't think that we saw a meaningful contribution or pickup related to World Cup just based on the location of the events and the location of our properties.

Our next question comes from the line of Adam Kramer of Morgan Stanley.

I just wanted to ask about the membership business. I think you wanted to -- I think you've talked in the past about sort of prioritizing rate over sort of membership count. It looks like it's declined now. So I just wanted to ask sort of what level is maybe sort of the right level for memberships and at what point maybe you sort of anchor back to membership count versus prioritizing rate?

Sure, sure. So I think as you recall, in 2024, we introduced a new dues-based upgrade option. And this program allows members to commit to a higher annual dues for a 2- to 4-year term with total upgrade costs of approximately $2,000 to $4,000. Those members, they look forward to that because they receive enhanced benefits really designed to increase usage of our properties, the ability to stay longer, earlier booking windows, discounts on cabin rentals, et cetera. So that initiative that we did a couple of years ago has contributed to that strong growth in the annual dues revenue. So on a per dues paying member base, we've seen an increase of about from, I think, about $580 to about almost $700 per member. So that really reflects the success of the upgrade and the members' willingness to pay for that additional flexibility. So I'd say what you're seeing as you compare the TT portfolio from a few years ago is really a deliberate trade-off with an emphasis on the higher rate rather than the volume.

Our next question comes from the line of Jason Wayne of Barclays.

So you consolidated 7 RV communities into the noncore portfolio during the second quarter. Could you just give some color on what was acquired in terms of geography mix, annual and transient and occupancy there?

Yes, sure. It's Patrick. It was 7 properties. It's about 1,400 sites. Two of the properties are in the West, California and Colorado. The balance of the properties, 5 properties are in the Southeast United States, approximate or adjacent to submarkets where we already have a presence. of the 7 properties, 5 of them and 70% of the sites were developed over the last 10 years. So they're new. They have a very attractive spec in high demand. And just with respect to the current mix of revenues, it's about 40% longer-term streams at this point. That's been increasing with our focus in our platform on the longer-term revenue streams, and we're optimistic about continuing to grow the long-term revenue streams in that portfolio.

Our next question comes from the line of Wesley Golladay of Baird.

I just want to go back to the comment about the positive demographics for MH. Would you look to increase your MH expansions? And if so, what is the primary constraint from doing more?

What we've done over the last few years is look at opportunities within our existing portfolio to do developments adjacent to, either with vacant land that we have or purchasing land that is vacant and adjacent next to our properties. So you will see us continue to look for opportunities within our portfolio to buy land adjacent to our properties and do those developments, specifically on the MH side, as Patrick pointed out, one example, I think that just shows you the strength of those MH developments.

Our next question comes from the line of Peter Ammeritz of Deutsche Bank.

Just to go back to some of your comments about the expenses. I think you said some savings on utilities and real estate taxes. Any other commentary you could provide or color on other expense items? And I guess as we think about expenses in the back half and into '27, how much of the, I guess, expense downside relative to expectations is sustainable going into the second half and '27?

Sure, sure. Thanks, Peter. So I'll just speak broadly to the guidance for the full year. We've guided to expense growth. Generally, it tracks to CPI with some realized and anticipated savings from a few sources. So when we think about our main 3 expense line items, utility, payroll and R&M, those represent about 2/3 of our core expenses. And those, we have an assumption for right around a CPI increase for 2026. That is some savings off of our prior guidance as a result of our anticipated occupancy level in our transient properties where we do see the relationship between our variable rent and our variable expenses. The remaining 1/3 of our expenses include real estate taxes, insurance, membership sales and marketing and some other line items. And the full year growth rate assumption for those is in aggregate, is flat to prior year. That does include the effect of our previously disclosed insurance renewal as well as some successful real estate tax appeals that we saw in the second quarter.

As we think about going forward, I would say that CPI is the key driver on the 2/3 of our expenses as it is this year. And then the other line items, the remaining 1/3, some of that is dependent on what we see in insurance. That's probably been the largest driver of variability in that 1/3 over the last few years.

Our next question comes from the line of David Segall of Green Street.

I'm trying to better understand the slow lease-up pace for MH. I want to -- is it due to the lack of available home inventory in properties that have demand? Is it due to a lack of demand in the properties that have the vacant sites? Or is it still primarily related to repairing storm damage or other factors?

Yes. I mean I think the -- I would focus on, one, we have good demand. So it's really driven by a recovery from the storms that impacted us in 2024 and into 2025. We're past that, and we're gaining momentum. And then it's the timing of getting inventory into the communities, which we're in the process of. And as I mentioned just on a previous question, the -- up 70 year-to-date from an occupancy perspective, I feel like we have a favorable trend and good demand to pick up the pace as we go through the back half of the year.

Our next question comes from the line of Jesse Lederman of Zelman.

I wanted to ask you about kind of the income profile of your renters. You have very healthy rent growth, and on the MH side, it's been a great part of the business. Just curious what their ability to continue to absorb these 5% to 6% increases is, if you see any change in behavior like resident turnover or delinquency or home sales from residents to compensate for these increases or anything from a resident health perspective would be great.

Sure. So as you mentioned, over the last number of years, we've had increases on the MH side of about 5% with our current average rent of about $950. But to arrive at that very top blended number, every year, we put together a really detailed market survey for each property, which includes what's happening at the customer level and how the customer is able to afford what our offerings, and we compare rents in multifamily, single-family rental and other [ manufactured ] communities in the area. And we also look at the global basis and consider how our market rates may compare to what's happening with CPI, as Paul pointed out earlier, and then the prices of new and resale homes in our community. So that's -- those are important pieces to consider. And as we think about our long-term levels of delinquency throughout our portfolio, they have been and remain very low.

And our next question comes from the line of John Kim of BMO Capital Markets.

When I look at your site count on Page 12, the RV transient sites are now up quarter-over-quarter and up 20% over the last 2 years despite the uneven results. And I know you use RV -- transient RV sites as a front door to annual and seasonal customers. But are you seeing like a slower conversion rate from transient to annual seasonal and that's why the site count keeps going up?

Well, one of the reasons the site counts increased was really as a function of putting our JV properties inside of that site count. So that's really the driver of those differences, John.

And when did that happen?

That happened in -- 2 quarters ago, I believe. So if you're comparing it to a couple of years ago, that's the main driver of the difference.

But is there anything about that the conversion rate or demand in annual seasonal is a little bit slower than it has been in the past?

Yes, John, it's Patrick. Well, we're seeing good demand on the annual front, and that is reflected in occupancy growth year-over-year, mid-200s. And as Paul addressed, a pickup in our guidance on the annual front. So we see consistent demand there. The transient to your point is a -- it's a component in addition to what Marguerite just raised with respect to sites coming online. A transient site is an available site for us for longer-term stays. We see 15% to 20% of our annuals and seasonals previously stayed with us as transient guests. So it's an introduction to our property for a good chunk of our leads. And we'll continue to meet that -- the longer-term demand, and we're seeing it come through on the annuals and are optimistic about the back half of the year.

Since we have no more questions on the line, at this time, I'd like to turn it back over to Marguerite Nader for closing comments.

Okay. Thank you for joining us today. We appreciate you taking the time to discuss our business. Take care.

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.

Good day, everyone, and thank you all for joining us to discuss Equity Lifestyle Properties First Quarter 2026 results. Our featured speakers today are Marguerite Nader, our Vice Chairman and CEO; And Patrick Waite, our President and COO; and Paul Seavey, our Executive Vice President and CFO.

In advance of today's call, management released earnings. Today's call will consist of opening remarks and a question-and-answer session with management relating to the company's earnings release. [Operator Instructions]. As a reminder, this call is being recorded. Certain matters discussed during this conference call may contain forward-looking statements in the meanings of the federal securities laws.

Our forward-looking statements are subject to certain economic risks and uncertainty. The company assumes no obligation to update or supplement any statements that become untrue because of subsequent events. In addition, during today's call, we will discuss non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release, our supplemental information and our historical SEC filings. At this time, I would like to turn the call over to Marguerite Nader, our Vice Chairman and CEO.

Good morning, and thank you for joining us today. I am pleased to report the results for the first quarter of 2026. We continued our long-term record of strong core operations and have maintained our full year normalized FFO guidance of $3.17 per share. Our manufactured housing portfolio represents approximately 60% of our total revenue, and these properties are currently 94% occupied. Our communities distinguish themselves by their ability to sustain high occupancy levels over extended periods.

This resilience is driven by the composition of our resident base as homeowners represent 97% of our MH portfolio. Homeownership promotes long-term residency and supports our strong operating performance. The high concentration of homeowners is a key driver of our predictable recurring cash flow Residents are invested in their communities, which encourages stability, long tenure and strong neighborhood engagement. Within our RV portfolio, the increase in annual revenue reflects continued strength across our customer base. Our annual customers stay in park models, resort cottages, and RVs with many families viewing our properties as an integral part of their traditions and family history.

This loyal -- this loyalty supports sustained long-term revenue. Turning to demand. Our offerings across our portfolio are unique. We offer great long-term experiences in sought-after locations at a fraction of the cost of alternatives. We are engaging with our customers through traditional e-mail campaigns, social media outreach and digital advertising. For the quarter, our websites attracted a combined 1.3 million unique visitors and generated 94,000 online leads, reflecting strong engagement. The drivers of the lead generation are from our RV annual lease campaign and trip planning lead generation.

Our social media strategy seeks to engage both customers and prospects in a wide variety of platforms. We have over 2.4 million fans and followers across several social media networks. Over the past 10 years, we have grown our social media fans and followers by an average of 25% annually. During periods of uncertainty, it's important to recognize the stability of our business and the fundamentals that support continued growth. I will highlight 3 of the key components of our success.

First, our unique business model drives sustained long-term outperformance. Over the past 25 years, ELS has outperformed the REIT industry NOI growth by 150 basis points. The stability through economic cycles is a hallmark of our success. Second, the demand drivers are the support for continued long-term outperformance. Our core customers are baby boomers and 10,000 people per day turn 65 through 2030. Thereafter, the Gen X generation maintains the demographic tailwind for the 15-year period following the baby boomers. The runway remains long supported by favorable migration patterns.

And finally, our capital structure is an advantage for us. Our balance sheet is in terrific shape with an average term to maturity of more than 7 years. Our debt is fully amortizing and not subject to refinance risk, and our debt maturity schedule through 2028 shows only 14% of our debt coming due compared to the REIT average of 35%. We have delivered an 18% compounded annual dividend growth rate over a 20-year period. ELS offers a rare combination of strong income growth, stability and demographic tailwinds backed by a well-managed balance sheet. I want to thank our team for a great start of the year. They've done an excellent job supporting our snowbird guests and will soon welcome our customers for the upcoming summer season. I will now turn it over to Patrick to provide more details about property operations.

Thanks, Margarite. We're in the middle of our seasonal shift with our snowbird customers heading back to Northern climates and our northern properties gearing up for the summer season. As we wrap up the busy season in the Sunbelt, I'd like to provide an update on our key Sunbelt MH markets and the value found in our communities. Florida is our largest market, accounting for about 50% of our core MH revenue.

In our top markets of Tampa St. Pete and Fort Ladders. Pound Beach, the average single-family home price ranges from 350,000 to over $500,000. Our communities in these markets offer a compelling value with average new home prices of $100,000 and resale home prices averaging about $50,000. We continue our strategy to expand existing communities in areas of high demand and have added more than 1,100 MH sites in Florida since 2020.

In our core Arizona market of Phoenix, Mesa, single-family homes averaged more than $400,000, while new homes in our communities averaged $100,000 and resale homes averaged $70,000. We are actively selling homes in our expansion projects in Arizona or new inventory is selling at prices typically ranging from 110,000 to $180,000. And we have 500 completed expansion sites to support further occupancy growth. In our Northern California markets around San Francisco and San Jose, homes averaged over $1.3 million. All the Southern California markets of Los Angeles and San Diego are about $900,000 to $1 million.

Given high demand and the strong value proposition for our California properties, the portfolio is 99% occupied and home sales are typically resales of resident homes in the range of $100,000 and higher. In each of these markets, residents received an exceptional housing value along with desirable amenities, including swimming pools, clubhouses, pickleball courts and more. The active lifestyle and social engagement offered our communities as why homeowners stay with us for an average of 10 years. Leveraging feedback from our customers, our property operations team establishes comprehensive budget plans for each property. Our on-site team members prioritize occupancy and revenue growth while thoughtfully managing expenses such as seasonal staffing, overtime and discretionary spending.

We're able to adjust to changes in the business to meet high customer expectations while managing expenses scaled to property operations. At the same time, we are investing in new technology across our business. customer touch points like online payments, customer surveys and follow-up and operational efficiencies like online check-in, staffing plans and expense management. This continued innovation allows us to increase operational capacity while improving the customer experience. Importantly, these efficiencies give our on-site team members more time to make connections with our customers and create memorable experiences.

In our RV business, the long-term annual are the core stable occupancy -- core of our stable occupancy. Through April, we have seen improvements in attrition trends compared to last year, and we are looking forward to the summer sales season. Annual sites account for 75% of our core RV revenue, and most of our annual RV customers on a park model or our view of site improvements and sell their unit in place when they choose to leave the can grow. Annual Marina revenues experienced occupancy headwinds year-over-year from delays for permits and longer construction time lines for projects related to previous storms.

We expect these construction projects to be completed late in 2016 and into 27, which will then contribute to occupancy gains as we build back that business. We're looking forward to launching the 12th annual 100 days of camping social media campaign this summer, which runs from Memorial Day weekend through Labor Day weekend. We see strong engagement with this campaign year after year, earning over 45 million views across social media last summer. Our teams will be following along as customers post photos online, helping each guest make memories and reinforcing the legacy of our brand. Now I'll turn it over to Paul.

Thanks, Patrick, and good morning, everyone. I will review our first quarter 2026 results and provide an overview of our second quarter and full year 2026 guidance. First quarter normalized FFO was $0.84 per share, in line with our guidance. Core portfolio NOI growth of 4.9% compared to prior year was slightly ahead of our expectations for the quarter. Core community-based rental income increased 5.7% for the quarter compared to the first quarter of 2025. The increase in rental income is primarily the result of noticed increases to renewing residents and market rent paid by new residents.

Occupied sites increased 54% during the first quarter, resulting in occupancy of 93.9%. During the first quarter, we sold 228 new and used homes. The occupancy comparison to first quarter 2025 is impacted by expansion sites added during the past 12 months. Adjusted for expansion sites, occupancy would be 94.4%, in line with first quarter 2025.

First quarter core resort and marina based rental income outperformed our budget by 10 basis points in the quarter. Rent growth from RV and Marine annuals increased 4.2% for the quarter compared to prior year. slightly below expectations for the quarter. Marina performance was impacted by delays in slip restoration efforts. Seasonal and transient ramp was 70 basis points higher than guidance as a result of higher-than-expected seasonal rent in the quarter.

For the first quarter, the net contribution from our total membership business, which consists of annual subscription and upgrade revenues, offset by sales and marketing expenses was $17.6 million. an increase of 13.7% compared to the prior year. Membership dues revenue growth is primarily rate driven. Approximately 1,200 upgrade subscriptions were originated in the quarter from new and existing members. Core utility and other income increased 5.4% compared to first quarter 2025. Our utility income recovery percentage was 50.4%, about 280 basis points higher than first quarter 2025. First quarter core operating expenses increased 1.8% compared to the same period in 2025.

We renewed our property and casualty insurance programs, April 1 and the premium decrease year-over-year was approximately 18%. We are pleased with the results, which reflects no change in our property insurance program coverage. Core property operating revenues increased 3.7%, while core property operating expenses increased 1.8%, resulting in growth in core NOI before property management of 4.9%. Our noncore properties contributed $3 million in the quarter, slightly higher than our expectations. Property management and corporate expenses were $28.6 million in the first quarter of 2026, and 3.4% lower than 2025.

The press release and supplemental package provide an overview of 20,262nd quarter and full year earnings guidance. The following remarks are intended to provide context for our current estimate of future results. All growth rate ranges and revenue and expense projections are qualified by the risk factors included in our press release and supplemental package. Our guidance for 2026 full year normalized FFO was $3.17 per share at the midpoint of our guidance range of $3.12 to $3.22. We project core property operating income growth of 5.7% at the midpoint of our range of 5.2% to 6.2%, we project the noncore properties will generate between $5.7 million and $9.7 million of NOI during 2026. Our property management and G&A expense guidance range is $119 million to $125 million.

In the core portfolio, we project the following full year growth rate ranges, 4% to 5% for core revenues, 2.2% to 3.2% for core expenses and 5.2% to 6.2% for core NOI. Full year guidance assumes core MH rent growth in the range of 5.1% to 6.1% and Full year guidance for combined RV and Marina rent growth is 2% to 3%. Annual RV and Marina rent represents approximately 75% of the full year RV and Marina rent and we expect 4.8% growth in rental income from annuals at the midpoint of our guidance range. As I mentioned, the change in expectations for full year growth in annuals compared to our prior guidance is attributed to our Marina portfolio, which is experiencing longer-than-anticipated delays in restoration of slips.

Our full year expense growth assumption includes the impact of our April 1 insurance renewal for the rest of 2026. Our second quarter guidance assumes normalized FFO per share in the range of $0.69 to $0.75. Core property operating income growth is projected to be in the range of 4.8% to 5.4% for the second quarter. Second quarter growth in MH rent is 5.6% at the midpoint of our guidance range. We project second quarter annual RV and Marina rent growth to be approximately 5.1% at the midpoint of our guidance range. Our guidance assumes second quarter seasonal and transient RV revenues performed in line with our current reservation pacing. We've made no changes to prior guidance for seasonal and transient rent in the third and fourth quarters.

Second quarter growth in core property operating expenses is projected to be in the range of 3.9% to 4.5% and includes the impact of our April 1 insurance renewal. I'll now provide some comments on our balance sheet and the financing market. Our balance sheet is insulated from refinance and rate risk and is well positioned to execute on capital allocation opportunities. Our floating rate exposure is limited to balances on our line of credit. Our debt-to-EBITDAre is 4.5x and interest coverage is 5.6x. We have excess to approximately $1.2 billion of capital from our combined line of credit and ATM programs. We continue to place high importance on balance sheet flexibility, and we believe we have multiple sources of capital available to us.

Current secured debt terms vary depending on many factors, including lender, borrower sponsor asset type and quality. The current 10-year loans are quoted between 5.25% and 6.25% 60% to 75% loan-to-value and 1.4 to 1.6x debt service coverage. We continue to see solid interest from life companies and GSEs to lend for 10-year terms. High-quality, age-qualified MH assets continue to command best financing terms. Now we would like to open it up for questions.

[Operator Instructions]. And our first question comes from Jamie Feldman of Wells Fargo.

Great. I wanted to dig a little deeper into the insurance renewal and then just the impact on the expense savings and the new guidance. Can you talk about what you had in the original guidance for the insurance renewal, how that compares to the down 18%? And then just maybe some of the moving pieces around the expense savings and the guidance going forward?

Sure, Jamie. I think that we've guided to full year core expense growth. I think I mentioned this in the January call. It includes a premium to CPI. That is offset by some anticipated savings in a few line items. And just as a refresher for everybody, roughly 2/3 of our expenses are comprised of utilities, payroll and repairs and maintenance.

And those three line items, we expect year-over-year growth for the remainder of 2026 to be approximately 4.7%. The CPI reported in April was almost 100 basis points higher than the prior month, and we've made some expense adjustments, including utility expenses and R&M both in anticipation of potential energy and supply cost increases. And with respect to the insurance we had an assumption in our budget, which was informed based on what we understood what's happening in the market at the time that we finalized our budget in January. And so we've made the adjustment to reflect the 18% reduction in premium and all of that is rolled into the guidance that we provided.

But are you able to say like what was in the initial number for the insurer? I'm just trying to figure out how much better it was than what you thought.

Yes. Generally, we don't go into that level of detail, Jamie.

And our next question comes from Jana Galan of Bank of America Securities.

Following up on the revised seasonal and transient top line guide, can you just talk a little bit more about like booking visibility and kind of reservation pacing. And I don't know any impacts with kind of the weather.

Sure. I mean, with respect to the seasonal business and just as we think about advanced reservation pacing, certainly, we talked a lot in the past about our transient business and not great visibility beyond the coming 90 days as our first point of kind of visibility. So as I mentioned, we've updated our guidance for transient to reflect what we're seeing in the system right now in terms of reservation pacing. But just a reminder, roughly 60% of the revenue comes from bookings that are within 7 to 10 days of arrival.

And also very much appreciate the update on the financing environment. I was just wondering if you can maybe comment on any changes in the transaction environment or any more product coming to market potentially on the RV side.

Sure. Thanks, Jana. Yes, as you know, our assets are really in demand from an investor standpoint. It's not a secret that the model that we have is compelling. But we find times in our history that we have limited amount of quality assets for sale, and we're in that time right now. As an industry, we're experiencing a low volume of activity. The ownership remains highly fragmented, but our team is very engaged with owners as they consider their next step in the future. I think that with your -- with respect to your question on whether on the RV side, I think there probably is more opportunities to buy transient RV parks than there were previously. But that's necessarily something we are interested in.

And our next question comes from Eric Wolfe from Citi.

For the Northeast annual RV sites, can you just talk through the trends that you're seeing there? I think last year, around this time, you started to see some higher turnover like 20 properties or so. Does that seem to be normalizing? Is occupancy head behind? Maybe just talk through sort of for those Northeast properties, the annual trends you're seeing thus far?

Yes. Sure, it's Patrick. We are seeing trends that are more consistent with our historical experience as opposed to the elevated attrition that we saw at the same time last year. And as we made our way through the quarter, sequentially month after month, we were able to achieve a higher level of sales. We feel like we have consistent demand in the RV annual space. And just as a reminder, in the back half, of 2025, we added 500 annual.

So we kind of rolled out of that period into a period of steady demand, and we're past that elevated attrition that you referenced from last year.

Got it. That's helpful. And then maybe just going back to the marina restoration. I guess it sounds like based on your original guidance, you expected maybe some slips to come back, I guess, this quarter, but now it's sort of getting pushed to late 2026 or even early 2027. I guess, first, I just want to confirm, that was right. And then maybe just discuss, I guess, it sounds like maybe over the last 2 months, you've seen construction delays or permitting delays. Just sort of what happened and what the magnitude of it is. I guess I calculated like $1.5 million, but maybe just let us know if that's incorrect.

Yes. So I'll -- let me speak to what's actually going on at the property. So it's 3 properties. They were impacted by the hurricane season in I think your time line is pretty close to our thinking. I would have expected that we would have been on coming into this year and starting to build occupancy as projects were completed through the current year. The reality is the delays are, call it, in the neighborhood of 9 to 12 months. And the expectation of progress being completed and building back occupancy late in 2026 and into 2027, I think is a good way to think about it.

And our next question comes from John Kim of BMO Capital Markets.

Many teasing occupancy, it continued to trend down. It did end the quarter on a high note, but I'm wondering how you see that playing out for the rest of the year, excluding the impact of expansions.

Yes. As I mentioned in the call, occupancy ended the quarter at 93.9%. That's up 10 basis points from year-end on the 54 sites that we filled during the quarter with no expansion sites added. We have a -- we essentially have an assumption in the budget for a modest uptick in occupancy for the rest of the year. not quite the volume of growth that we saw in the first quarter in the future 3 quarters, and so anticipate a slight increase during the rest of the year.

Okay. Can I ask a second question?

Sure, you can.

The 1,000 trails, you talked about a new -- I think a new rate strategy. just given that it's gone up 12% year-over-year despite fewer members. Is this something that you're going to carry on through for the near future and potentially increase rates further at the expense of memberships?

Yes. I mean I think if you look at the supplemental, as you point out, you see that increase in revenue. I think all -- if you add all the line items together, you get to about an 8% growth. And that is primarily because we changed that product. And we have a higher annual dues rate. The term is, I think, 2 to 4 years and with costs ranging from $2,000 to $4,000 a and the members want to have that extra time at the properties, take advantage of discounts on cabins, et cetera.

So right now, that price is, I think, is properly priced. And as we head into '27, we would look to what increases we would think that we should do in terms of that product. But the product as a whole has been very successful for our customers, our members wanting to get that upgrade and pay the additional does.

And our next question comes from Haendel St. Juste of Mizuho Securities.

I wanted to go back to the OpEx guide for a bit. Again, I guess I understand that you don't want to get into the specific pieces of how much things like insurance or causing an adjustment for the guide. But I guess I was more curious on the oil side. Obviously, the cost of oil has picked up quite a bit this year. And I'm curious how you can hedge the future volatility in the price of oil? Or how -- what's contemplated in the guide and potentially how that can be hedged. So any color on what's being contemplated, how it can be offset and how to think about that in the broader context of the prior guidance versus the new guide

Sure. So our process to update guidance considered the impact of the roughly increase in oil price since December. We reviewed the pricing structure used by the utility providers in states where we operate. These include regulated, frankly, primarily regulated and some deregulated markets. utility providers in certain states like Florida do have pricing structures with variability clauses that allow them to recapture some portion of their costs if the regulated rates limit their ability to recapture price increases. So as we looked at all of that, we increased our utility expense assumptions for the remainder of 2026.

Okay. Fair enough. I appreciate that, I suppose. And then if I could squeeze in one just on the revised guide for the noncore portfolio income, maybe some color on what's driving that and how to be thinking about modeling that? Is that fair just to perhaps ratably grow that through the model the rest of the year?

Yes. I think it relates to just improved expectations, a couple of the properties in that portfolio. primarily RV locations. You may recall that there are a number of properties that are in the noncore portfolio that were previously impacted by storms that were not operational. And so as they're recovering, we noticed some upside in the performance and the expected contribution and that was the basis for the adjustment.

And our next question comes from Brad Heffern of RBC.

Historically, you've talked about weather being the primary swing factor on RV transient and there hasn't really been an obvious impact from gas price movements. Obviously, with the or we're seeing a much more dramatic and quick change in prices. Is there anything in your data that suggests that it might be having a negative impact on transient demand?

Yes. We've looked certainly over many years at gas prices and the effect on RV transient. And certainly, gas prices have made headline news over the past several weeks. Year-over-year, I think we've seen a $0.90 increase in the price of gas, not unlike what we saw during the pandemic during times in the pandemic. But we kind of think of it in terms of just what is it -- what's the incremental cost to our customer. And if you consider a 3-night trip. Our average customer is going about 90 miles to our locations.

That higher gas price results in an increase of about $25, $30 for the trip -- and if that's three nights, you're talking about kind of $10 per night. So if you think about other vacation alternatives, the overall cost of our vein is really significantly lower and offers the flexibility of really being able to control your spend and also be able to control your environment. So I think at the current rates, net-net, I think it can be a positive certainly, if you're talking about rates that are significantly higher or you're talking about supply issues, then you get into kind of maybe different conversations. But I think where we're at right now, our customers are excited to get out there and use their RB.

Okay. Got it. And then the Canadian tariffs kind of went into effect more than a year ago. So we should be starting to lap some of the comps on the boycotts. Are you seeing any evidence that those Canadian customers might be coming back or any other color that you can give around that?

Yes. The we're just out of the summer season and the impact of the Canadians rolled through those results. I think it's early to call what we're going to see for the summer season. And certainly, we're in some unpredictable times. But we'll provide updates as we start to get greater visibility into the next couple of quarters.

And our next question comes from Michael Goldsmith of UBS.

Maybe just a follow-up on the seasonal and transient seems like the first quarter number was in line with the initial guidance. You're kind of guiding to second quarter of down 9%, but then it kind of -- it implied that the back half is up about 3%. So I was just wondering how you're thinking about that 3% growth in seasonal and transient in the back half? And if that split is that more fourth quarter weighted than third quarter? And then are you expecting in the guidance, are you baking in kind of an acceleration in the fourth quarter as you lap some of that disruption from the Canadian customer.

Sure. Broadly, Michael, as you said, the base rental income growth rate, it does reflect a 50 basis point decline to prior guidance. half of that, as we talked about as the marina. The remainder is heavily weighted to our seasonal expectation for the second quarter. That's mainly in April. Just to provide that color. And then as we think about the remainder of the year, as I said during my opening remarks, we've left the assumptions for third and fourth quarters in place as they were budgeted as we don't have great visibility into that activity.

So as they were originally budgeted, was that does that bake in an assumption that you'd get back some of the Canadian customers that didn't come in fourth quarter.

We have an assumption in the fourth quarter of a recovery of some of that. I wouldn't qualify it to Canadian customers. I think that, as we've talked, the impact on the seasonal business, provides an opportunity for us to backfill occupancy from customers, whether they're Canadian or domestic customers.

Got it. And then just as my follow-up question, on the home sale volumes on price, it looks like new sale volumes were down and the rate and the price per home was down and then similarly on the used homes. I think they were also -- at least the price was down. So presumably that's a mix shift, but can you provide a little bit more color in what's going on in the home film.

Yes, sure. I mean we continue to see steady demand. The beginning of the quarter was -- it was impacted by weather, it was winter and that even bled down through many of the Southeast markets. And as we work our way through the quarter, we saw steady demand and feel good about the demand profile. Just with respect to the new and used sales the one, I wouldn't read too much into in any particular quarter, the home sale price because to your point, it has a lot to do with mix. I mean, directionally, the price per on the new was up and the price per on the used was down. But all of that is with the backdrop of -- we feel like we have steady demand in the MH portfolio.

And our next question comes from Wesley Golladay of Bard.

Can you unpack the seasonal and domestic transient guests for the first quarter? Was that positive growth ex Canadian?

Yes, it was primarily overall, it was growth. It did included the Canadian customer in the revenue, of course, but just to be clear, the marginal improvement was from customers that we saw booking seasonal stays during.

I guess the -- I mean, if you were -- could you unpack the domestic traveler? Was that positive? Is that customer segment bottomed? And do you have a positive outlook for that segment going forward.

The domestic seasonal customer is what [indiscernible] sorry, sorry.

Domestic seasonal and transit segment. So I'm trying to figure out how much of that was weighed down or the outlook this year is maybe Canadian negative, but U.S. domestic and transit gas positive? Just trying to unpack if that is if that segment is bottoming out at the moment.

Well, I guess. I'll say two things. One, as we -- as Patrick mentioned, we've ended our winter season and we're heading into our northern season. So that's a very different customer and different potential there. And maybe with respect to the seasonal as we just think about the future, the coming winter season next year, maybe it'd be helpful to walk through some historical context on the reservation patterns for the winter season revenue.

I mean in the past, we would end our winter season with approximately 50% of the anticipated future winter season revenues booked those advanced reservations allowed customers to reserve the site that they wanted at the property and didn't carry penalties for cancellation. Then following a fair amount of booking and cancellation activity after the first quarter and into the summer months. By the end of any winter season, roughly 1/3 of the revenue that was generated during the winter season came from those advanced bookings.

So start the season with 50% of the revenue booked to end with about 1/3 after all the cancellations -- and so as we think about it now, there's been a meaningful disruption to the seasonal business, we think that we've talked about as a result of the domestic and the Canadian relations, and so we look at it in terms of engagement. And as we sit here right now, 50% of the in-place guests have reserved space for next year, and that compares to 47% of the in-place guests last year.

And then one more, I guess, bigger picture question. With the rise of artificial intelligence and the way people are searching for product these days, are you noticing any change in the way you source your residents or a seasonal and transient guys?

Certainly, our marketing department is very focused on using artificial intelligence inside of our search options, understanding and appreciating customers are searching for our offerings. It is no longer kind of a simple camp grounds in Maine. It's a much more robust search and we're focused on making certain that once that search is put in place and once the person indicates what exactly they're looking for, we are able to have our communities and our resorts come up at the top of the list. And a lot of that is a function of our websites have been around for a really long time, and they have a really high number of reviews, which is very helpful for that algorithm.

Our next question comes from Jason Lane of Barclays.

Just on the RV and Marina. Looking at the RV and Marina. annual guidance cut, so that was driven primarily by transient and marinas. So can you just give any color on how rent growth and occupancy trended in RV annual specifically in the first quarter and what your assumptions are for the rest of the year, RV annual, specifically.

The RV annual, when we reported in October, we provided our guide for rate growth that was 5.1%, and that's been consistent. And we anticipate that to be consistent for 2026. We're seeing no change from that. And in terms of occupancy, we had roughly 100 sites that we were down in the first quarter, and we anticipate, as Patrick was talking recovery of those sites and addition of annual sites throughout the year.

it. And then it looks like there were some other sites added this quarter. Just curious where those new sites were added, if that was all in kind of the markets you mentioned earlier. And if there's any that are expected to come online this year in those markets and maybe outside the.

We didn't add sites in the quarter. We did have some shifting in our reporting. So a couple of things in terms of just the presentation of sites in our earnings release, if that's what you're referring to provide greater visibility and clarity on the composition of sites in our JV portfolio. We reported those a bit differently and showed those in the categories with footnote disclosure that they relate to the JVs.

And then we also annually at the end of the first quarter, we true up our seasonal site count for the number of seasonal customers that we had during the winter season. So that adjustment was made. And with that adjustment, the transient site count was offset or adjusted accordingly.

And our next question comes from David SegaLoggerhead of Green Street.

Just a follow up on the site count changes. What do you think are the prospects for reclassifying those sites that were converted from or classified from seasonal transient back to seasonal later this year? Or is that more of a 2027 event?

Yes. Our practice is to update that at the end of the first quarter based on what we saw during the winter season. So we would anticipate doing that a year from now.

Great. And I appreciate the color on local home prices that you gave earlier in the call. I'm curious what your thoughts are on the impact of stagnating or lowering prices and the local for sale market would be on the MH values and the ability to increase rents and just kind of implicitly what do you expect the spread between stick built homes in your markets to MH home values to remain stable? Or do you think it would narrow

Yes. Let me -- I guess, first, I'd put in the context the value proposition that I addressed in my prepared remarks is very attractive and is a wide band to the next mark on single family. So we have a strong value proposition even if there was some moderation in single-family home pricing, and we've seen that historically that we've had consistent occupancy and consistent home sales, even in up cycles and more moderate cycles. So I think that's our reasonable expectation as we look forward to 2026. And I'd also highlight that those key markets that I highlighted have a very consistent demand profile, including in single family in the mid-tier across each one of those submarkets.

And our next question comes from Peter Abramowitz of Deutsche Bank.

Yes. Just wondering, could you give us kind of a refresher on general demographics of your transient customer base I think age average income levels would be helpful. And I know you talked about the impact of oil prices on decisions around train and travel. But just generally, kind of what are the democrats of that customer base? And then also maybe some of the broader macro factors like job growth, anything we should be watching for thinking about as it relates to results through the rest of the year?

I guess, the demographics of our transient customer really varies by region. So in the northern part of the country, the Northeast and the Midwest is really family camping. So you're talking about a couple. 40-, 50-year-old couple with a couple of children, and they come out on a weekend basis, and they're generally employed full-time workers and just have the time when they have time off from their jobs to be able to camp and then very differently in the South and Southwest in Florida, Arizona, et cetera.

We have -- our transient camper tends to be a retired couple who tends to go and stay in a few different locations and has just more time on their hands to be able to work their way through our properties and through our system.

Okay. That's helpful. I appreciate that. And then just one more on the scope of the work of the Marinas I think you mentioned it was three properties specifically. Can you share where they are? And then is there any sort of kind of offsetting revenue pickup in 2017? Or is this just work to kind of get the properties back online? And kind of back on the trajectory that you previously expected?

Yes. The properties are all in Florida, three properties are in Florida. And yes, certainly, there is a revenue pickup in 2017. There's upside in 2017 for these assets. because there is a high demand for these slips to be brought online, they'll be filled and then we'll be recognizing that revenue in 2017.

And our next question comes from Adam Kramer of Morgan Stanley.

Just want to ask about capital allocation priorities here. I think, in particular, right, development seems like a really interesting opportunity. Given I think what you talked about for yields historically versus what acquisition yields would be today. So just wondering, again, general capital allocation priorities sort of stack ranking them. And then I think with development in particular, is there an ability or an interest in sort of that beyond, I think, the sort of 700 to 1,000 sites you've talked about on an annual basis?

Yes, sure. So on the development front, over the last 3 years, we've brought online a little over 2,000 sites, that's been a mix of MH and RV, highly focused on our core markets in the Sunbelt. This year, looks to be in the range of 200 to 400 sites that deceleration is not is not an indication of our desire to continue developing our expansion sites, but it's just the cadence of projects as they're working their way through an approval process and then getting a shovel in the ground. Those yields, we continue to expect to be in the high single digits. Those properties that we're focused on for the upcoming year in Florida, and then we have another 1 out on the West Coast.

Great. And then maybe switching gears a little bit more of a bigger picture question. Just on the policy side of things. I think the -- so Roto Housing Act has a number of elements related to manufactured housing in it. I think the permanent chassis requirement getting removed sort of a big one, but also some financing elements pushed for factory-built housing a number of others. So I was just wondering, again, sort of open any question here. Sort of maybe the company's thoughts just on the act and what it might mean for the industry and the potential read-throughs to DLS specifically?

I mean, overall, I would say that it would be helpful to the industry for the points that you just highlighted, specifically to ELS some variability in manufactured housing setup may provide an opportunity for us. I think there's broader opportunities for the manufacturers. We are close to tracking what is the progress on that legislation. And just given the current state of affairs in DC, that bill has stalled for all practical purposes. I think there's still a desire to move it forward, but we'll have to we'll continue to monitor. We can provide updates on future calls as we get some more insight.

And our next question comes from Steve Sakwa of Evercore ISI.

A lot of questions have been asked and answered. I just wanted to kind of circle back on the MH occupancy point. I guess whether you kind of look at the data on Page 9 or the data on Page 7, slightly different numbers, but kind of paints the same sort of broad picture, which is the site count has gone up year-over-year. but the number of occupied sites is actually down when you kind of look at the ending March 31, '26 versus March 31, '25, and I think Patrick mentioned that you guys added about 500 expansion sites maybe over the course of the past year.

So maybe just talk about that lease-up process? And are you still doing expansions at the same pace, given that the occupancy has kind of been trailing down? Or how do you sort of think about that development lease-up pace and future builds?

Yes. Well, just high level on the occupancy front, just a reminder that as we made our way through '24 and '25 the hurricane impact from the '24 season was basically 300 occupied sites. So we're working through building that back. With respect to our expansions. We've completed some very solid recent expansions in particular, in Florida and Arizona. The lease-up rates there, I would expect to be anywhere in the range of 20 to 30 sites potentially as high as 40. And that's really going to depend on macro factors and then what's going on in the individual submarkets. But if you're leasing up in this space somewhere between the neighborhood of 20 and 40 sites on an annual basis. That's a good run rate.

These properties are -- the expansions are part of very solid core properties and solid submarkets. So they'll continue to contribute to occupancy over the next couple of years to reach stabilization. And then as I mentioned a little earlier, we have a desire to continue those types of projects. We have others in the pipeline, and we can talk about those more as we approach 2027 and 2028.

So just as a quick follow-up, Patrick. Is it your expectation that occupancy, given the hurricanes and the expansions, would you expect occupancy, whether it's an average or a spot to be bottoming in '26 and then moving higher in '27 or '28? Or could you envision where occupancy is even down next year as you're kind of working through the pace of that and then it kind of starts to take off in '28?

I would expect that we're going to increase occupancy in the MH portfolio on a consistent basis over time. That doesn't mean that we're not going to have an external catalyst that's a disruption to the business model temporarily, but we have a long history of continuing to increase the occupancy. And even backfilling the impacts of the hurricanes that I referenced show a very steady demand profile.

And we have a follow-up from Eric Wolfe from Citi.

Another questions. If I look at your guidance changes, in the supplemental, it adds up to almost $0.02 positive benefit. I was just wondering what's offsetting that?

Sure. Eric, we have maintained full year normalized FFO per share guidance though there are a lot of changes, as you mentioned. You can see the items that increased. The main offset in the updated guidance relates to assumptions for our income from home sales and ancillary operations.

Got it. That's helpful. And then you mentioned some adjustments to April seasonal. Was that just, I guess, the number of customers that typically extend their stays. So you just saw a little bit less extending their stays this year. And do you think that was perhaps due to sort of the greater shift towards domestic customers versus Canadian? Or is there some other factor around that?

A lot of what we see, Eric, in April, is really weather-related where people are saying, okay, it's nice enough up north, we can head up north. And No longer need to seek refuge in the cold or in Florida from the cold. So that's kind of what we saw. And you see that same effect in October, where -- some people stay longer, if you have a longer summer in September and October. And if you just saw people returning back north quicker than anticipated.

And we have a follow-up from Brad Heffern of RBC.

Yes. On the RV site count, what is the financial impact of a seasonal site moving to transient? I'm sure, obviously, it could just get booked again is the seasonal next winter. But if it stays a transient sight, is there a meaningful negative financial impact from that?

I mean it really depends on what -- how that site was performing. I guess just think -- if you just think about the annual conversions to transient our average annual is about $7,000 or $8,000 and your average transient customer is about $81 per night. So it depends how many nights and both the same with the seasonal, how many nights are occupied as to whether or not you have a financial impact to that conversion.

Okay. But the like shift of those, whatever it was 12 1,400 sites, is that meaningful in some way? Or is it really just moving change from one back to the other?

Well, it's -- I mean it's already embedded in our guidance because it's simply a reflection of what we experienced during the winter season in terms of the occupancy of those sites.

And we have a follow-up from Jamie Feldman of Wells Fargo.

I had a very strict instructions from Adam to ask one question. It's still hard. So I've had a couple of people ask me to clarify. So I apologize if you guys already answered this or provided it. But the 50 basis point cut to RV and Marina based rental income, was that all from the slips. And if it wasn't all the slips, how do you break it out between RV and Marina?

Well, the -- it's interesting because there's a 50 basis point decline in RV and Marine in total. And there's a 50 basis point decline in RV and Marine annual. So to be clear, the RV and Marina annual 50 basis point decline is attributed to the Marina portfolio. It's not the RV portfolio. It's the Marina portfolio. And I think somebody earlier in the call said they calculated roughly $1.5 million, and that's correct.

Okay. All right. And then last, the 300 sites lost in the hurricane, how many of those are back online. Because it seems like it comes up every quarter the occupancy change or fewer lease sites, fewer I should say.

Yes, we're in the process of putting homes on those sites in I put it in the context of this. It's an additional 300 vacant sites in a portfolio of 70,000 sites where we have a run rate practice of purchasing new homes and these occupancy it's not like the 300 go down, then we fill them 1 through 300 and the move on. They're part of the ongoing investment in inventory in those -- in the broader market. Obviously, they were hurricane impacted, so they're in Florida. I don't have the exact number, but we've filled a substantial number with new homes, and we'll continue through that process to reach full occupancy. The properties that were impacted by those hurricanes are Pinnacle assets where the demand profile is very solid and I would expect the occupancy to rebuild consistently.

Okay. And then finally, I think I know the answer, but you do have some portfolios out there for sale internationally. What are your latest thoughts on sticking to your knitting and keeping the type of assets you have? Or is there any yield IRR that would be compelling enough to go international at this point or into new property types or something outside of your core business?

I think you were right with how you started, which is you know what the answer is going to be. We are focused on growing our business inside the United States, and we will continue to do that.

And in terms of new property types?

Well, certainly, more MH, more RBS to new property types, nothing that we're looking at right now.

Since we have no further questions on the line, I'd like to turn it back over to Marguerite Nader for closing remarks.

Thanks for taking the time today to listen to our call. We look forward to updating you on our second quarter earnings.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Welcome to Citi's 2026 Global Property CEO Conference. I'm Eric Wolfe with Citi Research, and we are pleased to have with us Equity LifeStyle and CEO, Marguerite Nader. This session is for Citi clients only and disclosures have been made available at the Corporate Access desk. [Operator Instructions]. Marguerite, we'll turn it over to you to give some opening remarks, introduce your team and tell investors the top reasons to own your stock today.

Wonderful. Thank you very much, Eric. Appreciate the chance to present today. With me here today are Patrick Waite, our President and Chief Operating Officer; and Paul Seavey, our Chief Financial Officer.

There are many reasons to own ELS, and our investor presentation highlights the strength of our long-term performance and the durability of our business model. So first, I'd like to focus on our historical results.

Page 2 of our investor presentation shows that we've delivered 14% annualized total return since our IPO more than 30 years ago. This performance is driven by the consistency of our same-store NOI growth. For over 25 years, ELS has averaged 4.5% same-store NOI growth compared to the REIT sector average of 3.3%. That operational strength has allowed us to grow the annual dividend 19% since 2006. These results are compelling on their own, but context makes them even more important.

On Page 5 of our investor presentation, we show how ELS compares to both the broader REIT industry and the residential REIT subset. Across normalized FFO growth, dividend growth and balance sheet metrics, we consistently screen among the leaders. We continue that trend in this year's guidance. I think the next question would be, how do we consider that success to be able to be continued?

Our performance is highlighted and supported by high-quality locations, favorable customer demographics and a supply-constrained industry. As shown in our revenue mix in our presentation, 91% of our revenue is derived from stable recurring and annual resources. On Page 10, you'll see that our properties are located in premier retirement and vacation destinations. We also benefit from powerful demographic trends.

Finally, as highlighted on Page 20 in our industry, our industry has exceptionally favorable supply dynamics. Our portfolio experiences strong demand without meaningful new competing supply in our markets.

So in closing, I would say we offer -- ELS offers a rare combination: decades-long leading performance, a geographically diverse portfolio in highly desirable markets, and we are positioned to benefit from continued strong demand and minimal new supply. Now we'd be happy to take questions.

Great. So I think we were kind of joking about this a second ago, but it seems like when the world falls apart a little bit, people really turn to manufactured housing for that stability. But I guess right now, we're seeing very low job growth. We have this uncertainty around AI. But now we've also potentially introduced this sort of higher oil prices, higher gas prices. Can you maybe just talk about whether any of these sort of macro factors that you're seeing today are impacting your results? And then as we think about oil or gas prices potentially being higher, could that potentially impact you at some point?

Sure. I think I'll talk about it generally as it impacts our industry and ELS, and then maybe Paul can touch on the expenses as it relates to the oil and just utility expenses in general.

So I would say that ELS is a safe haven. People come to our properties to escape winter, to get away from the northern climates, be within communities where there are like-minded individuals who want to experience the community atmosphere and enjoy the last half of their years. And so I think that just only continues in this environment. As we got here and considered our presentation, we reviewed our guidance and -- for 2025 -- or 2026 continue to see strong numbers as it relates to our guidance as it relates to our revenue and NOI. So reaffirming those numbers. And so I think as it relates to expenses and utilities, I think Paul can cover something as it relates to oil prices.

Sure. When we think about our expense base, utilities are 25% to 30% of our expenses. Electric is the most significant component of that. Primarily it's service to our properties, of course, particularly the RV resorts. We do recapture about 50% -- almost 50% of our energy costs through billing back to our customers, submetering in our communities. But it is something that we pay very close attention to. Our assumption for 2026 in terms of our expenses does have a built-in kind of premium to where CPI was. We have a bit of room, but we are watching closely what's happening globally and how that might impact our utility expense going forward.

Got it. And then maybe just starting with RV. I think last year, you had a little bit higher turnover. It sounds like based on your guidance, you expect to actually see maybe even a little bit of improvement this year, so maybe a little bit of an occupancy build. Maybe just help us understand sort of where you are in the process of renewing those customers? Are you running ahead, behind, in line? And I don't know if it's too early to know at this point, but sort of where you are within the Northeast property specifically because I think we're getting sort of closer to that season?

Yes. Let me start by addressing the annual, the biggest component of our RV revenue. We've always focused on those longer-term stays. We continue to see consistent demand for the RV annual business as we move into 2026. Eric, as you mentioned, last year in the second quarter, we saw an elevated level of attrition in our RV annual, particularly in markets in the North and Northeast. We attribute that to some normalization following COVID with those longer-term stays.

Attrition that otherwise would have occurred earlier was delayed. We worked our way through that attrition. And as I mentioned on the last call, in the back half of 2025, we saw positive trends. And for the 6 months ending 2025, we increased our annuals by 500. So seeing that consistent demand coming into 2026, we view that favorably.

With respect to the seasonal and the transient, and maybe Paul can talk a little bit about how it rolls through guidance. But I'd say that as we saw colder weather set in through the winter, we did see some positive trends as we work through that early parts of the quarter. How that's going to translate for those seasonal customers in the Sunbelt into the 2026 and 2027 winter season, it's early to say, but I think we're -- the trends that we see currently, we consider to be favorable relative to the trends that we saw last year.

And I always try to get -- put numbers around it. And you can just tell me if it's like a stupid question because I think I've tried it before, I'm going to try it again. I guess what I'm trying to understand is for -- you have 34,000 annual RV sites. At this point, are you 20,000 of the way through kind of the annual like acceptance? Like I'm trying to understand sort of where you are in the process? How much information you know at this point? How much things could change between now and, say, second quarter earnings? Obviously, the further along you are through that, like if you've already had 80% acceptance of -- you are 80% of the way through the process, things aren't going to change that much. So I'm just trying to understand sort of what could really change between now and the second quarter? How far you are through the process on the annual side, specifically, not anything else, just annual?

Yes. And I think, Eric, it's difficult to say the percentage. So I would just say it like this, and I think this is -- Patrick covered this a little bit, but it's really what's happening in March and April. The customers are making those decisions then. What we've seen so far supports the guidance that we've put forth, and then we'll be able to update on the -- on our earnings call in April and then further update in the July call.

And then on the seasonal side, it was terrible winter. That's partly why I sound like this. Why -- I guess it wouldn't be too early to know that part of it, though, right? Because I mean, at this point, I think, is normally when you're starting to see that seasonal customer say, it was bad winter, let's extend my vacation by 2 weeks. How much of that have you seen? Are you encouraged by what you're seeing in terms of the extensions of the stays on the seasonal side?

Sure. What we've seen so far, and we issued our guidance a few weeks ago. And at that time, we had the benefit of January. So that's 1/3 of quarter. We already kind of know where we're at. So we felt very comfortable issuing that guidance, and we continue to be comfortable with that guidance. As it relates to extensions, that really starts to happen as you head into the end of March and when people start to consider what does April look like in the north. If the northern climates are seeing snow in April or just difficult weather, we see our customers saying, let's extend another week or 2. And so that's really where we see those extensions.

That doesn't happen right now. It happens closer to the time when they intended to head back. Right now, they're enjoying this wonderful weather that you see here. February and March is a great -- great months for us, and our customers are just enjoying being down here. And then as we head into the end of March, we start reminding more and more about here's the extension, here's the opportunities for you to stay longer with us.

And is this the same true? And I think -- I can't remember the exact percentage, but I think it's maybe like 1/3 or maybe 50%. You can tell me how much it is of your reservations for next year's season among your Canadian customers, typically comes like in the current year, right? The people that are leaving, they say, "Okay, I would like to come back next year." They make a reservation for next year. Can you talk about sort of the pacing of that reservation process so far? How many of your Canadian customers are saying they want to come back versus perhaps what you expected or where it was at this time last year?

Sure. I would say relative to both all of our customers, Canadian and our American customers, we're pacing ahead on what you refer to as our early bird reservations. So those are the reservations for next year. So we're talking about the January through March of 2027 and we're pacing ahead. But there's also more clarity as we make our way through the season on that number. So we'll have a better idea as we head into April, where we end up on that early bird. And then, of course, there's reservations that come after that, and that comes closer to when you head into September, October as people start making reservations for the next year.

And then maybe just to finish off the discussion on the RV side. I guess, transient, it's sort of pacing in line with what you thought. Maybe just any sort of -- I know it's impossible to sort of predict beyond a certain point, but you did make a comment on the call that the bookings were looking favorable to last year. So maybe just talk about sort of what you've seen in the first quarter and then looking forward, the bookings and the bookings pace compared to last year?

Sure. So as you know, the transient -- our transient revenue is really concentrated in the second and third quarter and it has a very short booking window. I think one of the things that we focused on during our earnings call was the fact that the 3 holiday weekend -- the 3 major holidays in the summer fall on weekends, which is very positive for us. So you're able to get a 3-day weekend from a booking revenue perspective.

Additionally, America is celebrating its 250-year anniversary. I don't know how many people in this room were around for the 200-year anniversary, but I was, and it was very exciting and people got really embraced the whole view of celebrating America, and I think there's a lot of buildup energy around that and being at a campground is a perfect way to celebrate the birthday of America.

And then switching over to MH. I think 50% of your portfolio around there, correct me if I'm wrong, is in Florida. And I guess I look at the occupancy opportunity there, and I'm just wondering if you think we're going to start seeing that occupancy sort of increase throughout this year. I know you don't put it into your guidance. And then I guess the second part of my question is, you look at the percentage of actual rentals that you have in your community versus those that own, and it's very, very small. I guess why not just try to increase sort of the number of rentals in your community to get more people in there and then try to convert them to homeowners? Or maybe you're already doing that, but it seems like there's definitely a focus on trying to have as least rentals as possible. Correct me if I'm wrong in that.

Sure, sure. So why don't I handle the rental question? And then Patrick, maybe you can touch on just MH occupancy. So as it relates to the rental program, prior to 2008, our rental program was about 2% to 3% of our occupancy. As we headed into 2008 and we saw that we were having some difficulty selling homes, we decided that we need to look at this rental program a little bit deeper and get a better understanding of it, the house -- the things we should do, the things we shouldn't do. At that time, we learned a lot, and we increased our rental program to about 9% of our total occupancy.

In the ensuing years, we saw that there was an opportunity for us to sell those homes. And the business model is us owning the land -- ELS owns the land and a resident puts their home on our land. That's an important piece of the business model. And so as we saw the opportunity to continue that model and decrease the size of our rental program, we took an opportunity to do that. So we went from 9% down to 3%.

And what that does, in my mind, that gives us flexibility. So we have the opportunity to grow. If you're already at 9%, growing from that point can be a little bit more difficult than impact the quality of the portfolio of the properties. So we -- this was a long-term plan for us. It slowed down some occupancy growth because you can -- rental growth is easier, quicker, but it has some back-end issues that you need to focus on. So right now, we're at 3%. We have the ability to grow. And in certain markets, we're just, as you say, kind of a rental conversion. Where that's appropriate, we will do that. So I think you'll see more of that, but we're glad that we're at that 3% and being able to work into that. And maybe Patrick touch a little bit on the occupancy.

Yes. I think a helpful takeaway just to understand demand. Our new home sales on an annualized basis right now are running at about 500. That was considered a good number pre-COVID, 500 to 600 new home sales. As we went through COVID, there was a higher level of demand. So we had an elevated period of new home sales. But we're seeing consistent demand with respect to our kind of historical trends. And I think it's reasonable to assume that we can increase occupancy on a long-term basis, and we've proven that over our long history.

One thing that I'd point out is that we continue to develop both on the MH side and on the RV side. And I'd encourage everybody to -- when we're talking about occupancy, look at the number as opposed to the percentage because when we complete development sites, those vacant sites come into our denominator and the percentage will be diluted somewhat. That said, the optics appear to be unfavorable, but it's actually more opportunity for us to continue to grow our occupancy.

And I think it's important to note the home sale prices that we have relative to other home sale prices in the market are significantly lower, which gives us a real advantage and the quality of the homes just improve every year. So that's another positive thing that we have as we work through our leads that we get every day.

Do you consider that home sale business like a profit generator for the company? Or is it more just a tool to actually encourage people to come in and stay with you for 10 years? I guess how do you think about the ability to generate actual profit from home sales versus just trying to get -- taking less profit to incentivize people to come in?

Right. For us, it's about filling our communities with high-quality homes and high-quality residents. And in the end, what you see is usually we're at a breakeven on the home sale, but really focused on the underlying rent, what is the fair market rent for us to charge and focusing on that continuing rental stream.

And then I guess, at least my understanding of the recent legislation and some of the things that have been done on the housing side is that you now have the ability to offer sort of more flexible type of home structures, maybe 2 story, other things. Correct me if I'm wrong. But let me know if you -- did you see any sort of material impact from the legislation that's come out over the last 6 months? And also on the -- we're talking more on the positive side. But on the negative side, is there any sort of like obsolescence of sort of homes that before might have been viable, but now given current standards and options that people would just say, I don't want to live in that type of home?

Right. Well, with us here today is the Chairman of the manufactured housing industry. So I will let Patrick touch on that. I'll touch on the first part of your question. As it relates to the obsolescence, there are certainly homes in our communities that are 1970s model homes. Many of those homes have been refurbished just like you would see on the single-family side from the inside out: new kitchen, new bathrooms, virtually a brand-new home. So the age of the home isn't necessarily the driver for obsolescence or where a home would have to be removed from the community. But maybe, Patrick, you could touch on some of the legislation.

Yes. So the road to housing on the Senate side and 21st Century Housing on the house side have been moving forward for some time. Overnight, they made another step forward with respect to a Senate vote. So those bills are working through a consolidation and would expect them to continue to move forward.

I'd highlight that over the last 5 to 7 years, The Manufactured Housing Institute and our members have been more and more present in Washington, D.C. Manufactured housing is now regularly discussed alongside of the priorities for affordable housing. I think that's good for the industry, it's good for the manufacturers, it's good for single-family developers who use manufactured housing, and it's good for us as land lease community owners.

Eric, with respect to the question on the flexibility of manufactured homes, the factory-built homes under the HUD standard, there was introduced and it's part of the legislation that was voted on yesterday, chassis removal. So just for those that -- I guess I'll lay out real quickly the basics of a manufactured home.

The manufactured home goes through several stages. It's just standard construction line that you'd see in car manufacturing as well. You start with the chassis, you finish the floor, it goes to the next stage, you start working on interior walls and finishes, then you get the exterior walls, roof, et cetera. And then the home is transported to the place that it's set for the rest of its life.

It's a little bit of a misstatement that they're mobile. They're mobile in the sense that they're built in a factory and then they're set in their location the same way that you would a site-built home. The distinction with the chassis that is in the new legislation is there's an option to complete that home. And when it's set on its final location, it won't have the permanent chassis.

So with respect to one story, there will be a more flexibility around the elevation of the home, the appearance of the home. And we would anticipate adoption or more readily adopted approvals for that type of housing in infill locations in urban and suburban locations as well as when we're proposing manufactured housing as the affordable housing in these locations, approvals that are more consistent with building codes and their experience in locations across the country. The other thing it provides for is multistory. So you can do a 2-story home. That higher density would be helpful in higher-cost locations where the alternative cost would warrant a higher density on any particular plot.

With respect to land lease communities, potentially some flexibility with respect to the aesthetic of the homes, for us, given that we've been focused on age qualified for decades, we're probably going to remain focused on 1 story as opposed to 2 story, given our core customer is generally not looking to add staircases and flights of stairs to their retirement housing. There are going to be also some anticipated cost savings as well just with respect to the materials and the final finish on the homes.

And then maybe, Eric, Paul could touch on some of the financing that's out there relative to manufactured housing.

Sure. There hasn't -- despite efforts, there hasn't been much movement on the available financing. Chattel financing has been available for years. The government through Fannie and Freddie have tried to promote programs. They have achieved some success in situations where customers own the land as well as the home, but not for programs in land lease communities. So it remains available on a limited basis to customers, and it's relatively high priced as compared to conventional mortgage financing. For ELS, our customers, 95% of them pay cash for their house. So it's less relevant for us though it is certainly important for the industry.

And I guess I was asking it partly because I was thinking that maybe there's an opportunity at some point if you can lower the cost. You said before that. It's not -- you don't really think of the home sale business is a profit driver. It's really a tool to get people in. I guess, is there an opportunity to lower the cost of what you're selling, improving the affordability, thus getting more residents to come to your properties?

Since we haven't seen this enacted yet, as Patrick said, this is just being voted on now. So my expectation is that, the removal of the chassis will reduce our home cost and I assume that the manufacturer will send that down to us in terms of increasing the profitability. It's not a large number overall, and I don't think it's going to be a driver of additional home sales.

Maybe last question on MH. We've seen pretty dramatic change in job growth. At least from the results, we haven't seen really anything in your results. Maybe just talk about your all-age portfolio. Are there parts of your portfolio that are actually seeing an impact from the sort of lower job growth? Or is it more insulated based on sort of the type of communities that you have there?

Sure. So 70% of our portfolio is age-restricted and 30% is all age. But of the 30% that is all age, roughly 2/3 is kind of vacation destination locations, Rehoboth Beach kind of locations where people are using it as their second home and their families using it as their second home. So not -- we haven't really seen any impact. We continue to show incredibly low delinquency rates. Our customers are very cognizant about paying the rent, and we're cognizant about making certain that we give them the benefit of all of the capital that we spend at the property and focused on delivering results for them.

And then I guess switching to membership and campground business. What is your core customer there? We don't talk about it quite as much as the other parts of your business. Has that core customer changed at all over time? And I think your most recent guidance implies a bit of a step-up in growth or improvement in growth. Can you just talk about what's driving that?

Sure. So within the Thousand Trails system, it's made up about 80 properties with 24,000 sites, and we have 100,000 roughly members. The members haven't changed in terms of the demographics over time. They are -- the Thousand Trails member starts out as a traveler. They're really interested in going to many different locations. That's the purpose of the membership, the ability to go from property to property. It's about a dream. It's about the ability to have the freedom to go out on the road and kind of go from property to property, both experiencing the property, meeting new people. And I think that's really what the customer is all about.

I'd say that roughly half of them are traveling with their families and half are couples traveling alone and their families are grown in their home locations. So that hasn't -- and that demographic hasn't changed too much over time.

What we do see is people moving from the membership model to where they're traveling around a lot to then settling down. And they -- after they visited a lot of our properties, they've figured out the one that they really like and then they'll settle down and they'll become an annual. And you see that in our -- our membership table shows the number of annuals within our properties, and that has grown significantly over time.

What you were referring to on the membership revenue increasing, what we did last year in 2025, at the end of '24, beginning of '25, we rolled out a new upgrade program, which allowed our members to upgrade for an additional dues payment. So increase the subscription fees or dues fees in exchange for getting additional benefits such as being able to book early for the holiday weekends, stay longer. We have -- at Thousand Trails, we have this -- at the base price, you have the -- you have to have -- be out of the system for a certain amount of time. This allows you to stay in the system so you can kind of go from property to property without having to leave the system.

And so with those benefits, I think our customers and our members have found that those benefits are really interesting. And so that's where you see that increase in that revenue line item.

And I'm not going to be the one that knows whether oil prices are going higher or lower, they're staying there, impact on gas prices. But maybe you can talk about when you've seen gas prices rise quickly over time, has that impacted any part of the membership business? Has it impacted any part of your transient business? Just anything on sort of where you see those changes, whether it impacts any part of your portfolio at all?

Sure. So we've certainly experienced a lot of different oil prices and gas prices over the last 25 years since we've been in the RV industry. And we've looked and as gas prices are rising, we're wondering what's going to be happening. Are the transient bookings going to be coming down. And what we kind of continue to go towards on that is that it's really a focus on what's happening with the weather, and it's not the gas prices because really, our customers are traveling between 60 to 90 miles.

So that additional dollar amount is not that much relative to kind of their alternatives if they were going to go stay at a hotel or do something else. The RV is packed. All of the -- the food is in there, the kids' toys are in there, they're ready to go. It's not great to have it as a headline news, but we haven't seen in our long history that it is the reason that people are choosing to not visit our properties.

There's a question here from the audience. There's been much discussion around selling or repurposing federal land to address housing affordability. Could any of this land be zoned or structured for manufactured housing? Have you had any preliminary conversations with policymakers or agencies about federal land being used for MHCs?

Yes. I think that there is certainly federal land available. There are federal campgrounds that are available that whether or not the highest and best use is in the hands of the federal government, I think, is a question. I think there are opportunities. I would say that it really ends up being more of a local level discussion. And zoning and restrictions within the local level really haven't seen it kind of rise to a federal discussion on those lands, although it's a great idea, but we haven't seen much progress.

I guess how much land do you guys own today that's not sort of utilized?

We have 6,000 vacant acres adjacent to our properties, primarily 85% of that is adjacent to our RV parks.

Right. So 85%. And I guess now my question there is, if acquisitions are going to be few and far between, just given people don't want to sell good properties, good cash flowing businesses, is there an opportunity to sort of expand what you're doing, I guess, expand the expansions. If you have that much sort of unutilized land and you have that much demand, why not be more aggressive in terms of your expansions?

Yes. We -- I mean let me answer that first in the context of as we go through just the natural cycle of working through our development pipeline, we've developed or delivered between 500 and a little over 1,000 sites on a run rate basis over the last 5 or 6 years. Total, it was just over 5,000 sites.

I've been asked why did you pull back on development in a particular year, and it's really not related to a pullback. It's just related to when you put a 12-month calendar year over a development pipeline, those results are going to ebb and flow depending on the time line to bring projects to completion. We're focused on continuing on that path. I mean you can see in our deck that our stabilized returns are in the 7% to 10% range. It's very favorable investment. It's low risk with respect to any development project because I have a going concern business. I have an embedded, either resident or customer base for referrals. So we're focused on being closer to the 1,000 than the 500. But we have a long pipeline of projects that we're consistently working on, and I would expect that we're going to continue to deliver in that range.

And are they already like -- I mean, sort of like ready to go zoned and sort of there's no sort of permits and other things that you have to go through before you can do that? Or what's the process?

Yes, it's the entire range. There are some of that are closer to shovel-ready than others. There's a slide in the deck -- pictures in the deck of a project that we have in Sarasota. That was an adjacent parcel of land that we acquired was zoned single-family. We went through a rezoning and entitlement process to get approval for manufactured housing. That process took probably 18 months. The development is going to take another 6. And then at a project of that scale, we'll probably reach stabilized occupancy in 2 years. It's at 40 to 50 sites. We had a project identical to it and scale on the other side of the property that we completed previously, and it was the same fact pattern. We acquired single-family land -- zoned single-family and went through the entitlement process. The time line depending on the jurisdiction, really varies significantly.

All right. Rapid fire. What will same-store NOI growth be for the MH sector in 2027, so next year?

Similar to this year.

Will there be the same, more or less MH RV, I guess, marina companies at this time next year in the public space?

Same.

Thank you.

Thank you very much.

Good day, everyone, and thank you all for joining us to discuss Equity LifeStyle Properties Fourth Quarter 2025 Results. Our featured speakers today are Marguerite Nader, our CEO; Patrick Waite, our President and COO; and Paul Seavey, our Executive Vice President and CFO. In advance of today's call, management released earnings.

[Operator Instructions]

As a reminder, this call is being recorded. Certain matters discussed during this conference call may contain forward-looking statements in the meanings of the federal securities laws. Our forward-looking statements are subject to certain economic risks and uncertainty. The company assumes no obligation to update or supplement any statement that becomes untrue because of subsequent events. In addition, during today's call, we will discuss non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release, our supplemental information and our historical SEC filings.

At this time, I would like to turn the call over to Marguerite Nader, our CEO.

Good morning, and thank you for joining us today. I am pleased to report the final results for 2025. We continued our record of strong core operations and FFO growth with full year growth in NOI of 4.8% and a 5% increase in normalized FFO per share. Our year-end report is a good time to reflect on our business and our industry. Our business model is consistent and durable during all economic cycles. I'd like to focus on our annual rental streams, which comprise over 90% of our revenue. We offer prospective customers the opportunities to join a community where they can build their social connections in an active environment. The strength of our activity offering continues to be a leading factor in resident retention at our communities.

The average age of a new resident is 60 years old, and many are motivated by a desire to escape colder climates and avoid the isolation and inactivity found during Northern Winters. Resident engagement is the strength of our platform. Across our portfolio, hundreds of resident clubs promote social interactions, contributing to high occupancy levels and extended average lengths of stay.

Affordability in our sector remain a competitive advantage. Our communities provide a well-maintained living environment at a lower cost than surrounding housing alternatives. The value proposition is further enhanced by the structural advantages of manufactured housing. The homes have changed meaningfully over the last 20 years with today's homes generally featuring 3 bedroom, 2-bath layouts, modern open floor plans, energy-efficient systems and contemporary kitchens and bathrooms.

These home enhancements have wide demographic appeal and have strengthened the quality of our communities. Our MH portfolio has produced impressive growth rates over the last 30 years. These growth rates reflect an operating model in which residents choose to make our communities their long-term home and ELS has reinforced that decision by consistent investment in the community to support growth. Our RV portfolio finished the year strong with an increase in annual occupancy of over 500 sites over the last 6 months. Our annual RV customers generally stay with us approximately 10 years and appreciate the ability to use our properties as a second home or weekend getaway.

Last night, we issued initial guidance for 2026. Our guidance is built based on the operating environment at each one of our 450 communities, including a robust market survey process. Our teams communicate with our residents to understand their views around capital projects and property operations. The results show strength in both top line revenue and NOI. For the full year 2026, we anticipate normalized FFO growth of 3.7%.

Next, I would like to update you on our 2026 dividend policy. The Board has approved setting the annual dividend rate at $2.17 per share, a 5.3% increase. Our decision to increase the dividend is driven by stable cash flow, a solid balance sheet and strong underlying business trends. In 2026, we expect to have approximately $100 million of discretionary capital after meeting our obligations for dividend payments, recurring capital expenditures and principal payments.

Over the past 10 years, we have increased our dividend by an average of 10% per year, and this year's dividend marks the 22nd consecutive year of annual dividend growth. I want to thank our team members for all their efforts in 2025, and I'm looking forward to continued operating success in 2026. I will now turn it over to Patrick to provide more details about property operations.

Thanks, Marguerite. I'll start with some color on our MH business and then address our long-term RV business. In 2025, these revenue streams totaled more than $1 billion. Over the last 5 years, their combined revenue CAGR was 5.9%, continuing to support our history of consistent property NOI growth since our IPO in 1993. Approximately half of our MH revenue is Florida. Another 20% is California and Arizona, and the rest is mostly the North Central and Northeast U.S.

Over the last 5 years, we've sold 3,800 new homes, which improved our quality of occupancy. Florida has been a driver of growth with migration patterns supporting economic growth and demand. The rest of the Sunbelt coastal and northern markets have contributed to consistent growth as well, given the desirable locations of our properties and the great value that our MH communities offer in their submarkets. Focusing on Florida first, our largest submarkets, Tampa St. Pete and Fort Lauderdale, West Palm Beach are supported by tourism, financing technology, favorable tax structures, business relocations and in-migration.

Demand for MH communities has been consistently strong. And over the last 5 years, we sold nearly 2,000 homes and reduced our Florida rental load to 2.5% of our occupied sites.

Looking next to Arizona, our largest market is Phoenix, Mesa, which experienced strong population growth and GDP growth and has supported demand for our MH properties. We sold more than 400 homes over the last 5 years.

The last of the big 3 is California. Our MH communities offer great value in high-cost markets. Given the high demand, our California properties have an average occupancy of 96%.

Before I move on to our RV business, I would note that our portfolio and locations are well positioned to benefit from the demographic trends in the U.S. Our recent investor presentation highlights these demand drivers. There are 70 million baby boomers in the U.S., and every day, 10,000 baby boomers turn 65. Right behind the baby boomers, our 65 million Gen X, all aging towards our core demographic. After Gen X is the millennial cohort of 75 million. They will start retiring in about 20 years. As these generations age, they behave similarly, although the timing may differ. As an example, Gen X and Millennials entered household formation stages and buying homes later than baby boomers. But the direction is consistent through mid-life years and into retirement.

They seek what we offer: great value, active lifestyles and social engagement. On the RV annual business, long-term stays and low turnover provided stable revenue stream similar to our MH business. Most of our annuals on a park model or RV with fixed site improvements and when they choose to leave, they resell their unit in place to the next long-term guest resulting in an uninterrupted revenue stream, very similar to our MH business.

Over the last 5 years, the average RV annual rate growth of more than 6% contributes to our durable long-term revenue. Over the last 2 quarters, we added more than 500 annuals, and we continue to see consistent demand throughout the Sunbelt and Northern markets. Attrition that we experienced early in 2025 appears to have subsided and both current and new RV annual customers are enthusiastic about staying with us. Our RV properties are in desirable locations and a customer can buy one of our resort homes for a fraction of what a lake house or similar accommodation will cost in those markets. The value we offer across our long-term revenue business lines supports consistent demand. As we head into 2026, we see demand for our MH and RV annual offerings, which supports consistent growth in these long-term revenue streams.

I'll now turn the call over to Paul.

Thanks, Patrick, and good morning, everyone. I will discuss our fourth quarter and full year results, review our guidance assumptions for 2026, including some key considerations for the first quarter and close with a discussion of our balance sheet. Fourth quarter normalized FFO was $0.79 per share, and full year normalized FFO was $3.06 per share, representing 4.2% and 5% growth in the fourth quarter and year-to-date periods, respectively, compared to prior year. Strong core portfolio performance generated 4.1% NOI growth in the quarter and 4.8% year-to-date. Our results are in line with our guidance provided at the beginning of 2025 and reflect our consistent track record of earnings growth in line with guidance. Core community-based rental income increased 5.5% for the full year 2025 compared to 2024 primarily because of noticed increases to renewing residents and market rent paid by new residents after resident turnover.

Full year core RV and marina annual base rental income which represents approximately 73% of total RV and marina based rental income increased 4.1% compared to the prior year. Full year core seasonal and transient rent combined decreased 9.1%. The net contribution from our total membership business consists of annual dues and upgrade subscription revenues, offset by sales and marketing expenses.

For the full year, the membership business contributed $65.6 million net. During the year, we enrolled approximately 5,900 upgraded membership subscriptions. Core utility and other income increased 3.4% for the full year compared to prior year. In 2025, our utility recovery rate was 48.7%, a 220 basis point increase from 2024. Full year 2025 core property operating expenses increased 1% compared to the same period in 2024, our ability to deliver expense growth below CPI resulted from our management of payroll expense at our RV properties, our 2025 insurance renewal and a reduction in membership sales and marketing expenses. Income from property operations generated by our non-core portfolio was $1.9 million in the quarter and $10.2 million for the full year 2025.

Property management and corporate expenses increased 1% for the full year 2025 compared to prior year. The press release and supplemental package provide an overview of 2026 first quarter and full year earnings guidance. The following remarks are intended to provide context for our current estimate of future results. All growth rate ranges in revenue and expense projections are qualified by the risk factors included in our press release and supplemental package.

Our guidance for 2026 full year normalized FFO is $3.17 per share at the midpoint of our guidance range of $3.12 to $3.22. We project core property operating income growth of 5.6% at the midpoint of our range, and we project the non-core properties will generate between $4.6 million and $8.6 million of NOI during 2026.

Our property management and G&A expense guidance range is $121.3 million to $127.3 million. In the core portfolio, we project the following full year growth rate ranges: 4.1% to 5.1% for core revenues, 2.7% to 3.7% for core expenses and 5.1% to 6.1% for core NOI. Full year guidance assumes core MH rent growth in the range of 5.1% to 6.1%, full year guidance for combined RV and marina rent growth is 2.4% to 3.4%. We expect 5.2% growth in rental income from RV and marina annuals at the midpoint of our guidance range.

For the full year, our guidance assumes interest expense in the range of $133.3 million to $139.3 million. Our first quarter guidance assumes normalized FFO per share in the range of $0.81 to $0.87. That represents approximately 26% of full year normalized FFO per share. Core property operating income growth is projected to be in the range of 4.5% to 5.1% for the first quarter. First quarter growth in MH rent is 5.8% at the midpoint of our guidance range.

We project first quarter annual RV and marina rent growth to be approximately 4.5% at the midpoint of our guidance range. Our guidance assumes first quarter seasonal and transient RV revenues perform in line with our current reservation pacing.

I'll now provide some comments on our balance sheet and the financing market. Our balance sheet is well positioned to execute on capital allocation opportunities. We have no secured debt maturing before 2028 and the weighted average maturity for all debt is 7.5 years. Our debt-to-EBITDAre is 4.5x and interest coverage is 5.7x. We have access to $1.2 billion of capital from our combined line of credit and ATM programs.

We continue to place high importance on balance sheet flexibility, and we believe we have multiple sources of capital available to us. Current secured debt terms vary depending on many factors, including lender, borrower, sponsor and asset type and quality, current 10-year loans are quoted between 5% and 5.5%, 50% to 75% loan-to-value and 1.4 to 1.6x debt service coverage. We continue to see solid interest from the GSEs and life companies to lend for 10-year terms. High-quality age-qualified MH assets continue to command best financing terms. Now we would like to open it up for questions.

[Operator Instructions]

Our first question will come from the line of Michael Goldsmith from UBS.

First question on the seasonal and transient business. Your -- it sounds like the first quarter expectations are consistent with the reservation pacing that you're seeing. But then what's implied for the balance of the year is that it improved pretty materially to like a positive 2%-ish, 1.8%, you're being specific. So just trying to get a sense of what are you seeing -- or what gives you confidence that seasonal and transient can accelerate through the balance of the year as you sit here today?

Sure. Maybe Paul could take us through the pieces of the guidance and Patrick can give a little bit of color about the operating performances.

Sure. I'll start -- I'll frame first the composition of the revenue and some of the timing considerations. So the first quarter, we earned approximately 50% of our anticipated full year seasonal rent and almost 20% of our full year transient rent. And by the end of the second quarter, we've earned almost 2/3 of that full year seasonal and nearly 45% of our full year transient rent. The last thing I'll mention is during the third quarter, 40% of the transient rent is earned.

So when we think about that activity, particularly transient, the short booking window means our revenue is heavily influenced by weather forecasts. We did put together the 2026 budget for these 2 revenue streams based on current reservation pacing for rent we anticipate earning in the first quarter that implied rate is down about 13%. And for the remainder of the year, as you said, Michael, we anticipate approximately 2% growth in those revenue streams combined.

Yes. So I guess a little color on the seasonal and transient, but first, I'd start with our annual RV that represents 70% of our total RV revenue. And as we mentioned in our opening remarks, we added 500 annuals in the back half of the year. So we see consistent demand. And that demand through the year substantially offset the attrition that we saw earlier in the year.

On the seasonal and transient, Paul just walked through, we've basically given you the first -- our first quarter expectations. And as you look at Q2 to Q4 for seasonal and transient, that growth represents about $1.3 million. On the transient front, really the points that we focused on were the 4 major holidays. Juneteenth is on a Friday and the fourth of July is on a Saturday. So the 2 variable key holidays are on weekends. Also, we're coming into America's 250th birthday. So the fourth of July is expected to be particularly good for the hospitality business.

And then last, although it's early, our booking pace for the Q2 to Q4 period on transient is favorable to what we experienced last year. On seasonal for Q2 to Q4, the majority of the pickup is in Q4 as we'd be entering the '26, '27 Sunbelt season. And again, early booking pace is ahead of last year.

So really, at this point in the year, we're surveying and having events with our seasonal customers that are on site. The ones who are on site, the 2 things that they rank most highly is the warm weather and the time they spend with their friends and anybody in the Northern United States over the last few weeks have experienced sub-0 temperatures. So it's particularly relevant today.

We also survey the guests who did not book with us this season but have stayed with us in the past. They highlight really the same 2 things. They miss their friends, and they want to spend time in the warmer weather. So both of those groups are contributing to our positive early booking pace. Those are really the factors we considered as we are working our way through our long budget process, particularly with the seasonal and transient. But also for the RV, the total RV revenue demand and occupancy trend that we're seeing for the 70% of our RV annual has been positive in the last few quarters.

Very helpful. And maybe just as a follow-up, and maybe this also relates to the expense line is you just did -- you just had expense growth of 2.2%. You're guiding to 3.2% expense growth at the midpoint. So how much of that reflects like just a step-up in the transient revenue and so that there's according like payroll increases related to -- on the expense side? And then also, what are you expecting for your -- is like what are you expecting on the insurance renewal? And is that playing a role in the step-up in expense expectations for 2026?

Sure, Michael. I guess the way that I would kind of address those rolling all together in some respects. We have guided to expense growth that generally tracks to -- it's about a 50 basis point premium to current CPI. We do have assumptions for payroll at higher staffing levels than we had in 2025 to match the revenue. The same is true for the utility expense as a result of the expectations. With regard to insurance, we're quite pleased that we didn't have any adverse claims experience in 2025.

In addition, there are indications that the market is softening. Our guidance does have an assumption with respect to our insurance renewal were consistent with our past practice. We're not disclosing that. We've started the renewal process. So we won't make our guidance expectation public. We do look forward to updating you in April after we've completed our renewal.

Good luck in 2026.

Our next question come from the line of Jeffrey Spector from Bank of America Securities.

This is Jana on for Jeff. Just curious on a smaller portion of the RV and marina. On the marina side, there were some marinas that were taken offline. I was wondering if you can kind of help us kind of on the progress of those repairs and when those may come back into the portfolio?

Yes. Jana, it's Patrick. It's -- you're right, it's a small part of the business and it was a headwind for the quarter. As we're working through -- that's 3 marinas, as we're working through repairs of prior storm damage, and I think I mentioned this when we met and in previous calls that we had some delays with respect to permitting and construction. We're working our way through that. I think we have a pretty good eye on timing at this point, and it looks like it's the latter half of 2026 is when we're going to start coming online that should be completed into 2027.

Great. And then maybe a little bigger picture, just kind of curious some of the new -- whether it's the Roads Act or some of these other MH affordable housing programs that the administration is looking at. I was curious if there were potentially any pilot programs that ELS was looking to be a part of?

Yes, we haven't seen anything new from HUD. I think when you consider how manufactured housing fits into the discussions in D.C. It's important to consider manufactured housing in a kind of a broader degree. There's about 7 million manufactured homes in the country that house about 18 million people. And on a square foot basis, MH costs about half as much as single-family construction. So it's definitely a product that could help to address the housing issues across the U.S., but we really don't see widespread acceptance, especially in areas where we would see being interested in developing new communities. And so we haven't seen a lot of change from D.C.

Our next question comes from the line of Jamie Feldman from Wells Fargo.

Great. Can you talk more about the Canadian customer, I mean it sounds like you're seeing a -- you sound more optimistic about things getting better. But can you talk specifically about Canadian customers and what you're seeing? And what's in the guidance, what's your assumption for the decline in '26 in that group specifically?

Yes, I can -- with respect to the first quarter for seasonal and transient, as I mentioned before, it implies a 13% decline compared to prior -- the same quarter last year. The reservation pace for the seasonal customers is consistent with the pace we discussed during our call in October. So there hasn't been any meaningful change in that across the customer base. And then just thinking about the Canadians, we've previously talked about the fact that 10% of the total RV revenue is what the Canadians represent, 50% of that is from our annual customers. We have not seen any meaningful increase in home sales from those Canadian annual customers. So that demand profile remains strong. And then the remaining 50% is what we've talked about being split between the seasonal and transient.

And Jamie, Patrick walked through some of the Canadian sentiment based on some of the survey work that we had done, and that points to a positive view on our properties and traveling back to Florida.

Okay. And then I guess just shifting gears to the investment market. Anything that we should pay attention to that might feel different in '26. I know it's been very challenging to find opportunities and maybe that be honest question, anything on the legislative side or policy side that might be helpful for you with affordability or just in general, maybe a state of affairs that we could provide it on the investment market.

Sure, sure. So transaction activity continues to be constrained, I would say, as you know, ownership is highly fragmented and we engage with home owners as they move forward towards potential sale decisions. The strong performance of these properties over time has really reduced the desire to sell for the owners. And so knowing that, I think that attractive acquisition activities may be limited.

We focused on internal growth -- operations and expansions and continuing to keep our balance sheet in a position such that if there is an opportunity, we are able to take advantage of it. With respect to anything happening at the federal level, that would impact us. I think what we've seen more is it's really what happens at a city or local level, convincing City Council members to have an MH or RV community in their backyard. It really -- it's oftentimes difficult even for highly amenitized communities, but we continue to work through that at the local level.

Okay. If I could just sneak in, what's your appetite for like one-off MH properties rather than parks? Or do you think going forward, I mean assuming legislation gets passed, would you be interested in that at all? Or no, you're kind of sticking with the park business?

I'm sorry, interested in buying one-off manufactured housing communities?

Well, no, like manufacturing, managing them off like random properties around different municipalities if that becomes something that can [indiscernible].

Buying single-site homes. Is that what you're asking?

Correct.

I think that what we found is that, that community aspect of certainly, we operate 450 communities across the country. I think where -- our acquisition strategy is really focused on buying communities versus buying individual single off assets.

Our next question will come from the line of Brad Heffern from RBC.

Victor, maybe if you could move to the next caller and then we get back to Brad.

Our next question will come from the line of Eric Wolfe from Citi.

Maybe to follow up on Michael's question at the beginning. I'm just trying to understand why the annual RV rental income goes from 4.5% in the first quarter to, I think, around 5.4% for the rest of the year. Just trying to understand sort of why it steps up in the first quarter and stays at that higher level.

Sure, Eric. The main driver of that moderate growth in the first quarter, RV and marina annual rent growth is the comparison to our first quarter 2025, which had a higher level of occupancy. You may remember, we experienced attrition in the Northern resorts as they came back in season in the second quarter of '25, and that has some carryover impact to the first quarter of '26.

Got you. And so this year, tell me if I'm wrong, you're expecting normal attrition, normal turnover. Can you maybe just sort of tell us how much visibility you have into that at this point in the year, you have very good visibility because I don't know, 80% of your annual customers have already signed a lease or something like that? I'm just trying to understand how much visibility you have into that normal attrition at this point and what we should be watching, say, over the next couple of months to determine whether that's actually going to happen or not.

Yes. It's Patrick. It's reasonable to view the attrition as normal. That's the -- we had that period of elevated attrition early last year. Just as a reminder, we send out rent increase notices in the latter part of the year that there's a timing component, but that covers the Sunbelt and our Northern properties. And we're going through a renewal process as we make our way through the back half of the year. So we have pretty good visibility at this point.

I will note that in the north, there are some -- the effective dates of those rate increases are typically April as we're entering the summer season. So there's renewals that occur at that point. But the visibility we have right now, we feel pretty confident that the elevated attrition that we experienced in the prior year is behind us.

Our next question will come from the line of Manas Abic from Evercore ISI. And we'll go on to the next question, one moment.

Thank you, Victor. Our next question will come from the line of Wesley Golladay from Baird.

I have a question on the domestic RV transient and seasonal customer. Do you think we're finally back to normalized numbers on that? Are we back to the trend line post COVID?

We've had that question over the last several quarters as we work our way through the normalization of that business. I think given what we're seeing with respect to early pace, I feel that we -- if we're not at it, we have some -- we certainly see some green shoots with respect to positive trends on booking base going into 2026.

Okay. And then on your expansions, are you targeting the higher growth Sunbelt markets for those expansions?

Yes, for the most part of it, that's where the largest concentration of our portfolio is. So the significant majority of our expansions have occurred throughout the Sunbelt properties.

And we do have a small expansion in the North, in Minnesota. But other than that, they're basically in the Sunbelt.

Okay. And then just one quick follow-up on that. On the lease-up. I know you delivered some on the MH side in the fourth quarter. What's the typical time to lease that up and get the occupancy up?

I mean it depends on the number of sites. So just at any particular community, if you're filling in the range of, call it, 20 to 30 a year, you're having a -- that's a good pace for selling manufactured homes to new homeowners and an expansion.

Your next question will come from the line of John Kim from BMO Capital Markets.

This quarter, you provided a new disclosure on MH occupied sites at the beginning at the end of the quarter. So new disclosure is always good. The actual number went down though during the quarter. So I was wondering what contributed to the occupancy sites going down just given occupancy growth has been a focus for your company? And just generally, I think occupancy in MH has been at its lowest levels in about 10 years. And I'm wondering what has been driving that just given the demographic tailwinds that you talked about earlier?

Yes, John, it's Patrick. First, I'll take the quarter. The outcome for the quarter was really driven by our number of sites where we have depleted our home inventory. We're in the process of replenishing, which we -- it's just ordinary course of business for us and just the mix of move-ins and move-outs for the quarter. It's down about 70s, 10 basis points.

I think to your point on the demand profile, we consistently see good demand, and we feel very positive going into 2026. So I think that has more to do with just the timing of the quarter as opposed to any takeaway on the fundamentals. And just long term with respect to the view of occupancy, I mean we continue to increase the number of occupied sites over the years. The percentage, I appreciate, as we've talked about in the past, can fluctuate as we're bringing on expansion sites into the denominator.

And John, that was the kind of the reason for that new disclosure, just to be clear about those expansion sites.

Yes, that makes sense. Okay. Okay. So I'm asking on RVs today, minus 7 degrees Celsius in Toronto, it's 22 degrees Fahrenheit in New York. And I know in the past, you talked about the colder weather potentially being a driver for transient and seasonal RV demand. It doesn't sound like you feel that bullish on that today. But just wanted to get your updated thoughts on the cold weather impact on RV.

Sure. Sure. So we obviously look at it on a daily basis, sometimes throughout the day. But what we've seen in the month of January, I think we've had 3 or 4 -- only 3 or 4 days where we were not exceeding last year's pace. So really positive pacing and it really is corresponding what we're seeing as the temperature is dropping. Our marketing team does a really good job of monitoring the weather in the north and leveraging predictions for difficult weather, which is not difficult to do now because all the weather has been difficult across the country and encouraging the customers to escape the cold and visit our Sunbelt locations.

So we look at those marketing tools, our weather-related digital ads and organic posts and that's generating some positive return for us as people try to escape this difficult weather.

Our next question will come from the line of Jason Wayne from Barclays.

Just looking at the rental home business, had a nice year in '25, some growth there. So I'm just wondering what's the strategy there? And is that business one that you'd like to continue growing moving forward?

Yes. I mean that's really going to be based on what we see from a demand perspective. As we're replenishing new home inventory across the portfolio and filling expansions, our first priority is to sell the home and as demand is coming at us, we may very well accept rentals. Rentals is a positive business and that it exposes more and more prospects to be future homebuyers and it's been sometime since we spoke about the staff at roughly 15% to 20% of our sales on property are to current residents. Those are either renters looking to purchase a home and become a home buyer or current homebuyers that are looking to either downsize or get into an upgrade on their own.

And then you also began disclosing the rental home operating expenses. So just the increase was tied to those expansions then it sounds like, but just wondering how that's expected to trend this year, why it was kind of down the rest of the year based on disclosure?

Yes. The rental home expenses is essentially embedded in our operating expense growth assumption. And what we see in that business, yes, to the extent that we have incremental rental homes, we will see a higher level of expense relative to prior periods, there is also impact just on the mix of homes that are in the rental program, whether they're new homes that happen to be rented or homes that have previously been occupied and the expense associated with the latter can be higher. So as that mix changes, we see a slightly lighter load on expenses.

Our next question will come from the line of David Segall from Green Street Advisors.

Guidance for the MH portfolio seems to imply that the vast majority of growth is coming from rent growth and only a small bump from probably occupancy or other income and considering the higher level of expansion sites likely to be added this year versus last year, would it be fair to say that this implies occupancy will actually dip further this year?

I guess I wouldn't think about it that way. We have a practice that we've used for quite some time not to make a specific assumption about occupancy gains in our guidance and we've used that in building our model for 2026.

And then just on RV performance in 4Q. It ultimately landed below the low end of the range for the quarter, although as of November, it looks like it was tracking at the higher end of the range. And considering you mentioned the Canadian booking pace was in line with what was discussed in October. I just wanted to try and understand what happened in December to cause performance to lag so much?

Yes. I mean what we saw in December was really a weather effect going the other way. It was moderate temperatures kind of throughout the North, and we didn't see those bookings pick up like we had in previous years. So it's kind of the opposite of what we're seeing in January is what we saw in December.

Our next question from the line of Omotayo Okusanya from Deutsche Bank.

Yes. I wonder if you could talk a little bit about the campground membership results. Again, we kind of had another quarter where the membership count declined. I know in the past you've kind of talked about making it up with kind of better pricing and upgrades and things of that sort. But I think even upgrade activity this quarter was a little bit light.

So just curious what's kind of happening there? What does that tell us to about overall demand, whether it's on the transient side or seasonal side? Just kind of trying to get some read through from those results and how you're thinking about it going forward.

Sure. Thanks, Tayo. So I think the Thousand Trails system, as you know, has got about 80 properties with about 24,000 sites, and I think, 108,000 members right now. And it's -- I think it's helpful you've mentioned the upgrade, but I think it's helpful to just highlight all the pieces of the Thousand Trails business, we have our annual membership subscriptions where we sell those online and in the field. And that activity, I think about half of that activity comes from online activity, initial subscriptions are sold online. That's that $700 product that we've talked about, the entry-level product that has a set of benefits to stay at the locations.

This line item now also includes our new upgrade dues product. And in the year, we saw a healthy growth of over 5% in that line item. And then when you think about the Thousand Trails portfolio, you also, I think, need to consider the annual piece of it, and that's where we see our members wanting to stay and have a more permanent stay at our communities and that annual income has increased significantly over time, I think, 7% or 8% over the last 5 years.

And then as it relates to the promotional membership originations, which we highlight in the supplemental, we're seeing traction on that. And those -- that is trial memberships that's included in the sale of an RV. And these are really just really great prospects for the annual camping passes at our properties, and we've seen an increase in conversion of those. And the conversion is the important piece because that's the piece where the customer starts to pay dues in the year following their initial membership.

Got you. So what's the piece that kind of still, if I'm going to use the word, weak amongst all these moving pieces that's kind of dragging down the counts and things like that.

Sure. So what we've seen is there's some attrition of the legacy members that are paying -- we're paying a lower dues amount, and we're bringing in new members that are paying a higher dues amount. And so that's what you're seeing in the count.

Our next question will come from the line of Eric Wolfe from Citi.

For the non-core income, it looks like it's dropping $3.6 million year-over-year. I think it's the same pool of properties in 2026 and 2025. So I was just curious what's causing that?

Sure. We have $6.6 million in our guidance for '26. That does compare to the $10.2 million that we recognized in 2025. The difference is really attributed to timing of insurance proceeds and the recovery of the storm-affected properties. There's just a timing difference there.

Okay. So you expect to get it. It's just -- because I mean, normally, when I think about business interruption proceeds, it's the pay for the business interruption that you're seeing. So you're saying that you expect to get that at some point, it's just a timing difference or you already received more in 2025 than you thought you would.

Exactly. The recognition occurs when it's received, and that doesn't necessarily line up with when we would otherwise earn it.

Okay. And then I think your historical practice has been to not include any use of free cash flow in your core FFO estimate, just confirming that that's true this year. And then I guess sort of practically speaking, is that $100 million of cash after dividends and recurring CapEx earmarked for anything this year? I assume perhaps you just go to more sort of inventory growth, but maybe help us understand where that could go.

Yes. I mean, I guess I'll focus on the interest expense and our assumption for 2026. I mean, certainly, we look at our debt in place at the end of '25, scheduled principal amortization during '26 and then how our line of credit will increase or decrease throughout the year. We don't make any -- any assumption for a change in the short-term borrowing rate. But the funding of working capital investments, such as you described, that comes from borrowings on the line of credit that exceed the free cash flow.

So that includes purchasing homes for sale and rental in our communities, the discretionary CapEx that we have that includes expansion as well.

And since we have no more questions on the line, at this time, I would like to turn it back over to Marguerite Nader for closing comments.

Thank you all for joining today. We appreciate you taking the time and look forward to updating you on our next quarter call.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.

Good day, everyone, and thank you all for joining us to discuss Equity LifeStyle Properties Third Quarter 2025 Results.

Our featured speakers today are Marguerite Nader, our CEO; Patrick Waite, our President and COO; and Paul Seavey, our Executive Vice President and CFO.

In advance of today's call, management released earnings. [Operator Instructions] As a reminder, this call is being recorded.

Certain matters discussed during this conference call may contain forward-looking statements in the meanings of the federal security laws. Our forward-looking statements are subject to certain economic risk and uncertainty. The company assumes no obligation to update or supplement any statements that become untrue because of subsequent events. In addition, during today's call, we will discuss non-GAAP financial measures as defined by SEC Regulation G, Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release, our supplemental information and our historical SEC filings.

At this time, I would like to turn the call over to Marguerite Nader, our President and CEO. Please go ahead.

Good morning, and thank you for joining us today. I am pleased to discuss our third quarter results and will provide some insight into the strengths we see in 2026.

Turning to the results for the third quarter, we delivered strong normalized FFO growth in line with our expectations of 4.6%. Our full year guidance shows continued strength in property operations and FFO.

I would like to highlight some of the key demand drivers for our annual business and the access points for our new customers. There are approximately 7 million manufactured homes across the country, housing over 18 million people, accounting for about 6% of all U.S. housing. Outside of metro areas, this share increases significantly to 14%. New manufactured homes in our communities are designed to meet the needs of our core demographic, offering value both in terms of cost and quality of life. Construction and safety standards for manufactured housing have been meaningfully enhanced over time, making today's homes more durable and cost 60% less than that of a comparable site built home in the surrounding area. As important as affordability, our residents benefit from amenitized communities that foster a strong sense of belonging, security and connection. We serve a large and expanding market, which includes nearly 70 million baby boomers and 65 million members of Gen X within our target demographic. These individuals are increasingly seeking housing options that combine desirable locations, high-quality homes at attractive price points and a welcoming community environment. Our properties deliver on all 3 fronts, offering a value proposition that resonates with this growing segment of the population.

Our marketing efforts focused on leveraging technology and insights into our customers' travel patterns and lifestyles to reach the nation's 8 million RV owners. We listen closely to feedback and adapt to evolving preferences. Our seasonal guests increasingly seek flexibility to book stays and visit multiple locations while [ Thousand Trails ] members value our new subscription-based memberships with tiered benefits that they can purchase online. Manufactured home buyers increasingly research and communicate with us online and via text. Our digital tools offer detailed information, virtual tours, online applications and text messaging with local sales agents. Alongside technology, our teams focus on personal outreach. Property managers build relationships with their customers invite guests to return next season and share new home opportunities that meet their needs.

Turning to 2026 expectations. Within our manufactured housing portfolio, we expect to have issued 2026 rent increase notices to 50% of our MA presence by the end of October with an average rate increase of 5.1%. In our RV portfolio, annual rates have already been set for over 95% of our annual sites with an average rate increase of 5.1%. We continue to engage with our residents to identify and prioritize capital improvements within our communities. These efforts not only enhance the resident experience, but also support the long-term value of our assets. The anticipated rent increases position us to extend our long-standing track record of REIT-leading revenue growth. Our ability to share strong current results and provide early visibility into 2026 reflects the strength and dedication of our team. Their ongoing commitment to supporting our residents and customers is fundamental to our success. Through their focus on service quality and community, we've been able to consistently deliver superior operating performance over the past 2 decades.

I will now turn the call over to Patrick to provide an overview of property operations.

Thanks, Marguerite. As we wind down the summer season in the north, our Sunbelt properties are gearing up for their winter season. Our MH and RV properties in Florida, Arizona and South Texas are preparing for the inflow of customers and increase in activities. [indiscernible] have begun welcoming residents and gas to properties. Our manufactured homes and communities continue to experience consistent demand and offer desirable features and amenities at prices that provide value in their respective markets. In the quarter, we continued to experience a consistent pace of new home sales.

Our Florida MH portfolio reached 94% of occupancy. Florida continues to be one of the top states for net in migration, which supports demand for our key submarkets like Tampa and [indiscernible] and for Lauderdale West Palm Beach. To meet that demand, we developed more than 900 sites in Florida over the last 5 years. Florida is also supporting strong rent growth, reflected in mark-to-market rent increases of 13% to new homebuyers. Arizona and California are our next largest markets, which are 95% occupied.

Home buyers in our Western markets are attracted to these communities due to their desirable locations, quality amenities and the substantial value they offer in their respective markets, particularly the coastal markets in California. We continue to execute on our expansion strategy, providing opportunities for more customers to enjoy our product offerings. This strategy leverages in-place utility infrastructure operational efficiencies, zoning and the brand recognition of existing properties. We started the fourth quarter -- as we started the fourth quarter, we started a -- completed a 103 site expansion at [ Cloverleaf ] farms and MH community on the Gulf Coast of Florida. This was the second and final phase of development, which added a total of 170 sites plus an amenity core. The first phase of 67 sites is approaching 100% occupancy.

We also continue to see growth on the RV side of our business. Our RV annual sites provide an affordable second home, whether it's lakeside retreat in the summer or warm weather destination in the winter. In the quarter, we increased annual RV occupancy by 476 sites.

With respect to our Canadian customers, many of whom return year after year to their site in one of our properties for the winter season, we're engaging with them through personal outreach as well as our traditional marketing channels. The regional weather outlook for the winter season looks favorable. The NoA Climate Prediction Center forecasts a [ La Nina ] pattern this winter. This season's forecast calls for warmer drier conditions in the South, along with cooler weather conditions in the north, making the Sunbelt particularly attractive for winter getaways. Our operations team has prioritized occupancy and revenue growth while thoughtfully budgeting and executing on expenses.

Our on-site teams are focused on providing excellent customer service, and we are leveraging technology to increase efficiency for the staff members. Tools like electronic lease agreements and SMS text customer service platforms have been well received by our customers and help ensure that our teams have more time to focus on delivering memorable experiences.

Finally, the third quarter wrapped up our 11th annual 100 days of camping campaign, which saw record engagement among our social media fans and followers. The campaign had over 46 million impressions on social media, and we received nearly 1,100 photo entries of our views with our signature rally towels, which reflects a strong and active customer base that wants to engage with our properties and brands.

Now I'll turn the call over to Paul.

Thanks, Patrick, and good morning, everyone.

I will discuss our third quarter and September year-to-date results, review our guidance assumptions for the fourth quarter and full year 2025 and close the discussion of our balance sheet. Third quarter normalized FFO was $0.75 per share, in line with our guidance. Continued strong performance in our core portfolio resulted in 5.3% NOI growth in the quarter, 40 basis points higher than guidance. Core community-based rental income increased 5.5% for the quarter and for the September year-to-date period compared to the same periods in 2024.

In the third quarter, we generated rate growth of 6% as a result of noticed increases to renewing residents and market rent paid by new residents after resident turnover. Core RV and Marina annual base rental income, which represents approximately 70% of total RV- and Marina-based rental income increased 3.9% for the third quarter and for the year-to-date period compared to the same periods last year. Year-to-date, in the core portfolio, seasonal rent decreased 7% and transient rent decreased 8.4%. We continue to see offsetting reductions in variable expenses. The net contribution from our total membership business consists of annual subscription and upgrade revenues, offset by sales and marketing expenses. The membership business contributed $16.8 million and $48.2 million net for the third quarter and September year-to-date periods, respectively, compared to the same periods last year. Core utility and other income increased 4.2% for the September year-to-date period compared to prior year. Our utility income recovery percentage was 48.1% year-to-date in 2025, about 150 basis points higher than the same period in 2024.

In addition, we recognized higher tax pass-through income, mainly in Florida. Core property operating expenses for the year-to-date period were 60 basis points higher than the same period last year. This includes the change in membership expenses associated with the membership upgrade subscription program that was implemented earlier this year. Expense growth for the third quarter was 40 basis points lower than guidance, mainly resulting from savings in real estate tax expense. Third quarter core property operating revenues increased 3.1%, while core property operating expenses increased 50 basis points, resulting in growth in core NOI before property management of 5.3%. For the year-to-date period, core NOI before property management increased 5.1%. Income from property operations generated by our noncore portfolio was $1.8 million in the quarter and $8.3 million year-to-date.

I'll now discuss guidance. As I do the following remarks are intended to provide context for our current estimate of future results. All growth rate ranges and revenue and expense projections are qualified by the risk factors included in our press release and supplemental package. We are maintaining our full year 2025 normalized FFO guidance of $3.06 per share at the midpoint of our range of $3.01 to $3.11 per share. Full year normalized FFO per share at the midpoint represents an estimated 4.9% growth rate compared to 2024. We expect fourth quarter normalized FFO per share in the range of $0.75 to $0.81. We project full year core property operating income growth of 4.9% at the midpoint of our range of 4.4% to 5.4%. Full year guidance assumes core base rent growth in the ranges of 5% to 6% for MH and negative 20 basis points to positive 80 basis points for RV and Marina. The midpoint of our guidance assumptions for combined seasonal and transient show a decline of 13.3% in the fourth quarter and a decline of 8.8% for the full year compared to the respective periods last year. Core property operating expenses are projected to increase 40 basis points to 1.4% for the full year 2025 compared to prior year. Our full year expense growth assumption includes the benefit of savings in payroll expense year-to-date in 2025, reduced membership expenses and the impact of our April 1st insurance renewal for 2025.

Consistent with our historical practice, we make no assumption for the impact of a material storm event that may occur. Our fourth quarter guidance assumes core property operating income growth is projected to be 4.4% at the midpoint of our guidance range. In our core portfolio, property operating revenues are projected to increase 3.3% and expenses are projected to increase 1.6%, both at the midpoint of the guidance range.

I'll now provide some comments on our balance sheet and the financing market. We maintain our focus on balance sheet management and believe we are well positioned to execute on capital allocation opportunities. We have no secured debt scheduled to mature before 2028, and our weighted average maturity for all debt is almost 8 years. Our debt-to-EBITDAre is 4.5x and interest coverage is 5.8x. We have access to over $1 billion of capital from our combined line of credit and ATM programs. We continue to place high importance on balance sheet flexibility, and we believe we have multiple sources of capital available to us. Current secured debt terms vary depending on many factors, including lender, borrower sponsor and asset type and quality. Current 10-year loans are quoted between 5.25% and 5.75%, 60% to 75% loan-to-value and 1.4 to 1.6x debt service coverage. We continue to see solid interest from life companies and GSEs to lend for 10-year terms. High-quality, age-qualified MH assets continue to command best financing terms.

Now we would like to open the call up for questions.

[Operator Instructions] And our first question will come from Michael Goldsmith with UBS.

First question is on the 2026 rent increases. Can you talk a little bit about the process that goes into setting those? And then I guess historically, RV has been at a higher rate than MH, and it has closed the gap here. So can you talk a little bit about what's going on there? And is there a risk that maybe you're not even conservative enough there. So just trying to get the thought process on that closing of the gap.

Yes. Sure, Michael, it's Patrick. The process for them a trade increases and the RV annual rate increases are very similar to one another. Our property operations teams review the competitive set. And as we work our way through our budget process, we set the rates for the upcoming year. So that's been consistent and [indiscernible] take that we're hearing, and it's early, is that the year is behaving very similar to prior periods. There's nothing really unusual. Just with respect to the fact that the annual has moderated somewhat, so it's just general market forces. We've come off of a period where the annual rate increases did outpace as you noted. The fact that, that's coming a little bit more in line. I don't think there's a real relationship between the 2 property types, it just has more to do with the overall cadence of the market.

Got it. And my follow-up has to do with the seasonal reservation base for Canadian customers. It sounds like you've been reaching out and through traditional marketing channels and reaching out individually, I'm just trying to get a sense of the success rate there and just the ability to affect change and get that number higher as we approach the seasonal time.

Yes. I mean, Michael, one of the things that we've often talked about is that it's really the cold winter season that drives the reservations. We've had a very moderate October. So both in the United States and Canada, there hasn't been a lot of bad weather, which tends to dampen reservations a bit. So I think as we continue to head into winter, we will see increased reservations. On the Canadian front, as you know, there is a political issue there that is causing people to pause before coming to the United States.

And the next question will come from Brad Heffern with RBC.

On the reservation on the reservation pace being down 40% for the Canadians that does guidance assume that the actual bookings from those customers end up being down 40%, or do you assume that they're just waiting longer to book, and there's some sort of moderation there?

Yes. So Brad, I guess I can walk through. As we said, the combined seasonal transient growth is down 13.3% at the midpoint of that range. That compares to our prior guidance update issued in July when we assumed the combined seasonal and transient will be down 1.5%. That difference, the unfavorable development of $2.7 million is primarily related to seasonal and mainly the result of the lower reservations from Canadian customers. And I'll just walk through that just to kind of be clear on what's happened. So we've previously said that Canadians represent about 10% of our total RV revenue, 50-percentage from annual customers. So the remaining 50%, which is just over $21 million is generally split evenly between seasonal and transient. In the fourth quarter, we earn approximately 25% of our seasonal revenue for the year and approximately 15% of our transient revenue for the year. So that was the basis for our prior expectation of approximately $4.3 million of Canadian seasonal and transient in the fourth quarter. Our current Canadian reservation pace, as we said, is down approximately 40% compared to prior year.

Okay. Got it. And then obviously, 4Q typically the lowest combined seasonal transient revenue quarter, first quarter are typically the highest. So I'm just curious how much we should read the expectations for the fourth quarter into the first quarter as well.

Yes. I mean we're not providing guidance right now for 2026. I can say that the reservation pace from Canadian customers for the first quarter is similar to the pace that we're seeing for the fourth quarter.

And the next question comes from Yana Galan with Bank of America.

Paul, I was just curious on the core FFO guidance range, fourth quarter, you have $0.06 of variability and full year is still $0.10. So just checking if there's any expectation of greater volatility or share count changes or anything to call out for the difference?

Nothing to call out. We simply carried forward the convention that we've used all year with the $0.10 range for the year.

Great. And then Marguerite, curious on your MH comments at the beginning of the call and kind of the opportunity there, could you potentially be developing more sites or anything on the acquisition side available in MH that could be interesting?

Sure. Patrick, maybe can walk through our development. With respect to acquisitions, as you know, we'd certainly like to buy a high-quality MH portfolios. They're just difficult to source. I think we continue to see muted volume in terms of transactions. The ownership base is very fragmented, and we work with owners as they make their way towards becoming sellers. These assets have -- they've behaved and performed incredibly well over time. And so there's not a lot of desire to sell the assets. So -- but to the extent that there are opportunities to grow inside of the MH space, we would certainly want to continue to do that. Right now, as we look to deploying capital, we think that continuing to invest in our properties is a good return. And maybe, Patrick, you can walk through that.

Yes. So for -- for the year, we're looking to add about 400 to 500 expansion sites. That's on the lower end of what we've developed over the last 5 years on an annual basis. We had just over 1,000 sites delivered in 2020, and through the last 5 years, we've delivered about just shy of 5,000 sites. So our goal is to be in that 500 to 1,000 site range. We think that's sustainable for the foreseeable future. But there will be some variability year-over-year when you're imposing a calendar year over a development pipeline. And as I mentioned on previous calls, we have had some headwinds just working our way through some of the administrative processes to get permits and complete developments in recent quarters.

And our next question comes from Steve Sakwa with Evercore.

I guess I wanted to circle up on the MH rent increase. It's gone to 50% of the customers. But when you sort of look back historically, at the other 50%. How does that bucket trend relative to the first half? And then could you maybe just also comment on the decline in occupancy that we're seeing in the MH portfolio?

Sure, Steve. With respect to the lease agreements with our customers, 50% of those agreements are based on market. The other 50% have some linked to CPI. Half of those are rent control or some other direct CPI link and the other are what we call long-term agreements. There are typically 2- to 3-year agreements, primarily in Florida, that we've entered into in negotiation with our customers. When we think about the first 50% that have been noticed for 2026, it is more heavily weighted towards Florida residents. And we do also have a higher percentage of customers going to market. So the notices in January tend to be slightly higher than what we might see throughout the year. subject to fluctuations in CTI as we issue notices throughout 2026 that are more heavily weighted to the CPI index.

And then, Stephen, just with respect to the occupancy trends. I mean we increased occupancy in the quarter. year-to-date through Q1, Q2, we did have some hangover from the impact of hurricanes last year. we're past that now, and the trend is back towards increasing occupancy.

Okay. And then I guess second question, just you guys have done a very good job on expense containment, both in the quarter and year-to-date at sub-1%. Just any kind of broad thoughts as you kind of look into next year on some of the puts and takes that you maybe got this year that were better or maybe worse? And how should we just think about that broad trend moving forward?

Sure, sure. As we think about it, we focus quite a bit on the 2/3 of our expenses that are utilities, payroll and repairs and maintenance. And we have certainly in 2025, benefited with respect to payroll expenses as we've managed through some of the challenges we've seen in the RV transient business. So that for the year is trending close to flat. I wouldn't necessarily anticipate that as a run rate over the long term for payroll our insurance renewal that occurred in April of 2025 was favorable. And that was, as a reminder, for everybody, down 6% compared to prior year. And then the last thing I'll note is in 2024, we saw some fairly significant increases in real estate taxes, particularly coming from the state of Florida. That, based on our preliminary TRIM notices received for the 2025 tax year, that trend has reversed somewhat, and we've seen some relief from our expectations. Not to say that those taxes have declined necessarily. It's just some relief from our expectations. So we could see volatility in real estate taxes continue into 2026.

And the next question comes from Jamie Feldman with Wells Fargo.

I just wanted to make sure I understand the seasonal impact of the Canadian demand down 40%. So if we assume it stays at 40% into '26 based on the fact that so much of the income is hitting in 4Q and 1Q, like is there another 3% hit next year? Or since you've already taken it out of -- if we already take it out of '25 models, it's kind of the run rate already in '26. Can you just help us think through that?

Sure. I mean, I think it's challenging to consider what we're experiencing in the fourth quarter, our run rate for '26 because clearly, the current environment is something that will likely change over the next 12 months. What I'll say about the first quarter is when you think about our expectation to earn 50% of our seasonal rent and 20% of our transient rent in the first quarter. That suggests that we -- that -- the 40% decline would be around $3 million. And what I'll say, as we think about the current environment, and how challenging it is as it relates to U.S. and Canadian relations, when we think about our long history, the only time period that we can see as any sort of reference point is during the pandemic. In late 2020 and early 2021, when there were travel restrictions in place, including the border closures, that impacted our expectations for seasonal and transient revenue. In January of '21, we anticipated a decline of $10 million in seasonal and transient revenue during that first quarter of 2021. And when we were on our call in April, the results proved better than that, and we ended up being down $6 million.

;

So it is about a last minute those last-minute bookings. And as I mentioned, as the weather changes and as the reservations increase and that pace increases.

Okay. I guess in this environment, I think we've all learned not to get hopeful. Who knows it's around the corner. I mean are there any data points or tea leaves you can point to that are actually giving you conviction that 40% is not the bottom or 40% won't -- isn't going to stay around for a while?

I mean, what we've heard is that our customers or Canadian customers that have made reservations are excited to come back. And what we know from our long history of watching reservation pacing, it is a function of what's happening in one's local area. And as the snow starts to come down, the phone start to ring. So that's -- we don't think that's going to change.

Can I ask 1 more since that was more of a follow-up.

Sure. Sure, Jamie.

Okay. Just got to play by the rules here.

We'll appreciate that.

So following up to Steve's question on expenses. You've -- your model has been very successful in being able to lower expenses based on the transient revenue decreases. At some point, does that relationship break and you just can't cut anymore? I mean I know you've commented you think 40% is about as bad as it's going to get, but just theoretically, if it gets worse or if transient continues to decline, like is there some point where you just have fixed expenses that you can no longer compensate or mitigate the revenue declines?

Yes. I mean certainly, there are fixed expenses at the property level. There's a certain amount of staff that's needed just to run the business. But we look at this and evaluate it. The operating team does a great job evaluating it on a daily basis to understand who's coming into the properties, who's checking into the properties and how many people are working. So we'll just continue to do what I think the team has done a really good job over the last 3 or 4 years on making sure that we're operating efficiently.

And the next question comes from Eric Wolfe with Citi.

For the 5.1% price increase on annual RV, at what point over the next couple of months, will you have a good understanding of what the acceptance of those increases look like. So I'm trying to understand at what point do you know sort of the turnover for those properties, specifically for the Sunbelt locations that renew a bit earlier. And I think you've said in prior calls that the Phoenix market is by far the biggest in terms of annual customer for Canadian travelers. So do you have any early read on what that market looks like so far?

Sure. So Eric, we mentioned that a portion of the notices or the rate increases for the RV annual are essentially effective now or over the next couple of months as the winter season is starting, and so we have visibility into the annual renewals right now. That's live. And then with respect to the summer season, those renewals tend to take effect in the middle of the second quarter. So that's when we start to gain visibility into customer acceptance.

And then, Eric, in terms of Canadian annuals, and we haven't seen any decrease in appetite for people for our annual customers to stay with us. We haven't seen an increase in home sale activity among the Canadians that are annual with us. So that is all trending positively.

Got it. So I guess just to make sure I understand. I mean because I think if you look back to the fourth quarter call earlier this year, I think you said that you noticed a bit higher tuber in some of those Sunbelt locations. But it sounds like you're saying right now, you have very good insight, at least for the next 3 months because those rate increases are effective. I guess what I'm trying to understand is, at what point do you sort of have that locked in that 5% locked in? Is that by kind of like December, January, or is it already set for those 95% they've already effectively accepted those? Just trying to understand how turnover might change from the next 3 months to like the next 6 months and the potential for any kind of surprise come sort of the fourth quarter call.

Yes. I guess, adding to what Paul said that -- the cadence of the Sunbelt were at the early stages of that process right now. And the notice is going out for the next summer season are being sent currently. So we're getting very early visibility there. I guess I'd say at this point, we don't see anything, as I mentioned earlier with -- just with respect to the MH and the RV notices. They seem very much like a run rate year for us. We're not seeing any indication that there's an unusual pattern. I would phrase that or characterize that as a normal rate of acceptance. And as we move into the summer season when those increases are effective in the second quarter, we'll have better visibility. But the early read is that it's behaving very much like a run rate year for us.

And Eric, I think it's also just an important data point that we covered in I think Patrick covered it in his comments, but also in our release that we filled 475 annual RV sites in the quarter, which is a very high watermark for us. So I wanted to make sure you saw that.

And our next question comes from John Kim with BMO Capital Markets.

I work at a Canadian bank, so I have to stick to Canada. In your discussions with your Canadian customers, how much of the reason that there not returning due to weather versus the political environment? And if it's the latter, why would that not impact the annual RV customers?

Yes, I think there's a couple of things happening. So what we're hearing is the customers that have not booked that had previously booked, they are not interested due to political issues. So that's just what we're hearing. Now the reason it doesn't impact the annual customers, that annual customer has a home on site at one of our properties. They've already made that that decision. They put capital on our properties. They own a home, they own an RV, maybe on the site, but that is -- they've made that commitment. So that's why -- I think that's why we're not seeing it because the -- on the seasonal base, they haven't made their way down yet. They haven't gotten the RV and started driving yet. So that's the difference that we're seeing. It's really a function of the political overtones right now.

Okay. And then on your guidance for the fourth quarter, seasonal transient down 13% at the midpoint. What do you assume as far as backfilling some of that Canadian demand with non-Canadians. And also, you mentioned the shorter booking window. Like how much of that do you think commentate demand do you think just books kind of like last minute.

Yes. I would point -- I think Paul mentioned that what we -- how we dealt with things during COVID. We thought it was going to be one number ended up being much better, and that was because we were filling the properties with U.S. demand. The impact on the Canadian properties is a handful of properties as the primarily the bulk of the discrepancy. And so those are -- that is something that we continue to market to United States customers, which we, in the past, have not. So we're continuing to try to provide them access to those properties that they previously didn't have access to because they were filled and reserved with our Canadian customers.

And the next question comes from Jason Wayne with Barclays.

Just on the RV and Marina annual, that came in a bit weaker than expected in a little lower guidance. You previously mentioned there was an impact from some storm damaged properties. So just wondering that's driving impact, and are the storm properties back online there?

Yes. So what you're referring to is the impact on our Marina portfolio, the Marina annuals. We're working our way through that 3 specific properties that were previously damaged by storms. It's just taking us a little bit more time to work through the permitting process and complete construction. We expect those properties to come online fully in 2026. So we'll see a rebound. We're not seeing an impact from an overall demand perspective, rather, it's driven by the impact of those properties that have some reduced capacity.

Our next question will come from Wesley Golladay with Baird.

Can you talk about the seasonal can you talk about the seasonal and transient RV trends ex Canada?

Sure. What I'd say just kind of walking through the math or the analysis that I discussed earlier. If you think about the remainder, what we're seeing is reservation level or pacing that is similar to what we've seen year-to-date in 2025.

Okay. And then when we look at the building blocks for '26 RV revenue growth, it looks like this year, overall revenue growth lagged the rate growth that was set last year. Do you expect similar headwinds this year on occupancy and other items?

As we look forward, I'll go back to just what I highlighted with respect to the rate increases, and what we're seeing is early acceptance. I would expect that we're going to go to something that's a more normal trend for us, which would include occupancy that would improve over what we've seen over the prior year.

And the most recent data point we have on that is the sites that I mentioned just the annual growth, annual RV sites growth in the quarter.

And the next question comes from David Segall with Green Street.

I was hoping you can kind of provide a little more color on how you can backfill the missing demand from Canadian customers of domestic and domestic customers and whether that might involve discounted rates or spur demand?

Sure. It's really about exposing those customers to the property. So our marketing strategy really -- we engaged with previous guests and try to give them exposure to the new properties, making social media post. It's really important and making them very relevant and topical. We have over 2.2 million fans and followers between Facebook, Instagram and Twitter. We use pictures and videos of the locations to really help the customer make the decision to book. And then we're very focused on leveraging the current news cycle for topical material that we can really incorporate into our marketing, including sporting events, local festivals and that type of thing to draw people into and experience the properties. In many ways, we try to view it as a sample to property, you'll try it, you like it kind of thing. And I think we've been successful with that in the past. And then we successfully work with online travel agents, [ expediabooking.com ] to post our properties on their websites.

Okay. So you're not necessarily trying to cut rates to fill demand, it's more of a marketing play.

Yes. And that decision whether or not to offer concessions is done on a market-by-market or property-by-property basis and in some instances, where we see it makes sense to reduce rates and bring in volume, we will do that.

Great. And then for my second question, just with regard to the several hundred annual RV sites that you released in the quarter, looks like it effectively reversed the sites that went last quarter that went from manual to transient. Are you reletting the same sites that had been vacated last quarter or these different sites? And why the addition of these additional annual paying sites not seem to impact the outlook for the remainder of the year? Is it just too late in the year to make a difference?

Yes. I think the latter part of your question is the answer to the impact. There is impact, of course, from filling those, but it's modest, just given the time left in the year. When you think about the chart that we provide that shows the site count, the annuals increased as you saw in the transient decrease. Essentially, the way that chart works all sites are available for transient to the extent that we fill annuals we're going to show that, and it just naturally offsets the transient. And finally, I guess said so we didn't release the same sites. It was the mix of sites that we filled in the quarter, that changed.

And the next question will come from Omotayo Okusanya with Deutsche Bank.

I just wanted to wanted to go back to Yana's question just about guidance. Again, just kind of you've been too late in the year already, but there's still that $0.10 gap from that perspective. Just wondering, again, at this point, what's driving the higher end or the lower end of guidance kind of at this stage in the year?

Well, I guess I'll just say when you look at the math, yes, there's a difference. I'll also comment. We've done this the other way in the fourth quarter, where we've reduced the range to $0.06, and we've had confusion on that. So I'm not sure which way is the right way to handle it on a go-forward basis. But with respect to the upper and the lower end of guidance, I think I would point to, as I mentioned, we don't have an assumption for a storm event. So that's not factored in at all to the extent that we see meaningful acceleration in something like MH occupancy, that could potentially drive revenues. We could see expense changes potentially if we have not yet seen meaningful impact from tariffs or other influencers on expenses. But I suppose it's possible that, that could come up in the quarter. And generally speaking, there could be just other points of volatility in the business, but there's not a signal as it relates to the difference between the guidance for the quarter and the guidance for the full year.

That's helpful. And then 1 follow-up question. In regards to kind of initiatives to kind of move some of the transient business over to annual, again to kind of just lower volatility in general. Could you talk a little bit about kind of what's happening along those lines, how successful you are at kind of making some of those conversions, or whether it's kind of been a little bit more difficult than you were anticipating?

I'll just speak to the typical trends that we see. And of our annual customers, about 15% to 20% of them has previously stayed with us as a transient or a seasonal. That also adds to our seasonal customers, 15% to 20% of them has previously stayed with us as a transient customer. So that pipeline of an original transient stay that ends up migrating to longer-term stays for us is, call it, in that 20% range. And that's been relatively consistent. We are focused on -- we have guests on sites that that they experienced a high level of customer service and that they're presented with the ask of a take on a longer-term stay.

Since we have no more questions on the line, at this time, I would like to turn it back over to Marguerite Nader for closing remarks.

Thank you. We appreciate you joining our call today. We look forward to updating you on our next call.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Welcome to Bank of America's 2025 Global Real Estate Conference. I'm Jana Galan, and I cover the residential REITs at BofA. We're very pleased with us to have Equity LifeStyle's CEO, Marguerite Nader; EVP and CFO, Paul Seavey; and President and COO, Patrick Waite.

I'll turn it over to Marguerite to share some opening remarks, and then happy to jump into Q&A and want this to be interactive.

Wonderful. Thank you very much, Jana. I appreciate the opportunity to present today. What I'd like to start with is a couple of pages from our investor presentation, and Paul will walk through -- give a little bit of an operational update, and Patrick will talk a little bit about ELS through the economic cycles.

So on Page 2 of our investor presentation, we are just highlighting the fact that 91% of our revenue comes from annual sources, which is an important component to consider when thinking about the full year results for ELS.

And then the other thing we're pointing out is that our return over the -- since IPO, 30 years ago, has been 14% per year.

Turning to Page 3. We wanted to focus on our strong performance over that time period. We've had a 4.4% long-term NOI growth. And that has translated and we're really focused on translating NOI growth into FFO growth, and we've translated that into 8.4% FFO per share growth.

The next thing to point out is just the REIT-leading balance sheet with a 5.6% interest coverage and something that's unique about ELS, 18% of our debt is fully amortizing. So no refinance risk inside of that 18%. And our term to maturity is 8 years. So certainly on the longer end with limited headwinds with respect to refinancing in the next few years.

With that, I will turn it over to Paul to give a little bit of an operational update that we've been discussing during the conference.

Thanks, Marguerite. With respect to rent in the MH portfolio and the RV and Marina for the 2-month period ending August, our performance on the -- in the Core MH portfolio, showed growth of 5.5% over last year, the same period. And we provided a reference point in our update showing that for the quarter, our guidance was a range of 5% to 5.6%. Occupancy is holding steady at 94.3% as of the end of August in that core portfolio.

The RV and Marina rent was down 10 basis points compared to the same period last year, and the range that we provided for guidance was down 10 basis points to up 50 basis points. And so as we think about rent broadly, we see an offset essentially the performance of the MH offsetting what we saw in the RV space.

Patrick?

Sure. And I'm going to touch on Page 14, it goes over the value proposition in our manufactured housing portfolio, largest part of our business.

Today, a single-family home in the U.S. average cost for new home is about $500,000. Our typical customer purchases a manufactured home in our community for between $100,000 and $150,000. They typically pay cash, and their monthly costs are typically less than $1,000. That compares to the monthly cost of carrying a $500,000 or a single-family home, roughly $2,500. So that value proposition is very stark.

One thing we offer above and beyond the value is the lifestyle that our residents are seeking. That MH business has contributed to durability on our top line revenue stream throughout our history. And that has contributed to outperformance in NOI.

Over the last 25 years, our NOI growth has outpaced inflation by 200 basis points. That's all I had.

Great. Thank you. Maybe starting with MH and kind of the strength there that you're seeing year-to-date heading a little bit above where you guys have guided. And then, maybe talking to that a little bit, like where the upside surprises have come from. And then, as we think about the comments you made on in excess of inflation when we see kind of the COLA adjustments, kind of how do you think about where you're setting rents for next year?

Sure. And I think Patrick can cover that, Jana. I think, we appreciate you leading off with a question on MH, because that's not always the case. And we really appreciate it because it is the core of our business, so we love to talk about it. So Patrick can walk through it and also maybe focus in a little bit on our rate increases for this year.

Yes. So the results in the update are really just based on mix of occupancy over recent periods. So some more occupancy growth in communities that had higher rents that will fluctuate over time and nothing really fundamental in that outcome other than the consistent demand that we see across the portfolio.

Something we've been talking about in the conference has been the rent increases for 2026. And we're in the early process of our budget for 2026. As part of that process, I get together with my operating team, Vice Presidents, and regional managers, our typical regional manager oversees 10 to 15 properties that's typically a mixed-use portfolio, including MH, and we go property-by-property through the submarkets compared against the direct comps from MH, but also reviewing trends in the single-family market and the multifamily market directionally, how that informs demand for the properties in their individual housing submarkets.

So we're working through that process. I would say that it's going very much as it has in recent years. It tends to be very consistent. And again, we continue to see consistent demand. Some of that just came through in the results in our update.

And Jana, we've talked -- we talk often on our earnings calls about our mark-to-market within our MH portfolio, and we continue to see strong gains inside the mark-to-market on new residents.

And I think kind of the start to the year, maybe occupancy was a little bit lower than expected from some of the hurricane damage. Maybe if you could just kind of talk to that in terms of whether occupancy is coming back the way you anticipated or a little bit stronger? And any trends kind of also on the like home sales?

Sure.

Yes. So first, I'll touch on occupancy. And the impact from last season to hurricanes is basically 300 total sites that, where we lost home inventory, and we're going to be replenishing that home inventory.

Just as a reminder, I try to put it in context that those 300 sites are across the portfolio of 70,000 sites, where across the portfolio, we're investing in new home inventory and maintaining and growing occupancy.

In Florida, we continue to see consistent demand and then those properties that were impacted, we continue to see consistent demand. So we feel like we're in a good position with respect to the demand for our properties and occupancy growth. With respect to new home sales, the last few quarters have been around 120 new home sales in the quarter, annualized around 500. 500 to 600 new home sales for a full year would have considered -- would have been considered to be a reasonable or good year pre-COVID. So we went through a period of higher demand, which elevated home sales. I'd say that's normalized, and we continue to see consistent demand across the MH portfolio.

Do you have kind of like a rough number of, kind of, what kind of churn or like new homes you'd like to see just to keep kind of the average age of communities, kind of like, the curb appeal of them?

Yes, I don't know that I would frame it that way. I mean typically, we're investing somewhere between 400 and 600 new homes, over the course of the portfolio or across the portfolio over the course of the year, back in ebb and flow just based on the timing of the inventory coming into the properties when we impose a calendar over the run rate.

And what we tend to see, just like you see in single-family neighborhoods where there is a new home that's brought into the street inside of our manufactured home communities all of a sudden, you see that there's a person next door that says they will want a new home. So the street starts to change. And then, so you see a lot of that. And sometimes we'll start that mission kind of and then we'll see other people, other customers kind of finishing off the street that way.

And I guess kind of some of the regulatory, federal efforts to improve affordable housing. There's been some changes at HUD in terms of the requirements for manufactured homes. I don't know if you see this kind of really bringing down price or is that a potential benefit to the sector?

Yes. So the road to housing, there's been some conversations about manufactured housing that hadn't been there in the past, and Patrick can walk through some of the changes that really the manufacturers have done a really good job of working with the regulators and coming to some things that I think are going to be positive for the MH industry. And Patrick, maybe you could walk through the chassis requirements.

Yes. So a significant component of the bill for the MH space is the option to complete a HUD home to HUD standards without a chassis. And basically, what that means is in the manufacturing process today, the first step is having a steel chassis that flooring has laid down on. That's then moves to several further steps. It's like a Model T being manufactured. You have interior walls and fixtures, you work exterior and eventually roof trusses in the roof.

But when that home leaves the factory, it is on the steel chassis and the steel chassis is embedded in the structure of the home itself. And that's the way the home has eventually delivered it and set whatever its final locations.

The flexibility to remove the chassis is going to provide for particularly the manufacturers to access some other components of the housing market that have been a challenge. One, they'll be able to do multi-storey. So two storey is something that is very difficult, if not impossible to do when you have a chassis. That's going to be an advantage in higher density uses. Also, the -- a broader acceptance of a home without a chassis that has an elevation that's aesthetically much more like a single-family home, anticipating that will provide access to infill vacant sites in urban locations and denser suburban locations as well.

So it will open up some additional avenues for the manufacturers. I think broadly, that's good for the industry, and it will provide some flexibility for land lease communities like us.

Great. And then maybe just on Florida specifically because we are hearing of kind of single-family home prices coming down a bit in various markets there. Just do you see that product kind of competing with yours?

I get that question a lot about competing against -- directly against manufactured housing. I appreciate from a value proposition. The value proposition that I referenced earlier is really substantial. So some moderation in the competing single-family market. I don't think significantly impacts demand for our properties. And we offer something much more broad than single-family neighborhood. Our properties have grassroots activities in groups that just, that occur in that active lifestyle environment.

I explain to investors frequently, when I'm in our communities, particularly in the Sunbelt, the level of activity in common areas in the conference room, pickleball courts, tennis courts, it all of which happens in grassroots, I mean, we're not a core component of those people coming together. They're doing it on their own court. That's just embedded in the community.

So there's a value proposition is a huge driver. But even if you were inclined to move up to a more moderately priced house, it still is substantially more expensive, you lack that community engagement.

[indiscernible]

Yes. I mean, this push just happened. So this is just -- this is very new. This is not -- and the issue that has long been in the industry with respect to new development on the MH side of the business is local city council members not wanting these manufactured home communities built in their backyard. So the nimbyism has been an issue. And what we're talking about here doesn't solve for that. So this is a federal regulation.

We still need to have conversations at the local level -- and that's where the change needs to take place, and we haven't seen very much movement on that side. We have been successful over the years -- over the last few years in getting entitlement rights for development for our properties, so expansions of our properties. And we've built MH sites and RV sites. But ground-up development has been much more difficult.

So isn't there any better [indiscernible]

Right. At this point, there isn't.

Do you expect that will be?

It's really difficult to tell us just -- you're talking about so many different local municipalities and what their agenda is differs by county. And do they really -- is there a real desire to engage in the affordable housing discussion? Or is it just words on a page?

Any other MH questions before we flip to RV?

All right. Just maybe if we could talk to a little bit the -- just how the summer played out on the transient side, Labor Day weekend. Any color around that? And just kind of where you are relative to pre-COVID and kind of this more active hybrid work, and now we're really seeing people call back into the office?

Sure. Sure.

So in terms of the -- a little bit more color around the performance update, our seasonal and transient rents essentially are in line with our expectations. Labor Day specifically was down a bit from last year, but a bit better than we expected.

The annual line item, the Marina properties in the core portfolio. We have three properties, two of which Patrick talked about on the earnings call in July and another that had some slips that were damaged in prior storms, and the restoration of those slips and the recovery, there are some permitting issues and so forth that are taking longer. And as a result, occupancy was lower. So it's really those Marina locations that were impacting the results in the quarter-to-date period.

And in the transient business in general, we're just seeing kind of reverting back to pre-COVID dynamics just from a standpoint of the availability of time for what people have -- they are now coming out on the Friday night as opposed to a Thursday night during COVID and unable to stay on the Sunday night because they have to be at work in the office, as you point out, Jana, on Monday.

And maybe just going back to kind of the Marina component a bit. I guess, is there any kind of like outlook in terms of the timing of like the permits? And then on top of that, how long for the work to be done to make it functional again?

Yes. The Marina that really was the change from the Q2 earnings call. It's Gulf Coast of Florida. It's in a very good location. It's a very strong Marina. We'll be building back those docks to be completed, it looks like mid-2026. It's a high-demand location. I don't foresee much of a challenge in recapturing the occupancy headwind that we had during construction.

And I guess, like historically, is there a certain level of whether it be kind of hurricane damage or when you would actually like take something out of same-store or how do you think about kind of just the reporting around these events?

Yes. We look at that. We have internal criteria that we use to make that decision. And it is very much focused around a property. There's a significant disruption or a ceasing of operations as the property recovers. In the case of the properties that we're discussing at the moment, the disruption is less significant than that. And so we have not gone so far as to remove them from the core portfolio.

And then I guess, just in terms of kind of the seasonality, it sounds like trending kind of at the low end of the guide, quarter-to-date. It's kind of more due to this timing issue? Or is there also like I guess, how should we think about the seasonality of transient. I guess it picks up in 4Q?

Well, the largest quarter for transient is the third quarter. So we're coming out of that and heading into the fourth quarter and then the first quarter where the seasonal event is more significant contributor.

And then maybe just kind of how you're thinking about seasonal year-over-year?

Yes. The primary focus on the seasonal, we talked about it on, I think, the first and the second quarter earnings calls, and that relates to the impact of the Canadian customers. They do represent a component of that. And we had mentioned previously that the reservation pace on the early reservations that were made was down about 25% compared to prior year.

We also noted that we didn't really expect that to change after the Canadian snowbirds left in March and April. I didn't expect that to change until later into the fall closer to winter when they would normally make reservations for the coming season. So that's kind of played out as expected, and we're beginning our marketing efforts now to remind them that it's going to be cold in the winter, and they should go ahead and book to be warm in Florida.

And I guess kind of on that like shorter booking windows that the industry is experiencing because of just volatility in weather and that's both for seasonal and transient or the seasonal because it is longer, it's more like a commitment they'll know in advance.

The booking window that we talk about is really on that transient side. The seasonal customer generally commits to us after they leave for the prior year. So when they're leaving in March and April, they're really focused on getting the particular site that they want. They want to be around the group of people that they tend to travel with, and that's an important piece for them. And so that's a longer booking window.

And so, I guess for this coming season, when they left March, April, that's where that 25%, I assume -- And then now you're starting kind of the campaign to remind everyone.

Right. And this is what we would normally do, although we just have a bigger gap where we've been focused right now. It's getting to be a little bit colder. I think the temperature needs to go down a little bit more before there's a realization that it's going to get really cold soon. And so we would pick up those efforts in -- we're starting them now but pick it up, pick up the pace in October and November. And encourage our Canadian friends to come down and visit Florida.

And I guess kind of in your various products and different pricing tiers with Thousand Trails and Encore and I guess, are there any changes that you guys are thinking of doing or adding or taking away different levels just to kind of like spur a little bit more demand?

No. I mean, as it relates to the Canadians, it's really the Canadian traffic and our Canadian customers. It's really about just making sure that Canadians feel comfortable, coming across the border and coming to Florida. And I think that's what we are focused on.

On the Thousand Trails side, what we've seen is an increase in RV dealer leads. And that is, as I think you remember, Jana, those are leads that come to us. They -- through RV dealer, someone buys an RV, they get a Thousand Trails membership and they have the ability to camp for a year and then the following year, they pay. So it's camp for free for a year and then they have the ability to then become a full-time member. We're seeing an increase in that activity, which we view as a positive in RV sales are up and they are intended to be up for 2025 for the full year.

And what we've seen on the -- we have our Thousand Trails camp passes and probably 12 years ago, we were in the selling about 4,000 of those. We now sell every year about 19,000, 20,000 passes. So there's been considerable movement on that front within the Thousand Trails platform.

And also this year, we introduced a new upgrade product, which was dues-based product that I mentioned on the last earnings call, and we have had success in launching that product this year. And it's just a matter of our customers wanting to spend a longer time with us, a larger -- longer booking window and being able to go from property to property. So that has been a successful endeavor for us.

Great. And then, can you remind us on the annual RV, what's the average kind of like tenure of residents?

Sure. It's similar to what it is in our MH portfolio, about 10-plus years. So a very sticky customer base on both the MH and the RV annual.

[indiscernible]

Yes. I think the challenge that we face on the transient side of the business, we talk about it very often, is the weather challenges. And it's not the big weather events, it's a stormy Saturday or a stormy Friday weekend. And the customer knows that in advance, a 10-day advance window and is saying, I'm not going to camp this weekend, and so there's just -- you just see cancellations coming through as a result of weather. So that's not any different than what we've experienced in the past. So it's really that on the transient side.

On the annual side, I think there -- on the annual RV side, there's really high demand for our product offering because it is a really affordable way to have a second home in a location that's relatively -- can be relatively close to your home. So 60, 90 miles away, and you develop a whole new friends set at this property. And so we see high demand for people signing up on our website to try to engage with us and book an annual stay.

Maybe turning over to the transaction market. And I know it's not very active, but this year, one of your peers announced a couple of assets that they put on the market, and also announced that they then had capital to buy a lot of assets. So curious if that just kind of increased a little bit of people shopping their portfolios.

Yes. I think some of those transactions, I don't know where the state of those, whether or not they're when they're closing or not. But certainly, we haven't seen much of a change from a transaction standpoint. I think there are a lot of owners who appreciated the cap rates of 2 or 3 years ago and appreciated the interest rates of 2 or 3 years ago and are waiting on the sidelines for those to come back.

And as a reminder, just in terms of the space within the manufactured housing space, there are about what we would consider 3,000 investable assets, we own 200 of those. So there's a real opportunity to buy more inside of the MH space. And on the RV space, there is about 16,000 RV parks across the country, 8,000 of which are private, 8,000 are public. But the 8,000 that are private, we would consider about 1,200 of those to be investable, and we own roughly 200 of those.

So there are a lot of opportunities out there for us to further expand our portfolio. And it's just a matter of continuing to work with interested sellers to complete a transaction.

And I guess maybe if you could just help us understand some of the criteria that like whittles that down on the MH side, you look for low number of rental units or...

Sure. It's actually interesting. The MH space has 50,000 that we whittle down to 3,000. Going from 50,000 to 3,000 is mainly driven by just the number of sites. So there are a lot of properties that are inside of the 47,000 that are 2,550 site properties. So first it's primarily a number of sites driven and then we further bifurcated between age qualified, all age, location and that type thing. But the biggest amount comes out when you deal with the number of sites and just the size of the property.

Any questions?

[indiscernible]

Right. So, when we became a public company in 1992, we had some all-age assets. We sat down. We tried to figure out what was -- what should ELS become at the time it was MHC, what should we be when we grow up. And as we looked at it, we looked at the opportunity to expand in the age-qualified space. And the all -- what we were seeing in all age was that volatility, kind of what we talk about on the transient side, that volatility that somebody who owns ELS is not looking for. So we saw on the all-age side where you could have an impact to the local community, whether or not a factory closes down or some other employment issue, and you see a large vacancy rate that happens inside of the community.

So what we did is really focus on growing our age restricted portfolio. And what we found is that, that is -- has represented a very stable revenue source for us. There are a lot of things that when you buy all-age property that you need to consider between what's happening in the school districts, what's happening in the employment, what's happening with the neighborhood in general, as compared to what you look at on the age-restricted side, it's really about the -- what's happening inside your local community.

You're much more in control. So we found that the age restricted provides a much more stable base for us.

I think, there maybe a couple of larger portfolios on the market now. And I think maybe those are a mix of all age. I don't know if you have any comments or views on those?

Sure. And maybe Patrick could weigh in a little bit on this, because some of the portfolios that are for sale, Patrick operated during a time when he left ELS for a brief moment. But those the properties -- the portfolios that are for sale are primarily all-age assets. They do have some age restricted assets, but there's a desire, I believe, to sell them all together as opposed to cherry pick.

And maybe Patrick, you could talk a little bit about your experience.

Yes. So those properties, Marguerite touched on a little bit earlier, they are typical all-age properties, where generally you have people looking for an entry-level home, frequently young families, we want to be in a good school district. They want a property that's professionally managed. It's very helpful to have clubhouse facilities, so that kids have a place to participate in the study groups and other activities. That generally, that portfolio, which is spread around to various larger owners at this point was in Texas, some in Florida throughout the upper Midwest Iowa, Michigan.

And as was touched on just a little bit earlier, the volatility that occurs, if you have an economic disruption, we happen to own and operate that portfolio going into the great recession, which was significantly disruptive. Just led to a transition when people need to kind of reorganize and typically are relocating relative to their next employment opportunity.

As the economy started to recover, the portfolio recovered. And I think long term, performed relatively well. But it does introduce that greater volatility that compared to the experience of ELS through that period, just the stability of the occupancy and the revenue stream was much more noticeable.

I think we have time for one more question before a rapid fire round.

[indiscernible]

Yes. Yes, certainly. So over the years, -- we've -- our rental program has been lower, it's grown. And so I think probably 15 years ago, it was about 3%, at a high point, about 9%. Now it's sub 3% of our occupancy. And it is certainly -- it is a tool that we can use to increase occupancy.

And it's much better to do that when you're at 3% versus when you're at 9%. So that flexibility, we're in that place right now where we have that flexibility to be able to do that, and it's certainly a good return on our investment.

Now these are three questions we're asking all REITs presenting at the conference.

When the Fed starts to cut, do you expect REITs for long-term debt to decline, stay flat, or rise?

Decline.

Last year, the majority of companies stated the ramping up spending on AI initiatives. How would you characterize your plans over the next year? Spend more, flat, or less?

More.

And then, do you believe same-store NOI for your sector will be higher or lower or the same next year?

Stay the same.

Thank you.

Thank you very much.