Good day, everyone, and thank you all for joining us to discuss Equity Lifestyle Properties Third Quarter 2020 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 and COO. 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. 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. Our forward-looking statements are subject to certain economic risks and uncertainty. The company assumes no obligation to update or supplement any statements that become untrue because of subsequent events. In addition, during today's call, we will discuss non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release, our supplemental information and our historical SEC filings. At this time, I would like to turn the call over to Marguerite Nader, our President and CEO.

Good morning, and thank you for joining us for our third quarter earnings call. Our third quarter results released yesterday show strong trends. Our manufactured home (MH) communities are showing their resiliency through difficult times. We continue to increase occupancy and see high levels of engagement and pride of ownership from our residents. The daily routines at our properties have always been filled with activities, and during these times, our residents have found new opportunities to create safe outdoor activities to continue to enrich their experiences at our properties. Within our MH communities, we saw a high volume of home sales, an increase in MH applications, and a shift to virtual engagement to view homes and communities. Year-over-year, we increased new home sales by 42%. The sales were concentrated in Florida, Arizona, and Minnesota. Our applications for residency were up 25% for the quarter, fueled by an improved online application experience. We have seen an increase in conversions from virtual tours, and we continue to upgrade the content of our website to allow prospective customers the chance to view our homes and communities. We saw increased demand for our RV parks during both the traditional weekend holidays as well as during the week. Our properties have benefited from our customers' flexible schedules. Our online transaction activity continues to escalate. In the quarter, our RV revenue through digital channels increased 121%, and our sales of online camping passes increased by 56%. Our transient bookings continue to shift to digital, with nearly 60% of all transient bookings completed online compared to 43% last year. Sales of RVs have increased significantly over this summer. Our partnerships with RV dealers throughout the country continue to bear fruit as we engage with customers as they begin their travel adventure. In the quarter, we activated 6,400 trial memberships through the Thousand Trails preferred RV dealer program, an increase of 15% from last year. We are attracting new younger customers to our RV resorts with our digital marketing; analytics show strong demand among customers under 34 years old, with 18 to 24-year-olds showing increases of over 300% and 25 to 35-year-olds showing increases of over 140% in online revenue compared to last year. These trends represent an opportunity to grow in future years by providing an excellent customer experience and retaining these newer customers. Providing a best-in-class customer experience contributes to our strong customer loyalty. TripAdvisor recognized our high customer ratings with 76 of our RV resorts receiving the TripAdvisor Traveler's Choice Award and 15 parks receiving the Hall of Fame for five straight years of top customer reviews. Turning to 2021. Each year, we finish our budget process in October and provide detailed projections for the following year. This year, because certain line items require additional time to determine the full year impact, we have decided to issue our detailed guidance on our January call. Within our MH portfolio, by the end of October, we will have noticed 48% of our residents for rent increases and anticipate a 4% rate growth in core MH revenue. We have had success filling our communities while continuing to increase rents in line with market conditions for in-place residents. Based on rates we have set for over 90% of our RV annual customers for the 2021 season, our core RV annual rental rate is anticipated to grow 4% in 2021. These two line items have historically represented over 70% of our overall revenue. Our seasonal and transient revenue requires more visibility as we monitor the impact of travel restrictions. I would like to now comment about our 2021 annual dividend. Each year, to arrive at a recommendation, we review our projected growth in funds from operations (FFO) and our outstanding obligations with the goal of ensuring our underlying financial flexibility. In addition, we stress test our future obligations to ensure we can continue to meet both our financial obligations and customers' expectations. This year, management plans to make a recommendation to the Board of Directors upon completion of the 2021 budget process and intends to use the same methodology to shape that recommendation. The stress test reveals the strength of our balance sheet, which has been fortified over the years with longer-term maturities. Currently, our average term to maturity is 13 years, which is more than double the REIT sector average. We are focused on long-term value creation. Our team in the field and in the home and regional offices has done a great job servicing our residents, members, and guests. I thank all of them for their efforts and look forward to turning our attention to our winter season activities. I will now turn it to Paul to walk through the numbers in detail.

Thank you, Marguerite, and good morning, everyone. I will review our third quarter results, including a brief discussion of the operations update included with our earnings release. I will close with some comments on our balance sheet and the successful refinancing of our scheduled 2021 secured debt maturity. For the third quarter, we reported $0.55 normalized FFO per share. As part of our refinancing activity, we incurred approximately $9.7 million in early debt retirement costs. Consistent with our normalized FFO definition and past practice, we've added these costs back in our calculation of FFO. Our core MH rent growth of 4.3% consists of approximately 3.8% rate growth and 50 basis points related to occupancy gains. We've increased occupancy by 196 sites since December, with an increase in owners of 270, while renters decreased by 74. Core RV resort base rental income increased 5.2% for the third quarter and 90 basis points year-to-date compared to the same period last year. Rents from annuals have shown consistent growth since the onset of the pandemic, with growth of 5.2% and 5.8% for the quarter and year-to-date periods, respectively. The driver of rent growth from annuals in the quarter was increased rate of approximately 4.2% compared to the prior period. Year-to-date core resort base rent from seasonals increased 2.3% compared to 2019. Our core RV transient business delivered growth for the quarter of 7.3%. Membership dues revenue increased 2% compared to the prior year. During the quarter, we sold approximately 7,400 Thousand Trails Camping Pass memberships. This represents a 24% increase for the year. The net contribution from membership upgrade sales in the quarter was flat compared to last year. Sales volumes increased almost 20%, while the mix of products sold changed, resulting in a lower average sales price. In addition, the expenses include commissions on a higher volume of Camping Pass membership sales. Core utility and other income was about 6.5% higher than third quarter 2019. The main contributor to this increase is an accrual of insurance recovery revenue related to losses experienced from Hurricane Hanna and Isaias. Core property operating expenses include approximately $2.8 million resulting from the hurricane in July and August. Hanna made landfall in Texas and caused damage at 12 of our properties, while Isaias made landfall in North Carolina and affected 40 properties. Excluding these expenses, the main contributors to our property operating maintenance expense growth over the prior year period were utility expenses, including labor costs associated with sewer, water, and electric distribution systems, insurance, and real estate taxes. In summary, year-to-date, core property operating revenues have increased 3.7%, and core property operating expenses have increased 5%, resulting in an increase in core net operating income (NOI) before property management of 2.7%. Income from property operations generated by our non-core portfolio, which includes our Marina assets, was $4.1 million in the quarter. Property management and corporate G&A expenses were $24.2 million for the third quarter of 2020 and $75.5 million for the year-to-date period. Other income and expenses generated a net contribution of $4.3 million for the quarter. The decrease from the prior year is attributed to income recognized in 2019 related to our Loggerhead portfolio acquisition. Interest and related loan cost amortization expense was $25.2 million for the quarter and $77.5 million for the year-to-date period. This includes the impact of the refinancing activity I'll discuss in more detail shortly. Before closing with remarks about our balance sheet, I'll briefly discuss the operations update we included in our earnings release. Our properties continue to be open, subject to state and local guidelines. While certain property amenities remain closed, we are welcoming transient guests at all RV communities. We expect to complete our annual budget process in the coming weeks. In the past, we've completed our budget in early October and provided detailed preliminary guidance with our third quarter earnings release. A significant factor in our process that has long given us confidence to provide initial guidance earlier than others in the REIT space is the early visibility we have into expected rent rate growth from our core MH and RV annual revenue streams. On a combined basis, these revenue streams have historically represented more than 70% of our total core revenues. Our earnings release provides information about noticed MH rent increases and the rates we've established for our RV annuals for the 2021 season. This information supports our preliminary expectations of 4% rent rate growth from core MH and core RV annuals. Our suspension of guidance continues to be influenced by the lack of visibility we have into other areas of our business, including our seasonal and transient RV revenues. We anticipate providing performance updates in 2021 guidance in advance of our January earnings call. Before we open the call up for questions, I'll discuss our refinancing activities, debt markets, and our balance sheet. During the quarter, we closed on a $386.9 million secured credit facility with Fannie Mae. The facility has two tranches and carries a weighted average coupon of 2.55% with a weighted average maturity of 13.4 years. We used proceeds to repay our $200 million unsecured term loan and our scheduled 2021 secured debt maturities. We incurred approximately $9.7 million in early debt retirement costs. As a result of the accretive refinancing we've closed in the first and third quarters of 2020, the weighted average rate on our outstanding debt has decreased almost 35 basis points to 3.7%, and our weighted average debt maturity has extended 1.5 years to 13 years. Current secured financing terms available for MH and RV assets range from 55% to 75% loan-to-value (LTV) with rates from 2.75% to 3.5% for 10-year money. We continue to see lenders place high value on sponsor strength, and ELS continues to be highly regarded. High-quality age-qualified MH assets will command preferred terms from participating lenders. Our cash balance after funding our October dividend was more than $50 million. We have available capacity of $350 million from our unsecured line of credit. We have $200 million of capacity under our ATM program, and we have no scheduled debt maturities before February 2022. We continue to place high importance on balance sheet flexibility, and we believe we have multiple sources of capital available to us. Our interest coverage ratio is 4.9x, and our debt to adjusted EBITDAre is 5x. Now we would like to open it up for questions.

Yes. Marguerite, Paul as well. I guess I was just curious about the two RV development properties you bought for $16.3 million, which seems kind of like a new acquisition approach for you. Curious to hear your kind of more detailed color on those acquisitions. And then if you're seeing any changes in the space that might mean it's easier to do ground-up developments.

Sure. Sure. Thanks, Josh. So yes, we closed on two ground-up developments in the quarter. The first one was actually previously a Boy Scout camp, and it's zoned for 900 sites and it's located in Virginia. So it has water access and is very close to two of our flagship RV parks, which we purchased a few years ago. So it's in a high-demand market, and we looked at it as a real opportunity to do some development there in a market that we really like. The second one was in Cape Coral, a 500-site development near many ELS properties and in a really high-traffic location. We also closed on five parcels of land adjacent to our existing properties, and we generally close on those after we have fully entitled the land and are able to build sites adjacent to our existing properties. So that's in line with what we've done in the past. I think new RV parks and MH communities tend to make the front page of local or regional papers because there are so few of them. Over the years, we have looked at opportunities for development, and we've seen the most attractive opportunities in the RV space. And these two opportunities that I talked about are examples of opportunities that we really find attractive. The ability to build an RV park in a well-located area with a focus on annuals but then having the ability to really supplement with transient traffic as you build up the annual base. I think that's an excellent use of our capital. But overall, I think there's still limited development of MH and RV, and I think maybe you are not talking about just the context of the number of communities out there. There's about 50,000 manufactured home communities across the country and about 16,000 RV parks across the country. So any new development has a very minimal impact on supply at the level of the industry as a whole.

Marguerite, maybe just following up on that. What is the expected stabilized development yield? And then what is the time to stabilization?

Sure. In Florida, the stabilized yield is approximately a 6% cap in about 2 to 3 years. The project in Virginia is slightly behind Florida. It's a former Boy Scout camp that is no longer operating as one. The property is partially zoned, but it requires significant work in terms of construction. Therefore, I believe it will take a few more years to stabilize, and the yields will likely be similar to those in Florida.

And then what impact do you expect on the seasonal and transient RV business from the Canadian travel restrictions? And then how do you think about the ability to backfill any loss of demand?

Sure. I think as you talk about our Canadian business, I think it's good to talk about the full year, and I'll kind of break that down a little bit. So for the full year 2019, we had about $27 million of RV revenue coming from our Canadian customers. Our Canadian customers generally stay with us in Florida, Arizona, and Texas. Fifty percent of that revenue comes from annual customers; however, those annual customers, 98% of whom have their park model or RV on-site in the south. So that kind of differentiates the two between the annual and then the seasonal and transient. And the seasonal transient fourth quarter represented last year about $1.8 million of the total. We see risk associated with that, but we're monitoring the border regulations and will be able to know more when there's more input on the border regulations. As we consider the start of the year, in the first quarter of 2019, our seasonal and transient revenue from Canadian customers was approximately $5.4 million. This revenue is also subject to customers being able to cross the border. I think maybe Paul can walk you through a little bit and provide some detail about the payment patterns that we're seeing right now that may help as well.

Yes. I think broadly, Nick, since the onset of the pandemic, customer behavior, I think we've talked about this a bit, particularly the seasonal transient customer. We've seen shorter booking windows. We've seen elevated levels of cancellations. Marguerite mentioned the uncertainty related to regulatory actions, including the border closure, but it also impacts just interstate travel as people are watching various orders and case counts across the country; that's having an impact on customers' decisions as well.

Just a follow-up on the transient and seasonal bookings. How have they trended in November and December versus the 17% increase that you saw during the Labor Day weekend?

I'm sorry, John, I missed what you asked.

How have the transient and seasonal RV bookings trended so far for November and December?

I think what we can talk about without stepping too far into the guidance lane is what we've seen so far in October. And we've seen, really, for the seasonal, there's not much to speak of in October because the seasonal that Marguerite just mentioned occurs in the fourth quarter, which really happens from Thanksgiving through the end of the year. But on the transient, we're seeing continued strong demand, as we saw in September so far in the month of October.

Yes, it's Patrick. Just to, I guess, add a little further color on what we've seen in October and nearing the end of the northern RV season. Both in North and Northeast performed well. They're up more than 20% in October. That's driven by a number of factors. One is, and we talk about this a lot, the weather was relatively good throughout the north for the month of October. So we've seen good, consistent demand, including in the midweek. And as Paul touched on, when you're talking about interstate travel, these customers typically come from the local market. So you avoid some of those concerns that can impact other parts of our business.

Okay. And then you mentioned that there's a 300% increase in bookings from basically Gen-Zs. Can you break that down as far as the age cohort of your RV customers?

I don't have that in front of me, John. I can provide that offline. I can break that down. That increase was year-over-year. So we are seeing an increase in the younger customer base, and I can provide that to you offline.

Okay. The one-time costs that you had during the quarter, $9 million of hurricane damage, how much do you think will be recovered with insurance? And how much of the infrastructure costs are one-time in nature?

Yes. I think, as I mentioned, there's about $2.8 million of expense in the quarter. The $9 million is the total expected loss from property damage and cleanup. As we've seen in past hurricanes, these storms shape up to be similar in that there's an expense component and then there's a capital component. Typically, the expense component happens earlier in the recovery period, and then what completes is the capital expenditure to restore and recover. I think that we've realized, for the most part, the expense and the revenue accrual that we've booked—the amount of net recovery that we otherwise would expect in these storms.

And can I ask what the bad debt expense was for the third quarter and what you expect for the remainder of the year?

In terms of bad debt overall, I mean, just broadly, our delinquency, as we've talked about, really hasn't changed as we stepped through the pandemic. What we've seen historically is our aged delinquencies are about 50 basis points. So we end any given month with somewhere between 2% and 3% of our rents uncollected, and then over the next 90 to 120 days, we continue to collect those rents and land in a place where the aged delinquency is about 50 basis points. Because that has remained consistent, what we've seen, generally speaking, is that level of expense flowing through our income statement when you think about just on a percent of revenue basis.

So how does that compare to prior years? I just noted the footnote that you had this supplement versus prior years?

Yes. The footnote actually is simply clarification of the GAAP presentation on our income statement of rental income. So we're providing disclosures so that a reader of our core operating statements can trace through to our rental income on our income statement.

Marguerite, sorry if I missed this, but can you provide color on pricing or cap rates on the RVs that you acquired in the quarter?

Sure, Samir. So the two properties have kind of a going-in cap rate of 4.5% to 5% cap. I think there are some opportunities on both sides to increase those yields under our management.

Okay. And then I guess, sticking to the transaction side, just kind of curious to know your views on the Marina business. Considering the recent announcement of your peer, just trying to get an understanding of your appetite to grow the platform that you have today in your business?

Sure. The Marina industry is really highly fragmented. I think as more investors enter the space, you'll see that the owners of the individual assets will kind of have more bidders coming to their doors. But we've developed great relationships in the industry, and we'll continue to work with those owners towards transactions. From our perspective, really, the key for ELS is to own high-quality, well-located properties. The quality of the cash flow and the continuation of the cash flow is important to us as we bring on a new line of revenue to sit alongside our proven and predictable cash flow streams of MH and RV.

Okay. And is there a way to—if you go back to the time you've acquired the Marina—what's been sort of the operating performance from an NOI perspective since the time you've held that till today? Is there a way to give us some sort of idea?

Sure. So I think as we entered the business in 2017, I think what we talked about was a going-in yield of about 6 cap, and that's essentially how they've performed over the last two years. These are assets that are highly annualized and really long-term revenue, and it continues to be sticky.

Great. I wanted to go back to Nick's question on the Canadian border being closed. The worst-case scenario where the border remains closed through the spring, what percentage of that seasonal and transient Canadian revenue do you think you can get back through domestic demand reasonably?

Yes. I think it's a difficult question for us to answer right now. We've kind of framed what the risk is relative to Canadian traffic. But I will say that we've certainly seen an increase in people's interest in coming to Florida from the United States, inside the United States. So it's difficult to frame that. As we are able to and provide more information, we would do that, but we don't have that right now, John.

Okay. Understood. But just logistically lining up that demand. I mean, I'm not asking for a precise estimate, but are we talking about like—you can reasonably get 20% of that demand back or 80%? Just logistically, how difficult is it to get that lined up and get the demand in the door?

I think it's difficult to answer the question because I think we have to figure out how things are trending from a health perspective. I wouldn't want to guess how things are going to go there; as the winter progresses, are things going to get worse, are they going to get better? There's a lot of uncertainty with respect to that, obviously, throughout the country. But I think that what we've seen is shorter booking windows. So people are saying, 'Oh, now I have an opportunity. I have kind of a clean bill of health, I feel good. I feel like I can make this decision.' So people are making their decisions, and they're saying, 'I want to come down today. I want to come down tomorrow. I'm not comfortable; our customers are saying, I’m not comfortable booking a month out because I don't know what's going to happen a month from now.' So we are seeing those shorter booking windows, which makes it difficult for us to project.

Okay. Understood. And then, Patrick, could you give some color on how the process this year went with how you get to the 4% annual rate increase on the RV side? Is it an exercise of, 'Hey, we're in a recession; we can't push as hard,' or is there some sort of leniency for lost days in the parks this past year? So how did basically on-the-ground dynamics and the pandemic impact the 4% rate increase preliminarily planned for this coming year?

While going into it, obviously, there was a—for us operationally. And then for all of our customers is both RV and MH, it was just an understanding of how the COVID process was starting to play out. On the MH side of the world, as we mentioned on previous earnings calls, we suspended late fees and evictions. On the RV side, we did offer some credits for some of our customers in our northern properties on the annual front. But by and large, across the balance of the portfolio as we went through sizing up what rate increases were going to be year-over-year, it was a process that was very consistent with prior years. We've seen a consistent demand profile across H&R as we issue those rent increases. Certainly, there were some discussions around the potential impact of COVID, but those were small portions of our discussions, and our process working through both MH and RV was pretty consistent having dialogue with our customers, and the rent increases were able to be implemented and were, for the most part, well-received.

And one of the things, John, that we benefited from was, I think we mentioned it earlier on the call, is a mild autumn so far. So our customers—our annual customers were able to enjoy while they got cut off at the beginning of the season; they've been able to extend the season. And so that's certainly been helpful that they've been able to camp through September and October.

Okay. Makes sense. And then just one follow-up there. On the RV side and the annual RV side. Within the portfolio, I guess what's kind of the weakest market? Are rates on the annual RV side declining in any markets? Could you give us a sense of the goalposts with or around that 4% average?

Yes. I mean, I'd say the strongest markets are, as you'd expect, at the core of our portfolio in Florida, California, and Arizona. We saw really pretty consistent strength throughout the northern region as we made it through the summer season. With the impact of COVID, it was reassuring to see that consistent demand profile. Core markets in the north, near major metropolitan areas, as Marguerite just mentioned our acquisitions in the Greater Virginia market—that's about an hour outside of Richmond, about 1.5 to 2 hours outside of DC—very strong locations that have been strong across the board. You get into some secondary markets like called South Texas, Southern Arizona, the Yuma market, those tend to have more moderate rate increases than our core markets.

No.

With the two development projects acquired in the quarter, you couple that with the five land parcels. It just shows a little more risk appetite than we usually see from you guys. Are these the types of opportunities you see all the time, and this is just a timing issue just because you closed all at once? Maybe just expand on the growth trajectory that you're seeing.

Sure. With respect to the land parcels adjacent to our properties, we are always looking at land around our properties. We think that's just an excellent execution. So it just so happened that our fantastic acquisitions team was able to close all of those in the quarter, but those are deals that we've been working on for a while, and we continue to do that. So there's no real change there. With respect to the two other deals, the Boy Scout deal was a deal really that just recently came up, and the ability to get into that space in an area that we are located in and really appreciate the area a lot. That was something that just recently came up, and we were happy to be able to close on that transaction. The Florida deal is a deal that we've actually been looking at for a long time and we just wanted to appreciate the best entry point, and we thought it was a good time now. So that was something that we've been working on for a while, but the team did a great job in pulling that all together this quarter.

For something to convert from a Boy Scout camp to RV, can't be zoned just yet, right? Or I mean, it's not quite residential. How do you look at the entitling process?

It actually was an RV park, then it became a Boy Scout camp, and so it has some great amenities and buildings. But it is zoned for 900 RV sites, so that's what was really attractive to us.

Okay. That's helpful. And then just back to the expansion sites. What are your return expectations there? I'd imagine you're buying them adjacent to existing communities; they're probably highly occupied; you can drive rents, and lease-up periods are quite short—maybe just kind of give some return expectations.

Sure. Some of them are adjacent to our RV sites, but maybe Patrick can walk through some of the numbers associated with it.

Yes. Of the five parcels, really three of them are adjacent to our RV properties, and that's the lion's share of the sites that are coming from that subset of acquisitions. I would expect the yields on those to be in the high single digits. They're in really strong locations. One is outside of San Francisco, one is coastal North Carolina. You referenced quick lease-up periods; we just had completed a 56-site expansion on the property in coastal North Carolina and had a waiting list and an advanced list of interest, and we're able to lease-up more than 50 sites very quickly and fill that section. We view the next phase as a very opportunistic opportunity for us.

That's great. Just one last one, if you don't mind. The Marina Dunes acquisition. So if that's in Monterey County, any rent controls? You certainly see rent controls in the Santa Cruz area, just more MH, but what kind of constrictions, if any, would be on an RV park along the Coast of California?

I would not like to say what would happen in the future necessarily. But right now, there isn't rent control on RV, so it isn't a factor.

Thank you. Since we have no more questions, I would like to turn the call back over to Marguerite Nader for closing comments.

Thank you all for participating in the call today. We look forward to updating you on the next call. Stay well.

Ladies and gentlemen, this concludes today's conference call. Thanks for participating. You may now disconnect.