Q3 2025 Equity LifeStyle Properties Inc Earnings Call

[Company Representative]: Good day, everyone, and thank you all for joining us to discuss Equity LifeStyle Properties, Inc.'s third quarter 2025 results. Our featured speakers today are Marguerite Nader, our CEO, Patrick Waite, our President and COO, and Paul Seavey, our Executive Vice President and CFO. In advance of today's call, management released earnings. Today's call will consist of opening remarks and a 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 asks that you limit yourself to two questions, so everyone who 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 meanings of the federal securities laws. Our forward-looking statements are subject to certain economic risk and uncertainty.

Speaker #2: Good day everyone and thank you all for joining us to discuss Equity LifeStyle Properties third quarter 2025 results . Our featured speakers today are Marguerite Nader , our CEO Patrick Wade .

Speaker #2: Our president and COO , and Paul Seavey are Executive Vice President and CFO . In advance of today's call management released earnings . Today's call will consist of opening remarks and a question and answer session with management relating to the company's earnings release .

Speaker #2: For those who would like to participate in the question and answer session , management asks that you limit yourself to two questions . So everyone who would like to participate has ample opportunity .

Speaker #2: 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 security laws .

Speaker #2: Our forward looking statements are subject to certain economic risks and uncertainty . The company assumes no obligation to update or supplement any statements that become untrue because of subsequent events .

[Company Representative]: The company assumes no obligation to update or supplement any statements that become untrue because of subsequent events. In addition, during today's call, we will discuss non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release, our supplemental information, and our historical SEC filings. At this time, I would like to turn the call over to Marguerite Nader, our President and CEO. Please go ahead.

Speaker #2: In addition , during today's call , we will discuss non-GAAP financial measures as defined by SEC regulation G . Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release .

Speaker #2: Our supplemental information and our historical SEC filings. At this time, I would like to turn the call over to Marguerite Nader, our President and CEO.

Speaker #2: Please go ahead .

Marguerite Nader: Good morning, and thank you for joining us today. I am pleased to discuss our third quarter results and will provide some insights into the strengths we see in 2026. Turning to the results for the third quarter, we delivered strong normalized FFO growth in line with our expectations of 4.6%. Our full-year guidance shows continued strength in property operations and FFO. I would like to highlight some of the key demand drivers for our annual business and the access points for our new customers. There are approximately 7 million manufactured homes across the country, housing over 18 million people, accounting for about 6% of all U.S. housing. Outside of metro areas, this share increases significantly to 14%. New manufactured homes in our communities are designed to meet the needs of our core demographic, offering value both in terms of cost and quality of life.

Speaker #3: Good morning , and thank you for joining us today . I am pleased to discuss our third quarter results and will provide some insights into the strengths we see in 2026 .

Speaker #3: Turning to the results for the third quarter, we delivered strong normalized FFO growth in line with our expectations of 4.6%. Our full-year guidance shows continued strength in property operations and FFO.

Speaker #3: I would like to highlight some of the key demand drivers for our annual business and the access points for our new customers . There are approximately 7 million manufactured homes across the country .

Speaker #3: Housing over 18 million people , accounting for about 6% of all U.S. housing outside of metro areas . This share increases significantly to 14% .

Speaker #3: New manufactured homes in our communities are designed to meet the needs of our core demographic , offering value both in terms of cost and quality of life , construction and safety standards for manufactured housing have been meaningfully enhanced over time , making today's homes more durable and cost 60% less than that of a comparable site built home in the surrounding area .

Marguerite Nader: Construction and safety standards for manufactured housing have been meaningfully enhanced over time, making today's homes more durable and cost 60% less than that of a comparable site-built home in the surrounding area. As important as affordability, our residents benefit from amenitized communities that foster a strong sense of belonging, security, and connection. We serve a large and expanding market, which includes nearly 70 million baby boomers and 65 million members of Gen X within our target demographic. These individuals are increasingly seeking housing options that combine desirable locations, high-quality homes at attractive price points, and a welcoming community environment. Our properties deliver on all three fronts, offering a value proposition that resonates with this growing segment of the population. Our marketing efforts focus on leveraging technology and insights into our customers' travel patterns and lifestyles to reach the nation's 8 million RV owners.

Speaker #3: As important as affordability , our residents benefit from Amenitized communities that foster a strong sense of belonging , security and connection . We serve a large and expanding market which includes nearly 70 million baby boomers and 65 million members of Gen X within our target demographic .

Speaker #3: These individuals are increasingly seeking housing options that combine desirable locations , high quality homes , and attractive price points , and a welcoming community environment .

Speaker #3: Our properties deliver on all three fronts , offering a value proposition that resonates with this growing segment of the population . Our marketing efforts focus on leveraging technology and insights into our customers travel patterns and lifestyles to reach the nation's 8 million RV owners .

Marguerite Nader: We listen closely to feedback and adapt to evolving preferences. Our seasonal guests increasingly seek flexibility to book stays and visit multiple locations, while Thousand Trails members value our new subscription-based memberships with tiered benefits that they can purchase online. Manufactured home buyers increasingly research and communicate with us online and via text. Our digital tools offer detailed information, virtual tours, online applications, and text messaging with local sales agents. Alongside technology, our teams focus on personal outreach. Property managers build relationships with their customers, invite guests to return next season, and share new home opportunities that meet their needs. Turning to 2026 expectations, within our manufactured home communities portfolio, we expect to have issued 2026 rent increase notices to 50% of our MH residents by the end of October, with an average rate increase of 5.1%.

Speaker #3: We listen closely to feedback and adapt to evolving preferences . Our seasonal guests increasingly seek flexibility to book stays and visit multiple locations .

Speaker #3: While Thousand Trails members value our new subscription based memberships with tiered benefits that they can purchase online . Manufactured home buyers increasingly research and communicate with us online and via text .

Speaker #3: Our digital tools offer detailed information , virtual tours , online applications and text messaging with local sales agents alongside technology . Our teams focus on personal outreach , property managers build relationships with their customers , invite guests to return next season , and share new home opportunities that meet their needs .

Speaker #3: Turning to 2026 , expectations within our manufactured housing portfolio , we expect to have issued 2026 rent increase notices to 50% of our MH residents by the end of October , with an average rate increase of 5.1% in our RV portfolio .

Marguerite Nader: In our recreational vehicle communities portfolio, annual rates have already been set for over 95% of our annual sites, with an average rate increase of 5.1%. We continue to engage with our residents to identify and prioritize capital improvements within our communities. These efforts not only enhance the resident experience but also support the long-term value of our assets. The anticipated rent increases position us to extend our longstanding track record of leading revenue growth. Our ability to share strong current results and provide early visibility into 2026 reflects the strength and dedication of our team. Their ongoing commitment to supporting our residents and customers is fundamental to our success. Through their focus on service, quality, and community, we have been able to consistently deliver superior operating performance over the past two decades. I will now turn the call over to Patrick to provide an overview of property operations.

Speaker #3: Annual rates have already been set for over 95% of our annual sites, with an average rate increase of 5.1%. We continue to engage with our residents to identify and prioritize capital improvements within our communities.

Speaker #3: These efforts not only enhance the resident experience , but also support the long term value of our assets . The anticipated rent increases position us to extend our long standing track record of REIT leading revenue growth .

Speaker #3: Our ability to share strong current results and provide early visibility into 2026 reflects the strength and dedication of our team , their ongoing commitment to supporting our residents and customers is fundamental to our success .

Speaker #3: Through their focus on service , quality and community , we have been able to consistently deliver superior operating performance over the past two decades .

Speaker #3: I will now turn the call over to Patrick to provide an overview of property operations .

Patrick Waite: Thanks, Marguerite. As we wind down the summer season in the north, our Sunbelt properties are gearing up for their winter season. Our MH and RV properties in Florida, Arizona, and South Texas are preparing for the inflow of customers and increase in activities. Onsite teams have begun welcoming residents and guests to our properties. Our manufactured homes and communities continue to experience consistent demand and offer desirable features and amenities at prices that provide value in their respective markets. In the quarter, we continue to experience a consistent pace of new home sales. Our Florida MH portfolio reached 94% on occupancy. Florida continues to be one of the top states for net in-migration, which supports demand for our key submarkets like Tampa, St. Pete, and Fort Lauderdale, West Palm Beach. To meet that demand, we developed more than 900 sites in Florida over the last five years.

Speaker #4: Thanks, Marguerite. As we wind down the summer season in the North, our Sunbelt properties are gearing up for their winter season.

Speaker #4: Our MH and RV properties in Florida , Arizona and South Texas are preparing for the inflow of customers and increase in activities onsite .

Speaker #4: Teams have begun welcoming residents and guests to our properties . Our manufactured homes and communities continue experience consistent demand and offer desirable features and amenities at prices that provide value in their respective markets .

Speaker #4: In the quarter , we continued to experience a consistent pace of new home sales . Our Florida MH portfolio reached 94% occupancy . Florida continues to be one of the top states for net In-migration , which supports demand for our key submarkets like Tampa , Saint Pete , and Fort Lauderdale , West Palm Beach .

Speaker #4: To meet that demand , we developed more than 900 sites in Florida over the last five years . Florida is also supporting strong rent growth , reflected in mark to market rent increases of 13% to new homebuyers Arizona and California .

Patrick Waite: Florida is also supporting strong rent growth, reflected in marked-to-market rent increases of 13% to new home buyers. Arizona and California are our next largest markets, which are 95% occupied. Home buyers in our western markets are attracted to these communities due to their desirable locations, quality amenities, and the substantial value they offer in their respective markets, particularly the coastal markets in California. We continue to execute on our expansion strategy, providing opportunities for more customers to enjoy our product offerings. This strategy leverages in-place utility infrastructure, operational efficiencies, zoning, and the brand recognition of existing properties. As we started the fourth quarter, we completed a 103-site expansion at Cloverleaf Farms, an MH community on the Gulf Coast of Florida. This was the second and final phase of development, which added a total of 170 sites, plus an amenity core.

Speaker #4: Are next largest markets , which are 95% occupied . Homebuyers in our western markets are attracted to these communities due to their desirable locations , quality amenities and the substantial value they offer in their respective markets , particularly the coastal markets .

Speaker #4: In California . We continue to execute on our expansion strategy , providing opportunities for more customers to enjoy our product offerings . This strategy leverages in-place utility infrastructure , operational efficiencies , zoning , and the brand recognition of existing properties .

Speaker #4: We started the fourth quarter as we started the fourth quarter , we started at one , completed a 103 site expansion at Cloverleaf Farms , an MH community on the Gulf Coast of Florida .

Speaker #4: This was the second and final phase of development which added a total of 170 sites , plus an amenity core . The first phase of 67 sites is approaching 100% occupancy .

Patrick Waite: The first phase of 67 sites is approaching 100% occupancy. We also continue to see growth on the RV side of our business. Our RV annual sites provide an affordable second home, whether it's a lakeside retreat in the summer or a warm-weather destination in the winter. In the quarter, we increased annual RV occupancy by 476 sites. With respect to our Canadian customers, many of whom return year after year to their site in one of our properties for the winter season, we're engaging with them through personal outreach as well as our traditional marketing channels. The regional weather outlook for the winter season looks favorable. The NOAA Climate Prediction Center forecasts a La Niña pattern this winter. This season's forecast calls for warmer, drier conditions in the south, along with cooler weather conditions in the north, making the Sunbelt particularly attractive for winter getaways.

Speaker #4: We also continue to see growth on the RV side of our business . Our RV annual sites provide an affordable second home , whether it's lakeside retreat in the summer or warm weather destination in the winter .

Speaker #4: In the quarter, we increased annual RV occupancy by 476 sites with respect to our Canadian customers, many of whom return year after year to their site in one of our properties for the winter season.

Speaker #4: We're engaging with them through personal outreach as well as our traditional marketing channels . The regional weather outlook for the winter season looks favorable .

Speaker #4: The NOAA Climate Prediction Center forecasts a La Nina pattern this winter . This season's forecast calls for warmer , drier conditions in the south , along with cooler , wetter conditions in the north , making the Sunbelt particularly attractive for winter getaways .

Patrick Waite: Our operations team has prioritized occupancy and revenue growth while thoughtfully budgeting and executing on expenses. Our onsite teams are focused on providing excellent customer service, and we are leveraging technology to increase efficiency for these staff members. Tools like electronic lease agreements and SMS text customer service platforms have been well received by our customers and help ensure that our teams have more time to focus on delivering memorable experiences. Finally, the third quarter wrapped up our 11th annual 100 Days of Camping campaign, which saw record engagement among our social media fans and followers. The campaign had over 46 million impressions on social media, and we received nearly 1,100 photo entries of our viewers with our signature rally towels, which reflects a strong and active customer base that wants to engage with our properties and brands. Now I'll turn the call over to Paul.

Speaker #4: Our operations team has prioritized occupancy and revenue growth while thoughtfully budgeting and executing on expenses . Our onsite teams are focused on providing excellent customer service , and we are leveraging technology to increase efficiency for these staff members .

Speaker #4: Tools like electronic lease agreements and SMS text , customer service platforms have been well received by our customers and help ensure that our teams have more time to focus on delivering memorable experiences .

Speaker #4: Finally , the third quarter wrapped up our 11th annual 100 Days of Camping campaign , which saw record engagement among our social media fans and followers .

Speaker #4: The campaign had over 46 million impressions on social media , and we received nearly 1100 photo entries of our viewers with our signature rally towels , which reflects a strong and active customer base that wants to engage with our properties and brands .

Speaker #4: Now I'll turn the call over to Paul .

Paul Seavey: Thanks, Patrick, and good morning, everyone. I will discuss our third quarter and September year-to-date results, review our guidance assumptions for the fourth quarter and full year 2025, and close with a discussion of our balance sheet. Third quarter normalized FFO was $0.75 per share, in line with our guidance. Continued strong performance in our core portfolio resulted in 5.3% NOI growth in the quarter, 40 basis points higher than guidance. Core community-based rental income increased 5.5% for the quarter and for the September year-to-date period compared to the same periods in 2024. In the third quarter, we generated rate growth of 6% as a result of noticed increases to renewing residents and market rent paid by new residents after resident turnover.

Speaker #5: Thanks , Patrick , and good morning , everyone . I will discuss our third quarter and September year to date results . Review our guidance , assumptions for the fourth quarter and full year 2025 , and closed the discussion of our balance sheet .

Speaker #5: Third quarter normalized FFO was $0.75 per share , in line with our guidance . Continued strong performance in our core core portfolio resulted in 5.3% NOI growth in the quarter , 40 basis points higher than guidance core community based rental income increased 5.5% for the quarter and for the September year to date period , compared to the same periods in 2020 .

Speaker #5: For in the third quarter , we generated rate growth of 6% as a result of noticed increases to renewing residents and market rent paid by new residents after resident turnover .

Paul Seavey: Core RV and marina annual base rental income, which represents approximately 70% of total RV and marina base rental income, increased 3.9% for the third quarter and for the year-to-date period compared to the same periods last year. Year-to-date in the core portfolio, seasonal rent decreased 7% and transient rent decreased 8.4%. We continue to see offsetting reductions in variable expenses. The net contribution from our total membership business consists of annual subscription and upgrade revenues offset by sales and marketing expenses. The membership business contributed $16.8 million and $48.2 million net for the third quarter and September year-to-date periods respectively compared to the same periods last year. Core utility and other income increased 4.2% for the September year-to-date period compared to prior year. Our utility income recovery percentage was 48.1% year-to-date in 2025, about 150 basis points higher than the same period in 2024.

Speaker #5: Core RV and Marina annual rental income , which represents approximately 70% of total RV and Marina based rental income , increased 3.9% for the third quarter and for the year to date period compared to the same periods last year .

Speaker #5: Year to date . In the core portfolio , seasonal rent decreased 7% and transient rent decreased 8.4% . We continue to see offsetting reductions in variable expenses .

Speaker #5: The net contribution from our total membership business consists of annual subscription and upgrade revenues , offset by sales and marketing expenses . The membership business contributed 16.8 million and $48.2 million , net for the third quarter and September year to date periods , respectively , compared to the same periods last year .

Speaker #5: Core utility and other income increased 4.2% for the September year to date period compared to prior year . Our utility income recovery percentage was 48.1% year to date .

Speaker #5: In 2025 , about 150 basis points higher than the same period in 2020 . For . In addition , we recognized higher tax pass through income , mainly in Florida .

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

Speaker #5: Core property operating expenses for the year to date period were 60 basis points higher than the same period last year . This includes the change in membership expenses associated with the membership upgrade subscription program that was implemented earlier this year .

Speaker #5: Expense growth for the third quarter was 40 basis points lower than guidance , mainly resulting from savings in real estate tax expense . Third quarter core property operating revenues increased 3.1% , while core property operating expenses increased 50 basis points , resulting in growth in core NOI before property management of 5.3% for the year to date period .

Speaker #5: Core NOI before property management increased 5.1% . Income from property operations generated by our non-core portfolio was $1.8 million in the quarter , and $8.3 million year to date .

Speaker #5: I'll now discuss guidance as I do the following remarks are intended to provide context for our current estimate of future results . All growth rate ranges and revenue and expense projections are qualified by the risk factors included in our press release and supplemental package .

Paul Seavey: As I do, the following remarks are intended to provide context for our current estimate of future results. All growth rate ranges and revenue and expense projections are qualified by the risk factors included in our press release and supplemental package. We are maintaining our full year 2025 normalized FFO guidance of $3.06 per share at the midpoint of our range of $3.01 to $3.11 per share. Full year normalized FFO per share at the midpoint represents an estimated 4.9% growth rate compared to 2024. We expect fourth quarter normalized FFO per share in the range of $0.75 to $0.81. We project full year core property operating income growth of 4.9% at the midpoint of our range of 4.4% to 5.4%.

Speaker #5: We are maintaining our full year 2025 normalized FFO guidance of $3.06 per share at the midpoint of our range of $3.01 to $3.11 per share .

Speaker #5: Full year normalized FFO per share at the midpoint represents an estimated 4.9% growth rate compared to 2024 . We expect fourth quarter normalized FFO per share in the range of $0.75 to $0.81 .

Speaker #5: We project full year core property operating income growth of 4.9% at the midpoint of our range of 4.4 to 5.4% . Full year guidance assumes core base rent growth in the ranges of 5% to 6% for MH , and -20 basis points to positive 80 basis points for RV and Marina .

Paul Seavey: Full year guidance assumes core base rent growth in the ranges of 5% to 6% for MH and negative 20 basis points to positive 80 basis points for RV and marina. The midpoints of our guidance assumptions for combined seasonal and transient show a decline of 13.3% in the fourth quarter and a decline of 8.8% for the full year compared to the respective periods last year. Core property operating expenses are projected to increase 40 basis points to 1.4% for the full year 2025 compared to prior year. Our full year expense growth assumption includes the benefit of savings in payroll expense year-to-date in 2025, reduced membership expenses, and the impact of our April 1 insurance renewal for 2025. Consistent with our historical practice, we make no assumption for the impact of a material storm event that may occur.

Speaker #5: The midpoint of our guidance assumptions for combined seasonal and transient show a decline of 13.3% in the fourth quarter and a decline of 8.8% for the full year compared to the respective periods last year .

Speaker #5: Core property operating expenses are projected to increase 40 basis points to 1.4% for the full year 2025 , compared to prior year . Our full year expense growth assumption includes the benefit of savings in payroll expense , year to date in 2025 , reduced membership expenses and the impact of our April 1st insurance renewal for 2025 .

Speaker #5: Consistent with our historical practice , we make no assumption for the impact of a material storm event that may occur . Our fourth quarter guidance assumes core property , operating income growth is projected to be 4.4% at the midpoint of our guidance range .

Paul Seavey: Our fourth quarter guidance assumes core property operating income growth is projected to be 4.4% at the midpoint of our guidance range. In our core portfolio, property operating revenues are projected to increase 3.3% and expenses are projected to increase 1.6%, both at the midpoint of the guidance range. I'll now provide some comments on our balance sheet and the financing market. We maintain our focus on balance sheet management and believe we are well positioned to execute on capital allocation opportunities. We have no secured debt scheduled to mature before 2028, and our weighted average maturity for all debt is almost eight years. Our debt to EBITDA RE is 4.5 times and interest coverage is 5.8 times. We have access to over $1 billion of capital from our combined line of credit and ATM programs.

Speaker #5: In our core portfolio property operating revenues are projected to increase 3.3% and expenses are projected to increase 1.6% , both at the midpoint of the guidance range .

Speaker #5: I'll now provide some comments on our balance sheet and the financing market . We maintain our focus on balance sheet management and believe we are well positioned to execute on capital allocation opportunities .

Speaker #5: We have no secured debt scheduled to mature before 2028 , and our weighted average maturity for all debt is almost eight years . Excuse me , our debt to EBITDA is four and a half times and interest coverage is 5.8 times .

Speaker #5: We have access to over $1 billion of capital from our combined line of credit and ATM programs . We continue to place high importance on balance sheet flexibility , and we believe we have multiple sources of capital available to us .

Paul Seavey: We continue to place high importance on balance sheet flexibility, and we believe we have multiple sources of capital available to us. Current secured debt terms vary depending on many factors, including lender, borrower sponsor, and asset type and quality. Current 10-year loans are quoted between 5.25% and 5.75%, 60% to 75% loan to value, and 1.4 to 1.6 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. Now we would like to open the call up for questions.

Speaker #5: Current secured debt terms vary depending on many factors , including lender , borrower , sponsor , and asset type and quality . Current ten year loans are quoted between 5.25% and five and three quarters percent .

Speaker #5: 60 to 75% loan to 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 ten year terms .

Speaker #5: High quality , age qualified MH assets continue to command best financing terms . Now we would like to open the call up for questions .

Operator: Thank you. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. As a reminder, management asks that you limit yourself to two questions so everyone who would like to participate has ample opportunity. Our first question will come from Michael Goldsmith with UBS. Your line is open.

Speaker #2: Thank you . To ask a question , please press star one one on your telephone and wait for your name to be announced .

Speaker #2: And to withdraw your question , please press star one one again as a reminder , management asks that you limit yourself to two questions .

Speaker #2: So everyone who would like to participate has ample opportunity. And our first question will come from Michael Goldsmith with UBS. Your line is open.

[Analyst 1]: Good morning. Thanks a lot for taking my questions. First question is on the 2026 rent increases. Can you talk a little bit about the process that goes into setting those? Historically, RV has been at a higher rate than MH, and it has closed the gap here. Can you talk a little bit about what's going on there? Is there a risk that maybe you're not even conservative enough there? Just trying to get the thought process on that closing of the gap. Thanks.

Speaker #6: Good morning . Thanks a lot for taking my questions . First , question is on the 2026 rent increases , can you talk a little bit about , you know , the process that goes into setting those and then , you know , I guess historically RV has been at a higher rate than other than MH .

Speaker #6: And it has closed the gap here . So can you talk a little bit about what's going on there and you know , is there a risk that , you know , maybe you're not even conservative enough there ?

Speaker #6: So, just trying to get the thought process on that closing of the gap. Thanks.

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

Speaker #4: Yeah , sure . Michael , it's Patrick , the process for the MH rate increases and the RV annual rate increases are very similar to one another .

Speaker #4: Our property operations teams review the competitive set . And as we work our way through our budget process . We set the rates for the upcoming year .

Speaker #4: So the that that's been consistent and the and the take that we're hearing and it's early is that the year's behaving very similar to prior periods .

Speaker #4: There's nothing really unusual just with respect to the the fact that the annual has moderated somewhat . So that's just general market forces .

Speaker #4: We've come off of a period where the annual rate increases did outpace, as you've noted, the fact that that's coming a little bit more in line.

Speaker #4: I don't think there's really a relationship between the the two property types . It just has more to do with the overall cadence of the market .

[Analyst 1]: Got it. Thanks for that. My follow-up has to do with the seasonal reservation pace for Canadian customers. It sounds like you've been reaching out through traditional marketing channels and reaching out individually. I'm just trying to get a sense of the success rate there and the ability to affect change and get that number higher as we approach the seasonal time. Thanks.

Speaker #6: Got it . Thanks for that . And my follow up has to do with the seasonal reservation pace for Canadian customers . It sounds like you've been reaching out and you know , through traditional marketing channels and reaching out individually and just trying to get a sense of , you know , the success rate there and , you know , just your ability to affect change and get that number higher .

Speaker #6: As we approach the seasonal time . Thanks .

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

Speaker #3: Yeah . I mean , Michael , one of the things that we've often talked about is that it's really the cold winter season that drives the reservations .

Speaker #3: We've had a very moderate October , so both in the United States and Canada , there hasn't been a lot of bad weather which which tends to dampen reservations a bit .

Speaker #3: So I think as , as we continue to head into winter , we will see increased reservations on the on the Canadian front , as you know , as you know , there's a there's a political issue there that , you know that is causing people to to pause , you know , before coming to the United States .

[Analyst 1]: Thank you very much. Good luck in the fourth quarter.

Speaker #6: Thank you very much . Good luck in the fourth quarter .

Marguerite Nader: Thank you, Michael.

Speaker #3: Thank you . Michael .

Operator: The next question will come from Brad Hefron with RBC. Your line is open.

Speaker #2: And the next question will come from Brad Heffernan with RBC . Your line is open .

Paul Seavey: Yeah. Hi. Good morning, everyone. On the reservation pace...

Speaker #7: Yeah . Hi . Good morning everyone . On the reservation , please . Morning . On the reservation pace being down 40% for the Canadians .

[Analyst 1]: Good morning.

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

Speaker #7: Does that does guidance assume that the actual bookings from those customers end up being down 40% ? Or do you assume that they're just waiting longer to book and there's some sort of moderation in there ?

[Analyst 1]: Yeah. Brad, I guess I can walk through. As we said, the combined seasonal transient growth is down 13.3% at the midpoint of that range. That compares to our prior guidance update issued in July when we assumed that combined seasonal and transient would be down 1.5%. That difference, excuse me, the unfavorable development of $2.7 million is primarily related to seasonal and mainly the result of the lower reservations from Canadian customers. I'll just walk through that just to kind of be clear on what's happened. We've previously said that Canadians represent about 10% of our total RV revenue. 50% is from annual customers. The remaining 50%, which is just over $21 million, is generally split evenly between seasonal and transient. In the fourth quarter, we earn approximately 25% of our seasonal revenue for the year and approximately 15% of our transient revenue for the year.

Speaker #5: Yeah . So , Brad , I guess I can I can walk through , you know , as we said , the combined seasonal transient growth is down 13.3% at the midpoint of that range .

Speaker #5: That compares to our prior guidance update issued in July when we assumed that combined seasonal and transient would be down 1.5% . That difference .

Speaker #5: Excuse me , the unfavorable development of 2.7 million is primarily related to seasonal and mainly the result of the lower reservations from Canadian customers .

Speaker #5: And I'll just walk through that just to kind of be clear on on what's happened . So we've previously said that Canadians represent about 10% of our total RV revenue , 50% is from annual customers .

Speaker #5: So the remaining 50% , which is just over $21 million , is generally split evenly between seasonal and transient . In the fourth quarter , we earned approximately 25% of our seasonal revenue for the year , and approximately 15% of our transient revenue for the year .

[Analyst 1]: That was the basis for our prior expectation of approximately $4.3 million of Canadian seasonal and transient in the fourth quarter. Our current Canadian reservation pace, as we said, is down approximately 40% compared to prior year.

Speaker #5: So that was the basis for our prior expectation of approximately $4.3 million of Canadian seasonal and transient in the fourth quarter , our current Canadian reservation pace , as we said , is down approximately 40% compared to prior year .

Paul Seavey: Okay. Got it. Obviously, Q4 is typically the lowest combined seasonal transient revenue quarter. First quarter is typically the highest. I'm just curious how much we should read the expectations for the fourth quarter into the first quarter as well.

Speaker #7: Okay . Got it . And then , you know , obviously for Q , typically the lowest combined seasonal transient revenue quarter , first quarter , typically the highest .

Speaker #7: So I'm just curious how much we should read the expectations for the fourth quarter into the first quarter as well .

[Analyst 1]: Yeah. I mean, we're not providing guidance right now for 2026. I can say that the reservation pace from Canadian customers for the first quarter is similar to the pace that we're seeing for the fourth quarter.

Speaker #5: Yeah , I mean , we're not providing guidance right now for 2026 . I can say that the reservation pace from Canadian customers for the first quarter is similar to the pace that we're seeing for the fourth quarter .

Paul Seavey: Okay, thank you.

Speaker #7: Okay . Thank you .

Operator: The next question comes from Yana Gallen with Bank of America. Your line is open.

Speaker #2: And the next question comes from Yana Gallan with Bank of America . Your line is open .

[Analyst 2]: Thank you. Good morning all. Paul, I was just curious, on the core FFO guidance range, fourth quarter, you have $0.06 of variability, and full year is still at $0.10. Just checking if there's any expectation of greater volatility or share count changes or anything to call out for the difference.

Speaker #8: Thank you . Good morning . All . Paul . I was just curious on the core FFO guidance range fourth quarter . You have $0.06 of variability and full year is still $0.10 .

Speaker #8: So just checking if there's any expectation of greater volatility or share count changes or anything to call out for the difference .

[Analyst 1]: Nothing to call out. We simply carried forward the convention that we've used all year with the $0.10 range for the year.

Speaker #5: Nothing . Nothing to call out . We simply carried forward the convention that we've used all year with the ten cent range for the year .

[Analyst 2]: Thank you for clarifying. Marguerite, curious on your MH comments at the beginning of the call and the opportunity there. Could you potentially be developing more sites or anything on the acquisition side available in MH that could be interesting?

Speaker #8: Great . Thank you for clarifying . And then , Marguerite . Curious on your MH comments at the beginning of the call and kind of the , you know , opportunity there .

Speaker #8: Could you potentially be developing more sites or anything on the acquisition side available in MH that could be interesting ?

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

Speaker #3: Sure . Patrick maybe can walk through our our development with respect to acquisitions . You know , as , as you know , we'd certainly like to buy a high quality MH portfolio's there just difficult , difficult to source .

Speaker #3: I think we continue to see muted volume in terms of transactions . The ownership base is is very fragmented and we work with owners as they make their way towards becoming sellers .

Speaker #3: These assets have you know , they've behaved and performed incredibly well over time . And so there's not a lot of desire to sell the assets .

Speaker #3: So but but to the extent that there are opportunities to grow inside of the MH space , we would certainly want to continue to do that right now as we look to deploying capital , we think that continuing to invest in our properties is is a good return .

Speaker #3: And maybe , Patrick , you can walk through that .

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

Speaker #4: Yeah . So for for the year , we're looking to add about 400 to 500 expansion sites . That's on the lower end of what we've developed over the last five years on an annual basis .

Speaker #4: We had just over a thousand sites delivered in 2020 and through the last five years , we've delivered about just shy of 5000 sites .

Speaker #4: So , you know , our our goal is to be in that 500 to 1000 site range . We think that's sustainable . You know , for the foreseeable future .

Speaker #4: But there will be some variability year over year when you're when you're imposing a calendar year over a development pipeline . And as I mentioned on previous calls , we have had some headwinds just working our way through some of the administrative processes to , you know , get permits and complete developments in recent quarters .

[Analyst 2]: Thank you.

Speaker #8: Thank you .

Marguerite Nader: Thanks, Jana.

Speaker #3: Thanks , Jenna .

Operator: Our next question comes from Steve Sakwa with Evercore. Your line is open.

Speaker #2: And our next question comes from Steve Sakwa with Evercore . Your line is open .

[Analyst 1]: Great. Thanks. I guess I wanted to circle up on the MH rent increase. You know, it's gone to 50% of the customers. When you sort of look back historically at the other 50%, you know, how does that bucket trend relative to the first half? Could you maybe just also comment on the decline in occupancy that we're seeing in the MH portfolio? Thanks.

Speaker #9: Great . Thanks . I guess I wanted to circle up on the MH rent increase . You know , it's gone to 50% of the customers , but when you sort of look back historically at the other 50% , you know , how does that bucket trend relative to the first half ?

Speaker #9: And then could you maybe just also comment on the decline in occupancy that we're seeing in the MH portfolio ? Thanks .

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

Speaker #5: Sure . Steve , with respect to the the lease agreements with our customers , 50% of those agreements are based on market . The other 50% have some link to CPI .

Speaker #5: Half of those are excuse me , rent control or some other direct CPI link . And the other are what we call long term agreements .

Speaker #5: They're typically 2 to 3 year agreements , primarily in Florida that we've entered into in negotiation with with our customers . When we think about the first 50% that have been noticed for 2026 , it is more heavily weighted toward Florida residents and excuse me , we do also have higher percentage of customers going to market .

Speaker #5: So the notices in January tend to be slightly higher than what we might see throughout the year , subject to fluctuations in CPI as we issue notices throughout 2026 that are more heavily weighted to the CPI index .

Patrick Waite: Yeah, Steve, with respect to the occupancy trends, we increased occupancy in the quarter. Year-to-date through Q1 and Q2, we did have some hangover from the impact of hurricanes last year. We're past that now, and the trend is back towards increasing occupancy.

Speaker #4: Yeah . And then Steve , just with respect to the occupancy trends , I mean , we increased occupancy in the quarter . The year to date through , you know , Q1 , Q2 , we did have some hangover from the impact of hurricanes last year .

Speaker #4: We're past that now . And and the trend is back towards increasing occupancy .

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

Speaker #9: Okay . And then I guess second question , just you guys have done a very good job on the expense containment , both in the quarter and year to date .

Speaker #9: You know , sub 1% , just any kind of broad thoughts as you kind of look into next year on some of the puts and takes that you maybe got this year that were better , or maybe worse , and how should we just think about that broad trend moving forward ?

Paul Seavey: As we think about it, we focus quite a bit on the two-thirds of our expenses that are utilities, payroll, and repairs and maintenance. We have certainly, in 2025, benefited with respect to payroll expenses as we've managed through some of the challenges we've seen in the RV transient business. For the year, that is trending close to flat. I wouldn't necessarily anticipate that as a run rate over the long term for payroll. Our insurance renewal that occurred in April of 2025 was favorable. That was, as a reminder for everybody, down 6% compared to prior year. The last thing I'll note is in 2024, we saw some fairly significant increases in real estate taxes, particularly coming from the state of Florida. Based on our preliminary trim notices received for the 2025 tax year, that trend has reversed somewhat, and we've seen some relief from our expectations.

Speaker #5: Sure , sure . As we think about it , we focus quite a bit on the two thirds of our expenses that are utilities , payroll and repairs and maintenance .

Speaker #5: And we have certainly in 2025 benefited with respect to payroll expenses , as we've managed through some of the challenges we've seen in the RV transient business .

Speaker #5: So that for the year is trending close to flat . I wouldn't necessarily anticipate that as a run rate over the long term for payroll , our insurance renewal that occurred in April of 2025 was favorable .

Speaker #5: And that was as a reminder for everybody down 6% compared to prior year . And then the last thing I'll note is in 2024 , we saw some fairly significant increases in real estate taxes , particularly coming from the state of Florida that based on our preliminary trim notices received for the 2025 tax year , that trend has reversed somewhat .

Speaker #5: And we've seen some relief from our expectations . Not to say that those taxes have declined , necessarily . It's just some relief from our expectations .

Paul Seavey: Not to say that those taxes have declined necessarily. It's just some relief from our expectations. We could see volatility in real estate taxes continue into 2026.

Speaker #5: So we could see volatility in real estate taxes continue into 2026 .

[Analyst 1]: Great. Thank you.

Speaker #9: Great . Thank you .

Paul Seavey: Thanks.

Marguerite Nader: Thanks, Steve.

Speaker #5: Thanks .

Speaker #3: Thanks , Steve .

Operator: The next question comes from Jamie Feldman with Wells Fargo. Your line is open.

Speaker #2: And the next question comes from Jamie Feldman with Wells Fargo . Your line is open .

Patrick Waite: Thank you. I just wanted to make sure I understand the seasonal impact of the Canadian demand down 40%. If we assume it stays at 40% into 2026, based on the fact that so much of the income is hitting in Q4 and Q1, is there another 3% hit next year, or since we've already taken it out of our 2025 models, it's kind of the run rate's already in 2026. Can you just help us think through that?

Speaker #6: Thank you .

Speaker #10: I just wanted to make sure I understand the seasonal impact of the Canadian demand down 40% . So if we assume it stays at 40% into 26 based on the fact that so much of the income is hitting in in for Q and one Q , is there another 3% hit next year or since you've already taken it out of if we already take it out of our 25 models , it's kind of the run rates already in 26 .

Speaker #10: Can you just help us think through that ?

[Analyst 1]: Sure. I mean, I think it's challenging to consider what we're experiencing in the fourth quarter, our run rate for 2026, because clearly the current environment is something that will likely change over the next 12 months. What I'll say about the first quarter is when you think about our expectation to earn 50% of our seasonal rent and 20% of our transient rent in the first quarter, that suggests that the 40% decline would be around $3 million. What I'll say as we think about the current environment and how challenging it is as it relates to U.S. and Canadian relations, when we think about our long history, the only time period that we can see as any sort of reference point is during the pandemic.

Speaker #5: Sure . I mean , I think it's I think it's challenging to consider what we're experiencing in the fourth quarter or run rate for 26 , because the clearly the the current environment .

Speaker #5: Is , is something that will likely change over the next 12 months . What I'll say about the first quarter , excuse me , is when you think about our expectation to earn 50% of our seasonal rent and 20% of our transient rent in the first quarter .

Speaker #5: That suggests that we that excuse me , the 40% decline would be around $3 million . And what I'll say , as we think about the current environment and how challenging it is as it relates to US and Canadian relations , when we think about our long history , the only time period that that we can see as any sort of reference point is during the pandemic , in late 2020 and early 2021 , when there were travel restrictions in place , including the border closures that impacted our expectations for seasonal and transient revenue in January of 2021 , we anticipated a decline of $10 million in seasonal and transient revenue during that first quarter of 2021 , and when we were on our call in April , the results proved better than that .

[Analyst 1]: In late 2020 and early 2021, when there were travel restrictions in place, including the border closures, that impacted our expectations for seasonal and transient revenue. In January of 2021, we anticipated a decline of $10 million in seasonal and transient revenue during that first quarter of 2021. When we were on our call in April, the results proved better than that, and we ended up being down $6 million.

Speaker #5: And we ended up being down $6 million .

Marguerite Nader: It is about those last-minute bookings. As I mentioned, as the weather changes and as the reservations increase and that pace increases.

Speaker #3: So it .

Speaker #11: Is it is about those .

Speaker #3: Last minute , those last minute bookings . And as I as I mentioned , as the weather changes and as the reservations increase and that pace increases .

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

Speaker #10: Okay . I guess in this environment , I think we've all learned not to get hopeful . I think who knows what's around the corner ?

Speaker #10: I mean , are there any data points or tea leaves you can point to that are actually giving you conviction that , you know , 40% is not the bottom or 40% won't isn't going to stay around for a while .

Marguerite Nader: What we've heard is our customers, our Canadian customers that have made reservations are excited to come back. What we know from our long history of watching reservation pacing, it is a function of what's happening in one's local area. As the snow starts to come down, the phone starts to ring. We don't think that's going to change.

Speaker #3: I mean , what what we've heard is the our customers are Canadian customers that have that have made reservations , are excited to come back .

Speaker #3: And what we know from our our long history of watching reservation pacing it is a function of what's happening in one's local area .

Speaker #3: And as the snow starts to come down , the phone starts to ring . So that's we don't think that's going to change .

Patrick Waite: Okay. Can I ask one more since that was more of a follow-up?

Speaker #10: Okay . Can I ask one more , since that was more of a follow up ?

Marguerite Nader: Sure, Jamie.

Speaker #3: Sure , sure . Jamie .

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

Speaker #10: Okay , just got to play by the rules here . So let me following up to Steve's question on expenses . You know , you've your model has been very successful in being able to lower expenses based on the transient revenue decreases at some point .

Speaker #10: Does that relationship break ? And you just can't cut anymore ? I mean , I know you've commented , you think 40% is about as bad as it's going to get , but just theoretically , if it gets worse or if transient continues to decline , like , is there some point where you just have fixed expenses that you can no longer , you know , compensate or mitigate the revenue declines ?

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

Speaker #3: Yeah , I mean , certainly there are fixed expenses at the property level . There's a certain amount of staff that's needed just to run the business .

Speaker #3: But we look at this and evaluate it . The operating team does a great job of evaluating it on a daily basis to understand who's coming into the properties , who's checking into the properties , and how many people are working .

Speaker #3: So we'll just continue to do what I think the team has done a really good job over the last 3 or 4 years .

Speaker #3: On , on making sure that we're operating efficiently .

Patrick Waite: Okay, thank you.

Speaker #10: Okay . Thank you .

Marguerite Nader: Thanks, Jamie.

Speaker #3: Thanks , Jamie .

Operator: The next question comes from Eric Wolf with Citi. Your line is open.

Speaker #2: And the next question comes from Eric Wolf with Citi . Your line is open .

[Analyst 1]: Hey, thanks. For the 5.1% price increase on annual RV, at what point over the next couple of months will you have a good understanding of what the acceptance on those increases looks like? I'm trying to understand, at what point do you know the sort of the turnover for those properties, specifically for the Sunbelt locations that renew a bit earlier? I think you've said in prior calls that the Phoenix market is by far the biggest in terms of annual customers for Canadian travelers. Do you have any early read on what that market looks like so far?

Speaker #12: Hey , thanks for the 5.1% price increase on annual RV . At what point over the next couple months will you have a good understanding of what the acceptance of those increases looks like ?

Speaker #12: So I'm trying to understand at what point do you know the sort of the turnover for those properties specifically for the Sunbelt locations that renew a bit earlier ?

Speaker #12: And I think you've said in prior calls that the Phoenix market is by far the biggest in terms of annual customers for Canadian travelers .

Speaker #12: So do you have any early read on what that market looks like so far ?

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

Speaker #5: Sure . So , Eric , we mentioned that a portion of the notices or the rate increases for the RV annual are essentially effective now or over the next couple of months as the winter season is starting .

Speaker #5: And so we have visibility into the annual renewals right now . That's that's live . And then with respect to the summer season , those renewals tend to take effect in the middle of the second quarter .

Speaker #5: So that's when we start to gain visibility into customer acceptance .

Marguerite Nader: In terms of Canadian annuals, we haven't seen any decrease in appetite for people for our annual customers to stay with us. We haven't seen an increase in home sale activity among the Canadians that are annuals with us. That is all trending positively.

Speaker #3: And then Eric , in terms of Canadian annuals and we haven't seen any decrease in in appetite for people for our annual customers to stay with us .

Speaker #3: We haven't seen an increase in home sale activity among the Canadians that are that are annuals with us . So that is all trending positively .

[Analyst 1]: Got it. I guess just to make sure I understand, I mean, if you look back to the fourth quarter call earlier this year, I think you said that you noticed a bit higher turnover in some of those Sunbelt locations. It sounds like you're saying right now you have very good insight, at least for the next three months, because those rate increases are effective. I guess what I'm trying to understand is at what point do you sort of have that locked in, that 5.1% locked in? Is that by kind of like December or January, or is it already set for those 95%? They've already effectively accepted those? Just trying to understand how turnover might change from the next three months to the next six months and the potential for any kind of surprise come the fourth quarter call.

Speaker #12: Got it . So I guess just to make sure I understand , because I think if you look back to the fourth quarter call earlier this year , I think you said that you noticed a bit higher turnover in some of those Sunbelt locations , but it sounds like you're saying right now you have very good insight , at least for the next three months , because those rate increases are effective .

Speaker #12: I guess what I'm trying to understand is at what point , you know , do you sort of have that locked in that 5.1% locked in ?

Speaker #12: Is that by kind of like December or January , or is it already set for those 95% ? They've already effectively accepted . Those are just trying to understand how turnover might change , you know , from , you know , the next three months to like the next six months and , and the potential for any kind of surprise come sort of the fourth quarter call .

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

Speaker #4: Yeah . I guess adding to what what Paul said that the cadence of the Sunbelt were , you know , at the early stages of that process right now .

Speaker #4: And the notice is going out for the next summer season are being sent currently . So we're getting very early visibility there . I guess I'd say at this point we don't see anything .

Speaker #4: You know , as I mentioned earlier with just with respect to the MH and the RV notices , they seem very much like , you know , a run rate year for us .

Speaker #4: We're not seeing any indication that there's an unusual pattern . There's I would I would phrase that or characterize that as a normal rate of acceptance .

Speaker #4: And as we move into the summer season , when those those increases are effective in the second quarter , we'll have better visibility .

Speaker #4: But the early read is that that it's a behaving very much like a run rate year for us .

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

Speaker #3: And Eric , I think it's also just an important data point that we covered in , I think Patrick covered in his comments , but also in our release that we filled 475 annual RV sites in the quarter , which is a very high watermark for us .

Speaker #3: So I wanted to make sure you saw that .

[Analyst 1]: Got it. Thank you.

Speaker #12: Got it . Thank you .

Marguerite Nader: Thanks, Eric.

Speaker #3: Thanks , Eric .

Operator: Our next question comes from John Kim with BMO Capital Markets. Your line is open.

Speaker #2: And our next question comes from John Kim with BMO Capital Markets. Your line is open.

Paul Seavey: Thank you. I work at a Canadian bank, so I have to stick to Canada. In your discussions with your Canadian customers, how much of the reason that they're not returning is due to weather versus the political environment? If it's the latter, why would that not impact the annual RV customers?

Speaker #10: Thank you . I work at a .

Speaker #13: Canadian bank , so I have to stick to Canada . In your discussions with your Canadian customers , how much of the reason that they're not returning due to weather versus the political environment ?

Speaker #13: And if it's the latter , why would that not impact the annual RV customers ?

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

Speaker #3: Yeah , I think there's a couple of things happening . So what we're hearing is the customers that have not booked that had previously booked , they are not interested due to political issues .

Speaker #3: So that's that's just what we're hearing now . The reason it doesn't impact the annual customers , that annual customer has a home on site at one of our properties .

Speaker #3: They've already made that , you know , that decision they put capital on our our you know , our our properties . They own a home .

Speaker #3: They own an RV . Maybe on on the site , but that is , you know , they've made that commitment . So that's why I think that's why we're we're not seeing it because the season on the seasonal base , they haven't they haven't made their way down yet .

Speaker #3: They haven't gotten RV and started driving yet . So that's the that's the difference that we're seeing . It's really a function of , you know , the political overtones right now .

Paul Seavey: Okay. On your guidance for the fourth quarter, seasonal transient down 13% at the midpoint, what do you assume as far as backfilling some of that Canadian demand with non-Canadians? You mentioned a shorter booking window. How much of that do you think, how much of the demand do you think just books kind of last minute?

Speaker #13: Okay . And then on your guidance for the fourth quarter , seasonal transient down 13% at the midpoint , what do you assume as far as backfilling some of that Canadian demand with with Non-canadians and also , you mentioned the shorter booking window , like how much of that do you think ?

Speaker #13: Like how much of the demand do you think just books kind of like last minute .

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

Speaker #3: Yeah , I would point . I think Paul mentioned that , you know , what we how we dealt with things during Covid .

Speaker #3: We thought it was going to be one number . It ended up being much better . And that was because we were filling the properties with us .

Speaker #3: Demand the the impact on the Canadian properties is a handful of properties . Has the primary , primarily the bulk of the discrepancy .

Speaker #3: And so those are that is something that we continue to market to United States customers , which we in the past have not .

Speaker #3: So we're continuing to try to , you know , provide them access to those properties that they previously didn't have access to because they were , you know , they were filled and reserved with our Canadian customers .

Paul Seavey: Okay, thank you.

Speaker #13: Okay . Thank you .

Marguerite Nader: Thanks, John.

Speaker #3: Thanks , John .

Operator: The next question comes from Jason Wayne with Barclays. Your line is open.

Speaker #2: And the next question comes from Jason Wayne with Barclays. Your line is open.

[Analyst 1]: Hi. Thanks for the question. Just on the RV and marina annual, that came in a bit weaker than expected, a little lower guidance. You previously mentioned there was an impact from some storm-damaged properties. Just wondering, is that still having an impact, and are the storm properties back online now?

Speaker #14: Hi . Thanks for the question . Just on the RV and Marina Annual , that came in a bit weaker than expected , a little lower guidance .

Speaker #14: You previously mentioned there was an impact from some storm damaged properties . So just wondering if that's still having an impact . And are the storm properties back online now ?

Patrick Waite: Yeah. What you're referring to is the impact on our marina portfolio, the marina annuals. We're working our way through. That's three specific properties that were previously damaged by storms. It's just taking us a little bit more time to work through the permitting process and completing construction. We expect those properties to come online fully in 2026. We'll see a rebound. We're not seeing an impact from an overall demand perspective. Rather, it's driven by the impact of those properties that have some reduced capacity.

Speaker #4: Yeah. So what you're referring to is the impact on our marina portfolio: the marina annuals. We're working our way through.

Speaker #4: That's three specific properties that were previously damaged by storms. It's just taking us a little bit more time to work through the permitting process and complete construction.

Speaker #4: We expect those properties to come online fully in 2026 . So we'll see a rebound . We're not we're not seeing a impact from an overall demand perspective .

Speaker #4: Rather , it's driven by the the impact of of those properties that have some reduced capacity .

[Analyst 1]: All right. Thank you.

Speaker #14: Right . All right . Thank you .

Patrick Waite: Sure.

Marguerite Nader: Thank you.

Speaker #4: Sure .

Speaker #3: Thank you .

Operator: Our next question will come from Wesley Gallaudet with Baird. Your line is open.

Speaker #2: Our next question will come from Wesley Golladay with Baird . Your line is open .

[Analyst 1]: Good morning, everyone. Can you talk about the seasonal and transient RV trends ex-Canada?

Speaker #15: Hey . Good morning everyone . Can you talk about the seasonal and hey there . Can you talk about the seasonal and transient RV trends ?

Speaker #15: X Canada .

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

Speaker #5: Sure . What I'd say just kind of walking through the the math or the the analysis that I discussed earlier . If you think about the remainder , what we're seeing is reservation level or pacing .

Speaker #5: That is similar to what we've seen year to date in 2025 .

[Analyst 1]: Okay. When we look at, you know, the building blocks for '26 RV revenue growth, it looks like, you know, this year, overall revenue growth lagged the rate growth that was set last year. Do you expect similar headwinds this year on occupancy and other items?

Speaker #15: Okay . And then when we look at the building blocks for 26 RV revenue growth , it looked like this year , overall revenue growth lagged the rate growth that was set last year .

Speaker #15: Do you expect similar headwinds this year on occupancy and other items ?

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

Speaker #4: As we as we look forward , I I'll go back to just what I highlighted with respect to the rate increases and what we're seeing as early acceptance .

Speaker #4: I would expect that we're going to go to something that's a more normal trend for us , which would include occupancy . That would that would improve over what we've seen over the prior year .

Marguerite Nader: The most recent data point we have on that is the sites that I mentioned, just the annual growth, annual RV sites' growth in the quarter.

Speaker #3: And the most recent data point we have on that is the sites that that I mentioned , just the annual growth annual RV sites growth in the quarter .

[Analyst 1]: Okay, thank you.

Speaker #15: Okay . Thank you .

Marguerite Nader: Thank you.And

Speaker #3: Thank you Wes .

Operator: The next question comes from David Siegel with Green Street. Your line is open.

Speaker #2: And the next question comes from David Siegel with Green Street . Your line is open .

[Company Representative]: Hi. Thank you. Can you provide a little more color on how you can backfill the missing demand from the Canadian customers, domestic customers, and whether that might involve discounted rates in order to spur demand?

Speaker #16: Hi . Thank you . So you can kind of provide a little more color on how you can backfill , you know , the missing demand from Canadian customers with domestic and domestic customers .

Speaker #16: And whether that might involve , you know , discounted rates in order to spur demand .

Marguerite Nader: Sure. It's really about exposing those customers to the property. Our marketing strategy really engages with previous guests and tries to give them exposure to the new properties. Making social media posts is really important, and making them very relevant and topical. We have over 2.2 million fans and followers between Facebook, Instagram, and Twitter. We use pictures and videos of the locations to really help the customer make the decision to book. We're very focused on leveraging the current news cycle for topical material that we can really incorporate into our marketing, including sporting events, local festivals, that type of thing, to draw people in to experience the properties. In many ways, we try to view it as a sample the property, you'll try it, you'll like it kind of thing. I think we've been successful with that in the past.

Speaker #3: Sure . It's really about exposing those customers to the property . So , you know , our marketing strategy really we engage with previous guests and and try to give them exposure to the new properties , making social media posts .

Speaker #3: It's really important . And making them very relevant and topical . We have over two and 2.2 million fans and followers between Facebook , Instagram and Twitter .

Speaker #3: We use pictures and videos of the locations to really help the customer make the decision to book . And then we're very focused on leveraging the current news cycle for topical material that we can really incorporate into our marketing , including sporting events , local festivals , that type of thing to draw people into an experience .

Speaker #3: The properties in many ways , we try to view it as a sample . The property you try it , you'll like it kind of thing .

Speaker #3: And I think we've been successful with that in the past . And then we we successfully work with online travel agents , you know , Expedia and Booking.com to post our properties on their , on their websites .

Marguerite Nader: We successfully work with online travel agents, you know, Expedia and Booking.com, to post our properties on their websites.

[Company Representative]: Okay. You're not necessarily trying to cut rates to fill demands. More of a marketing play.

Speaker #16: Okay . So you're not necessarily , you know , trying to cut rates to fill demand . It's more of a marketing play .

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

Speaker #3: Yeah . In that that decision , whether or not to offer concessions is done on a market by market or property , by property basis .

Speaker #3: And in some , in some instances where we see , you know , where we see it make sense to reduce rate , to bring in volume , we will do that .

[Company Representative]: Great. Thank you. For my second question, just with regard to the several hundred annual RV sites that you released in the quarter, it looks like it effectively reversed the sites that went last quarter that went from annual to transient. Were you reletting the same sites that had been vacated last quarter, or are these different sites? Why does the addition of these additional annual paying sites not seem to impact the outlook for the remainder of the year? Is it just too late in the year to make a difference? Thank you.

Speaker #16: Great . Thank you . And then for my second question , I just with regard to the several hundred annual RV sites that you release in the quarter , looks like it effectively reversed the sites that went , you know , last quarter that went from manual to transient , where were you reloading the same sites that had been , you know , you know , vacated last quarter ?

Speaker #16: Are these different sites, and why does the addition of these additional annual paying sites not seem to impact the outlook for the remainder of the year?

Speaker #16: This is just too late in the year to make a difference. Thank you.

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

Speaker #5: Yeah , I think the I think the latter part of your question is the answer to the impact there is impact , of course , from from filling those .

Speaker #5: But it's modest just given the the time left in the year when you think about the chart that we provide that shows the site count , the annual increased , as you saw in the transients , decreased essentially the way that that chart works .

Speaker #5: All sites are available for transient to the extent that we fill annuals , we're going to show that and it'll just naturally offsets the transient .

Speaker #5: And finally , I , I said we didn't release the same sites . It was it was the mix of sites that we filled in the quarter that that change .

[Company Representative]: Great, thank you.

Speaker #16: Great . Thank you .

Marguerite Nader: Thank you.

Speaker #3: Thank you .

Operator: The next question will come from Amateo Ocasano with Deutsche Bank. Your line is open.

Speaker #2: And the next question will come from Omotayo Okusanya with Deutsche Bank . Your line is open .

Paul Seavey: Hi. Yes, good morning, everyone.

Speaker #6: Hi . Yes .

Speaker #17: Good morning everyone . I just wanted to good morning . Wanted to go back to your question . Just about guidance again , just kind of given so late in the year already , but there's still that that sense gap from that perspective .

Marguerite Nader: Good morning.

Paul Seavey: I just wanted to go back to the morning. I wanted to go back to Yana's question about guidance. Just kind of given so late in the year already, but there's still that $0.10 gap from that perspective. Just wondering at this point, what's driving the higher end or the lower end of guidance at this late stage in the year?

Speaker #17: Just wondering again at this point, what's driving, you know, the higher end or the lower end of guidance kind of at this late stage in the year?

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

Speaker #5: Well , again , I guess I'll just say when you look at the math , yes , there's a difference . I'll also comment .

Speaker #5: We've done this the other way in the fourth quarter , where we've reduced the range to $0.06 , and we've had confusion on that .

Speaker #5: So I'm not sure which way is the right way to to handle it on a go forward basis . But with respect to the upper and the lower ends of guidance , I think I would point to , as I mentioned , we don't have an assumption for a storm event .

Speaker #5: So that's not that's not factored in at all to the extent that we see meaningful acceleration in something like MH occupancy , that could potentially drive revenues , we could see expense changes potentially , if we have not yet seen meaningful impact from tariffs or other influencers on expenses .

Speaker #5: But I suppose it's possible that that could come up in the in the quarter . And , you know , generally speaking , there could be just other points of volatility in the business .

Patrick Waite: There's not a signal as it relates to the difference between the guidance for the quarter and the guidance for the full year.

Speaker #5: But, but there's not a signal as it relates to the difference between the guidance for the quarter and the guidance for the full year.

Paul Seavey: That's helpful. Thank you. One follow-up question. In regards to initiatives to move some of the transient business over to annual, to just lower volatility in general, could you talk a little bit about what's happening along those lines? How successful you are at making some of those conversions or whether it's been a little bit more difficult than you were anticipating?

Speaker #17: That's helpful . Thank you . And then one follow up question in regards to kind of initiatives to kind of move some of the transient business over to annual again , to kind of just lower volatility in general .

Speaker #17: Could you talk a little bit about kind of what's happening along those lines , how successful you are ? You know , you are at kind of making some of those conversions or whether it's kind of been a little bit more difficult than you were anticipating .

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

Speaker #4: I'll just I'll just speak to the the typical trends that we see and of our annual customers , about 15 to 20% of them have previously stayed with us as a transient or a seasonal that also holds for our seasonal customers .

Speaker #4: 15 to 20% of them has previously stayed with us as a as a transient customer . So that , you know , that pipeline of an original transient stay that that ends up migrating to longer term stays for us .

Speaker #4: Is they call it in that 20% range . And that's been that's been relatively consistent . We are focused on when we have , you know , guests on site that that they experience a high level of customer service and , and that they're , they're presented with the ask of , of a take on a , on a longer term stay .

Speaker #13: Okay .

Paul Seavey: Thank you.

Speaker #17: Thank you .

Marguerite Nader: Thank you.

Speaker #3: Thank you .

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

Speaker #2: Since we have no more questions on the line at this time, I would like to turn it back over to Marguerite Nader for closing remarks.

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

Speaker #3: Thank you. We appreciate you joining our call today. We look forward to updating you on our next call.

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