Equity Lifestyle Properties, Inc. 2026 Q3 Earnings Call

Good morning, and thank you for joining us today. I am pleased to discuss our third quarter results and share early insights into the momentum we see building into 2027. For the quarter, we delivered strong normalized FFO growth of 4.6%, in line with our expectations. Our full year guidance reflects continued strength. I will highlight the key demand drivers supporting our annual business, as well as the ways we are reaching and engaging new customers. The strength of our business is reflected in continued occupancy gains. Our teams remain focused on increasing occupancy, and we believe we have the right product and price point to continue this growth. Our communities have a long track record of sustaining high occupancy levels with 50% of our communities more than 98% occupied for an extended period.

Our customers are seeking a low-maintenance lifestyle that offers privacy and control of their home, along with opportunities for connection and an active social life. Our communities meet these needs by offering an amenity-rich environment, strong sense of community, and a compelling value compared to other options. For many years, we have discussed the impact of baby boomers choosing our locations for the lifestyle, value, and sense of community they offer. We are now seeing Gen X customers make similar decisions, with many seeking a community setting that supports a more flexible, low-maintenance lifestyle. Over the next 20 years, approximately 10,000 people per day will turn 65, creating a steady source of demand that supports the long-term outlook for our communities. Our customer acquisition platform across both manufactured housing and RV provides a strong lead flow for our teams in the field.

Our teams are well-versed at identifying prior guests and prospective customers who are interested in annual stays and using data and technology to nurture those relationships over time. For the RV customer, we have longstanding relationships with leading booking platforms that help us reach travelers as they are planning trips. Turning to our 2027 expectations, we expect continued growth across both our manufactured housing and RV portfolios. We continue to engage closely with our residents to identify and prioritize capital improvements across our communities, including investments in amenities, infrastructure, common areas, and other enhancements that support the residents' experience. These investments improve the quality and appeal of our communities while also supporting the long-term value of our assets. Our current performance and early outlook for 2027 underscores the durability of our platform. I want to thank our employees for their hard work and commitment to our residents and customers.

Their efforts enhance the customer experience and contribute to our record of superior operating performance. I will now turn the call over to Patrick to provide an overview of property operations.

Thanks, Marguerite. We wrapped up a busy summer season in the third quarter, and soon we'll turn our focus to welcoming snowbirds in the Sun Belt. In the quarter, we increased MH occupancy by nearly 100 sites. We sold 97 new homes during the quarter, and we continue to meet demand from both buyers and renters. Florida was the primary driver of the occupancy gains, in particular Fort Lauderdale and West Palm Beach markets, the Vero Beach market, and the Fort Myers/Punta Gorda markets on the Gulf Coast. Additional drivers were properties in California and throughout the Northern U.S. We continue to fill expansion sites with properties in the Arizona markets of Phoenix and Mesa contributing to MH occupancy growth year to date. During the quarter, we launched a redesigned website for our MH communities.

The new website modernizes the customer experience with improved navigation, search functionality, mobile accessibility, and more robust content. Together, these enhancements improve lead generation and make it easier for prospective residents to find the right home in the ideal community. Early results are encouraging, with community and home tour requests up double digits year over year. Demographics continue to provide a tailwind for MH demand. The baby boomers continue to turn 65 at a rate of 10,000 per day, and the oldest Gen Xers are now 61. They are increasingly finding our communities to be an attractive option, offering compelling value and an active lifestyle. While the average age of new residents remains stable around 65, the Gen X cohort is following the baby boomers as an important core audience.

The prospective residents, differing in work status, life stage, and communication habits, are prioritizing flexible tour options, clear cost information, and a balanced mix of marketing outreach. Boomer and Gen X residents at our 55 plus communities typically continue to work, as the typical new resident in our communities comes to us during their working years, and they transition to full-time retirement during their residency. 100 Days of Camping is our annual summer-long social media campaign in which we highlight the peak summer camping season between Memorial Day and Labor Day. This was our 12th annual campaign and was marked by record numbers. The hashtag received more than 100 million views across social channels. We doubled our 2025 views, largely driven by highly engaged social posts.

This high level of engagement reflects the strong sense of community found at our RV properties across the country, largely based on the friendships and family connections among our annual campers, which leads to stable occupancy as these customers return season after season. Annual RV occupancy grew by 444 sites during the quarter, similarly driven by gains in our northern summer-focused RV campgrounds. Last month, MHI hosted the 2026 Homes on the Hill Showcase, of which ELS is a sponsor. The event showcased several homes on the National Mall in Washington, D.C., including a HUD home built without a chassis and a two-story HUD home built without a chassis on the second floor.

The event coincided with the 50th anniversary of manufactured housing and came on the heels of the passage of the Road to Housing Act, which removes the permanent chassis requirement for manufactured housing and creates new opportunities for innovation and broader adoption of factory-built housing. Our communities offer great value and lifestyle to our residents, and innovation in home plans and options available to them further supports the value proposition. 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 full year 2026 with some fourth quarter highlights, and close with a discussion of our balance sheet. Third quarter normalized FFO was $0.79 per share, in line with our guidance. Continued strong performance in our core portfolio resulted in 6.7% NOI growth in the quarter. Core community-based rental income increased 5.7% for the quarter and for the September year-to-date periods compared to the same periods in 2025. Base rental income growth for the third quarter outperformed the midpoint of our guidance and includes rate growth of 5.6%. Occupied sites increased by 99 during the quarter and 166 year-to-date. Core RV and Marina base rental income increased 2.1% for the third quarter compared to prior year.

Annual base rental income, which represents approximately 75% of total RV and marina base rental income, increased 5.3% for the third quarter, 40 basis points higher than our guidance midpoint. Rental income growth exceeded the midpoint of our guidance estimate mainly as a result of an increase in occupied annual sites. For the third quarter, seasonal and transient rent decreased 4.4% and 5.8%, respectively, slightly better than our guidance expectations. The net contribution from our total membership business consists of annual subscription and upgrade revenues offset by sales and marketing expenses. Membership dues subscription revenue increased 9.2% and 10.8% for the third quarter and September year-to-date periods, respectively. The growth in dues revenue is the primary contributor to the increase in net contribution from our membership business. That net contribution has grown 9.5% to $52.8 million in the September year-to-date period compared to prior year.

Core utility and other income increased 2.6% for the third quarter compared to prior year. Our utility income recovery percentage was 48.5% in the third quarter and 49.7% in the year-to-date period in 2026. Year-to-date utility recovery is about 160 basis points higher than the same period in 2025. Core property operating expenses for the year-to-date period were 2% higher than the same period last year. Roughly 135 basis points lower than average CPI over the same period. Third quarter core property operating revenues increased 4.4%, while core property operating expenses increased 1.3%, resulting in growth in core NOI before property management of 6.7%. For the year-to-date period, core NOI before property management increased 6%. Income from property operations generated by our non-core portfolio was $3 million in the quarter and $8.8 million year to date.