Good day, everyone, and thank you all for joining us to discuss Equity Lifestyle Properties First Quarter 2025 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 meanings of the Federal Securities Laws. Our forward-looking statements are subject to certain economic risks and uncertainties. The company assumes no obligation to update or supplement any statements that become untrue because of subsequent events. 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 results for the first quarter of 2025. The quality of our cash flow, our in-demand locations, the lack of new supply, and the strength of our balance sheet allow us to report impressive results. We continued our long-term record of strong core operations and FFO growth with growth in NOI of 3.8% and a 6.7% increase in normalized FFO per share in the first quarter. We are pleased with our outlook for the remainder of 2025. We have maintained our strong full-year normalized FFO guidance of $3.06 per share. Over the last 10 years, our average core NOI grew 5.3% and normalized FFO grew nearly 8%, both outpacing the REIT industry over that time. Our balance sheet is in terrific shape with an average term to maturity of more than eight years. Nineteen percent of our debt is fully amortizing and not subject to refinance risk, and our debt maturity schedule through 2027 shows only 9% of our debt coming due compared to the REIT average of 30%. During uncertain times, it's helpful to appreciate the stability of our business and the reasons it will continue to be stable. Our MH portfolio comprises approximately 60% of our total revenue, and our properties are 94% occupied. Our properties stand out due to their ability to maintain high occupancy levels once achieved. This is driven by the unique composition of our resident base. Homeowners occupy 97% of our MH portfolio, creating long-term stability and reducing turnover. A high percentage of homeowners plays a key role in maintaining consistent cash flow. Our communities foster a sense of connection where residents are focused on building relationships and contributing to an engaged neighborhood environment. Within our RV footprint, our annual revenue grew 4.1% in the quarter. Our annual customers stay with us in park models, resort cottages, and RVs. We welcome many multigenerational customers who consider our properties as part of their family history. Our transient day service is an important entry point for introducing new customers to our properties, laying the foundation for long-term revenue growth. Turning to demand, our offerings across our portfolio are unique. We offer great long-term experiences in sought-after locations at a fraction of the cost in those locations. We are engaging with our customers through traditional e-mail campaigns, social media outreach, digital advertising, and ambassador programs. For the quarter, our websites attracted a combined 1.7 million unique visitors and generated 72,000 online leads, reflecting strong engagement. The drivers of the lead generation are from our RV annual site lease campaign and trip planning lead generation. Our social media strategy seeks to engage both customers and prospects in a wide variety of platforms. We have over 2.2 million fans and followers across the social media networks. Over the past 10 years, we have grown our social media fans and followers by an average of 30% annually. I want to thank our team for a great start to the year. They've done an excellent job supporting our snowbird guests, and now we're getting ready to welcome our customers for the upcoming spring and summer season. Our REIT-leading performance is made possible because of the efforts of our 4,000 team members across the country. I will now turn it over to Patrick to provide more details about property operations.

Thanks, Marguerite. Our business is currently in its spring seasonal shift with snowbirds in our Sunbelt locations beginning to head north and our northern locations preparing for the summer rush. This shoulder season is an opportunity to look at the elements that shaped our first quarter results as well as what we see ahead for the summer season. The fundamentals of our business remain strong. New supply of manufactured home communities and RV resorts continues to be limited with MH entitlement most challenging. Our portfolio of MH and RV properties offer prime locations and meet demand from homebuyers and RV vacations. First, I’ll focus on our MH business. Our MH occupancy is at historically high levels. And on average, ELS homeowners pay $80,000 to $100,000 for a new home, and renters paid $1,500 per month. Our high homeowner count results in stable occupancy with homeowners in our communities remaining an average of 10 years. For perspective on the relative value of homes in our MH communities, I’ll highlight three states: Florida, California, and Arizona that comprise the largest share of our MH business. In our primary submarkets in Florida, the average single-family home price ranges from over $370,000 in Tampa St. Pete to nearly $460,000 in the Fort Lauderdale, West Palm Beach submarket. Homes in Northern California, around San Francisco and San Jose averaged over $1.4 million; and in Southern California, in Los Angeles and San Diego, it's just over $1 million. While homes in the Phoenix and Mesa submarket average more than $425,000. In each submarket, our communities offer great value to residents, both homeowners and renters. Our largest market is Florida, and last quarter, we discussed the impact of recent hurricanes on MH occupancy. The result of last season's hurricanes, we lost approximately 170 occupied sites in Q1 in addition to more than 90 occupied sites in Q4. We are ordering replacement homes, and we will see the positive impact on the community and cash flow in coming quarters. On the RV side of our business, we continue to see strength from our annual sites, where we saw 4.1% revenue growth in the quarter. Customers are leveraging annual sites for their RV or park model as an attractive and affordable path to a vacation home. The annual site rent on one of our properties is a fraction of the cost of a mortgage on a second home, particularly on a home offering amenities like water access, a swimming pool, and a clubhouse with sports courts, among others. For many customers, the annual site rent ranging from $5,000 to $6,000 in the north and averaging about $8,000 in the Sunbelt is equivalent to the cost of their annual weeklong vacation considering travel expenses and accommodations. Annual customers typically purchase a park model for $25,000 to $100,000, which compares favorably to vacation homes that often exceed $500,000 in some markets where our properties are located. These annual sites provide a stable revenue base for our RV portfolio, accounting for more than 75% of our core RV revenue. While transient sites are an important element of our business, including serving as a pipeline for annual sites and membership sales, we have less visibility into this revenue line as the time between booking and travel continues to be short. More than half of our transient reservations are booked within 30 days of arrival. A majority of our full-year transient revenue comes to us in Q2 and Q3 when we see historically high holiday demand. We're looking forward to our annual 100 days of camping promotion spanning from Memorial Day to Labor Day. This will be our 11th season celebrating the 100 days of camping. We see very high engagement levels with this promotion. We saw more than $38 million impressions for the campaign last summer. Now, I'll turn it over to Paul.

Thanks, Patrick, and good morning, everyone. I will review our first quarter 2025 results and provide an overview of our second quarter and full-year 2025 guidance. First quarter normalized FFO was $0.83 per share, in line with our guidance. Core portfolio NOI growth of 3.8% compared to prior year was in line with our expectations for the quarter. Core community-based rental income increased 5.5% for the quarter compared to the same quarter in 2024. Rate growth of 5.7% was in line with our guidance, primarily as a result of noticed increases to renewing residents and market rent paid by new residents after resident turnover. Our high-quality resident base consists of more than 97% homeowners with very low levels of bad debts written off currently below 40 basis points on average. First quarter core resort and marina-based rental income performed in line with our budget. Rent growth from annuals increased 4.1% for the quarter compared to prior year and was slightly higher than our guidance. Transient rent was down 9.1% compared to first quarter 2024. For the first quarter, the net contribution from our total membership business, which consists of annual subscriptions and upgrade reps offset by sales and marketing expenses was $15.5 million, an increase of 4% compared to the prior year. Core utility and other income increased 3.9% compared to first quarter 2024. Our utility income recovery percentage was 47.6%, about 110 basis points higher than first quarter 2024. First quarter core operating expenses increased 1.5% compared to the same period in 2024. Property operating and maintenance and real estate tax expenses increased 2.6%. Membership sales and marketing expenses were in line with our budget and lower than prior year. We renewed our property and casualty insurance program April 1, and the premium decrease year-over-year was approximately 6%. We are pleased with the result, which reflects no change in our property insurance program deductibles or coverage. Core property operating revenues increased 2.9%, while core property operating expenses increased 1.5%, resulting in growth in core NOI before property management of 3.8%. Our noncore properties contributed $4 million in the quarter, slightly higher than our expectations as a result of expense savings. JV income includes income recognition related to an expected distribution from one of our joint ventures. The press release and supplemental package provide an overview of 2025 second 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 in 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 5% at the midpoint of our range of 4.5% to 5.5%. We project the noncore properties will generate between $8.2 million and $12.2 million of NOI during 2025. Our property management and G&A expense guidance range is $119 million to $125 million. In the core portfolio, we project the following full-year growth rate ranges: 3.2% to 4.2% for core revenues, 1.5% to 2.5% for core expenses, and 4.5% to 5.5% for core NOI. Full-year guidance assumes core MH rent growth in the range of 4.8% to 5.8%; full-year guidance for combined RV and Marina rent growth is 2.2% to 3.2%. Annual RV and marina rent represents approximately 70% of the full-year RV and Marina rent, and we expect 5% growth in rental income from annuals at the midpoint of our guidance range. Our full-year expense growth assumption includes the impact of our April 1 insurance renewal for the rest of 2025. Our second quarter guidance assumes normalized FFO per share in the range of $0.66 to $0.72 that represents approximately 23% of full-year normalized FFO per share. Core property operating income growth is projected to be in the range of 5.4% to 6% for the second quarter. Second quarter growth in MH rent is 5.3% at the midpoint of our guidance range. We project second quarter annual RV and Marina rent growth to be approximately 4.6% at the midpoint of our guidance range. Our guidance assumes second quarter seasonal and transient RV revenues perform in line with our current reservation pacing. Second quarter growth in core property operating expenses is projected to be in the range of 1.6% to 2.2%, and includes the impact of our April 1 insurance renewal. 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. As of the end of March, we have only $87 million scheduled to mature before 2028, and our weighted average maturity for all debt is 8.4 years. Our debt-to-EBITDAre is 4.4 times, and interest coverage is 5.4 times. We have access to approximately $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. 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 5.5% and 6.25%, 60% to 75% loan-to-value, and 1.4 times 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 the best financing terms. Now we would like to open it up for questions.

Certainly. Our first question comes from Jamie Feldman from Wells Fargo. Your question please.

Hey, this is Cooper Clark on for Jamie today. Thank you for taking the question. On the MH top line guidance cut and full-year reduction, was there anything outside of the hurricane impact that drove this number lower? And also just wondering if you've seen any material changes in the MH mark-to-market on new leases recently. I believe it was roughly 14% last year?

Good morning, Cooper. Patrick, maybe you could walk through that.

Yes, sure. Let me just start by taking a step back to last October when we set our initial expectation for rate in the MH space, and we're at 5%. Our rate growth is now 5.6%. So I think that shows strong demand across the resident base, good consistent demand from our in-place residents. And for the mark-to-market, it's running in the mid-teens, about 14%. Year-to-date the occupancy headwind, as you noted, is the result of the hurricanes. We experienced a loss of 176 sites in the quarter as a result of the hurricanes and just to put that in perspective, the Q1 occupancy is down 171. So if you control for the hurricanes to take that out of the basic math, the occupancy for the portfolio was flat to slightly up, which, again, I think underscores the consistency of the demand part.

Thank you. And then earlier on the call you mentioned the average length of stay in the MH portfolio is 10 years. Just wondering what that figure was pre-COVID?

That was around 10 years. It's been pretty consistent.

And that number, I would say Cooper has been consistent over the last 30 years, that 10-year mark.

Thank you. And our next question comes from the line of Eric Wolfe from Citi. Your question please.

Hey, thanks. Just to follow up on the MH question a second ago. I guess at the time you gave guidance, you probably would have known about the storm damage. So I was just curious, is it normally that the people stay through the storm damage and this time, they decided not to? Like, what changed versus the original guidance and why? Because I think the guidance you gave was sort of at the end of January, hurricanes in 4Q. So just trying to understand if the behavior among storm-impacted tenants changed a bit versus what normally happens.

Yes, I don't know that I'd say that the behavior changed. And as you work your way through the aftermath of the hurricane, there are homes that are significantly impacted, and that's clear. And then there's a significant number of homes where the individuals who own those homes either haven't come down from up north yet. So they come down over some period of time and evaluate any damage or they are living at the property, and they're evaluating what their options are. They're reviewing what their options are to complete any repairs that are almost repairable. That tends to play out over several months after we work our way through the initial assessment. So it can be difficult to get that visibility until the residents are actually making their final decision on whether they are going to repair their home or move on to whatever their next housing choice is going to be.

And Eric, a clear indicator for us is certainly if they're paying us rent, which they were prior to making the decision to move their home or no longer stay in the community. So that's the difference between January and now.

Got it. Makes sense. And I know you've given some of this information not on calls a couple of years ago, but could you just help us understand sort of what your exposure is to the Canadian customer and whether you sort of factored in any changes to that customer's behavior into your guidance? Or if you think it's probably unlikely to materially impact your guidance this year?

Yes. I think for just as a reminder, what we've talked about in the past is roughly 10% of the RV revenue comes from Canadian customers. Half of that roughly is annual rent, and then the remaining 50% is split between seasonal and transient. The first quarter, obviously, is behind us. And so, the seasonal impact is really in the first quarter of the year. And so, we didn't make any change to guidance as a result of that. I think the next kind of meaningful impact that we would see would be into the first quarter of 2026. And just to circle back on the annual for a moment, those customers primarily have a park model or an owned unit in place. And so, if they decide not to return, there's a transfer of ownership that occurs, and our revenue stream remains uninterrupted as typically happens on turnover of customers.

Thank you.

Thanks, Eric.

Thank you. And our next question comes from the line of Jana Galan from Bank of America Securities. Your question please.

Thank you. Good morning. I'm just curious, any chance that you could discuss the MH occupancy trends that you have embedded in the guidance for the second quarter through year-end?

Generally, we have an assumption for a modest increase in occupancy for the remainder of the year. Typically, we don't forecast forward significant uptick in occupancy, and we've kept that consistent in 2025.

Thank you. And then maybe just if you could provide some color on trends in MH home sales kind of the mix of new and used and what you're seeing in the early spring selling season?

Yes, sure. Well, we're in a bit of a shoulder season here. So let me just touch on Q1, where we saw some headwinds in Florida, that's basically a hangover from the hurricanes that occurred late in the quarter. And as we're moving through the shoulder season, we're seeing consistent demand including applications for new home sales. And as I referenced, that consistent mark-to-market as people are choosing to purchase a home in our property and accepting a 14% increase in the in-place rent. With respect to the used home sales, I mean, it's a very small part of the business and we see consistent demand there as well, but the larger driver of our overall occupancy is the new home sales.

Great. Thank you so much.

Thanks, Jana.

Thank you. And our next question comes from the line of Steve Sakwa from Evercore ISI. Your question please.

Yes. Great. Thanks. Can you maybe just talk a little bit more about the seasonal and transient RV? If I did my math right, I think you did reduce the revenue growth a little bit. So just curious, is that sort of an expectation that international travel may come down? Is that just a little more cautiousness about the U.S. consumer? Maybe what drove that?

Well, maybe, Steve, I'll start by just reminding everybody of how we forecast our seasonal and transient and then Patrick can step in with some more color. But in terms of our process, if you think about the first quarter, we earn about 50% of that seasonal rent and about 20% of the transient rent, and then by the end of quarter two, we've earned about two-thirds of our full-year seasonal and almost 45% of the full-year transient. And then in the third quarter, 40% of our transient rent comes in. Because of the short booking window, we've adopted a practice, and I think I mentioned it during the call in January, we used it when we prepared our budget we focus on reservation pacing at the time for rent we anticipate earning in the coming quarter. And then we've left our budget assumption alone. So the change in the forecast that you see is really our reservation pacing for the second quarter. Maybe Patrick, you can address some comments.

Yes. And Steve, I just also just touch on for transient, as I mentioned in my opening comments. It's a short booking window and continues to be. But just looking forward to the summer season, we have over 200 RV properties, and 85% of them are pacing in line with the same time last year. So it's a smaller subset of the portfolio that is experiencing some headwinds when we're reviewing pacing in the northern markets around the Wisconsin Dells, coastal New Jersey, somewhat in Bar Harbor, Maine. We see lagging at a small number of properties, a common trend that we characterize as a normalization of demand. And just for further perspective, in the case of Bar Harbor, we're seeing commentary around service level changes at Acadia National Park potentially leading to fewer visits there, and that would have a marginal impact on our properties in that submarket.

Okay. Great. Thanks. Maybe could you just touch on home sales? I think they were down. I know it's not a large number and not a huge revenue contributor, but home sales were down in the quarter. Anything that you noticed there? And I guess, any just sort of broad changes in your expectation about home sales over the balance of the year?

No, I mentioned this last quarter, and there's a bit of carryover into Q1. The hurricanes in Florida had an impact. We believe that the demand in Florida remains strong, but we have observed a recovery along the Gulf Coast. As we entered the winter season, it was not particularly cold in the north, which affected our velocity in the Western Sunbelt. Looking ahead to the summer season, we are optimistic about the demand we are seeing. I have mentioned frequently that we have experienced a period of elevated new home sales. A typical good year before COVID would be around $500 million to $600 million. Last year, we reached about $750 million in home sales for the entire year, and we reported $117 million in Q1, which is down 74% year-over-year. That provides a lot of context. Overall, we feel positive about the demand profile for the MH portfolio.

Thank you. And our next question comes from the line of Michael Goldsmith from UBS. Your question please.

Good morning. Thanks a lot for taking my question. My question is on the insurance renewal. What were you assuming in your guidance prior to it coming down 6%? And just what was the conversation with the insurance providers, given you've had a couple of incidents or storms over the last couple of years, we've just taken things offline. So how are you able to drive a decrease of 6%?

Sure, Michael. So as I mentioned, our core expense growth assumptions include the impact of the renewal we disclosed in our earnings release as well as other changes to expense assumptions based on actual first quarter experience and insight into the remainder of the year. Our insurance premiums were down 6% compared to the prior year. Negotiating insurance programs for our portfolio is a fairly complex endeavor with multiple parties involved. Consistent with past practice, we do not share our budget assumptions in order to help us secure the most favorable renewal terms for the current and future programs. Then with regard to the conversation with the carriers, I think there was certainly discussion of the events that you mentioned. There were two storms at the end of 2024. One was a far more modest storm that did not result in a claim. So there was one storm that did result in a claim.

And then I think the other thing, Paul, you mentioned in your comments that there's no change. There was no change in the deductibles or the coverage, which I think is an important point, Michael, to note.

And then just as a follow-up, can you talk on the guidance, right? You took down the annual MH guidance by 40 basis points, RV down by 50 basis points, but then the total same-store revenue was down by 20 basis points. So can you talk about some of the offsetting factors? I assume that relates to memberships and some other factors. But can you provide a little bit more color on that?

Yes. I think that as we mentioned, we have the occupancy impact on the MH and then discussed a little bit about the impact on the RV. We do have some adjustments to our other line items in the quarter. Some of it is timing-related associated with insurance proceeds that we might recognize and just some other changes.

Thank you very much. Good luck in the second quarter.

Thank you.

Thanks, Michael.

Thank you. And our next question comes from the line of Wesley Golladay from Baird. Your question please.

Hey, good morning, everyone. Are you seeing more Canadians listing their homes for sale? And can you give us your overall MH exposure to Canada?

Yes, I don't know that I have our overall exposure to Canadians in the MH space. I would directionally say that it's similar to what Paul covered earlier with respect to the RV business. And we are not seeing any trends coming through with respect to Canadian demand on the MH portfolio or listings of the existing residents in our MH portfolio from Canadians. I've been on site through several times through the Sunbelt season. And I can tell you that the Canadians were there all seem very happy to be there. And we're sharing their interest in coming back next year.

Thank you.

Thank you. And our next question comes from the line of John Kim from BMO Capital Markets. Your question please.

Thank you. How long do you think it will take to regain the occupied sites, the 260 lost in the last two quarters due to the hurricanes? Will it be this year or will it take a couple of years to fully regain occupancy?

I believe that as we start to repopulate those sites with homes, you will see this happen over the next few years as we increase occupancy in Florida.

And so, why would it take more than, I guess, 12 months? Like, how would it take a couple of years?

It would take into 2026, I guess. I think the rest of this year and into 2026.

Okay. Great. And then my second question is on the casual RV user, like the seasonal transient and Thousand Trails. Why do you think it's continued to be weak? I guess you had to pull forward in 2021 and 2022, and you had three straight years where it's been either weak or declining. Do you think that seasonal transient goes back to 2019 levels? And can you maybe comment on any change in demand among generations? I think during COVID, you had widespread increase from baby boomers all the way to Gen Z. Have you noticed anything different than those customers have pulled back?

Yes. Recently, our seasonal revenue has experienced some growth pressure due to seasonal workers and displaced residents. We are noticing this trend, but we believe that demand remains very strong, especially when looking at the length of stay. The length of stay for customers has remained steady over the past few years. However, some workers no longer have their previous jobs, which leads to a slight decline in demand. Most of this is happening in Florida. Nonetheless, overall demand appears robust, as reflected in the annual side of our business. We continue to demonstrate strength in converting seasonal and transient customers into annual customers.

Okay. Thank you.

Thanks, John.

Thank you. And our next question comes from the line of John Pawlowski from Green Street. Your question please.

Hey, good morning. Thank you for the time. Patrick, I still don't understand the cadence of manufactured housing occupancy throughout the quarter. So you told us a few months ago, occupancy was at 94.8% as of end of January, which implies you lost 80 basis points of occupancy between January to end of March and 176 shakes out like 25 bps of occupancy. So, the occupancy loss throughout the quarter seems to be more than just storms. So can you help me understand what the moving pieces here?

Sure, John. I think maybe Paul would be able to walk through that a little bit based on the guidance and the numbers.

Yes, John, I do think there's a little bit of confusion. So at the end of the quarter core occupancy was 94.4%. You can see on Pages 8 and 9 of the earnings release that occupied sites were nearly the same for the quarter average as at quarter end. What happened during the time period when lost those occupied sites was related to the storm events that Patrick mentioned. We completed expansion sites and added those to our core site count, which impacted the occupancy percentage.

Okay. That makes sense. Paul, you mentioned expecting a slight increase in occupancy. How do you define slight? Are we looking at 10 to 20 basis points? Is that the right range to consider?

Like 25 to 50 sites.

I have a final question regarding the annual RV revenue growth. I believe it was just above 4% this quarter, which is lower than the revised lower range. First, what is causing the slightly weaker start to the year for annual RV? And second, what observations do you have that give you confidence that annual RV revenue growth will pick up as the year progresses?

John, in the first quarter, we’re facing a unique comparison because 2024 was a leap year, giving us an extra day. The comparison for 2025 in Q1 will be tougher. We're looking at an adjustment of about 100 to 110 basis points for the rest of the year, just for your information.

And then as it relates to just the guidance for the rest of the year, that really has to do with one property, one marina that is in the process of being brought back online, and it's taking longer than anticipated. So that's the driver of that.

Okay. Thanks for all the color.

Thank you.

Thank you, John.

Thank you. And our next question comes from the line of Peter Abramowitz from Jefferies. Your question please.

Yes, sorry about that. Thank you for taking the questions. I was just curious, you had some pretty solid results on the OpEx side and disclosed what looks like a pretty favorable result on your insurance renewal. Just curious, there's been a lot of speculation about increased inflation potentially if there is kind of an extended issue with the trade war here. Anything that gives you pause, whether it be on payroll or anything else on the inflation side when it comes to operating expenses and maybe how you're thinking about that internally as you updated your guidance assumptions?

Yes. We watch those very closely. Roughly two-thirds of our expenses are in utilities, payroll and repairs and maintenance, and the expected year-over-year growth for the rest of the year is slightly higher than the most recent headline CPI print of 2.4%. So as we looked at it, our pay increases take effect April 1 each year. And so considering where CPI is right now, anticipating that we're slightly ahead of that going forward. We note the possibility that, that changes and that there could be an acceleration, but we don't see an indication of that at this time.

Okay. That's helpful. And kind of in a similar vein, I guess, on conversions or possibly site additions whether it be RV or MH. Any pause when it comes to potential just cost inflation, whether that could impact just kind of the pacing of conversions or site additions or if you think that could impact yields on those?

Yes. I think we're on track from a development perspective, as we've indicated throughout the year, our returns have gone down over the last couple of years as a result of increased cost pressures, but we don't see any large change in that.

Got it. That’s all from me. Thank you.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Thomas Asakiana from Deutsche Bank. Your question please.

Good morning, everyone. Could we follow up on Peter's question regarding OpEx? On the recurring CapEx side, is there anything we should consider in relation to tariffs, beyond the usual OpEx?

On the recurring CapEx side, our budget is approximately $90 million for the year. We had about $85 million in recurring CapEx last year. Anticipate about $90 million this year. And similar to what we're seeing on the OpEx side, we're watching that very closely and aren't yet seeing any signs of pressure. I think that as the team manages through that, certainly as it relates to labor and projects we're already into April. So contracts are already being signed for that type of work. So don't anticipate a significant increase and would expect to manage to that budget number for the year.

That's helpful. And then a question on the RV side, again, just on the marina side. Sorry, seeing again your peers exit from that business. Can you just talk about kind of implications for your own business, whether it validates valuation or how you kind of think about it? And also just from a competitive perspective, how do you see their exit kind of changing anything in regards to the competitive landscape?

Sure. Let's discuss the competitive landscape first. The marinas that currently exist have been established for a long time, so from a local perspective, there hasn't been much change. Regarding our marina portfolio, we acquired an underperforming portfolio in 2017 and have since added a couple more portfolios to our holdings. These properties have met our expectations, and we have successfully integrated them into our manufactured housing and RV portfolio. The assets we selected are mostly under annual leases with limited additional revenue. They are located in strong markets with high demand for our slips. It’s encouraging to see market price points that support and reinforce our valuations. Overall, the properties have been performing very well, and our team has done an excellent job managing them over the past five to six years.

Thank you.

Thank you.

Thank you. And our next question is the follow-up from the line of Eric Wolfe from Citi. Your question please.

Thanks. It's Nick Joseph here with Eric. Just one follow-up on the Canadian RV seasonal exposure. My understanding is that a certain percentage you talked, 30% to 40% in the past, but please let me know if not typically booked for the following year when they leave this year. So curious where that reservation pace stands right now versus where it was this year or historically?

Nick, we do have roughly that level that reserve typically. We do see a lower number this year than we've seen in the past. It's about 20% lower than it's been. But I would say that it's early and there's a fair amount of time between now and January when those customers arrive. So we'll watch and see what happens, but we're happy to see the level of early reservations that we have to date.

Sounds good. Thank you. And then just one other question just on interest expense guidance. I think the current run rate is around $124 million, but you're guiding to $132 million. So just trying to bridge that gap and it seems like there's only about $87 million of debt maturing in 2025.

Yes. We have the $87 million that's maturing. We do have an assumption in the budget for some investments, some working capital investment that we plan to make in the properties, and that's really the driver of the difference between first quarter and the run rate for the year.

Thanks. So that's not external growth; that's more investment in existing properties?

Yes.

Great. Thank you very much.

Thank you.

Thank you. Since we have no more questions on the line, at this time, I would like to turn it back to Marguerite Nader for closing comments.

Thanks for joining today. We look forward to updating you on our next call. Take care.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.