Q4 2021 Equity LifeStyle Properties Inc Earnings Call
Annual RV revenue growth of 7%, where we increased core annual RV occupancy by approximately 200 sites for the year and transient RV revenue growth of 43% in.
In the quarter, we saw an increase in RV revenue of 16%. This growth was fueled by marketing campaigns for fall and winter camping opportunities.
The demand continues to accelerate for weekday campaign in the fourth quarter weekday occupancy increased 18% as customers extended their typical weekend trips into Monday, Tuesday, and Wednesday, the extended length of stay was driven primarily by our properties in Florida, and California. The trend has been evident throughout the pandemic.
In 2021, our thousand trails membership properties performed better than expected our dues revenue increased nearly 10% to $58 million. We sold almost 24000 camping passes an increase of over 16% from 2020.
The channel with the largest increase was our online channel with a 30% increase in sales.
Our upgrade sales increased almost $15 million fueled by the new upgrade product that we launched in the first quarter.
Our quarterly survey results show the entry of younger our viewers and remote work flexibility has increased interest in our RV resorts and campgrounds.
Among those that reported plans to camp more 26% reported flexibility to work remotely as a driving reason about two thirds of customers and prospects surveyed said that they plan to travel in their RV or staying a campground more in the coming year than they did last year.
Turning to 2022, we have issued guidance of $2 69 at the midpoint for next year, which is a 6% growth in normalized <unk> per share.
The demand for our MH communities communities continues to increase over the last five years, we have sold approximately 2600, new homes in our MH communities. These new homes improve the look of the community as a homeowners throughout our portfolio showcase their pride of ownership.
We have noticed rent increases for approximately 65% of our residents and anticipate a four 8% rate growth and core MH rent revenue.
Our guidance for 'twenty two reflects the strength in our business. Our guidance is built based on the operating climate of each property, including a robust market survey process and continuous communication with our residents.
In 2021, we have deployed over $800 million of capital.
These transactions, we added approximately 5600 RV sites in 4000 Marina slips to the portfolio in 2021.
We were pleased to close on the acquisition of MH village Datacom MH village is the premier online marketplace dedicated to buying and selling manufactured homes and Datacom provides industry information, including market surveys and manufactured home appraisal reports.
Additionally, in 2021, we closed on three parcels of land totaling 725 acres.
This additional acreage brings our total undeveloped acres to 6500, our vacant land is geographically diverse and will positively contribute to our future <unk> growth.
Next I'd like to update you on our 2022 dividend policy. The board has approved setting the annual dividend rate at $1 64 per share a 13% increase the board will determine the amount of each quarterly dividend in advance of payment.
The stability and growth of our cash flow, our solid balance sheet and the strong underlying trends in our business are the primary drivers of the decision to increase the dividend.
Historically, we have been able to take advantage of opportunities due to the free cash flow generated by our operations.
This new dividend increase of $37 million is roughly equivalent to our anticipated increase in <unk> for 2022.
In 2022, we expect to have in excess of $110 million of discretionary capital after meeting our obligations for dividend payments recurring capex and principal payments.
Over the past five years, we have increased our dividend on average 11%.
Since the start of the pandemic, we have asked a lot of our team members. Our team members are focused on providing excellent customer service in the new operating environment. The results have been impressive and I am grateful for their continued energy and excitement that dedicated to each role I will now turn it over to Paul to walk through the numbers in detail.
Thanks, Marguerite and good morning, everyone.
I will review, our fourth quarter and full year 2021 results and provide an overview of our first quarter and full year 2022 guidance.
Fourth quarter normalized <unk> was <unk> 64 per share strong performance in our core portfolio generated eight 2% NOI growth for the fourth quarter.
Core NOI growth of eight 8% for the full year contributed to our normalized <unk> per share growth of 16, 6%.
Core community based rental income increased four 7% for the full year compared to 2020.
Rate increases contributed four 2% growth while occupancy generated the additional 50 basis points.
Our 2021 core occupancy increase included a gain of 785 homeowners. The continued strong demand for home sales is reduced inventory available for rental as we are focused on growth in occupancy from home sale.
Our rental homes currently represent 5% of our MH occupancy.
Full year core resort and Marina base rental income increased 12, 9% compared to 2020.
Growth from annuals was six 8% with four 3% from rate increases and two 5% from occupancy gains.
Full year rent from core RV seasonal was flat to 2020.
Strong demand for days of a month or more drove outperformance in the second third and fourth quarters and offset the unfavorable impact of travel restrictions in the first quarter.
Full year core rent from transient customers increased to 43, 2% for the year, consisting of 24% from rate and 19% from occupancy.
For the full year net contribution from our membership business was $13 $3 million higher than 2020, an increase of 23%.
Dues revenues increased almost 10%, reflecting a three 5% increase in the member base and a rate increase of approximately six 5%.
The increase in average rate includes the impact of dues related to our trails collection product, which provides access to RV properties outside the thousand trails network.
At year end, 18% of our members held it trails collection path.
Strong demand for our upgrade products as evidenced by the full year increase in sales volume of 44%.
Full year growth in core utility and other income is mainly the result of increases in utility income.
Utility income is generated from billings to our customers based on their usage or recovery percentage remained consistent in 2021 compared to 2020.
Our earnings release and supplemental package includes line item detail for core expenses with comparisons to prior periods for the quarter and full year.
Overall full year 2021 core property operating expenses increased seven 7% compared to 2020.
Setting aside sales and marketing expenses that are directly related to the performance of our membership upgrade sales utilities and insurance and other expenses show the highest percentage growth.
Overall, we experienced a mid single digit rate increase across all utility expense types with usage driving the remainder of the increase.
Our utility income recovery rate remained consistent with our historical level at approximately 45% for the year.
We've previously discussed the impact of our April insurance renewal, which is the main driver of increased expense in that category.
The remaining expense line items generally head inflationary increases in 2021.
Our noncore properties contributed $7 9 million in the quarter and $22 4 million for the full year.
This group of properties is performed in line with our pro forma underwriting expectations.
Property management, and corporate G&A were $106 $1 million for the full year.
Other income and expenses net which includes our sales operations joint venture income as well as interest and other corporate income was $20 7 million for the year in.
And interest and amortization expenses were $108 7 million for the full year.
The press release and supplemental package provide an overview of 2022 first quarter and full year earnings guidance.
As I provide some context for the information we've provided keep in mind. My remarks are intended to provide our current estimate of future results.
All growth rates and revenue and expense projections represent mid points in our guidance range and are qualified by the risk factors included in our press release and supplemental package.
Our guidance for 2022 full year normalized <unk> is $2 69 per share at the midpoint of our guidance range of $2 64 to $2 74.
We project core property operating income growth of five 9% at the midpoint of our range of five 4% to six 4%.
Full year guidance assumes core rent rate growth in the ranges of four 6% to four 8% for MH and 5% to five 2% for annual RV rents.
We assume occupancy in our stabilized MH portfolio will be flat to year end 2021.
Our guidance model includes the impact of all acquisitions, we've announced and the impact of the debt and equity capital events, we disclosed in our earnings release and supplemental package.
The full year guidance model makes no assumptions regarding other capital events or the use of free cash flow, we expect to generate in 2022.
Our first quarter guidance assumes <unk> <unk> per share in the range of 66 to 72.
Which represents approximately 25% to 26% of the full year normalized <unk> per share.
Core property operating income growth is projected to be seven 4% at the midpoint of our guidance range for the first quarter.
The comparison to prior year is impacted by the results from our RV business, particularly the seasonal RV rent in the first quarter of 2021.
Our guidance assumes first quarter seasonal and transient RV revenues performed in line with our current reservation pace.
Our customer reservation trends continue to indicate strong interest in visiting our properties during the remainder of the winter season.
As a reminder in years prior to 2020.
The first quarter represented approximately 50% of our seasonal RV revenues for the year.
I'll now provide some comments on the financing market and our balance sheet.
As noted in the earnings release and supplemental package, we've raised equity from stock sales using our ATM and closed an unsecured term loan to generate total proceeds of approximately $366 $4 million.
During 2021, we invested cash of approximately $650 million net of assumed debt and LP units in acquisitions.
This investment was funded with available cash and proceeds from our line of credit.
At year end, our unsecured line of credit balance was $349 million.
After using proceeds from our equity and debt capital events. The current line of credit balance is approximately $69 million.
Current secured debt terms are 10 years at coupons between 295% and 4%, 60% to 75% loan to value and one four to one six times debt service coverage.
We continue to see strong interest from life companies, <unk> and <unk> lenders to lend at historically low rates for terms 10 years and longer.
High quality age qualified MH assets continue to command best financing terms.
We have approximately $74 million of secured debt maturing in 2022.
Our $500 million line of credit currently has approximately $430 million available.
Our ATM program currently has approximately $30 million of available liquidity.
Our weighted average secured debt maturity is approximately 12 years.
Our debt to adjusted EBITDA is around five six times and our interest coverage is five five times.
We continue to place high importance on balance sheet flexibility and we believe we have multiple sources of capital available to us.
Now we would like to open it up for questions.
Certainly ladies and gentlemen, thank you I have a question at this time. Please press Star then one on your Touchtone telephone.
My question has been answered and you'd like to remove yourself from the queue. Please press the pound key.
Our first question comes from the line of Brad Heffern from RBC capital markets. Your question. Please.
Hey, good morning, everyone. Thanks for taking my questions.
I was wondering if you could talk through how the Canadian border reopening has gone so far and how much of a recovery of that is included in the guide I think it was roughly $8 million negative impact in the first quarter of 'twenty. One so is there a full recovery of that assumed.
Yes.
In terms of that comp.
Youre right. It was $8 million last year, our guidance anticipates that we recover that.
With growth in the I'll call it mid to high teens in terms of a percentage.
In the first quarter.
Okay great.
And then on transient RV, obviously, we've seen a lot of tailwind sort of in 2021 I'm curious.
Does that continue to be sticky the new.
The customers that Youre seeing there and any color you can give on that.
Yes, it's Patrick.
And the best way to frame it is around the new transit customers.
Coming into the platform.
And just based on recent surveys about 12%.
Of customers new to us are actually new to camping.
And with those new customers.
There there is similar to our current customer base average age was around 60.
And what we're seeing is.
Return percentage them coming back to our property in the following year, our intent to come back to us in the following year.
Around 20%.
As a lift from pre pandemic, where that where that return percentage was in the neighborhood of 15%. So there are there are more sticky customer than we've seen historically.
And other surveys that we have indicated you have 60% of our beers intend to camp more in 2022, then in 2020 once a direct directionally.
The customer behavior is favorable for us and I think Brad as.
As I pointed out in my comments, just that weekday midweek camping activity has increased.
I think Wednesday was the highest.
That we had for the quarter, which is about a 23%.
Growth and nice year over year.
Really think that the flexibility and work schedules that positively impacts those results and we anticipate that that those that that would continue in terms of people having continued flexibility in their work schedules.
Great. Thank you.
Thanks Roger.
Our next question comes from the line of John Kim from BMO capital markets. Your question. Please.
Okay.
Good morning, John .
Hey, good morning, sorry.
Can you just clarify what the transient RV growth was in the fourth quarter. I think you said for the year was 43% for the quarter was 16 just wanted to make sure that was the case, but also on guidance for the year, what are you expecting as far as transient RV.
Revenue in thousand trail membership upgrade sales.
Yes.
So to your first question John .
The transient RV growth for the quarter.
26%.
And then so do you think that's a good run rate for the year.
I'm sorry.
Is that a is that a fair run rate for the year.
On a go forward basis.
Okay.
Is the Youre asking for the transient run rate for the year is that what you're asking John yes, exactly it's tied into the original question as far as guidance.
So I guess I'll say.
As we're looking at customer behavior, it's quite different this year as compared to last year right. There is there is.
Last year, the travel restrictions created some challenges for us in the first quarter also translated into shorter stays relative to shorter booking window I should say relative to what we're seeing this year, but for first quarter.
Anticipating.
Mid single digit.
Increased.
Over what we saw which was <unk>.
15% last year and John similar to what we've had in years past the transient activity.
It really takes a little bit more time to.
I appreciate where it's going to be.
As the quarters go forward, so we have less visibility into that and so thats way.
Similar to what we've had in the past that's kind of where we're at.
Okay, and then as far as the expense growth that you have in guidance it was up significantly.
In 2021, and you expect it to moderate this year I wanted to ask particularly about the payroll costs because that was really kept moderate at 2% for the quarter.
Just given.
Certain aspects too to payroll I was wondering how are you. How you were able to maintain that and how you see it going forward.
So John let me just speak to our expense growth assumption overall.
We built that in a manner. It really was similar to the rest of our budget, which is bottom up we start at the property level and look at what we expect and roll all that up.
When we.
Have done that then we take a look at the whole portfolio to understand what it's telling us about the growth and the expectations that we have.
And we then frame it and I think about the disclosure that we provided in our supplemental in the line item detail. If you look at 2021, you can see utilities payroll in R&M. Those three line items combined represent almost two thirds of our operating expenses on a full year basis.
And.
When we think about the assumptions there is obviously a revenue element to it and our expense assumption in the budget and in our guidance.
It maintains a consistent percent of revenues for that.
On a combined basis that two thirds of our expense base.
And so as we think about.
The business and how we might perform going forward, we may see some fluctuation in particular line items.
And some variability as our actual 2022 revenues may differ from.
The numbers that are in our guidance.
And payroll in particular.
Hi.
We're not providing that level of line item detail, John I'd say that with respect to payroll we're focused on the.
Attraction of our employees attraction of employees to fill open positions that we have.
That's resulting in market increases we've talked quite a bit about the.
Experience that we've had in recent years, and we think that that mitigate some of the outsized.
Rate growth that debt.
Being discussed kind of broadly and maybe Patrick you can just touch on some of the operating conditions at the property level with respect to payroll.
John similar to.
You've covered in the last couple of earnings calls.
We have two I think the part of your question.
Have experienced some open positions at the property level and some of that is.
Really focused on our RV properties and particularly <unk>.
Seasonal components. So as you are.
During the summer season, and we're in a little bit of a shoulder and we're going to go into a peak in the Sun belt season here.
And the ramp up to that currently.
And what our property operating teams have done in order to address some of those challenges in filling open positions is cross training and sharing responsibilities.
The net result of that as we have consistently high customer service scores.
I'd like to underscore for our property teams they've done a fantastic job navigating some of those challenges through the summer season, and then as we're working our way into the sunbelt season.
Thanks, and apologies for going over the two questions.
Thanks Sandra.
Thank you. Our next question comes from the line of Michael Goldsmith from UBS. Your question. Please.
Thanks, a lot for taking my question as we think about <unk> NOI algorithm. The 2022 guidance for core NOI growth of five four to six 4% that's a deceleration from the 8% generated in 2021.
Still a little vague.
<unk>.
<unk> comparison relative to maybe two or three years prior to the pandemic just around 501, so should we think about <unk> NOI.
NOI algorithm going forward is fundamentally stronger than maybe it was prior to the pandemic.
I think if you break down the pieces between MH and RV, we've kind of highlighted our MH rent growth. So you can see that and how that's changed over time.
Which is.
A significant ponant to the NOI growth and certainly to the MH revenue and the.
The strengthen annual RV annuals, both in rate and growth is seen in the numbers that we put out for guidance.
But I guess the question is there kind of is there something else fundamentally different.
Can you kind of sustain this this new elevated algorithm going forward.
Is there anything else to assisting this algorithm.
I think the components that I've, just highlighted and continued strength in our RV platform both on the thousand trails side.
And in our encore business.
Okay, and then on the RV side in particular.
Expectations for 2022 core RV rate growth kind of <unk>.
Moved up slightly from November what was driving that and then just in general with RV pricing going up annual rents moving higher demands elevated there is increasingly sophisticated pricing algorithms that are there to maximize revenues is there a risk that this affordable form of vacationing becomes law.
So affordable and maybe the core customers you needed.
So Michael as to the 10 basis point change when we released our preliminary RV annual rate growth in October .
We said that 95% of our residents have been notified of their increases effective in 2022 and since that time, there was a change in the mix of our occupancy a slight change it did increase our annual rate expectations because of that.
And Michael as it.
Relates to just pricing in general we have our reservation system provides the dynamic pricing feature that really is based on a demand on a per property basis. So certainly we.
We watched the demand and.
And then the rates are reflected in that I think that the RV lifestyle is still a very affordable vacation.
Option and we will continue to be so.
It's certainly something that we look at and look at what's happening in the market, but right now we see real strength.
We have about there's about $11 million our views on the road, another 40 million outdoor enthusiasts and theirs.
Little over $1 million RV sites. So those are pretty good numbers for us.
As we bring customers into our into our <unk>.
Property.
Thank you very much good luck in 2022.
Thank you Michael.
Thank you. Our next question comes from the line of Karl from Wehrenberg. Your question. Please.
Hey, guys. Thanks for taking the time can you just give us some more detail on the MH village in data comp acquisition, what's the rationale behind it how do you guys envision in your long term MH acquisition pipeline if at all.
Sure. So I think maybe it's helpful to provide a little background on the strategy behind the acquisition. So we've worked with this team at MH village for over 25 years.
We've listed our new and used homes on the site and it's really been a primary source of our new resident leads.
And the MH village business they began back in.
They get 25 26 years ago.
As a website really dedicated to listing homes and they've grown to where now they have 25 million unique visitors.
With 80000 homes are sold each.
Each year with.
A combined transaction value of about $3 billion and then on the Datacom side. They provide manufactured home value report.
Price information appraise it reports.
And they really express an interest in a transaction where.
The shareholder with style and then the seasoned management team would remain on and continue to operate that business. So we were really excited to be able to do that and work closely with the MH MH village I think it is going to operate similar to what it's done in the past which is.
Continue to operate and offer long standing customers the ability to access to lead.
And I guess, just the second part of that question. I mean, do you guys think it's going to impact your acquisition pipeline at all just kind of given the relationships with other parties that might sell their homes on that platform.
It's more about one off.
Our sellers selling individual homes than about the communities.
Yes.
And just kind of switching gears here two part question on acquisitions first within the quarter could you disclose the cap rates on the additional transactions you've done I mean as far as 2022 any commentary around the pipeline and sort of competition youre seeing within the different business segments you participate in.
Sure so in the quarter and the cap rates that we closed a blend out to about a five five cap rate.
The properties are really they are well located in areas, where we've been looking to increase our footprint as well as new locations for us and in terms of just.
The pipeline in general I would say as we head into 2022.
Our investment team is really focused on opportunities in MH, RV and marinas and as we have contracts that right now we have contracts in various stages.
And as we disclosed as we close on those we will disclose that.
Great. Thanks for the time.
Thank you.
Our next question comes from the line of Nick Joseph from Citi. Your question. Please.
Thanks, Margaret maybe following up on the MH.
David comp acquisition can you walk through the valuation of that deal.
Sure.
So the MH village model, maybe just talk a little bit about the revenue model, that's really built around home listing fees and the.
Owners pay to lift the homes on the web site the site, it's free for the consumers to browse.
Then data comp is about I think 85% of the revenues from appraisal reports.
The valuation was roughly nine times EBITDA and our guidance includes the impact of that.
Thanks, That's helpful. And then you mentioned I think 6500 acres for expansion and then obviously you've been adding to that.
What are the expectations either in guidance or maybe it's outside of guidance. What you expect to do in terms of expansions this year in 2022.
Sure maybe Patrick if you could walk through that.
Yes, Nick for for the full year 2021, we delivered a little over 1000 sites.
Mix of RV, and MH and skewing towards RMB.
Look forward to the 2022 pipeline.
That's going to come in we expect between 1000 1100 sites again skewing towards RV.
And we feel.
In addition to the acquisitions, we've talked for many years about our inventory of available land, we should be able to sustain that level of development for.
The next several years.
Is there anything from a supply chain constraints or labor constraints that that would slow it down obviously your land, but are there any other variables that we should be aware of.
We're not we're navigating those.
Currently.
And we've been able to sustain this level of development.
Working with our internal development team as well as outside resources in the form of project managers and.
In general contractors too.
To navigate some.
Some pressures that they have with respect to.
Staffing in some of the pressures they have with respect to their subs.
And we have seen some pressure on development costs as well.
Commodities lumber.
Steel concrete has been relatively stable.
And we've.
We've seen some.
More favorable trends in lumber recently, but those pressures are out there and may be impacted.
Impacted at the margin, but for the most part we're pretty confident about maintaining that level of development.
Thank you very much.
Thanks, Nick.
Thank you. Our next question comes from the line of Sameer <unk> from Evercore ISI. Your question. Please.
Hi, Margaret.
You were quite active in the fourth quarter in terms of the acquisitions.
Trying to.
It kind of get to a sort of volume level for 'twenty two right. I mean is that the right quarterly run rate to think about for 'twenty two.
Considering how active you are in the fourth quarter, Yes, I think Sameer what we did in the fourth quarter was really took advantage of some some timing that the sellers the sellers at the timeline as it wanted to close and so that was just asked.
Something that they were wanting to do at the end of last year.
We generally don't share, yes, I said the acquisition pipeline as you look at 2022, we do have.
Deals that are in various stages, but it's not something that we guide towards.
Got it and I guess, Paul just in terms of.
G&A for next year does that I mean, considering inflation and wage pressures I mean is that corporate G&A side is that something that could be even grow more than it has been somewhat muted right and I'm just trying to figure out from a modeling perspective.
Why not.
Yes.
I think generally speaking you would see consistency with with a bit of.
The pressure on the on the.
Payroll side, but also the recovery will result in travel expense that we really haven't had since the first quarter of 2020.
So that will factor into the comparison.
And then we do have our continued investment in technology, which.
Which contributed to growth in that line item.
Got it that's it for me. Thank you. Thanks.
Thanks Connor.
Thank you. Our next question comes from the line of Anthony Powell from Barclays. Your question. Please.
Hi, good morning, good morning.
Anthony questions.
Good morning on acquisition, so skewed towards you guys RV Marina is last year was that just by chance and do you think the lack of any change in the tax code, maybe preventing some sellers.
Going to market.
Given our increased capital gains tax.
Primary motivator for some people.
Yes, I think I think that was more of just the way. It worked out it really I don't think you can take anything away from.
Not doing anything on the MH side, I think theres a lot of continued to be a lot of opportunities.
And it's really for the sellers.
Appropriate timeframe either from a tax perspective.
Lee from <unk>.
Their own family perspective, and when they when they want to sell.
Got it. Thank you talked a lot about the midweek increasing occupancies for RV.
Continues in 2022 whats your long term view on that part of the business is there any risk that that maybe kind of reverse or tail off.
Hopefully more normalized cogan.
Over the medium to long run.
Yes, I think that there is I think for the next six months or so I think we're still going to be in that same type of position, where there'll be increased activity, but of course, we'll be working off a different comp because.
And because the comments were working off of last time didn't it didn't have that activity, but I think that there will continue to be flexibility.
In People's schedules, maybe it ends up being more of a Friday Monday kind of flexibility, but I think that flexibility will exist and we will be the beneficiaries of that flexibility.
Was there like a total I guess revenue number or NOI number that you think you can distribute better midweek occupancy in 2021.
Okay.
I don't I don't have that number here, but we can circle back with you and provide that to you.
Okay. Thank you.
Thank you.
Thank you. Our next question comes from the line of John Pawlowski from Green Street. Your question. Please.
Thanks, Margaret on the margin are you seeing private competitors become more active on building expansion sites either on the RV or MH businesses.
We have seen I would say on the MH business. There is not a whole lot of activity. In fact, there is there is some.
On development, but there are some MH being brought kind of offline and maybe change to an alternative use.
On the RV side, there is more expansion activity than we've seen in the past.
Not something that is.
And overwhelmingly large number.
In terms of an increase to overall supply, but it is more than what we've seen in the past and consistent with what we're doing more than we've done in the past as well.
Okay.
Paul You mentioned the forward reservation pace for the RV business is strong could you just quantify for us how far above or below.
We are today versus a year ago.
Sure in terms of the in terms of the transient.
<unk>.
I think we're up about 20% ahead of where we were last year.
But again I want to be careful on that because the just the timing of those reservations from year to year was meaningfully different so as we translate it into.
Into revenues.
Restate last year, we saw about 15% increase.
We think we're going to see.
Mid single digit.
Increase over that when we think about the first quarter transient.
Okay.
Final question for me.
Patrick.
We acquired the Big Marina portfolio I'll, Miss a year ago can you give us a sense for NOI growth for that portfolio in the second year of ownership that's expected.
Sure.
Based on the performance that we have.
<unk> seen over the last year.
You've covered it from our views of the business in earlier earnings calls.
<unk>.
A reminder, that 90% of that revenue comes from the core slipped rental business and that is well into the high 90% a very stable annual customer.
Those occupancies have been holding in the 90% range very consistently.
We're able to get in the neighborhood of 3% to 4% rate growth year over year. There is some marginal opportunity for occupancy and grid management.
We expect to see some upside in rates in particular submarkets.
And then from an expense perspective.
Run rate business with some of the pressures that we've seen in our other core businesses on insurance and real estate taxes as an example.
So.
A 4% expectation at the NOI line for the Marine businesses is kind of where we're at and that's.
It's driven by that core stable topline.
Okay. Thank you.
Thank you. Our next question comes from the line of Joshua <unk> from Bank of America. Your question. Please.
Okay.
Maybe.
Just wanted to hear kind of more of your thoughts on the business rationale for MH village in Datacom acquisition.
How do you feel like that fits into your overall strategy going forward.
Hello.
Hello.
Yes, yes, I hear you.
Oh.
Ladies and gentlemen, please remain on your line your conference call will resume momentarily. Once again. Please remain on your line your conference call will resume momentarily.
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Once again, ladies and gentlemen, please remain on your line your program will resume momentarily.
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<unk>.
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Ladies and gentlemen, due to unforeseen circumstances, we will be concluding the program at this point in time. Thank you, ladies and gentlemen for your participation everyone have a great day.
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