Q3 2024 Equity LifeStyle Properties Inc Earnings Call

Operator: Good day, everyone, and thank you for joining us to discuss Equity Lifestyle Properties, third quarter, 2020 for results.

Good day, everyone and thank you for joining us to discuss equity lifestyle properties third quarter 2024 results. Our featured speakers today are Marguerite Nader, our president and CEO, Paul Seavey, Our executive Vice President and CFO and Patrick Waite, our executive Vice President.

Operator: Our features, speakers today, are Marguerite Nader, our President and CEO; Paul Seavey, our Executive Vice President and CFO; and Patrick Waite, our Executive Vice President and CEO. 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 companies' earnings release. For those who would like to participate in the question and answer session, management asks that you limit yourselves to two questions. So everyone who would like to participate has ample opportunity.

C O O in advance of today's call management released earnings today's call will consist of opening remarks, Andy question and answer session with management relating to the company's earnings release for those who would like to participate in the question and answer session management asked that you limit yourselves to two questions. So.

I Wonder if you would like to participate has ample opportunity as a reminder, this call is being recorded certain matters discussed during this conference call may contain forward looking statements in the meaning of the federal Securities laws.

Operator: As a reminder, this call is being recorded; certain matters discussed during this conference call. They contain forward-looking statements in the meaning of the Federal securities laws. Our forward-looking statements are subject to certain economic risks and uncertainties. The company assumes no obligation to update or supplement any statements that become untrue because of subsequent events.

Forward looking statements are subject to certain economic risks and uncertainties. The company assumes no obligation to update or supplement any statements that become untrue because of subsequent events.

Operator: In addition, during today's call, we will discuss non-GAAP financial measures as defined by SEC Regulation G. Recognitions 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.

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.

Marguerite Nader: At this time, I'd like to turn the call over to Marguerite Nader, our president and CEO. Good morning, and thank you for joining us today. I am pleased to be able to report on the third quarter today and provide some insights into the strengths we see in 2020. Turning to the results for the third quarter, we delivered strong normalized FFO growth of 5.3%. Over the last several years, we have seen increased demand for owning a home in our properties. Our rental pool is at the lowest point since 2010, with 2.9% of our occupancy comprised of rental homes.

Speaker Change: At this time I'd like to turn the call over to Marguerite Nader, our president and CEO.

Marguerite Nader: Good morning, and thank you for joining us today I am pleased to be able to report on the third quarter today and provide some insights into the strength, we see in 2025.

Marguerite Nader: Turning to the results for the third quarter, we delivered strong normalized <unk> growth of five 3%.

Marguerite Nader: Over the last several years, we've seen increased demand for owning a home in our properties. Our rental pool is at the lowest point since 2010 with two 9% of our occupancy comprised of rental homes.

Marguerite Nader: Over 95% of these new home buyers were cash fires. This investment is consistent with our entire portfolio as the vast majority of our residents have made a capital commitment to live in our communities. The commitment from our homeowners results in a pride of ownership and a long-term resident base. Our RV annual continues revenue continues to show strength with growth of 6.9% year to date. The attractive price point of the vacation cottage product at our properties drives the stable annual revenue base. Our first-time transient customer returning from last year showed a desire to strengthen their relationship with us.

Marguerite Nader: Over 95% of these new homebuyers were cash buyers.

Marguerite Nader: This investment is consistent with our entire portfolio as the vast majority of our residents have made a capital commitment to live in our communities.

Marguerite Nader: The commitment from our homeowners results in a pride of ownership and a long term resident base.

Marguerite Nader: Our RV annual continues revenue continues to show strength with growth of six 9% year to date, the attractive price point of the vacation cottage product at our property strikes a stable annual revenue base.

Marguerite Nader: Our first time transient customer returning from last year showed a desire to strengthen their relationship with us.

Marguerite Nader: I would like to turn to focus on our access points for new customers. In the last decade, ELS has made significant investments and developed partnerships with leading publishers and internet listing services to reach our target customers in the US and Canada. Our digital marketing efforts seek audiences that share characteristics similar to those of our existing customers. We focus on the lifestyle-driven decisions of our customers. Our social media strategy leverages engaging content, targeted advertising, and partnerships to expand our reach and boost customer engagement with our RV members, guests, and prospects.

Marguerite Nader: I would like to turn to focus on our access points for new customers in the last decade E. L. F has made significant investments and develop partnerships with leading publishers in Internet listing services to reach our target customers in the U S and Canada.

Marguerite Nader: Our digital marketing efforts seek audiences that share characteristics similar to those of our existing customers.

Marguerite Nader: We focused on the lifestyle driven decisions of our customers, our social media strategy leverages engaging content targeted advertising and partnerships to expand our reach and boost customer engagement with our RV members guests and prospects.

Marguerite Nader: This summer was the tenth year of our hundred days of camping marketing campaign. which celebrates the time between Memorial Day and Labor Day.

Marguerite Nader: This summer was the 10th year of our 100 days of camping marketing campaign.

Marguerite Nader: Which celebrates the time between Memorial day, and Labor day. The campaign recorded $38 7 million impressions. The highest we have experienced across several social media platforms.

Marguerite Nader: The campaign recorded at 38.7 million impressions, the highest we have experienced across several social media platforms. Before I talk about our expectations for 2025, I would like to highlight some of the demand drivers for the MH business. There are 7 million manufactured homes in the country, housing over 18 million people, making up 6% of the housing, and when you go outside of the metro area, that number increases to 14%. In 1994, the HUD Code was updated, and it increased the construction and safety standards for manufactured housing. Our homes fit the needs of our core demographic.

Marguerite Nader: Before I talk about our expectations for 2025, I would like to highlight some of the demand drivers for the MH business.

Marguerite Nader: There are 7 million manufactured homes in the country housing over 18 million people, making up 6% of the housing and when you go outside of the metro areas that number increases to 14%.

Marguerite Nader: In 1994 at the HUD code was updated in and increase the construction and safety standards for manufactured housing.

Marguerite Nader: Our homes fit the needs of our core demographic the average price of a new home in our property is approximately $90000, which is about 75% less than a similar home in the neighborhood.

Marguerite Nader: The average price of a new home in our property is approximately $90,000, which is about 75% less than a similar home in the neighborhoods. We offer incredible value, and our available audience is significant, with nearly 70 million baby boomers and 65 million Gen Xers included in our targeted base. Our customer seek out our properties for the vacation destination locations, high quality home product at an affordable price and the sense of community.

Marguerite Nader: We offer incredible value in our available audience is significant with nearly 70 million baby Boomers and 65 million. Gen. Xers included in our targeted base our customers seek out our properties for the vacation destination locations high quality home product at an affordable price and the sense of community.

Marguerite Nader: We are pleased to be able to provide you with an insight into the strength we see ahead in 2025. Within our MH portfolio, by the end of October, we anticipate 2025 running crease notices to approximately 50% of our MH residents. These running crease notices have an average growth rate of 5%. For our RV portfolio, we have set annual rates for more than 95% of our annual sites. The RV annual rate increases have an average growth rate of 5.5%. We are engaged with our residents discussing the appropriate areas for capital allocation within our communities. These results set us up for continuing our long-term track record of reading revenue growth.

Marguerite Nader: We are pleased to be able to provide with you an insight into the strength. We see ahead in 2025 within our MH portfolio by the end of October we anticipate ending 2025 rent increase notices to approximately 50% of our MH residents. These rent increase noticed that's have an average growth rate of 5% for our RV portfolio, we have set annual.

Rates for more than 95% of our annual sites. The RV annual rate increases have an average growth rate of five 5%.

Marguerite Nader: We are engaged with our residents discussing the appropriate areas for capital allocation within our communities. These.

Marguerite Nader: These results set us up for continuing our long term track record of REIT, leading revenue growth.

Marguerite Nader: Our supplemental report included information on the impact of hurricanes, healing, and melting. The strength of the infrastructure, particularly the new homes in the communities, has been evident after the storms. Our teams have shown incredible resilience and dedication to the residents and communities. This commitment from our employees and residents reinforces the sense of community founded our properties. Our snowboard residents and guests are anxious to head back to Florida and Arizona for the season. Our teams are prepared for their arrival and will continue to focus on providing outstanding customer service.

Marguerite Nader: Our supplemental report included information on the impact of Hurricanes Helene and Milton.

Marguerite Nader: The strength of the infrastructure, particularly the new homes in the community has been evident after the storms. Our teams have shown incredible resilience and dedication to the residents and community. This commitment from our employees and residents reinforces the sense of community founded our properties.

Marguerite Nader: Our snowbird residents and guests are anxious to head back to Florida, and Arizona for the season. Our teams are prepared for their arrival and we will continue to focus on providing outstanding customer service.

Marguerite Nader: We are able to today to report the results from operations, provide a positive update about our cleanup efforts, and provide an advanced view into 2025 results because of our 4,000 plus team members who are actively engaged to support our residents and customers and to deliver shareholder value. Their focus on meeting the needs of the residents and customers is the reason we are able to report reading operating statistics over the last 20-plus years.

Marguerite Nader: We are able to today to report the results from operations provide a positive update about our cleanup efforts and providing advanced view into 2025 results because of our 4000 plus team members, who are actively engaged to support our residents and customers and to deliver shareholder value their focus on meeting the needs of the residents and customers is the reason we are.

Marguerite Nader: We're able to report REIT, leading operating statistics over the last 20 plus years I will now turn the call over to Patrick to provide you an overview of property operations.

Patrick Waite: I will now turn the call over to Patrick to provide an overview of the operation. Thanks, Murray. I'll start by providing a bit more detail regarding our assessments of the impact of hurricane development on our properties in Florida. In the day since the storm made landfall, I have two properties, and I've seen the great strides our team members have made in cleanup and restoration efforts. Hurricane Milton impacted a number of our properties in Florida locations. The affected properties experienced flood, wind, wind-blown debris, falling trees, and tree branches. We've seen damaged homes, car ports, screen rooms, and all.

Patrick: Thanks Marie.

Patrick: Thereby providing a bit more detail regarding our assessments of the impact of Hurricane mill on our properties in Florida.

Patrick: In the days since this car made landfall at pure properties and I've seen the great strides our team members have made and cleanup and restoration efforts.

Patrick: Hurricane Milton impacted a number of our properties in Florida locations.

Patrick: The effective properties experienced flood wind wind blown debris falling trees and tree branches.

Patrick: We have seen damaged homes carports screen rooms, and on X R.

Patrick Waite: Our team members and third-party contractors are on the process of cleaning projects at the impacted properties, and we're working towards quickly returning our properties to full operating condition. Our storm operation plan was enacted prior to landfall, helping to ensure our ELS team members were safe at the properties and were prepared for the weather. Our teams and contractors were staged and ready to be deployed after the storm. The strategic mobilization ensures that we have third-party vendors available to start work as soon as reasonably possible. I visited storm impacted properties after every large storm event, and each time I visit, I'm impressed by this stability of infrastructure our properties throughout Florida, as well as the impact the residents have as they gather to help others in their communities who may be in need.

Patrick: Our team members and third party contractors are in the process of cleanup projects at the impacted properties.

Patrick: And we're working towards quickly returning our properties to full operating condition.

Patrick: Our storm operation plan.

Patrick: <unk> was enacted prior to landfall.

Patrick: Helping to ensure our U S team members were safe at the properties and were prepared for the weather.

Patrick: Our teams and contractors, where stage already ready to be deployed after the storm.

Patrick: The strategic normalization ensures that we have third party vendors available to start work as soon as reasonably possible.

I visited storm impacted properties. After every large storm events and each time I visit I'm impressed by the stability of infrastructure our properties throughout Florida.

As well as the impact of residents have as they gather to help others and their communities who may be a need.

Patrick Waite: Turning to our third quarter results, our summer camping season is punctuated by three major holidays and supported by our annual 100 days of camping campaign. For the 14 weeks between Memorial Day and Labor Day, total RV revenue increased 2.5%. Over last year, large leader been by annual of 6.3%. As we have discussed in recent quarters, we are seeing a normalization of demand in the RV space from the peak COVID demand period when we experience flexible life schedules and the desire to spend time with one socially distanced group of family and friends.

Speaker Change: Turning to our third quarter results our summer camping season is punctuated by three major holidays and supported by our annual 100 days of camping campaign.

Speaker Change: For the 14 weeks between Memorial Day, and Labor Day total RV revenue increased two 5%.

Speaker Change: Over last year, largely driven by annual of six 3%.

Speaker Change: As we've discussed in recent quarters, we are seeing a normalization of demand in the RV space from the peak called the demand period, when we experienced flexible life schedules and the desire to spend time with one socially distance group of family and friends.

Patrick Waite: We now shift our focus to the winter season when activity picks up and our Sunbelt resorts. In the MH portfolio, our properties are 95% occupied and deliver consistent revenue growth. Florida, California, and Arizona collectively represent about 70% of our stable MH portfolio revenue. We continue to see strong demand for our homes and communities in these Sunbelt markets supporting stable long-term rate growth. Florida has historically been the leading state for net in-migration. Our development program continues to deliver opportunities for home sales and occupancy growth. And we have more than 1,500 MH sites in the expansion pipeline in Florida to support future growth.

We now shift our focus to the winter season, when activity picks up in our sunbelt resorts.

Speaker Change: And the MH portfolio, our properties are 95% occupied and deliver consistent revenue growth.

Speaker Change: Florida, California, and Arizona collectively represents about 70% of our stable MH portfolio revenue.

Speaker Change: We continue to see strong demand for our homes and communities in the sunbelt markets supporting stable long term rate growth.

Speaker Change: Florida has historically been the leading state for net in migration.

Speaker Change: All been program continues to deliver opportunities for home sales and occupancy growth and we have more than 1500 MH sites in the expansion pipeline in Florida to support future growth.

Patrick Waite: Our California and Arizona portfolios are 97% occupied. Those MH properties in Arizona benefit from strong Sunbelt locations. While California locations offer tremendous value to customers, given they are in high-demand markets and the high cost of alternatives to L.S. properties in those markets.

Speaker Change: Our California, and Arizona portfolios are 97% occupied.

Speaker Change: Those MH properties in Arizona benefit from strong Sunbelt locations, California locations offer tremendous value to customers given there are in high demand markets and the high cost of alternatives to U S properties in those markets.

Patrick Waite: I'd like to thank the L.S. team for their efforts. The progress that the properties over the last 12 days, often under difficult circumstances, shows a great deal of women in teamwork and that progress is meaningful to residents and guests at the impact of properties.

Speaker Change: I'd like to thank the <unk> team for their efforts to.

Speaker Change: The progress at the properties over the last 12 days often under difficult circumstances shows a great deal up to them and and teamwork and that progress is meaningful to our residents and guests at the impacted properties.

Paul Seavey: I'll now turn it over to Paul to walk through the results in the field. Thanks, Patrick, and good morning, everyone. I will discuss our third quarter and September year-to-date results.

Speaker Change: I'll now turn it over to Paul to walk through the results in detail.

Paul: Thanks, Patrick and good morning, everyone.

Paul: I will discuss our third quarter and September year to date results review, our guidance assumptions for the fourth quarter and full year 2024, and close with a discussion of our balance sheet.

Paul Seavey: Review our guidance assumptions for the fourth quarter and full year 2024 and close with the discussion of our balance sheet. Third quarter, FFO and normalized FFO were 72 cents per share, in line with our guidance. Strong core portfolio performance generated 5.8% NOI growth in the quarter, 130 basis points higher than guidance. Our results include JV income resulting from a distribution following a secured loan refinancing that was included in our guidance model. Core Community-Based Rental Income increased 6.2% for the quarter compared to the same period in 2023, primarily because of notice to increases to renewing residents and market rent paid by new residents after resident turnover.

Paul: Third quarter, <unk> and normalized <unk> were <unk> 72 per share in line with our guidance.

Paul: <unk> core portfolio performance generated five 8% NOI growth in the quarter 130 basis points higher than guidance.

Our results include JV income, resulting from a distribution following a secured loan refinancing that was included in our guidance model.

Paul: Core community based rental income increased six 2% for the quarter compared to the same period in 2023, primarily because of noticed increases to renewing residents and market rent paid by new residents after resident turnover.

Paul: Rent growth from occupancy was 40 basis points compared to the third quarter.

Paul: 2023.

Paul: We increased homeowners by 111 sites in the quarter.

Paul: Core RV and Marina annual base rental income, which represents approximately two thirds of total RV and marine the base rental income increased six 2% in the third quarter and six 9% year to date compared to prior year.

Paul Seavey: Since approximately two-thirds of total RV and marina-based rental income increased 6.2% in the third quarter and 6.9% year-to-date compared to prior year. Year-to-date in the core portfolio, seasonal rent decreased 4.4% and transient decreased 4.3%. We continue to see offsetting reductions in variable expenses. For the September year-to-date period, the net contribution from our membership business was $43.6 million. Membership dues revenue increased 1% for the year-to-date period compared to the prior year. Year-to-date we've sold approximately 16,100,000 Trails Camping Pass memberships. During the year-to-date period, members purchased approximately 2,900 upgrades at an average price of approximately $9,000. Core utility and other income increased 7.1% for the September year-to-date period compared to prior year, which includes past the recovery of real estate tax increases from 2023.

Paul: Year to date in the core portfolio seasonal rent decreased four 4% and transient decreased four 3%.

We continue to see offsetting reductions in variable expenses.

Paul: For the September year to date period, the net contribution from our membership business was $43 $6 million.

Paul: Membership dues revenue increased 1% for the year to date period compared to the prior year.

Paul: Year to date, we have sold approximately 16000 100000 trails camping pass memberships.

Paul: During the year to date period members purchased approximately 2900 upgrades at an average price of approximately $9000.

Paul: Core utility and other income increased seven 1% for the September year to date period compared to prior year, which includes pass through recovery of real estate tax increases from 2023.

Paul Seavey: As a result of our continuing efforts to unbundle utility expense, our utility income recovery percentage was 46.7% year-to-date in 2024, about 200 basis points higher than the same period in 2023. Third quarter core operating expenses increased 2.8% compared to the same period in 2023. Expense growth was 150 basis points lower than guidance, mainly resulting from savings in payroll, utilities, and repairs and maintenance expenses. For NOI before property management increased 5.8% and 6.2% for the third quarter and year-to-date periods, respectively. Income from property operations generated by our non-core portfolio was $2.1 million in the quarter and $10.7 million year-to-date.

As a result of our continuing efforts to unbundle utility expense our utility income recovery percentage was 46, 7% year to date in 2024 about 200 basis points higher than the same period in 2023.

Paul: Third quarter core operating expenses increased two 8% compared to the same period in 2023 <unk>.

Paul: Expense growth was 150 basis points lower than guidance, mainly resulting from savings in payroll utilities and repairs and maintenance expenses.

Paul: Core NOI before property management increased five 8% and six 2% for the third quarter and year to date periods respectively.

Paul: Income from property operations generated by our noncore portfolio was $2 1 million in the quarter and $10 $7 million year to date.

Paul Seavey: During the third quarter, we recorded in a cruel of approximately $1 million, representing our estimate of expenses incurred following Hurricane Elaine. The expenses presented in the casualty-related charges, recoveries, netline in our income statement.

Paul: During the third quarter, we recorded an accrual of approximately $1 million, representing our estimate of expenses incurred following hurricane Lane.

Paul: The expense is presented in the casualty related charges recoveries net line in our income statement.

Paul Seavey: The press release and supplemental package provide an overview of 2024-4 quarter and full year earnings guidance. The following remarks are intended to provide context for our current estimated 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 have increased our full year 2024 normalized FFO guidance 1 cent per share to $2.92 per share at the midpoint of our range of $2.89 to $2.95 per share. Consistent with historical practice at this time of year, we have narrowed our full year guidance range to match the 6 cent per share range we use for quarterly guidance updates throughout the year.

Paul: The press release and supplemental package provide an overview of 2020 for fourth quarter and full year earnings guidance. The following remarks are intended to provide context for our current estimate of future results.

Paul: Growth rate ranges and revenue and expense projections are qualified by the risk factors included in our press release and supplemental package.

Paul: We have increased our full year 2020 for normalized <unk> guidance <unk> <unk> per share to $2 92 per share at the midpoint of our range of $2 89 to $2 95 per share.

Paul: Consistent with historical practice at this time of year, we have narrowed our full year guidance range to match the <unk> per share range, we use for quarterly guidance updates throughout the year.

Paul Seavey: Full year normalized FFO per share at the midpoint represents an estimated 6 percent growth rate compared to 2023.

Full year normalized <unk> per share at the midpoint represents an estimated 6% growth rate compared to 2023.

Paul Seavey: We expect fourth quarter normalized FFO per share to be in the range of 73 cents to 79 cents. The fourth quarter guidance range we provided includes no assumptions related to impact from recent storms. As Patrick mentioned, we are in the early stages of assessing the impact on our portfolio. As we continue the process, we may identify expenses to be accrued, including any impairment write-off resulting from Hurricane Milton. At this time, we have not identified any property with an operational disruption significant enough to consider a non-core designation. We project full-year core property operating income growth of 6.3% at the midpoint of our range of 6% to 6.6%. Full-year guidance assumes core based rent growth in the range of 5.8% to 6.4% for MH and 2.7% to 3.3% for RV and Marina. The midpoints of our guidance assumptions for combined seasonal and transient show a decline of 6.6% in the fourth quarter and a decline of 4.7% for the full-year compared to the respective periods last year. Core property operating expenses are projected to increase 2.6% to 3.2% for the full-year. Our full-year expense growth assumption includes the benefit of savings in repairs and maintenance and payroll expense during the first 9 months of 2024, as well as the impact of our April 1st insurance renewal for 2024. The full-year guidance model makes no assumptions regarding the use of free cash flow we expect to generate in the remainder of 2024. Our 4th quarter guidance assumes core property operating income growth is projected to be 6.7% at the midpoint of our guidance range. In our core portfolio, property operating revenues are projected to increase 4.5% and expenses are projected to increase 1.4%, both at the midpoint of the guidance range. I'll now provide some comments on our balance sheet in the financing market.

Paul: We expect fourth quarter normalized <unk> per share to be in the range of 73 to 79.

Paul: The fourth quarter guidance range. We provided includes no assumptions related to impact from recent storms.

As Patrick mentioned, we are in the early stages of assessing the impact on our portfolio.

Paul: As we continue the process, we may identify expenses to be accrued, including any impairment write off resulting from hurricane Milton.

Paul: At this time, we have not identified any property with an operational disruption significant enough to consider a noncore designation.

Paul: We project full year core property operating income growth of six 3% at the midpoint of our range of 6% to six 6%.

Paul: Full year guidance assumes core base rent growth in the range of five 8% to six 4% for MH and two 7% to three 3% for RV and Marina.

Paul: The midpoint of our guidance assumptions for combined seasonal and transient show a decline of six 6% in the fourth quarter and decline of four 7% for the full year compared to the respective periods last year.

Paul: Core property operating expenses are projected to increase two 6% to three 2% for the full year.

Paul: Our full year expense growth assumption includes the benefit of savings in repairs and maintenance and payroll expense. During the first nine months of 2024 as well as the impact of our April 1st insurance renewal for 2024.

Paul: The full year guidance model makes no assumptions regarding the use of free cash flow, we expect to generate in the remainder of 2024.

Our fourth quarter guidance assumes core property operating income growth is projected to be six 7% at the midpoint of our guidance range.

Paul: Our core portfolio property operating revenues are projected to increase four 5% and expenses are projected to increase one 4% both at the midpoint of the guidance range.

Speaker Change: I'll now provide some comments on our balance sheet and the financing market as noted in the earnings release and supplemental package earlier. This month, we raised net proceeds of approximately $314 million from the sale of shares using our ATM program.

Paul Seavey: As noted in the earnings release in the supplemental package earlier this month, we raised net proceeds of approximately 314 million dollars from the sale of shares using our ATM program. The gross sale price per share was $70. We used the proceeds to repay our $300 million unsecured term loan with a maturity date in April 2026. In connection with the repayment of the term loan, we terminated the interest rate swaps that fixed interest at 6.05% through maturity. We're pleased with this execution, and we estimated its 3 cents per share accretive to normalize FFO per share on a full-year basis. On a pro-forma basis for this transaction, we project debt to EBITDA RE will be 4.6 times, interest coverage will be 5.5 times. Weighted average interest rate would be 4.05%, and weighted average maturity for all debt would be 9 years. 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 a quarter percent and 6%, 50 to 75% loaned of value and 1.4 to 1.6 times 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. In terms of our liquidity position, we have approximately $450 million available on our line of credit, and our ATM program has approximately $185 million of capacity.

The gross sale price per share was <unk> $70.

Speaker Change: We used the proceeds to repay our $300 million unsecured term loan with a maturity date in April 2026.

Speaker Change: In connection with the repayment of the term loan we terminated the interest rate swaps that fixed interest at six 5% through maturity.

We're pleased with this execution and we estimated a <unk> <unk> per share accretive to normalized <unk> per share on a full year basis.

Speaker Change: On a pro forma basis for this transaction, we project debt to EBITDA will be four six times interest coverage will be five five times.

Speaker Change: Weighted average interest rate would be four 5% and weighted average maturity for all that would be nine years, we continue to place high importance on balance sheet flexibility and we believe we have multiple sources of capital available to us.

Speaker Change: 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 6%, 50% to 75% loan to value and one four to one six times debt service coverage.

Speaker Change: We continue to see solid interest from life companies and Gse's to lend for 10 year terms high.

Speaker Change: High quality age qualified MH assets continue to command best financing terms.

Speaker Change: In terms of our liquidity position, we have approximately $450 million available on our line of credit and our ATM program has approximately $185 million of capacity.

Operator: Now we would like to open it up for questions. Certainly, and ladies and gentlemen, if you do have a question at this time, please press star 1-1 on your telephone. Our first question comes from the line of Jeffrey Specter from Bank of America Securities. Your question, please.

Speaker Change: Now we would like to open it up for questions.

Speaker Change: Certainly and ladies and gentlemen, if you do have a question at this time. Please press star one on your telephone and our first question comes from the line of Jeffrey Spector from Bank of America Securities. Your question. Please.

Joshua Dennerlein: Hey guys, it's actually Josh Dennerlein, not with Jeff Specter, I guess. I guess I'm just thinking about the 2025 preliminary rate growth guidance that you put out. Could you remind us where you sent out the 2024 notices, and then how much uplift you saw over the course of the year from just like new customers coming into the portfolio. I'm just trying to kind of gauge maybe a tie in with it to that would just be like, what do you think the market market is today across the portfolio.

Josh centerline: Hey, guys. This is actually Josh centerline, not with with Jeff Spector I guess.

Thank you.

Speaker Change: Just thinking about the 2025 preliminary rate growth guidance that you put out.

Could you remind us where you sent out the 'twenty 'twenty four notices and then how much uplift you saw over the course of the year from just like new customers coming into the portfolio just trying to.

Speaker Change: Kind of gauge like what maybe maybe a tie in to that would just be like kind of what do you think the mark to market is today across the portfolio.

Paul Seavey: Excuse me, Josh. What we're seeing in terms of the rents charged to new residents after turnover is 13%. It's moderated a bit in 2024. We started the year; first quarter it was closer to 16%, but that's moderated back to about 13%, which is what we saw during the year in 2023. We have included in our preliminary rate growth estimate the impact of that adjustment or the residents who received notices in January first. So that 50% of the residents is included in that estimate, but on a go forward basis, you're correct to point out that there's potential for that to have an impact.

Speaker Change: Hi, excuse me, Josh what we're seeing in terms of the rents charged to new residents. After turnover is at 13%. It's moderated a bit in 2024, we started the year first quarter. It was closer to 16%, but thats moderated back to about 13%, which is what we saw during the.

Speaker Change: At year end 2023.

Speaker Change: We have included in our preliminary rate growth to estimate the impact of that adjustment for the residents who received notices in on January one so that 50% of the residence. It's included in that estimate but on a go forward basis, you're correct to point out that there is potential for four.

Paul Seavey: And including that is similar to the way it was last year. So that's keeping with the same methodology.

Speaker Change: That to have an impact and including that is similar to the way. It was last year, so thats keeping with the same methodology.

Joshua Dennerlein: Okay. I know good to know.

Speaker Change: Okay, Okay no good.

Joshua Dennerlein: And then maybe just on the other side of the equation, the expenses you're today have been pretty low, especially the payroll expense. Just kind of thinking through, was there any kind of adjustments that you are making on the payroll front? And then just how should we think about this as like go forward? Like should it kind of normalize out towards just like standard wage growth inflation going forward? Or is there something you guys can do to keep it lower than inflation? Well, yeah, Josh, let me just touch on the trends that we're experiencing this year for the quarter.

Speaker Change: Good to know.

And then maybe just on the other side of the equation the expenses I mean year to date have been pretty low.

Speaker Change: Especially the payroll expense just kind of take you through was there any kind of adjustments that you were making on the payroll front and then just how should we think about this as I go forward like should kind of normalize out towards just like.

Speaker Change: Standard wage growth inflation going forward or is there something that you guys can do to keep it lower.

Speaker Change: Inflation.

Speaker Change: Well, yes, Josh let me, let me just touch on the trends that we're experiencing this year.

Speaker Change: For the quarter.

Paul Seavey: Our payroll favorability was largely based on 5% favorability with respect to the number of employees that we had on staff at our properties. So that's a comp you're over here, and that's largely driven by the RV properties. If you think about where we're moving through our summer RV season. Those positions are partly driven; those open positions are driven by the competitive job market to some degree, but we're also very focused on managing schedules at the property. And that that's coming through in favorability and overtime and temporary payroll. And we're achieving that through cross training and sharing of responsibilities that also helps to contribute to favorability not only in headcount, but in the overall payroll.

Speaker Change: Our payroll favorability.

Speaker Change: It's largely based on 5% favorability with respect to.

Speaker Change: The number of employees that we had on staff at our properties.

Speaker Change: So thats a comp year over year, and that's largely driven by the RV properties. If you think about where we're moving through our.

Speaker Change: Our summer RV season those.

Speaker Change: Those positions are partly driven.

Speaker Change: And physicians are driven by.

Speaker Change: The competitive job market to some degree.

Speaker Change: But we're also very focused on <unk>.

Speaker Change: Managing schedules at the property and that's coming through in favorability in overtime and temporary payroll.

Speaker Change: And we're achieving that through cross training and sharing our responsibilities.

Speaker Change: That also helps to contribute to favorability not only in head count, but in the the overall payroll.

Paul Seavey: I'd highlight that while we're managing through those schedule adjustments in the RV properties, we're also very consistently maintaining high customer experience scores.

Speaker Change: I'd highlight that well we're managing.

Speaker Change: Through those schedule adjustments in the RV properties. We're also very consistently maintaining high customer experience scores.

Speaker Change: Thanks for that.

Operator: Thank you.

Speaker Change: Yes.

Speaker Change: Thank you.

Brad Heffern: And our next question comes from the line of Brad Heffern from RPC; your question, please. Yeah, thanks. Morning, everyone. For the image rate increases, the past few years have seen that guided based rental income growth be higher than the noticed rate growth figure. I think some of that's obviously the CPI linkage, which presumably won't be a tailwind next year, but can you go through the composition of the other 50% that hasn't seen notices and whether you would expect those to be higher or lower than the 5% figure on the first 50? Yeah, I think that there are a couple of things to keep in mind.

And our next question comes from the line of Brad Heffern from RBC. Your question. Please.

Brad Heffern: Yes, thanks, good morning, everyone.

Brad Heffern: The MH rate increases the past few years have seen the guided base rental income growth be higher than the noticed rate growth figure I think some of that is obviously the CPI linkage.

Brad Heffern: Presumably won't be a tailwind next year, but can you go through the composition of the other 50% that hasnt seen notices and whether you would expect those to be higher or lower than the 5% figure on the first 50.

Speaker Change: Yes, I think that.

Paul Seavey: First, we are talking about rate. So let's just understand that there are two components to revenue growth: overall rate and occupancy. So this is the rate-only component. When we look at the remaining 50%, the population that received notices or receiving notices for January 1st is a bit more heavily weighted to the longer term agreements, as we call it, 25% of the population. So the remaining 50% are a bit more heavily weighted to market increases and the CPI associated with rent control.

Speaker Change: There are a couple of things to keep in mind first.

Speaker Change: We are talking about right. So, let's just understand that that there are two components to revenue growth overall rate and occupancy. So this is the right only component.

Speaker Change: When we when we look at the remaining 50%.

Speaker Change: The population that receive notices or is it receiving notices for January one is a bit more heavily weighted to the <unk>.

Speaker Change: Our longer term agreements as we call it 25% of the population. So the remaining 50% are a bit more heavily weighted to market increases and.

Speaker Change: The CPI associated with rent control.

Paul Seavey: Okay.

Speaker Change: Okay.

Brad Heffern: And then can you talk through the decision to pay off the term loan with equity? Is that building balance sheet capacity for maybe potential acquisition activity, or are you trying to move just to a lower leverage level overall? I think that in the ordinary course, in the first week of October, we had the opportunity. We sold 4.5 million shares at the $70 price that I mentioned. And we are pleased with the execution and the enhancement to our financial flexibility.

Speaker Change: And then can you talk through the decision to pay off the term loan with equity is that building balance sheet capacity for maybe potential acquisition activity or are you trying to move just to a lower leverage level overall.

Speaker Change: I think that.

Speaker Change: In the ordinary course.

Speaker Change: In the first week of October we had the opportunity we sold $4 5 million shares at a $70 price that I mentioned.

Speaker Change: And we are pleased with the execution and the enhancement to our financial flexibility.

Paul Seavey: Okay. Thank you.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks. Thank you thank.

Eric Wolfe: And our next question comes from the line of Eric Wolf from City. Your question, please. Hey, thanks. Maybe just a follow-up there. I mean, you just entered into these slots, I think, around April. I'm assuming there was an early termination payment for them, maybe correct me if I'm wrong. So I'm just, again, trying to understand that the raising 300 million. This is the largest amount you've raised since, I think, the fourth quarter for 2021. So, you know, it's just because it's a creative year, you're trying to be leveraged, trying to get a better sense for why now raising 300 million.

Thank you and our next question comes from the line of Eric Wolfe from Citi. Your question. Please.

Eric Wolfe: Hey, thanks.

Eric Wolfe: Maybe just a follow up there I mean.

Eric Wolfe: You just entered into these swaps I think around April I'm, assuming there was an early termination payment for them, maybe correct me if I'm wrong. So I'm just again trying to understand the raising 300 million. This is the largest amount you've raised since I think the fourth quarter for 2021, so just because it's accretive.

Eric Wolfe: Trying to deleverage just trying to get a better sense for to widen now raising $300 million.

Paul Seavey: Well, the first part of that, yes, there was a cost associated with it. It was about $5 million to unwind and then write off unamortized loan costs associated with it. And, you know, I think from our perspective, when we look at the capital stack, the opportunity to take out debt that was carrying 6.05% interest until 2026. And create the flexibility. We just in July renewed our credit facility with our bank group. And the opportunity to position ourselves to be able to tap that market in the future, if an opportunity shows up, was something that we found attractive, just kind of thinking about the levers that we can pull.

Speaker Change: Well the first part of that yes, there was a cost associated with it it was about.

Speaker Change: $5 million to unwind and then write off.

Speaker Change: Unamortized loan costs associated with it.

Speaker Change: And.

Speaker Change: I think from from our perspective, when we look at the capital stack the opportunity to take out that that was carrying six 5% interest until 2026.

Speaker Change: And create the flexibility.

Speaker Change: We just in July renewed our credit facility with our Bank group.

Speaker Change: And the opportunity to position ourselves to be able to tap that market.

Speaker Change: In the future if if an opportunity.

Speaker Change: Shows up.

Speaker Change: Something that we found attractive just kind of thinking about the levers that we can pull in.

Marguerite Nader: And Eric, as Paul had mentioned in his opening comments, we looked at our balance sheet statistics and, you know, increasing our term to maturity to nine years and decreasing our exposure to debt maturing through 2026 to 3% was, you know, important for us.

Speaker Change: And Eric is as Paul had mentioned in his opening comments, we looked at our balance sheet statistics, and increasing our term to maturity to nine years and decreasing our exposure to debt maturing through 2026% to 3%.

Speaker Change: Was that with important dress.

Marguerite Nader: Right, yeah, it makes sense. It was really more the time, and that was sort of interesting to me. And I guess you mentioned a second ago that in case opportunities do arise at some point, you see signs that there could be more opportunities. It's been pretty quiet for a while now. And so, just curious if you're starting to see something that suggests we're going to see larger terms actions in the future. Sure, I think addressing the debt that with the 2026 debt made sense for us. We don't think it limits, but rather improves our position to be able to act quickly on acquisition opportunities.

Speaker Change: Yes. It makes sense. It was really more the timing of that was sort of interesting to me and I guess you mentioned the second go to that.

Speaker Change: Case opportunities.

Speaker Change: Do arise at some point I mean are you seeing signs that there could be more opportunities, it's been pretty quiet for a while now and so.

I'm just curious if youre starting to see something that.

Speaker Change: Suggests we're going to see larger transactions in the future.

Speaker Change: Sure I think addressing the debt.

Speaker Change: The 2026 that made sense for us and we don't think it limits, but rather improves our position to be able to act quickly on acquisition opportunities with respect to the transaction market in general.

Marguerite Nader: With respect to the transaction market in general, it's been a significant slowdown in recent years. I think the volume of transactions for institutional quality assets like what we're looking for is very low. And there's just a lack of available inventory. We are seeing some smaller deals that don't really fit into our portfolio, and they're often sold using seller financing. But maybe it's helpful to just kind of point out on our available acquisition set with 50,000 manufactured home communities in the United States. And when you remove the smaller kind of non-investment grade assets, you get to about 3,000 assets and we own 200 of those.

Speaker Change: It's been a there's been a significant slowdown in recent years I think the volume of.

Speaker Change: Of transactions for institutional quality assets like what we're looking for it's very low.

Speaker Change: And there's just a lack of available inventory we are seeing some smaller deals that don't really fit into our portfolio and there are often.

Speaker Change: Sold using seller financing.

Speaker Change: But maybe it's helpful to just kind of point out on our available acquisition set.

Speaker Change: With 50000 manufactured home communities in the United States.

Speaker Change: And when you remove the smaller kind of non investment grade assets.

You get to about 3000 assets and we own 200 of those and then on the RV side kind of that using the same metrics. It's about 16000 RV parks.

Operator: And then on the RV side, kind of using the same metrics, it's about 16,000 RV parks. Half of those are owned by the state and federal government; that leaves about 8,000 private campgrounds, 1,200 of those assets that we consider investment grade, and we own about 200 of those. So the opportunity set is large, and we've always said that the acquisition market can be kind of lumpy, and we're seeing that continue. Thank you. Thanks, Eric. Thank you.

Speaker Change: Half of those are owned by the state and federal government.

Speaker Change: That leaves about 8000 private campgrounds.

Speaker Change: <unk> hundred of those invest of those assets are we consider investment grade and we own about 200 of those so the opportunity set is large.

Speaker Change: We've always said that the acquisition market can be kind of lumpy and we're seeing that continue.

Thank you.

Thanks, Eric.

John Kim: And our next question comes from the line that John came from BMO Capital Markets. Your question, please. Thank you. So I think the way it seems like the hurricane Milton impact isn't as bad as Ian, but I was wondering if we could just review how what happened at Ian and the aftermath versus what may play out with Milton. So from my collection two years ago during this time, you were true guidance for the full year, identified six assets and closed them. I'm not sure if all those assets have reopened, but they're not in your same sort of pool.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of John Kim from BMO capital markets. Your question. Please.

John Kim: Thank you.

John Kim: And thankfully it seems like the hurricane impact isn't as bad as Ian but I was wondering if we could just review how what happened at <unk> and the aftermath.

Versus what May play out with Milton.

John Kim: From recollection two years ago. During this time <unk> guidance for the full year, you identified six assets and close them I'm not sure. If all those assets have reopened but theyre not in your in your same store pool.

John Kim: I think you have like $55 million for clean of costs and business interruption. You got the proceeds from that and only included the insurance proceeds when you receive them back into earnings.

I think you had like $55 million cleanup costs and a business interruption.

John Kim: You've got the proceeds from that and only included the insurance proceeds when you received them back into earnings.

Marguerite Nader: But I wanted to see how you see Hurricane Milton playing out, given it stole relatively early in your assessment of the damage. Sure, I think you point out that is relatively early; that’s absolutely true. We're 12 days after the storm hit. But you can see the difference between what we saw in Ian and what we saw in Milton and just what Paul pointed out that at this point there aren't any properties that we're taking out of the core. And with Ian, you know, that was our, you know, our first release or right soon after the storm hit, we were able to assess that.

I wanted to see how you see hurricane open playing out given it's still relatively early in their tenure.

John Kim: Sure I think.

Speaker Change: You pointed out that it is relatively early that that's absolutely true. We're 12 days after the storm hit.

Speaker Change: But you can see the difference between what we what we saw in <unk> and what we saw in Milton ingest, what Paul pointed out that at this point there arent any properties that we're taking out of the core and with Ian.

Speaker Change: That was our first release of right soon after the storm hit we were able to assess that so as.

Marguerite Nader: So we've, as Patrick has pointed out, we've been on the ground; people in Chicago and, of course, the Florida team has been working tirelessly to make certain that our customers and our residents are safe and they're in a good place, and they've done a great job doing that. So there are significant differences, I would say, between Ian and Milton. But it is 12 days after. It's going to take us a little bit of time to work through and give you what, you know, what the final numbers would be. But I think just highlighting that there isn't property being removed from the core is probably a good thing for you to focus on as it relates to the impact of the storm.

Speaker Change: As Patrick has pointed out we've been on the ground people in Chicago and of course, the Florida team.

Speaker Change: <unk> has been working tirelessly to make certain that our customers and our residents are safe and are in a good place and they've done a great job doing that so there are.

Speaker Change: Significant differences I would say between Ian and Milton.

But but it is 12 days after it's going to take us a little bit of time to work through and give you. What we know what the final numbers would be but I think just highlighting that there isn't properties being removed from the core is it's probably a good a good thing for you to focus on as it relates to the impact of the storm.

Speaker Change: <unk>.

Marguerite Nader: What happened to those six assets from the close permanently or the day we opened? No, no, we've resumed operations at those properties; they're partial operations, but we have resumed just the way that we manage our core portfolio. Those assets didn't return to that condition until 2024, which means the earliest that they would appear in the core is the beginning of 2026. But the properties are back in operation. Right.

And what happened to those six assets from Ian or they close permanently or have they reopened.

Speaker Change: No go ahead.

No fevers.

Speaker Change: We have resumed operations at those properties. They are partial operations, but we have resumed.

Speaker Change: Just the way that we manage our core portfolio those assets didn't return to that condition until 2024, which means the earliest that they would appear in the core is the beginning of 2026 okay.

Okay, but the properties are back in operation.

John Kim: And I know it's really early, so last year following the end, you had a 58% insurance renewal increase. Where do you think this year's renewal rate, how does that play out given the damages were less, but there were two occurrences this time around, and we're just here for the last one. I think, as you point out, John, I think it's just, it's just too early to tell. We'll know better after we, you know, obviously, as we go through our renewal process. And remember that the impact will be nine months in 2025, because we already know what the first quarter will be, because it's an April 1st renewal.

Speaker Change: And I know, it's really early so.

Speaker Change: Last year following.

Speaker Change: And you had a 58% insurance renewal increase where do you think this.

Speaker Change: This year's renewal rate, how does that play out given the damages were last but there were two occurrence at this time.

Speaker Change: Well just to yes.

Speaker Change: The last one I think as you pointed out John I think it's just it's just too early to tell we will know better. After we obviously as we go through a renewal process and remember that the impact will be nine months in 2025, because we already know what the first quarter will be because it's an April one renewal.

John Kim: But not unlike years past, the main driver of the rate is the amount of claims history. And we've highlighted what happened during Helene, and we're working through Milton. So that's still yet to be determined based on the claim. Great. Thank you. Thanks, John. Thank you.

Speaker Change: But not unlike years past the main driver.

Speaker Change: Of the rate as the amount of claims history and.

Speaker Change: And we've highlighted.

Speaker Change: What what what happened during Helene.

Speaker Change: And and.

Speaker Change: We're working through Milton.

So that's still yet to be determined based on based on the claim.

Speaker Change: Great. Thank you.

Speaker Change: Thanks, John.

Keegan Carl: And our next question comes from the line of Keegan Carl from Wolf Research. Your question, please. Yeah. Thanks for the time, guys. I mean, maybe just a big picture. Where's your head at on Florida? I know you called out the expansion and development sites, but are you reconsidering maybe your geographic exposure to the state at all? And would there be any appetite to reduce your exposure over time? Just given we've now had two pretty catastrophic events in three years. Yeah. Thanks.

Speaker Change: Thank you and our next question comes from the line of <unk> from Wolfe Research. Your question. Please.

Speaker Change: Yeah. Thanks for the time guys I mean, maybe just big picture Where's your head at on Florida, I know you called out the expansion and development sites, but are you reconsidering, maybe your geographic exposure to the stated on would there be any appetite to reduce your exposure over time, just given we've now had two pretty catastrophic events in three years.

Speaker Change: Yeah.

Marguerite Nader: I think, you know, I think the recent effect certainly applies when, you know, someone's asked about a storm event that just happened, but it's probably good to think about and appreciate our long history with storm events inside of our portfolio. So we do have a geographically diverse portfolio, and you know, that's been subject to weather events each year over the last 30 years. And even with those weather events, we've been able to post read leading results. Florida specifically has always been a strong state for us. We look to continue to buy more assets in Florida in all different economic times for Florida and the country. You know, the properties have outperformed; the properties in Florida have outperformed.

Speaker Change: Thanks, I think I think the recency effect certainly applies when someone's asked about a storm event that just happened.

Speaker Change: But it's probably good to think about and appreciate our long history with storm events inside of our portfolio.

Speaker Change: We do have a geographically diverse portfolio.

Speaker Change: That has been subject to weather events each year over the last 30 years and even with those weather events, we've been able to post REIT leading results.

Speaker Change: Florida, specifically has always been a strong state for US we look to continue to buy more assets in Florida.

Speaker Change: All different economic times.

Speaker Change: For our Florida in the country.

Properties have outperformed the properties in Florida have outperformed.

Marguerite Nader: I think I highlighted on the last call or a couple calls ago that we have an NOI chart that's included in our investor presentation, and it shows our average NOI as a company for the last 20 years is about 4.1%, which compares favorably to the REIT industry. But then when you break that down further, you know, and you consider Florida in the analysis, it shows that Florida has outperformed our overall portfolio by over 100 basis points, and that's with, you know, a storm event, you know, every couple of years. And so the team has taken a look at the analysis of storm events, other impacts like economic times, election years, you know, just to try to get an understanding of what makes Florida tick, and it continues to come out ahead.

Speaker Change: I think I highlighted on the last call or a couple of calls ago that we have an NOI chart. That's included in our.

The investor presentation.

Speaker Change: And it shows.

Speaker Change: Our average NOI as a company for the last 20 years is about four 1%.

Speaker Change: Which compares favorably to the REIT industry, but then when you break that down further.

Speaker Change: Consider Florida in the analysis it shows that Florida has outperformed our overall portfolio by over 100 basis points and that's with.

A storm event.

Speaker Change: A couple of years.

Speaker Change: And so and the team has taken a look at kind of the.

Speaker Change: The analysis of storm events other impactful like economic times election years, just to try to get an understanding of what makes Florida tick.

Speaker Change: And it continues to come out ahead.

Keegan Carl: So, thanks.

Keegan Carl: That's really helpful.

Speaker Change: Okay. Thanks, that's really helpful and I guess, just pivoting to transient look I know, it's a much smaller portion of your guys business, but theres always questions around it. So I guess a few part question here.

Keegan Carl: And I guess, just pivoting to transient. Look, I know it's a much smaller portion of your guys' business, but there's always questions around it. So, I guess a few part questions here. It's always tough to gauge expectations, but how did it perform relative to your expectations within the quarter, and how much of an impact was there on weather? And then just, if we look out the next year, I mean, what are your general views on transient? Do you think we might have hit a relative trough, and we could start to see it accelerate? Should we just always expect some downward pressure given the ability to convert transient annual sites?

Speaker Change: It's always tough to gauge expectations, but how did it perform relative to your expectations within the quarter and how much of an impact was there on weather.

Speaker Change: And then just if we look out to next year I mean, what are your general views on transient do you think we might have hit a relative trough and we could start to see it accelerate or should we just always expect some downward pressure given the.

Speaker Change: Your ability to convert.

Speaker Change: Transient to annual sites.

Keegan Carl: Yeah, Keegan, just in terms of the performance in the quarter, the transient rent performed in line, I'd say generally speaking through August. In September, we did lose some traction. And the properties in the north and northeast caused the miss in our September results because of an impact. Inclimate weather in certain areas; we've talked in the past about the large variance that can be caused by individual locations. And just when I think about the impact in September, three properties represented almost 50% of the variance to our forecast. So, you know, if it was weather driven, as we've typically talked about, and again, a relatively small number can have that type of effect.

Speaker Change: Yes, Keegan just in terms of the performance in the quarter.

Speaker Change: The transient rent.

Speaker Change: Performed in line I'd say generally speaking through August and September we did lose some traction.

Speaker Change: And the properties in the north and northeast caused the Miss in our September results because of the inclement weather in certain areas. We've talked in the past about the large variance that can be caused by individual locations and just when I think about the impact.

Speaker Change: Impact in September.

Three properties represented almost 50% of the variance to our forecast so.

Speaker Change: It was weather driven as we've typically talked about.

Speaker Change: And again, a relatively small number can have that type of effect.

Keegan Carl: And just on the 25 outlook, I mean, is it fair to assume that maybe transient starting data trough, or I mean, I guess, like, how should we just big picture be thinking about that business? I mean, I think, you know, we've talked about this concept of normalizing demand. I think that, you know, the thing to keep in mind is the impact of the weather. So, you know, we will, I expect that we will perform well as we historically have when the weather is favorable, and it won't be the same when the weather isn't. That's about as much as I can say right now about next year's summer season.

And just on the 25 outlook I mean is it fair to assume that may be transient starting to hit a trough or I guess, how should we just big picture would be thinking about that business.

Speaker Change: <unk>.

Speaker Change: We've talked about this concept of normalizing demand I think that the thing to keep in mind is the impact of the weather so.

Speaker Change: We will.

Speaker Change: I expect that we will perform well as we historically have when the weather is favorable and it won't be the same when when the weather isn't.

Speaker Change: That's about as much as I can say right now about next year's summer season.

Operator: No worries. Thanks for time, guys.

Operator: Really appreciate all the insight. Okay. Thank you.

Speaker Change: No worries. Thanks for the time guys really appreciate all the insight.

Speaker Change: Okay. Thank you take care.

Samir Khanal: Our next question comes from the line of some of your canals from every core ISI. Your question, please. A poll or a margarita on the seasonal side, you were down; there's like 13% in the quarter. I'm just trying to get a better understanding of we probably a bit more color around that for both RV and Marina. Thanks.

Speaker Change: Thank you. Our next question comes from the line of Samir Khanal from Evercore ISI. Your question. Please.

Samir Khanal: Hey, Paul or Margaret on the seasonal side you were down.

Samir Khanal: 13% in the quarter I'm, just trying to get a better understanding of maybe.

Samir Khanal: Probably a bit more color around that for both.

Speaker Change: Our being Marina.

Patrick Waite: Yes, Nurse Patrick. You know, we've talked about some of the shifts, particularly driven by Florida with respect to the seasonals. And the construction and other transitional workers responding to Hurricane Ian has been winding on their activity in the state. That's been really a key with respect to the headwinds that we've seen. I plan out overall, however, that we had a number of markets that performed well. It's throughout the last California in the Pacific North. Last have been consistent, and Florida given that transition has really been the key factor.

Speaker Change: Yes, Patrick.

Speaker Change: We've talked about some of the shifts, particularly driven by Florida with respect to the to the seasonal <unk>.

Speaker Change: And then construction and other transitional workers responding there hurricane and I.

I have been winding down their activity in the state.

Speaker Change: That's been.

Speaker Change: Really.

Speaker Change: A key with respect to the headwinds that we've seen it.

Speaker Change: I'd point out overall, however that we.

Speaker Change: We had a number of markets that performed well throughout the last California the Pacific Northwest.

Speaker Change: <unk> been consistent in Florida, given that transition.

Ben.

The key factor and Samir I'll, just follow on kind of kind of piggybacking on what I said a minute ago to Keegan when we look at revenue growth by property in the third quarter and we look at the seasonal in particular at a majority of our locations we saw growth compared to the prior year. The minority is really driving the overall decline so just.

Patrick Waite: And Samir, I'll just follow on, kind of piggybacking on what I said a minute ago to Keegan. When we look at revenue growth by property in the third quarter, and we look at the seasonal in particular. At a majority of our locations, we saw growth compared to the prior year. The minority is really driving the overall decline. So just to kind of walk through that, 90% of our properties generated 2.3% growth here every year in seasonal revenue. It was the remaining 10% that really drove the variance that caused the negative performance.

Speaker Change: Just to kind of walk through that 90% of our properties.

Speaker Change: Generated two 3% growth year over year in seasonal revenue. It was the same as the remaining 10% that really drove the variance that caused the negative performance.

Paul Seavey: Okay, got it. And I guess Paul, on the expense side, I mean you've done a good job on the payroll's segment, but is that primarily a function of the RV business at this point? I'm just trying to understand how much more you can do or lower expense on payroll if transient sort of starts to normalize or at least hit a trough as we heard from the previous question and start to stabilize in the next year. I mean, how much payroll? So plus, can you do into next year as we think about 25? Yes, Mr. Patrick, I guess I'll add on to the earlier question, and we've been able to manage, particularly this driven by the summer RV business, which has a high seasonal employment component, and we've been able to manage a couple of variables.

Okay got it and then I guess, Paul on the expense side I mean, you've done a good job on the payrolls.

Speaker Change: Segment is.

Is that primarily a function of.

The RV.

Business at this point I'm, just trying to understand how much more you can do or lower expense on payroll if.

Speaker Change: If transient sort of starts to normalize or at least hit a trough as we heard from the previous question and start to stabilize in the next year I mean, how much payroll plus can you do into next year as we think about 25.

Speaker Change: Yes, Patrick.

Speaker Change: I guess I'll add on to.

The earlier question that we have.

Speaker Change: Been able to.

Speaker Change: To manage.

Speaker Change: Particularly this is driven by the summer RV business, which has a high seasonal employment component.

Speaker Change: And we've been able to manage.

Paul Seavey: One is in those competitive markets where we're competing for employees, along with other seasonal businesses. We've had some challenges filling some positions, so we've responded that by managing efficiencies at the property level and that cross training ensuring a responsibility has helped us modify our approach to the run rate business, and that's created some efficiencies. But also being very diligent in managing over time and other types of periodic expenses like temporary labor. I would hesitate to say that there are further efficiencies to be gained; certainly, we're always looking for opportunities as well as technology to help improve the operations of the business.

A couple of variables one is in those competitive markets.

Speaker Change: Where we're competing for employees along with other seasonal businesses.

Speaker Change: We've had some challenges filling some positions.

Speaker Change: So we've responded to that by managing efficiencies at the property level that cross training and sharing.

Speaker Change: Responsibilities as has helped us modify our approach to the run rate business and that's created some efficiencies.

Speaker Change: But also being very diligent in managing overtime and other types of periodic expenses like temporary labor.

Speaker Change: Yes.

I'd hesitate to say that there are further efficiencies to be gained certainly we're always looking for opportunities.

Speaker Change: As well as technology to help improve the operations of the business.

Paul Seavey: And we'll continue to focus on that in 2025, but I think the results that you've seen this year are reflective of us responding to those drivers at the property level. Thank you.

Speaker Change: And we will continue to focus on that in 2025, but I think the results that you've seen this year are reflective of us responding to to those those drivers at the property level.

Speaker Change: Thank you.

Yes.

Jamie Feldman: And our next question comes from the line of Jamie Feldman from Wells Fargo. Your question, please. Great, thanks for taking a question.

Speaker Change: Thank you.

Speaker Change: Next question comes from the line of Jamie Feldman from Wells Fargo. Your question. Please.

Jamie Feldman: Great. Thanks for taking the question.

Paul Seavey: Could you comment on any difference between RV annual renewal rates and arena annual renewal rates, just trying to get some color on, you know, how this compares and additionally, are you seeing better or worse pricing power for annual RV in any specific geographic regions, or is the five and a half percent expectation broad-based? Yeah, I would say that the, let me first start with the, the marine is a smaller section of the business and as you plan out on the annual front, it's the, you know, the high 90% with respect to the component of the revenue stream.

Jamie Feldman: You comment on any different.

RV annual renewal rates and Marina annual renewal rates, just trying to get some color on how those two compares and additionally are you seeing better or worse pricing power for annual RV in any specific geographic region or is the five 5% expectation broad base.

Yes.

Jamie Feldman: I would say that the but let me first start with the marine as it is smaller section of the business and as you point out on that on the annual front. It's the it's.

Jamie Feldman: The high 90, percents with respect to the component of the revenue stream.

Paul Seavey: That business is as a very granular turnover; it's a, where, where our annual business in, in RV tends to have more of a calendar cadence to it. The arena portfolio tends to be more prorata or spread out more equally over each of the successive months and quarters. So it's a kind of a consistent renewal. The turnover between the two is relatively consistent in the mid single digits, and the RV is consistent with the overall rates that we're talking about for the 2025 forward, with respect to the annual RV. The drivers are really in the summer season, you know, Maine, New Jersey, New York, Illinois, Wisconsin; those northern markets, we've experienced some normalization of the peak demand that we've talked about across the RV segments.

Jamie Feldman: That business is as a very granular turnover.

Jamie Feldman: I'd say.

Jamie Feldman: Where where our annual business and.

Jamie Feldman: And RV tends to have more of a calendar cadence to it.

Jamie Feldman: The marina portfolio tends to be more.

Jamie Feldman: Pro rata or spread out more equally over each of the successive months and quarters.

Jamie Feldman: So it's a kind of a consistent renewal.

Jamie Feldman: The turnover between the two is relatively consistent in the mid single digits.

Jamie Feldman: And the RV is consistent with the overall rates that we're talking about.

Jamie Feldman: For the 2025 forward.

Jamie Feldman: With respect to the annual RV.

Jamie Feldman: The drivers are really.

And then in the summer season.

Jamie Feldman: Maine, and New Jersey, New York, Illinois, Wisconsin, those northern markets.

Jamie Feldman: Experienced some normalization of the peak demand that we've talked about.

Jamie Feldman: Ross the RV segments.

Paul Seavey: And as we're working our way through that, and we've seen slightly elevated turnover, but we are rebuilding the business very consistently with respect to new customer acquisition consistent with pre-COVID rates. So that's, that's kind of on the occupancy front with respect to the, just the strength in the, in the sub markets. It's fairly widespread with respect to the overall. I've pointed out the strengths in the Eastern Seaboard, with some very strong locations, some key locations outside of key metro areas of properties outside of the Chicago area, particularly up in Wisconsin. So we see a consistent with respect to the mid five percent, but some points of strength in some of our more desirable locations.

Jamie Feldman: And as we're working our way through that.

Jamie Feldman: <unk> seen slightly elevated turnover, but we are rebuilding the business very consistently with respect to new customer acquisition.

Consistent with pre Covid rates.

Jamie Feldman: So that's that's kind of on the occupancy front with respect to the just the strength in the in the Submarkets.

Jamie Feldman: <unk>.

Jamie Feldman: Fairly widespread with respect to the overall I've pointed out the strengths and the eastern seaboard.

Jamie Feldman: We have a very strong locations.

Some key locations outside of key metro areas with properties outside of the Chicago area.

Jamie Feldman: Particularly up in Wisconsin.

Jamie Feldman: So we we.

Jamie Feldman: We see it consistent.

Jamie Feldman: Consistent with respect to the mid five percents, but some points of strength in some of our more desirable locations.

Jamie Feldman: Okay, thanks for that.

Speaker Change: Okay. Thanks for that.

Jamie Feldman: And then I guess just bigger picture, I mean, the transient business, especially RV, seems to be taking up a lot of time on the calls and creating a lot of noise. I mean, what are your thoughts on, you know, guiding for next year, super conservative, just to make sure there's more upside than downside? Like, do you think you might change how you're, how you're presenting this business. And then I guess just longer term, I mean, what do you even feel about the RV business? Is it really worth growing? Would you like to shrink it, get rid of it completely?

Speaker Change: And then I guess just bigger picture.

Speaker Change: The transient business, especially our <unk> seems to be taking up a lot of time on the calls and creating a lot of noise. I mean, what are your thoughts on guiding for next year Super Conservative just to make sure theres more upside than downside like do you think you might change how youre, how youre presenting this business and then I guess just longer term I mean, what.

Speaker Change: Do you feel about the RV business is it really worth growing would you like to shrink it get rid of it completely.

Marguerite Nader: Or is it really a core asset for you? Jamie, we really, we really like the RV business. We got into the business because it, it had all the hallmarks of the manufactured housing business, and we focused on the annual base, and we continue to focus on the annual base, and you've seen the results of those efforts with really strong annual numbers. The transient absolutely has volatility in it, and it has for 25 plus years. So that's, there's nothing new there. I think it's important to remember that the transient base and the transient customer is a, is a paying lead to the customer that pays us a lead that's paying us as opposed to, you know, as opposed to the other way around to be able to experience our properties.

Speaker Change: Or is it really a core asset for you.

So Jamie we really we really like the RV business, we got into the business because it.

Speaker Change: It had all the hallmarks of the manufactured housing business and.

Speaker Change: And we focused on the annual base and we continue to focus on the annual base and you've seen the results of those efforts with really strong annual numbers.

Speaker Change: On the transient absolutely has volatility in it and it has for 25 plus years. So there's nothing new there I think it's important to remember that the transient base and the transient customer is.

Speaker Change: The pain lead towards the customer that pays us a lead that's paying us as opposed to as opposed to the other way around.

Speaker Change: To be able to experience our properties and then become become an annual.

Marguerite Nader: And then become, become an annual. So, we really like the RV business, and the amount of discussion on the call with respect to the transient business, I think, is a function of everything else going so well in our company.

Speaker Change: So we really like the RV business.

Speaker Change: And and the amount of discussion on the call with respect to the to.

Speaker Change: The transient business I think is a function of everything else going so well in our company.

Operator: Okay, thank you.

Speaker Change: Okay.

Speaker Change: Okay. Thank you.

Operator: Thank you.

Speaker Change: Thanks, Thank you.

Michael Goldsmith: And our next question comes from the line of Michael Goldsmith from UBS. Your question, please. Good morning. Thanks a lot for taking my questions. First questions on the 2025 base rent increase. It seems like that, you know, inflation is down to 100 basis points from last year and the MH kind of came down 40 basis points, and while the RV base right increase is coming down a bit more than that. So, I guess, is that kind of what you're getting at with the prior question: is that there's some markets where some of the annual RV is facing a little bit more pressure.

Thank you and our next question comes from the line of Michael Goldsmith from UBS. Your question. Please.

Michael Goldsmith: Good morning, Thanks, a lot for taking my questions.

Michael Goldsmith: First question's on the 2025 base rent increase.

Michael Goldsmith: It seems like that.

Michael Goldsmith: Inflation is down 100 basis points from last year, and the MH kind of came down 40 basis points while the.

Michael Goldsmith: The RV base kind of increase is coming down a bit more than that so I guess.

Is that kind of what youre getting at was the prior question is that there are some markets where some of the annual RV is pacing a little bit more pressure and so you work with.

Michael Goldsmith: And so you went with a lighter. Later base rent increases for 25, or there's some other, there's some other implications why the base rent increase for our annual RV came down so much more than them.

Michael Goldsmith: Later.

Michael Goldsmith: Writer base rent increases.

Michael Goldsmith: For 25 or are there some other.

Speaker Change: Are there some other implications why the base rent.

Increase for our annual RV came down so much more than that.

Paul Seavey: Yeah, I mean, I guess I'd say that an increase in the mid-five percent range still seems pretty good, and I would highlight that as we speak to the relationship between rate growth, rent growth, and CPI, there is a correlation, but it's largely driven by demand at the property level. What we're seeing in the competitive set, and we did come through a period with the COVID demand, as we saw across all of our business lines, and we've highlighted in the RV space for the annual seasonal ammetry. We saw a very strong demand, very strong rate growth, and that's normalizing somewhat.

Yeah.

Speaker Change: Yes, I guess I would say that.

An increase in the mid 5% range.

Speaker Change: Still seems pretty good.

Speaker Change: And it is Ed.

Speaker Change: I would I would highlight that.

Speaker Change: Yes.

Speaker Change: As we speak to the relationship between.

Rate growth rent growth and CPI.

Speaker Change: There is a correlation but it's largely driven by demand at the property level and what we're seeing in the competitive set.

And we did come through a period with the Covid demand as we saw across all of our business lines and we've highlighted in the in the RV space for the annual seasonal and transient.

Speaker Change: Very strong demand very strong rate growth.

Michael Goldsmith: So the mid-five percent rate growth, I think, is reflective of consistent demand across our annual portfolio, but it also acknowledges that we're in a period with more moderate rating increases, as opposed to periods of peak demand. Got it.

Speaker Change: And that's normalizing somewhat so.

The <unk>.

Speaker Change: The mid 5% rate growth I think is reflective of consistent demand.

Speaker Change: Ross our annual portfolio.

Speaker Change: But it also acknowledges that that we're in a period with more moderate rate increases as opposed to periods of peak demand.

Paul Seavey: And then my follow-up question is related to issuing equity and just like the thought process about issuing equity versus debt. Do you have a target leverage ratio? Is that sort of still in play, and how do you think about this short term, like a creative nature of issuing equity versus potentially like the longer term diluted pressures of that? Thanks. Michael, we do not have a leverage target. We have not in our history had one. Our focus has been historically on financial flexibility, making sure that we are ready for opportunities, and so that's the answer to the first part of that.

Got it and then my follow up question is related to issuing equity and just your thought process about issuing equity versus.

Speaker Change: Do you have a target leverage ratio is that sort of still in play and how do you think about like the short term like accretive nature of issuing equity versus potentially little longer term.

Speaker Change: Dilutive pressures of that thanks.

Speaker Change: We don't Michael we do not have a leverage target we have not in our history had one our focus has been historically on financial flexibility and making sure that we are ready for opportunities.

Speaker Change: And.

Speaker Change: So that's the answer to the first part of that the second part of just kind of thinking about the opportunity to.

Michael Goldsmith: The second part of just kind of thinking about the opportunity to remove higher-cost debt and remove uncertainty associated with that. That's long been a hallmark of our strategy in terms of managing the debt stack. Thank you very much. Good luck in the fourth quarter. Thanks. Thank you.

Speaker Change: Remove higher cost debt and remove uncertainty associated with that that has long been a hallmark of our strategy.

Speaker Change: In terms of managing that debt stack.

Speaker Change: So.

Speaker Change: Okay. Thank you very much good luck in the fourth quarter.

Thank you.

Omatayo Ocasanaia: Our next question comes to the line of Omatayo, Ocasanaia, from Docherbank. Your question, please. Good morning, everyone. A quick question on the $5 million distribution on the JV side. Can you just talk to us a little bit about the nature of that distribution?

Speaker Change: Thank you. Our next question comes from the line of Tayo Okusanya from Deutsche Bank. Your question. Please.

Speaker Change: Yes. Good morning, everyone. A quick question on the $5 million distribution on the JV side could you just talk to us a little bit about the nature of that distribution.

Paul Seavey: Sure. Just as a reminder, we own interests in seven joint ventures. There's an aggregate investment. It's less than $100 million across those JVs. Our third quarter guidance included the income contribution from refinancing alone, secured by one of our JV assets. In the ordinary course of ownership, transactions like this generate this type of income, and consistent with GAAP guidance and our past practice, we recognize the distribution as JV income in the quarter. Okay, so the debt was refinanced, and that led to a distribution? Correct. And so gap guidance states that distributions are applied to your book investment until the basis reaches zero.

Speaker Change: Sure.

Speaker Change: As a reminder, we own interests in seven joint ventures, Theres, an aggregate investment, it's less than $100 million across those jv's. Our third quarter guidance included the income contribution from refinancing alone secured by one of our JV assets in the ordinary course of ownership transactions like this generate this type of <unk>.

Speaker Change: And consistent with GAAP guidance and our past practice, we recognize that distribution is JV income in the quarter.

Okay.

Okay. So the debt was refinanced and that led to a distribution.

Speaker Change: Correct.

Speaker Change: So GAAP guidance states that distributions are applied to your book investment until the basis reaches zero.

Paul Seavey: Then the excess cash is recognized as income. Okay, so that's what happens at the basis of not below zero. That makes a lot of sense to me. That is helpful.

Speaker Change: Zero then the excess cash is recognized as income.

Speaker Change: So that's what's happening is that the basis has not been those are okay that makes a lot of sense to me.

Speaker Change: That is helpful. Thank you.

Omatayo Ocasanaia: Thank you.

Speaker Change: Thank you. Thank you.

David Seagull: And our next question comes from the line of David Seagull from Green Street Advisors. Your question, please.

Speaker Change: Thank you and our next question comes from the line of David Siegel from Green Street Advisors. Your question. Please.

David Seagull: Hey, this is John on actually quick question on seasonal RVs based on leading indicators. You see right now for fourth quarter and first quarter. Can you expect a year of your declines in revenue for seasonal RV winter season or growth? Well, I can speak first to fourth quarter seasonal tracking slightly ahead of the forecast that we have for the quarter. And we are reserved 92% for the fourth quarter rent; that's slightly higher than this time last year. I'll just tuck in transient there since I'm on the topic. Transient is essentially flat to our guidance in terms of the reservation pacing.

Speaker Change: Okay.

Speaker Change: And this is John on actually quick question.

John Kim: On seasonal rvs based on leading indicators.

John Kim: Right now for fourth quarter and first quarter.

Speaker Change: We expect year on year over year declines in revenue for the seasonal RV winter season or growth.

Speaker Change: Well I can speak first to fourth quarter.

Speaker Change: Seasonal is tracking slightly ahead of the forecast that we have.

Speaker Change: For the quarter and we are reserve, 92% for the fourth quarter rent, that's slightly higher than this time last year.

Speaker Change: I would just tuck in transient there since I'm on the topic transient is essentially flat to our.

Speaker Change: Guidance in terms of the reservation pacing.

Speaker Change: Okay.

Paul Seavey: I guess, but any color, Paul, on the very busy first quarter, just given how much of a weight and in full year revenue of the first quarter seasonal businesses, how are how leading demand indicator shaken out for the first quarter. Yeah, I think that with respect to the first quarter, it's early. I think the leading indicators are flat to maybe down slightly. And you know, we're anticipating that that will pick up as we continue through the end of the year.

Speaker Change: I guess any color Paul on a very busy first quarter and just given how much of a weight in full year revenue in the first quarter seasonal businesses. How are how is leading demand indicators shaking out for the first quarter.

Yes, I think that.

Speaker Change: With respect to the first quarter it's early.

The leading indicators are flat to maybe down slightly.

Speaker Change: And.

Speaker Change: We're anticipating that that will pick up as we continue through the end of the year.

David Seagull: Okay, and then a question on just how to think through the translating of annual rate growth on the RV side to revenue growth. I know there was probably some modest drag from kind of short-term workers leaving this year. But it's a bit surprised that conversions from transits annual hasn't boosted annual RV revenue growth more above the rate growth. So, of the five and a half percent rate growth assumed, you expect any additional drag on the flow through from rate to revenue. Or should we expect some accretion above that five and a half percent from conversions from transient to annuals next year.

Okay.

Speaker Change: And then a question on just how to think through the translating of annual rate growth on the RV side of revenue growth I know there is probably some modest drag from kind of short term workers, leaving this year.

Speaker Change: But vince bit surprise that conversions from transits annual Hasnt boosted annual RV revenue growth more above the rate growth. So of the five 5% rate growth assumed you expect any additional drags on the flow through from rate to revenue or should we expect some accretion.

Speaker Change: Above that five 5% from conversions from transient to annual next year.

Paul Seavey: I do think that next year will continue to have a bit of a drag. We've talked about the displaced residents that were occupying some RV annual spaces across the core portfolio. And as we kind of transition to stabilized operations at those locations or, in other words, don't have that incremental revenue. There could be some offset to occupancy that we might otherwise gain in the annual. I think on a net basis, we would anticipate being up, but not as significantly as otherwise.

Speaker Change: I do think that next year, we will continue to have a bit of a drag we've talked about the displaced residents.

Speaker Change: That we're occupying some RV annuals spaces across the core portfolio.

Speaker Change: And and.

Speaker Change: As we kind of transition to stabilized.

Operations at those locations or in other words don't have that incremental revenue there could be some offset to occupancy that we might otherwise gain.

In the annual I think on a net basis, we would anticipate being up but not as not as significantly as otherwise.

Patrick Waite: Okay, one more follow-up question. Thanks for that for bearing with me. Have you noticed an increase of essentially attrition on recent tenants that have recently converted from transient to annual and recent years. Is that, is that some of the hole in the bucket? I, yeah, John Patrick, I think that's a reasonable way to think about it. I guess I would characterize it a little bit differently. As I was kind of walking through earlier, we move through that kind of post-COVID period where people were able to move around, but there was still a high degree of focus on isolating within your own social group and family that lines up very well with.

Speaker Change: Okay, and one more follow up question.

Speaker Change: For bearing with me.

Speaker Change: Have you noticed an increase of essentially attrition on recent.

Speaker Change: Tenants that have recently converted from transient to annual in recent years.

Speaker Change: Does that is that some of the hole in the bucket.

Speaker Change: Yes, John it's Patrick I think Thats.

Speaker Change: A reasonable way to think about it I guess I would characterize it.

Speaker Change: A little bit differently.

Speaker Change: As I was kind of walking through earlier.

Speaker Change: We move through that that kind of post COVID-19 period.

Speaker Change: Where people were able to move around but there is still a high degree of focus on isolating within your own social group and family that lines up very well with.

Patrick Waite: The RV camping and lifestyle, so we saw really significant demand that led to growth in occupancy as well as very strong rate growth. And now we're more at a point where the build back of normalized attrition isn't keeping pace with just the higher occupancy. So I keep in tune up. We have a level of attrition to fair fair point, although I can't speak to any level of detail. It's a fair point that there might be a higher level of attrition on that broader group, but we're working through that, and we're building back the business consistent with pre-COVID acquisition of new customer pace.

Speaker Change: The RV camping and lifestyle.

Speaker Change: So we saw really significant demand that led to.

Speaker Change: Growth in occupancy as well as very strong rate growth.

Speaker Change: And now we are.

Speaker Change: We're more at a point, where the build back of normalized attrition.

Speaker Change: Is isn't keeping pace with.

Speaker Change: Just the higher occupancy so occupancy went up we have a level of attrition. That's a fair fair point, although I can't speak to any level of detail. It's a fair point that there might be a higher level of attrition.

On that broader group.

Speaker Change: But we're working through that and we're building back the business consistent with.

Speaker Change: Pre COVID-19 acquisition of new customer pace.

Operator: So it's kind of an interaction of the two, and as we work our way through that process, as Paul highlighted, I would expect we'd revert to something that looks more like our run rate business pre-COVID with respect to occupancy in terms. All right, that's it from me. Thank you. Thank you, John. Thank you.

Speaker Change: So it's kind of an interaction of the two and as we work our way through that process as Paul highlighted I would expect we'd revert to something that looks more like our our run rate business pre COVID-19 with respect to occupancy and turnover.

Speaker Change: Alright, that's it for me thank you.

Sure Ken.

Mason Goll: Our next question comes in the line of Mason Goll from Barrett. Your question, please. We're going to do a pretty good job of detailing out our coverage every time, after every renewal, so we'll continue to do that. But it's pretty early in the process to determine any change in coverage. It's really a function of what's available in the market, and we're not, you know, we haven't started, had those conversations yet.

Thank you. Our next question comes from the line of Nathan <unk> from Baird. Your question. Please.

Speaker Change: Hey, good morning, everyone. Another question on Retrans on rate, but maybe more on the structure do you plan to make any changes to your insurance deductibles and limits or are you comfortable where you are at.

Speaker Change: Yes, I think that's.

Speaker Change: It's too early to tell.

Speaker Change: We do a pretty good job of detailing out our coverage every time. After every renewal. So we'll continue to do that but it's pretty early in the process to determine any change in coverage is really a function of.

Speaker Change: What's available in the market and we're not we haven't started to have those conversations yet.

Mason Goll: Thank you.

Speaker Change: Yeah.

Marguerite Nader: And you expect a meaningful uptick in demand from hurricane relief workers? You know, if you look at what we've seen historically after a few weeks after the hurricane, and as people, or after the storm events, as people get situated and kind of have an understanding of what their needs are, you do see an increase in occupancy. And as a result of that, it just takes a while for it to kind of work through the system and determine how many people are needed to help out.

Speaker Change: Thank you and you expect a meaningful uptick in demand from hurricane relief workers.

Speaker Change: If you look at what we've seen historically.

Speaker Change: After a few weeks after the hurricane and as people are after the storm events as people get situated and kind of have an understanding of what their needs are.

Speaker Change: You do see an increase in increase in occupancy as a result of that.

Speaker Change: It just takes a while for it to kind of work through the system.

Speaker Change: And determined how many people are needed to help out.

Marguerite Nader: Great.

Operator: That's all for me.

Operator: Thank you.

Speaker Change: Great. That's all for me thank you.

Operator: Thank you very much.

Speaker Change: Thank you very much.

Operator: Thank you.

Speaker Change: Thank you and our next question comes from the line of Anthony Hau from tourist Securities. Your question. Please.

Anthony Hau: And our next question comes in the line of Anthony Hau from Truist Securities. Your question, please. Hey guys, thanks for the question.

Speaker Change: Hey, guys. Thanks for the question.

Paul Seavey: Hey Paul, can you quantify the track from this place Resident for next year? I think you mentioned that earlier. Yeah, it was, it was a little over a million and a half dollars in 2024. And do you think that, do you think that drag will continue in 2025, like another million dollars in 2025? No, I mean, a million and a half is what we earned in 2024. So potentially that leads us to zero over time.

Anthony Hau: Paul can you quantify the drag from displaced residents for next year.

Speaker Change: Mentioned that earlier.

Speaker Change: Yes. It was it was a little over $1 million and $5 in 2024.

Anthony Hau: And do you think that do you think that drag will continue in 'twenty five like another $1 million.

125.

No I mean.

Anthony Hau: And a half as what we earned in 2024.

Gotcha Okay.

Anthony Hau: Potentially that eases to zero over time.

Anthony Hau: And then you mentioned that, like the market market for new tenants, remain that 13% unchanged from last year. But at the same time, right, you guys are renewing lease, is that like, you know, five, six percent. So doesn't that mean that the market rank growth is much higher than that?

Anthony Hau: Okay and then.

Speaker Change: You mentioned that like the mark to market for new tenants remained at 13% unchanged from last year, but at the same time right you guys aren't renewed lease is that like 5% 6%.

Speaker Change: Doesn't that mean that the market rent growth is much higher than that.

Paul Seavey: And just curious, like, what are you guys seeing in terms of market rank growth in your portfolio? I'm not sure I'm tracking your question, Anthony. When a resident leaves and a new one comes in, they're paying a rent that is 13% higher than the customer who is there. And I think maybe, maybe helps to think about it this way: with as we move from a period of low to moderate inflation. And we reached a period of higher inflation, significant demand in the MH space on across all our business lines. We saw growth in occupancy, and we saw sequential increases in rate in rates that we were charging in the market based on demand, which includes a correlation to inflation as well.

Speaker Change: Just curious like what are you guys seeing in terms of market rent growth in your portfolio.

I'm not sure I'm tracking your question Anthony when a.

Speaker Change: When a resident leaves in a new one comes in they are paying a rent that is 13% higher than the than the customer who is there Anthony maybe maybe it helps to think about it this way.

Speaker Change: As we move from a period of low to moderate inflation.

Speaker Change: And we reached a period of higher inflation significant demand.

Speaker Change: On the MH space on across all our business lines.

Speaker Change: We saw growth in occupancy and we saw it.

Speaker Change: Sequential.

Speaker Change: Increases in rating.

Speaker Change: In rates that we were charging in the market based on demand and clearly there's a correlation to inflation as well so higher inflationary period higher demand rates went up a couple of years at a rate that was just higher than we've seen.

Paul Seavey: So higher inflationary period, higher demand rates went up a couple years at a rate that was just higher than we've seen in our history. So that led to market rates taking those full increases of, you know, six, seven, eight percent, sometimes higher depending on the particular property. And our long-term residents, we have a very long-term view, would be getting an increase significantly less than that, something in the mid single digits. So if you go through a couple of years of that, you start to create a larger gap between the rate that's charged to our run rate customer or long-term MH residents and an incoming customer or a new home buyer, used home buyer, one of our properties.

Speaker Change: In our history.

Speaker Change: So that led to market rates, taking those full increases.

Speaker Change: Of six 7%, 8%, sometimes higher depending on the particular property and our long term residents. We have a very long term view will be getting an increase significantly less than that something in the mid single digits. So if you go through a couple of years is that you start to create a larger gap between the rate charged to our run.

Speaker Change: <unk> customer of long term MH residents and an incoming customer or a new a new homebuyer used all buyer one of our properties. That's what that's what really drove the call. It the earn in of a double digit mark to market.

Paul Seavey: That's what really drove the call at the earn-in of a double-digit mark Demar.

Marguerite Nader: This concludes the question and answer session at this time.

Speaker Change: Yes.

Speaker Change: This concludes the question and answer session at this time I'd like to turn the program back to Marguerite Nader for any closing comments.

Operator: I'd like to turn the program back to Marguerite Nader for any closing comments. Thank you for joining us today. We look forward to updating you on our next quarter's call. Thank you, ladies and gentlemen, for your participation at today's conference. This does conclude the program. You may now disconnect.

Marguerite Nader: Thank you for joining us today, we look forward to updating you on our next quarter's call.

Speaker Change #100: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

Operator: Good day.

Speaker Change #100: Yes.

Speaker Change #100: Okay.

Speaker Change #100: [music].