Good day everyone and thank you all for joining us to discuss Equity LifeStyle Properties Fourth Quarter and Full Year 2024 Results. Our featured speakers today are Marguerite Nader, our President and CEO; Paul Seavey, our Executive Vice President and CFO; and Patrick Waite, our Executive Vice President 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. For those who would like to participate in the question-and-answer session, management asks that you limit yourself to two questions so everyone that would like to participate has ample opportunity. As a reminder, this call is being recorded. Certain matters discussed during this conference call may contain forward-looking statements in the meaning of the Federal Securities Laws. 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'd like to turn the call over to Marguerite Nader, our President and CEO.

Good morning and thank you for joining us today. I am pleased to report the final results for 2024. The strength of ELS can be seen in all facets of our business. We continued our record of strong core operations and FFO growth with full year growth in NOI of 6.5% and a 5.9% increase in normalized FFO per share. Our year-end report is a good time to reflect on our business and our industry. Over the last 10 years, our average core NOI grew 5.3% and normalized FFO grew nearly 8%, both outpacing the REIT industry average over that time. Our balance sheet is in great shape with an average term to maturity of 9 years. Twenty percent of our debt is fully amortizing and not subject to refinance risk. Our debt maturity schedule through 2027 shows only 9% of our debt coming due compared to the REIT average of 36%. Last night, we issued initial guidance for 2025. Our guidance is built based on the operating environment of each property, including a robust market survey process and communication with our residents. The results showed strength in both top line revenue and NOI. Importantly, we have continued our focus on translating NOI growth into FFO growth. For the full year 2025, we anticipate normalized FFO growth of 5%. This strong growth rate is possible because of the strength of our properties as well as the overall industry landscape. The MH industry has evolved impressively over the last 20 years. The current homes that we are purchasing for our communities are generally 2 bedrooms, 2 bath homes with contemporary floor plans. The homes are energy efficient with centerpiece kitchens and bathrooms. The changes to the homes over time have increased our prospective customer base and have strengthened our communities. Just like in any neighborhood in the U.S., we operate in an environment where the resale activity in our communities is important. We focus our efforts on maintaining our high-quality communities and the residents' pride of ownership results in a robust home sale market for our existing customers. Ninety-seven percent of our occupancy is from residents who own their home. This high level of homeowner occupancy results in the impressive neighborhoods that our residents have helped us create. This year, we saw 9% of our residents sell their homes in our communities. The primary reasons our residents choose to sell their homes to another resident continue to be life events. Within our RV footprint, we have nearly 70% of our revenue derived from annual customers. These customers stay with us in park models, resort cottages, and RVs. Similar to our MH customer, our RV annual customer develops roots and considers our property their second home. Our properties offer the chance to have a second home near major metros at an affordable price. The average price of a park model sold in our communities in 2024 was $80,000. We continue to expose new customers to our properties through transient stays, which are an important building block for our longer-term revenue stream. Next, I would like to update you on our 2025 dividend policy. The Board has approved setting the annual dividend rate of $2.06 per share, an 8% increase. The stability and growth of our cash flow, our solid balance sheet, and the strong underlying trends in our business are the primary drivers of the decision to increase the dividend. In 2025, we expect to have approximately $100 million of discretionary capital after meeting our obligations for dividend payments, recurring CapEx, and principal payments. Over the past 10 years, we have increased our dividend by an average of 11% per year compared to the REIT average of 4.5% and this year's dividend marks the 21st consecutive year of annual dividend growth. I want to thank our team members for closing out another successful year. We have been able to post REIT-leading NOI growth, provide details into the strength we see in 2025, and announce an increase to our dividend because of the hard work done in the field, by our regional and corporate offices, and by our 4,000 team members. I will now turn it over to Patrick to provide more details about property operations.

Thanks, Marguerite. In the more than 30 years since our IPO, we've made a deliberate effort to grow our portfolio in areas that provide a quality lifestyle for our customers. Those markets have experienced consistent population growth over the years. We have divested our properties in less promising markets and recycled that capital in the coastal and Sunbelt locations where our residents and guests want to live and vacation. Our three largest states are Florida, California, and Arizona. With our winter season in full swing, I thought it would be helpful to provide some detail about our operations in these markets. Our Sunbelt locations continue to see favorable population growth trends. Over the next five years, Florida, California, and Arizona are expected to experience steady population growth, particularly among our focused demographic of those aged 55 plus. During that time frame, S&P Global estimates growth of 9.4% in Florida among this demographic, while California and Arizona are estimated at 6.4% and 6%, respectively. Both our MH and RV portfolios in these Sunbelt markets have benefited from consistent demand. The CAGR for MH and RV revenue in the primary markets within these states emphasizes the strength of our portfolio. Primary markets in Florida include Tampa St. Pete on the Gulf Coast and Fort Lauderdale, West Palm Beach on the East Coast. In California, there are Northern California anchored by San Francisco and San Jose and Southern California anchored by Los Angeles and San Diego. In Arizona, the primary market is Phoenix Mesa. In these core Sunbelt markets, the five-year revenue CAGR for MH was nearly 6%, supported by 900 new home sales. Florida markets Tampa, St. Pete, and Fort Lauderdale, West Palm Beach, and Arizona's markets, Phoenix Mesa led the growth with 6%, while Northern and Southern California was mid-4%, largely as a result of rent control. Note that our California portfolio is more than 98% occupied, while Florida and Arizona present opportunities to increase occupancy above our current occupancy of 95%, including ongoing expansion projects. For RV, the five-year revenue CAGR in these primary markets was mid-6%, largely driven by the same submarkets in Florida and Arizona. A key driver of the consistent growth in both MH and RV in our primary submarkets are the population growth trends that I referenced earlier, as well as the expansion opportunities that will support future growth in these Florida and Arizona markets. Over the last five years, we developed nearly 5,000 MH and RV sites across the portfolio with over half of those sites in Florida and Arizona. Stabilized yields range from 7% to 10% and we have a pipeline of projects with an additional 3,000 sites in various stages of entitlement and construction. Two projects that are good examples of our approach to expansions are Colony Cove MH with 293 expansion sites in Florida and Monte Vista mixed-use MH-RV with 513 sites in Arizona. Both projects are developments of parcels that are part of the property rather than acquisition of additional land. Expansions of properties present an attractive risk-reward because we have an in-place operating business with staffing, amenities, name recognition, and an established base of residents and guests. Among the benefits of our expansions are new leads generated through referrals from our core customers. Referrals represent approximately 20% of our new customers. Lease-up rates for the MH and annual RV expansions at these properties have been 30 to 40 sites per year. During the lease-up process, RV expansions also offer flexibility to book transient reservations on vacant sites to generate revenue and introduce new customers to the property, which is our best source of conversions to longer-term stays. We continue to see consistent demand for our properties, which supports the in-place business as well as our expansions. We have focused on stable, long-term occupancy, which results in annual revenue streams for MH and RV, representing nearly 75% of total property revenues. Demand is demonstrated by more than 100,000 new qualified leads we receive annually from potential customers who provide their contact information as part of their inquiry for manufactured home park model or RV annual site at one of our properties. I'll now turn it over to Paul.

Thanks, Patrick. Good morning, everyone. I will discuss our fourth quarter and full year results, review our guidance assumptions for 2025, including some key considerations for the first quarter and close with a discussion of our balance sheet. Fourth quarter normalized FFO was $0.76 per share, in line with our guidance. Growth in normalized FFO per share was 6.9% and 5.9% in the fourth quarter and year-to-date periods, respectively, compared to the prior year. Strong core portfolio performance generated 7.6% NOI growth in the quarter and 6.5% year-to-date. Core community-based rental income increased 6.1% for the full year 2024 compared to 2023, primarily because of noticed increases to renewing residents and market rent paid by new residents after resident turnover. Rent growth from occupancy was 20 basis points, and we increased homeowners by 379 sites during the year. Full year core RV and marina annual base rental income, which represents approximately 70% of total RV and marina-based rental income, increased 6.5% compared to the prior year. Our full year core seasonal rent decreased 4.7% and transient decreased 4.3%. The net contribution from our membership business was $59.9 million in 2024. We sold approximately 19,500 Thousand Trails camping pass memberships and members purchased approximately 4,100 upgrades during 2024. Core utility and other income increased 7.2% for the full year compared to the prior year, which includes pass-through recovery of real estate tax increases from 2023. Full year 2024 property operating expenses increased 2.6% compared to the same period in 2023. Our income from property operations generated by our noncore portfolio was $5.4 million in the quarter and $16 million for the full year 2024. The press release and supplemental package provide an overview of 2025 first quarter and full year earnings guidance. 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. Our guidance for 2025 full year normalized FFO is $3.06 per share at the midpoint of our guidance range of $3.01 to $3.11. We project core property operating income growth of 4.9% at the midpoint of our range of 4.4% to 5.4%. We project the noncore properties will generate between $8.8 million and $12.8 million of NOI during 2025. Our property management and G&A expense guidance range is $120 million to $126 million. In the core portfolio, we project the following full year growth rate ranges: 3.4% to 4.4% for core revenues, 2% to 3% for core expenses, and 4.4% to 5.4% for core NOI. Full year guidance assumes core MH rent growth in the range of 5.2% to 6.2%, with 10 basis points coming from occupancy. Full year guidance for combined RV and marina rent growth is 2.7% to 3.7%. Annual RV and marina represent approximately 70% of the full year RV and marina rent, and we expect 5.2% growth in rental income from annuals at the midpoint of our guidance range. Our first quarter guidance assumes normalized FFO per share in the range of $0.80 to $0.86, which represents approximately 27% of full year normalized FFO per share. Core property operating income growth is projected to be in the range of 3.6% to 4.2% for the first quarter. First quarter growth in MH rent is 5.8% at the midpoint of our guidance range. We project first quarter annual RV and marina rent growth to be approximately 3.8% at the midpoint of our guidance range. Our guidance assumes first quarter seasonal and transient RV revenues perform in line with our current reservation pacing. I'll now provide some comments on our balance sheet and the financing market. Our balance sheet is well positioned to execute on capital allocation opportunities. In addition to modest near-term maturities and a weighted average maturity for all debt of 8.6 years, our debt-to-EBITDAre is 4.5x and interest coverage is 5.2x. We have access to $1.2 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. 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 5.75% and 6.25%, 50% to 75% loan-to-value and 1.4 to 1.6x 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 it up for questions.

Our first question will come from Eric Wolfe from Citi.

I was just wondering if you could talk about your buildup to your expense guidance and what the key drivers are. It's a low number following some good expense controls in 2024. So...

Eric, can you hear us?

Yes, I'm here.

Okay. Wonderful. Paul will walk through that.

Sure. So we've guided to expense growth to generally track the CPI with anticipated savings in a few line items. Our assumption for real estate taxes is in line with our past experience of mid-single-digit growth. We have assumed savings in certain line items, including administrative expenses and membership commissions. So that brings us to the guidance for next year, Eric.

Right. And then it looks like you're guiding to about a $4 million increase in other income and expenses. Some new line items, so maybe you could confirm that. But I was just wondering what's causing that because I think you had a $5 million JV distribution in 2024 that won't repeat this year. So the actual increase might be more like $9 million on a core basis. Again, I'm not sure if that's right, but let me know if that's right. And if so, what's causing that?

Yes, the main factor contributing to the year-over-year increase is approximately $4 million, as you noted. This increase is driven by our expectations for sales and additional activities. We occasionally experience distributions, as I mentioned in relation to the joint venture distribution recognized in the third quarter of 2024, and we anticipate a similar distribution in the first quarter of 2025.

Got it. So about a $5 million distribution in the first quarter?

Our next question comes from the line of Michael Goldsmith from UBS.

The first question is about seasonal transient RV. The guidance for the first quarter suggests it will decline by 6%, and for the rest of the year, it is expected to decrease by around 2%. Can you explain your visibility regarding the weakness in the first quarter? Additionally, what gives you confidence that trends will improve throughout the year?

Sure. So Michael, as I mentioned in my remarks, we've used our current reservation pacing to put together our guidance for the first quarter. That's for both seasonal and transient. They are essentially tracking in line with our budget at this point for the quarter. I think Patrick can walk through some color by region.

Yes. And I'll highlight the seasonal component. Just as a reminder, roughly half of the seasonal revenue for the full year comes to us in the first quarter. And those seasonal customers are really rolling stock customers. They either drive down from the north to the Sunbelt or they fly down and store their RV during the off-season or they drive it back up to their own destination up north. Some of the factors leading to the performance for the full Sunbelt season started in really Q4. I mean, Q4, Q1 kind of bookend the Sunbelt season, starting late Q1. Just a reminder, the impact from the hurricanes led to a disruption of demand in Florida. We have also experienced a lag in our Canadian business. It's partially driven by what we're hearing from our customers, some uncertainty around the presidential election that's now behind us.

Got it. My follow-up is about the ongoing disruption caused by the hurricanes. Is there any continued impact on the financials as a result of that? In particular, it seems that home sales have significantly decreased in both volume and revenue per home. Could you elaborate on that?

Yes. As you pointed out, the new home sales for the quarter were down a little over 30% year-over-year; that was significantly the result of disruptions from the hurricane. We also had a relatively mild start to the Sunbelt season that contributed to the decline. We had some locations where we sold out of inventory, so expansions that were filled up. I consider the demand profile to still be very stable. I'd highlight that a good year pre-COVID on new home sales would have been in the neighborhood of 500 to 600. We've talked about it just over the last couple of years that there was peak demand through COVID and that's been normalizing. That's having an impact as well. We're just getting into a normal run rate for the MH business largely.

And Michael, just another note in the first part of your question about Milton, all of our properties are operational and have been since right after the storm, effectively.

It seems that the home sales that dropped in the fourth quarter may not return in 2025, especially as we see home sales continuing to stabilize. Is that accurate?

Yes, I guess that's right, but I'd also highlight that some of the disruption from the hurricane can be something that comes back in the following weeks. It's just people who are shopping for a home when a hurricane comes through, that can delay their plans and the ultimate decision.

Our next question will come from the line of Jamie Feldman from Wells Fargo.

So your current guidance implies 4.8% base rental income growth for MH, RV, and marina, but your total core revenue growth guidance is 3.9%. So we're wondering, what's driving that delta, whether it's rental home income, slower demand for Thousand Trails or utility and other income?

I would primarily point to utility and other income. One of the factors contributing to this is the timing of recognizing business interruption insurance proceeds from previous storms.

Okay. And as a follow-up, so your Thousand Trails membership count in '24 declined year-over-year. It's now lower than 2020 levels. While you've increased sites from 24,800 in 2020 to 26,000 in '24, how long until we see a re-inflection in RV demand either in revenue growth or more within the Thousand Trails portfolio?

Yes. I think, Jamie, the absolute number of members has changed over the years. If you look at the beginning of our ownership of Thousand Trails, we saw a decline in membership followed by growth. Then we saw a spike during COVID and now we're seeing some attrition with those members. But I think it's important to point out that over the last five years, the dues membership subscription revenue has increased an average of about over 5% and our focus is on growing that recurring stable revenue. So we'll continue to do that and focus on those line items within the Thousand Trails portfolio.

So I guess, if you don't mind me following up, I mean, if you just think about the next few years, do you think the market is looking at this wrong? Or maybe is there a better way we should all be thinking about this because there's so much focus on declining RV revenue and just usage levels?

I guess I would think of it like this. If you look at the growth we've seen in our initial membership offering of camp passes, it has really been impressive in our subscription offering. In 2013, we were selling 4,600 passes. Last year, we sold almost 20,000. I really think that shows the demand for the product. It allows people to belong to a system where they can camp in many different locations. I think the demand is very strong and will continue.

Next question will come from the line of Steve Sakwa from Evercore ISI.

Just to kind of zero in on the RV and marine base rental income. I think you had said on the last call and you reiterated here that the annual increases were about 5.5% to 95% of those customers. But the midpoint of that annual number is like 5.2%, so it's a little bit below the 5.5% which would sort of imply maybe slower growth on the marina business. So could you maybe just talk about pricing on the marinas and what you're seeing kind of for '25?

Yes. I mean, the difference between the 5.5% on the guidance and the 5.2% for revenue is a lower starting occupancy point for 2025. That's driven largely by higher attrition in RV annual guests for 2024. Typical attrition for our customers in the RV space is around 5%. I'll just reference a trend through COVID that, that number was lower through COVID as people were not moving around as much and had more time for leisure activities and spending time with family and friends. As schedules have normalized, that attrition has accelerated. It's accelerated above the historical norm because of the kind of pent-up duration of some of our RV annual customers. As we've worked our way through that attrition, we ended up having a lower starting point for 2025.

Patrick, can you just comment on where marina pricing is? Is it kind of in line with that 5.5% or...

Yes, yes. Yes, it's in line with that. It's in line with the overall guide.

Okay. And then maybe, Paul, just to go back to Eric's question initially on the expense guidance. There's been a lot of focus on insurance. I also noticed that your R&M and your payroll were basically flat to down in '24. So could you maybe just speak to where you are on the insurance renewal? And what steps did you take to mitigate R&M and payroll? And as you think about labor in '25, how are you sort of thinking about labor?

Yes. Sure. I mean a couple of things. As it relates to insurance, we do have an expense growth assumption. We are in the process of our renewals, so we're not disclosing that. We don't make that guidance expectation public because we are in active negotiations. With respect to R&M, the year-over-year comparison we had in '24, I've talked about this a few times during 2024, we had a favorable comp to a difficult start to 2023. We see normalizing, which is why I made reference to kind of CPI-type growth broadly across our expenses. I'd say the same applies to payroll as well.

Our next question comes from the line of John Kim from BMO Capital Markets.

All the talk about the deep sea kind of put the California wildfires in the back of our minds. But I just want to make sure that there was no impact on the wildfires to your operations. And as a follow-up to Steve's questions on insurance, do you think the wildfires and Hurricane Milton will have an impact on your insurance renewal this year?

We have 11 properties in Southern California, and fortunately, none of them were affected by the fires. Where applicable, we collaborated with local fire departments, and our properties even served as staging areas for fire trucks and emergency workers. We are prepared to assist any displaced residents and temporary workers as they work on rebuilding their communities. Regarding the insurance renewal, as Paul mentioned, it's too early to determine the impact on rates for next year. Our claims are significant, and we need to consider the global context of claims. I believe it's too soon to anticipate what will happen with claims both within and outside of California.

So just to clarify, your 2.5% expense guidance includes an assumption on the insurance renewal increase or ignores the impact of insurance?

No, it includes an assumption. But as Paul said, we're in the middle of negotiations. We generally don't talk about what our assumptions are due to those negotiations. We'll let everybody know on the next quarter call.

Okay. And then Patrick talked a lot about expansion sites and the high returns and what you delivered last year was 736, which was in line with your guidance but below your five-year average of over 1,000. Do you expect to get back to that 1,000 expansion site level this year? I know you mentioned last year it was somewhat timing related.

Yes, it is related to timing as well as longer timelines for completing projects from entitlements. For 2025, I expect the number to be between 400 and 600. We are continuing to develop that pipeline, as I mentioned earlier. It’s worth noting that a significant portion of our expansion projects, about half, are in Florida. Considering the growth occurring in Florida and the occasional impact from hurricanes, the process of obtaining entitlements and permits and navigating through local government offices often leads to delays, which slows down the timing of our projects from beginning to end.

And what is that typical breakdown of expansions between MH and RV?

In 2024, it was roughly I think 60-40 to the side of RV. I think that's going to come more into line leaning towards MH in coming years. We have a couple of larger projects that are going to be working their way through the pipeline.

And John, as a reminder, about 85% of our excess land is on the RV footprint. So just to give you a sense of that.

Our next question comes from the line of Anthony Hau from Truist Securities.

Can you guys provide a little bit more color on why the guidance assumed lower noncore NOI than last year?

Sure, Anthony. Our guidance is $10.8 million at the midpoint for 2025. That compares to $16 million in '24, that's just over a $5 million difference. There's a slight change from properties moving from noncore to core. Really, the remainder is the impact of timing associated with insurance recovery that we received in 2024 and assumptions for '25 NOI for certain of the noncore properties returning to stabilized operations.

Okay. So does it assume that all the properties that were affected by Hurricane Ian to be fully operational and stabilized by this year?

That's a bold statement, but we're working to return them to stabilized operations. They do remain in noncore because they haven't yet reached that level.

Got you. And then what does the guidance assume for business interruption income in 2025? I think you guys collected around $10 million in 2024.

We did collect around $10 million in 2024. That number is essentially embedded in our assumption, but is impacted by the timing of the return to normalized operations. So I don't really have a number to disclose because it toggles as we improve operations and generate NOI, then we receive less business interruption.

Our next question will come from the line of Wesley Golladay from Baird.

I want to discuss the annual sites. It appears that you have just over 34,000 annual sites. You mentioned some attrition, and I'm curious if there's any seasonality to that attrition. Additionally, does your guidance reflect an increase or decrease in that number throughout the year?

Yes. I mean, I guess we go back to the earlier question and answer which is largely driven by attrition. Some of the contributing factors, Hurricanes Helene and Milton negatively impacted the business in Florida year-over-year. We had a transition in Florida related to transitional workforce housing from Hurricane Ian. The attrition that I mentioned with respect to turnover was particularly present in North and Northeast that build through COVID and then a normalization. As that slows back to normal levels, I would expect we'll continue to build the business as we had pre-COVID. That's really the driver of that reduction, which has been turnover in the annual base.

Could you provide insight into the different tiers of Thousand Trails members? It seems like you have higher paying members who are more active users. That segment appears stable and possibly growing, while you might be seeing some attrition among the lower tier and free memberships. Is that a correct understanding?

Yes. You can observe in the supplemental information that there has been a decrease in the promotional membership originations. This reduction is reflected within the portfolio, stemming from the RV dealer leads we often discuss, along with a decline in transient activity at the property, where we sell the passes. A lack of transient activity affects the initial memberships at the lower line item.

Our next question will come from the line of Omotayo Okusanya from Deutsche Bank.

Just wanted to touch base on the membership again and just the sequential decrease in total memberships in 4Q. Again, obviously, the seasonality associated with that business, but we just felt what it looks like the decrease was probably a little higher than we expected from just purely seasonality. Just kind of curious what those may have been going on during the quarter and if there are any implications for how total memberships may grow in 2025?

Yes. Actually, it really is kind of the change in the member count is really the two things. I think I touched on a little bit just that reduced RV dealer member and then a reduction in transient activity reduced the overall number of camp pass sales. Those are the two drivers that we saw. As transient traffic picks up and as RV dealer memberships pick up and then the conversion of those RV dealer members to paid members, you'd see an increase in the member base.

Okay, that's helpful. Regarding the growth of base rental income for both the MH business and the RV marina business, it appears that expectations for 2025 indicate a slight slowdown. Could you explain if this is due to more challenging year-over-year comparisons, changes in demand, or difficulties in increasing rents? I'm trying to understand why there seems to be a slowdown in baseline income growth for 2025 compared to 2024.

Yes. I mean, I guess I'll start with MH. I'd highlight that the rate growth we are able to achieve is really driven and supported by the strength of our locations and just the fundamentals of that business. As I highlighted in my opening comments, we have some really strong demographic tailwinds that are going to work their way through not only the baby boomers, but successive aging cohorts in the U.S. So we're in a very good spot with respect to long-term demand. I'd highlight the rate increases that we're achieving now reflect a favorable spread to CPI and that's been a strong relationship for us over our history.

Could you clarify the reasons for the expected slowdown in 2025 compared to 2024? Is this mainly due to lower occupancy gains in 2025? I'm curious about what specifically accounts for the slowdown of 50 to 100 basis points.

I think, Tayo, if you keep in mind the composition of the MH rents, I think all the demand points that Patrick made are absolutely true, and we do continue to see increases on resident turnover to market that are 13%. When you look at the composition of the leases, we do have a portion that are tied to CPI. CPI is lower in '24 which drives the '25 increase than it was in '23, which drove the '24 increase.

Next question will come from the line of David Segall from Green Street Advisors.

I just want to clarify a bit on the annual RV churn. Are you assuming that the churn levels for '25 are back to that historical 5% level?

Yes, we're projecting that we're going to run the business in a way that's consistent with our history. As I mentioned, there were a couple of different impacts. Certainly, the attrition is part of it and that's normalizing as our other components of our business. But we also had some disruptions associated with hurricanes just in the ordinary course as well as a transition over the last couple of years on transitional workforce housing in Florida.

Great. And with regards to the transient and seasonal expectations over the balance of the year, the guidance seems to imply an improvement for 2Q and beyond versus 1Q. I'm just curious if you can help us understand the breakout of how much of that is attributable to an easier comp period versus improvements in underlying demand.

Yes. I think, David, it goes to our process, essentially. When we put together our budget and then we update our forecast on a quarterly basis for seasonal and transient, we think about, first of all, the amount that we earn. The first quarter, we earn about 50% of our anticipated full year seasonal and almost 20% of our full year transient. Then it starts to shift and we earn more transient than seasonal such that by the end of the third quarter, we're at 85% of our transient rent earned. What we're talking about when we talk about that business is one that has a short booking window and so we don't have a significant amount of visibility. The presentation of information as we head into each quarter is based on the reservation pacing we see for that period. Beyond that, we're using a flat to up slightly assumption for the revenues because we just don't have better visibility into the variables such as weather that drive those components of the business.

And 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 comments.

Thank you very much for your participation in today's call. We look forward to providing updates for you next quarter. Take care.