Good day, everyone, and thank you all for joining us to discuss Equity LifeStyle Properties' Second Quarter 2025 Results. Our featured speakers today are Marguerite Nader, our CEO; Patrick Waite, our President and COO; Paul Seavey, our Executive Vice President and CFO. In advance of today's call, management released earnings. Today's call will consist of opening remarks and a question-and-answer session with management relating to the company's earnings release. 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 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 CEO.

Good morning and thank you for joining us today. I am pleased to report year-to-date and second quarter results. For the first six months of 2025, our NOI increased 5% as compared to last year. We focused on translating NOI growth to normalized FFO growth, driven by continued strength in our annual revenue streams and reduced expenses throughout our portfolio. Our normalized per share FFO growth year-to-date is 5.7%. The strength of our portfolio and results in our balance sheet allows us to maintain our full year guidance for FFO per share. The demographics of the U.S. population support the demand for our manufactured housing (MH) and RV portfolio, with 70% of our MH portfolio catering to seniors and the strong interest in RV travel among older adults. During periods of broader market uncertainty, it's important to highlight the core strengths that drive the stability of our business and our outlook for continued performance. Our MH portfolio represents about approximately 60% of total revenue, with portfolio-wide occupancy over 94%. These metrics reflect not only strong operational execution, but also the resilience of our asset base. A key driver of this stability is the unique composition of our resident base, as 97% of our residents in our MH portfolio are homeowners. This high proportion of owner-occupied units contributes meaningfully to reduce turnover and increased length of stay. The result is a more consistent cash flow and lower operating volatility. Our communities foster a sense of belonging and engagement. This engagement reinforces retention, promotes neighborhood stability and supports long-term value creation. Our communities offer our residents the chance to build connections that directly contribute to their quality of life. Within our RV footprint, annual RV revenue grew 3.9% year-to-date, driven by retention across our park models, resort cottages and RV accommodations. Our RV annual customer base is split between winter and summer seasons. Approximately 70% of our annual revenue comes from Sunbelt locations. These customers are typically active adults who are retired or semi-retired. These customers closely resemble our manufactured housing customers seeking a warm community-oriented destination during the colder months. The remaining 30% of our annual revenues are generated for summer-focused properties representing families with children. They value seasonal recreation and return to us for the activities, amenities and sense of community our properties provide. This seasonal balance allows us to serve a diverse range of long-term annual customers and support stable recurring revenue throughout the year. We are proud to share that 55 of our RV resorts and campgrounds have received the recently announced 2025 TripAdvisor Travelers' Choice Award. Each year, this award is given to approximately 10% of businesses listed on TripAdvisor. Our property teams provide guests with positive experiences when they stay with us, and referrals from our guests are a top source of new customers. I want to thank our team members for their outstanding efforts for this quarter. Their dedication to our customers is the foundation of our success, and their work is greatly appreciated. I will now turn the call over to Patrick to provide further details on our financial performance.

Thanks, Marguerite. Our core MH portfolio continues to see high occupancy and generated revenue growth of 5.5% in the quarter. Constrained supply of new MH sites supports the value of our communities and their product offerings. We are strategically investing in our communities to ensure their continued success for the long term. We are actively adding new home inventory in key markets, an investment that improves the quality of our communities over time. The new inventory revitalizes the communities, encourages other homeowners to invest in their own homes and helps maintain property values for all. As homeowners in our communities stay with us an average of 10 years, this new inventory brings stable occupancy and a steady revenue stream. I'd like to highlight our MH communities in Florida, California and Arizona, which together represent approximately 2/3 of our MH revenue. In Florida, we are focused on bringing new home inventory to meet strong demand. In the Tampa-St. Pete submarket, for example, we've sold nearly 700 new homes over the last 5 years as Florida continues to be a hub of in-migration. Our California communities continue to be highly occupied and in demand as they provide outstanding value within their respective markets where alternative housing costs are among the highest in the country. In Arizona's Phoenix and Mesa submarkets, we have sold 800 homes over the last 5 years. Like Florida, Arizona benefits from demographics as the aging population looks for affordable, low maintenance housing options and a warm climate. To leverage this demand, we have added 700 development sites in Arizona over the last 5 years. Our home offerings are attractive in any economy, and they are well positioned with new homes that are appreciated by customers seeking value in a challenging economic environment. Plus, with approximately 90% of our customers and communities paying cash for their homes, our homebuyers are less sensitive to interest rates. Shifting over to the RV business, annual sites account for more than 70% of our core RV revenue, providing a stable base of revenue and occupancy. Our annual site offerings continue to provide outstanding value for customers who want affordable second homes or a lake house or those who want a home away from home in the Sunbelt. An annual RV site puts this luxury within reach for these customers. For the transient business, we continue to experience a short booking window. And for the second quarter, the weather was cool to start the camping season and rain impacted weekend weather, particularly in the Northern and South-Central U.S. Throughout the second quarter, our team is focused on their operations playbook, which includes growing revenue and strategically planning and executing on expenses. Our teams carefully manage their expenses as they maintain high levels of services to continue to meet customer expectations. One of the ways this is accomplished is through the use of technology. For example, using a scheduling platform to manage our team member schedules on site to reduce overtime. As I touched on in my discussion about the Arizona market, we continue to develop sites in our MH and RV portfolios. Over the last 5 years, we've delivered 1,500 MH sites and 2,900 RV sites across the portfolio. While we've seen an increase in the cost of development over time, we are also seeing an increase in revenue from developed sites over time. I'd now like to turn it over to Paul.

Thanks, Patrick. Good morning, everyone. I'll highlight some takeaways from our second quarter and June year-to-date results, review our guidance assumptions for the third quarter and full year 2025 and close with a discussion of our balance sheet. Second quarter normalized FFO was $0.69 per share, in line with the midpoint of our guidance range. Year-to-date, in 2025, we have successfully executed on our overall operating plan, as evidenced by achievement of normalized FFO per share at the midpoint of our guidance range for the six-month period. Strong core portfolio performance generated 6.4% NOI growth in the quarter compared to the same quarter last year, 70 basis points higher than guidance. Core community-based rental income increased 5.5% for the second quarter and June year-to-date periods compared to the same periods in 2024. In the second quarter, we generated rate growth of 5.8% as a result of noticed increases to renewing residents and market rent paid by new residents after resident turnover. Core RV and marina annual base rental income, which represents over 70% of total RV and marina based rental income, increased 3.7% in the second quarter and 3.9% year-to-date compared to prior year. Year-to-date in the core portfolio, seasonal rent decreased 5.6%, and transient decreased 8.6%. We continue to see offsetting reductions in variable expenses. The net contribution from our total membership business consists of annual subscription and upgrade revenues, offset by sales and marketing expenses. The membership business contributed $16 million and $31.4 million net for the second quarter and June year-to-date periods, respectively, compared to the same periods last year. Core utility and other income increased 4.4% for the June year-to-date period compared to prior year. Our utility income recovery percentage was 48.2% year-to-date in 2025, about 180 basis points higher than the same period in 2024. Second quarter core operating expenses were flat compared to the same period in 2024. Expense growth was 190 basis points lower than guidance, mainly resulting from savings in utility expense, payroll, membership expenses and real estate tax expenses. Utility and payroll expense savings compared to guidance demonstrate our continued ability to control expenses at RV properties with variable occupancy. June year-to-date expense growth was 70 basis points and includes the impact of our April 1, 2025, property and casualty insurance renewal. Second quarter property operating revenues increased 3.5%, while core property operating expenses were flat, resulting in growth in core NOI before property management of 6.4%. For the year-to-date period, core NOI before property management increased 5%. Income from property operations generated by our noncore portfolio was $2.5 million in the quarter and $6.5 million year-to-date. As I discuss 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. We are maintaining our full year 2025 normalized FFO guidance of $3.06 per share at the midpoint of our range of $3.01-$3.11 per share. Full year normalized FFO per share at the midpoint represents an estimated 4.9% growth rate compared to 2024. We expect third quarter normalized FFO per share in the range of $0.72 to $0.78. We project full year core property operating income growth of 5% at the midpoint of our range of 4.5% to 5.5%. Full year guidance assumes core base rent growth in the ranges of 4.9% to 5.9% for MH and 60 basis points to 1.6% for RV and marina. The midpoints of our guidance assumptions for combined seasonal and transient show a decline of 8.4% in the third quarter and a decline of 6.4% for the full year compared to the respective periods last year. Core property operating expenses are projected to increase 70 basis points to 1.7% for the full year 2025 compared to prior year. We project a core property operating expense increase in the range of 1.1% to 2.1% during the second half of 2025. Our full year expense growth assumption includes the benefit of savings in repairs and maintenance and payroll expense during the first six months of 2025, as well as the impact of our April 1 insurance renewal for 2025. Consistent with our historical practice, we make no assumption for the impact of a material storm event that may occur. Our third quarter guidance assumes core property operating income growth is projected to be 4.9% at the midpoint of our guidance range. In our core portfolio, property operating revenues are projected to increase 3.1%, and expenses are projected to increase 90 basis points, both at the midpoint of the guidance range. 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 June, we have no secured debt scheduled to mature before 2028, and our weighted average maturity for all debt is almost 8 years. Our debt-to-EBITDAR is 4.5x, and interest coverage is 5.6x. We have access to over $1 billion of capital from our combined line of credit and ATM programs. We continue to place high importance on balance sheet flexibility, and we believe we have multiple sources of capital available to us. During the quarter, we closed on an unsecured term loan with a total balance of $240 million. The loan funded in 2 draws, $150 million in the second quarter and $90 million in July. Term loan proceeds repaid the $87 million of secured debt that matured in April, along with repayment of the balance on our line of credit, which was $90 million at the end of June. During the second quarter, we also used term loan proceeds to fund a $56 million loan to one of our joint ventures, of which we own 80%. This loan appears as a note receivable on our balance sheet as of June 30. The joint venture used the proceeds to repay outstanding secured debt at maturity. Current secured debt terms vary depending on many factors, including lender, borrower sponsor and asset type and quality. Current 10-year loans are quoted between 5.25% and 6%, 60% to 75% loan-to-value and 1.4x 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 Jana Galan from Bank of America Securities.

Good morning, and congrats on the many Travelers' Choice Awards. I had a question on the revised outlook for the core RV and marina; the annual revenue guidance moved down a bit. I'm just curious what occurred in the second quarter that influenced this, whether it was driven by lower renewals or a specific geography or cluster of assets. If you could provide some color around that.

Sure. Patrick can kind of give you some color, I think, as to the portfolio basis, but kind of before we do that, maybe it would be helpful to put it into context. I think I touched on in my opening comments, our annual customer base is split between the winter and the summer seasons. Important to note that these customers pay an average of about $6,600 per year or roughly $550 per month to stay at our properties. These are really second home or vacation properties for our customers. And we consistently see multi-generations of families stay with us at these properties. The annual revenue stream is proven and resilient in all cycles for us. Over the last 5 years, we've seen that income stream grow about 7%. We have been able to increase rates at our RV parks because we focus on our capital projects, and Patrick can touch on that a little bit. And on the customer-focused amenities, they continue to be attractive for second homeowners. But concerning the quarter, maybe, Patrick, if you could walk through that a little bit, please?

Yes. So for the quarter, the RV and marina annual revenue was up 3.7%, but that was unfavorable by about 90 basis points or about $700,000. As Marguerite mentioned, we had strong rate growth around 6% for both the RV and the marina portfolio, and occupancy was the driver of the miss. As you look to the guidance for the balance of the year, that reflects roughly a $1.2 million reduction. That's driven by the occupancy and its impact on the balance of the year. Just real quickly on both the RV and marina. On the RV side, that was largely driven by higher rates of attrition in the North and Northeast. I spoke a little bit to that on the last earnings call, and we were moving into a renewal period, much of which occurs in the second quarter and didn't have great visibility, and we experienced more turnover. That was largely focused on 20 properties. On the marina side, while there was some elevated turnover at 2 marinas, we're backfilling that turnover, we had 2 properties that were impacted by storm damage, and we have some slips offline that need to be improved, and those will come back online in the coming quarters.

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

Great. So you typically start to send out renewal rate increases during the third quarter for the following year. I'm wondering if the weakness in RV growth, specifically in annual, in addition to transient and seasonal, impacts your pricing power for '26? And what's the right way to think about the setup for RV and also MH? Any early color on renewals being sent out would be very helpful.

Let me touch on the MH, and then I'll touch on the RV side. So we're actually going to be moving into our annual review of rates to establish our budget for 2026. And as you pointed out, those increases occur in the late third and in the fourth quarter, for the most part, for the MH portfolio. So we'll work through that over the next couple of months and have more to share on future earnings calls. But we've seen consistent demand across the MH portfolio, so I think we'll be in a good position. On the RV side, with respect to the annuals, we've highlighted that we're seeing pretty consistent rate growth in the 6% range. And we've seen consistent demand. As I talked about on last quarter's earnings call, while we've seen consistent demand and we've been able to achieve rates coming off of kind of COVID peak demand and the tenure that we typically see with our annuals, we're going through a cycle of attrition that just resulted from that higher growth in previous periods.

And Jamie, that time period is April of next year, where we would be increasing the rates.

Okay. Tying some pieces together from the press release and discussions with investors, there seems to be some concern regarding the rise in notes receivable, which you clarified as the JV loan. We also experienced some occupancy loss. Can you elaborate on how you're perceiving the bad debt, the occupancy loss, and your expectations for improvement in occupancy? Additionally, should we anticipate a potential structural change leading to a slightly lower occupancy rate in the future?

Well, I'd like to just clarify something. The occupancy change in the quarter was essentially flat. I think there's a little bit of confusion because we do have a table that shows occupancy percentages, but those occupancy percentages include an increase to the denominator as we add expansion sites. So we were not down 60 basis points, I think as maybe some may have interpreted from reading the reviews. We had a loss of 40 sites of occupancy in the quarter, so negligible. With respect to the payment patterns of our customers, we've historically talked about our very low levels of delinquency. That low rate of delinquency, we're talking basis points, 30 to 40 basis points, remain consistent throughout the pandemic and is consistent today. And we continue to see customers who are paying cash for their homes rather than being interested in financing their homes. Our rate of purchasing homes for cash is higher than 95%.

Next question will come from the line of Brad Heffern from RBC Capital Markets.

Do you have any updated views on the impact from potential reduced travel from Canadian customers? And then kind of along the same lines, there's this $250 Visa integrity fee in the BBB. Would that apply to your customers? And do you think that, that could potentially impact demand as well?

Yes. I'll speak first to the Canadian demand to take the seasonal first that we talked about on last quarter's call. We mentioned that we had a lower take rate on our early bird, which is a program for Canadians when they're down in the Sunbelt during the winter season to make a reservation for the following year. That was off about 20%. And as we said at that time, now that we're going through the summer season, we don't really expect that to move, and it really hasn't. And as we move towards the Sunbelt season, again, we would expect reservation pace to pick up again. It's going to be cold in Canada and it's going to be warm in the Sunbelt. So that's kind of a high level on the seasonal. With respect to transients, it's a relatively small part. Canadians are a relatively small part of the summer season for us. We have seen some pullback in Canadian transients in the Northeast and the Pacific Northwest, but it's not large dollars.

I think we'll just have a better update for you on our next quarter call on that topic. And then Paul?

And then with respect to the visa integrity fee, while it remains to be seen kind of how all of these changes are enforced and how the rules are established, it seems there may be some implication for Canadian customers. However, many of our customers, we believe, come and don't require a visa for short-term stays. So there may be some modest impact, but we don't anticipate it impacting all of the Canadian visits.

Okay. Got it. And then just looking at the site counts year-over-year, annual is down 500, seasonal is down 600, transient is up by 1,200. Is there a dynamic there where people don't renew and then those sites just get pushed into the transient bucket? Or is there some other dynamic that's driving those changes?

That's exactly how we manage that chart, Brad. To the extent that a site is not occupied by an annual or a seasonal, it's available for a transient and reported as such.

Our next question will come from the line of Eric Wolfe from Citi.

For the expense guidance reduction, could you just tell us how much of that was due to flexing labor and other variable expenses lower due to the lower transient business? Or how much you can kind of bring down expenses when you're not seeing the transient business? And then how much of it was from other expense categories? Maybe another way to ask it is the 8-bps reduction that you had in expense growth, how much of that was just flexing transient expenses lower?

Well, I guess the way I think about it, Eric, is generally, we've guided to expense growth that tracks to CPI, but we do have realized and anticipated savings from a few sources. If I take the utility payroll and repairs and maintenance, which we talk about a fair amount, that's about 2/3 of our core expenses. And the expectation for 2025 is that those will increase about 2.4%. The assumptions are impacted by the variable savings at the transient RV properties. So when you think about the remaining 1/3 of our expenses, we have real estate taxes, insurance and membership sales and marketing expenses, and we assume that third is down 1% compared to the prior year. So that includes the effect of the insurance renewal, and then we have expectations for savings associated with the membership upgrade product.

Got it. That's helpful. And then maybe getting back to the annual RV. Is there anything that you can point to that would sort of explain the higher turnover? I think you said there were 2 properties that had storm damage. But is there anything else that you can sort of pinpoint and, if possible, can you quantify sort of what the turnover is? Typically, you see 10% turnover. And this year, you saw 15%. Just trying to understand the magnitude.

Yes. So just with respect to the comments on the 2 properties that suffered some damage, those are in the marina portfolio. So that's our marina annuals. And we've seen some adjacent turnover at 2 properties where we're building back that inventory or that annual occupancy. In the marina portfolio, we've seen consistent demand, including launches year-over-year, so we feel good about how that business is shaping up. With respect to the turnover in the RV annuals, historically, that number has been around 5%. As I mentioned earlier, at about 20 properties, predominantly in the Northeast, we've seen some elevated turnover. But I would expect that to normalize over time because that has been a pretty consistent trend. But we're moving through the peak demand period that led to more people coming to our properties, and therefore, there are more people to turn over.

And Eric, that turnover happens in June typically. And so that's what we saw, the kind of June effect there.

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

Just a quick follow-up on that last question. Was the elevated turnover specific to Canadians? Is there any more turnover expected? Was there a bulk renewal in June, and do we not have any further renewals for the annual?

Wes, you're breaking up a little bit, but I think I got it. But no, it was consistent with what we've done in the past. There's no change to the renewal process.

Was it due to Canadian residents? Is what I was asking as far as the...

Oh, no. Sorry, no. I think you said Canadian residents. It was not due to Canadian residents, no.

Okay. And then when you look at the immigration policy that's been in place for a few months now, are you seeing any impact on demand or cost pressure?

What we look at is from the Canadian perspective, the majority of our MH annual customers are in the Phoenix market. And we've seen continued demand. We look to see whether or not we would see increased home sale activity, and we haven't seen that. So no reason to think that there will be a change at this point.

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

I know home sales is viewed more as a loss leader for you in terms of FFO impact. But the revenue was down pretty meaningfully this quarter. And the average sales price was pretty low too, both on the new and the used home sales. So I was wondering if you could comment on that and your outlook for home sales for the rest of the year.

Yes. First, I'd note that we are looking at annual new home sales of about 117 to 120 for the quarter, while pre-COVID levels were typically in the range of 500 to 600. So on the lower end, we are fairly aligned with what we experienced before periods of peak demand. Regarding the average price, it is influenced by two main factors. One is that we have seen a moderation in demand, particularly at the higher price points of our homes, which constitutes a small portion of our inventory but can still impact a limited number of sales. Additionally, it is affected by the mix of inventory throughout any given quarter. As we continue to replenish the inventory that we've sold in higher-price locations, you can expect some variability in that number from quarter to quarter.

On the acquisition front, I know it's been quiet for you, but you have at least 1 major owner looking to buy MH product. I was wondering if you could talk about sellers in the markets, where you think cap rates are for MH that you look at, if there are other buyers in the market that you've heard of? And just a follow-up on my last question on the used home sales. It was down to like 9,000 this past quarter. So I don't know if that calculation is correct, but maybe if you could follow up on that as well.

Sure. So Patrick, why don't you touch on the used homes?

Yes, on the used home sales; again, that's largely driven by mix. Some of that is likely driven by some lower price inventory that we would own for a short period of time and sell to a new homeowner, some of whom are going to make improvements to those homes.

And then, John, with respect to acquisitions, as you know, we haven't seen a lot of deals in our space over the last couple of years. But as I look back over the years, there have been probably 3 or 4 times in the last 30 years where we've seen this type of reduced deal volume. And then that transaction market generally improves, and that's when you see us participate. The MH and RV space continues to have a really highly fragmented ownership base, which will allow for future opportunities as property owners begin to make their ownership decisions. The industry is very small, as you know, and the brokerage community is very active. So we look at all deals. And in terms of cap rates, it's difficult to point to a cap rate when there haven't been a lot of transactions. So I guess I would wait for some transactions to happen to start quoting cap rates.

Our next question will come from the line of Jason Wayne from Barclays.

Just on the campground membership count stabilizing now. Sales volume has picked up for the past few quarters here. I'm just wondering if you could walk through the sales strategy around the 2- to 4-year membership subscriptions that you've been doing recently.

Sure. It might be helpful to give a little bit of background on the Thousand Trails system. As you can tell from our supplemental, it's got 24,000 sites and 80 properties because our customers are really focused on these natural resources and the surroundings in our properties. As you mentioned, in terms of the member count in the quarter, we've seen basically for the last 10-ish quarters, negative growth. And this quarter, we saw a slight increase. That was really attributed to the paid origination sales of about 5,600, which is in excess of what we would see from our historical COVID Q2 sales, which I think were about north of 4,000. And then you also saw an increase for the second sequential quarter in the promotional membership originations. So that is another nice green shoot because you're able to see additional activity at the RV dealer level. With respect to the dues-based upgrade product, last year, based on customer feedback, we launched a new product. That product provides for an upgrade, but it's an increase in the dues program as opposed to a one-time payment. The new program has increased dues of about $1,500 to $3,500 per year depending on the product. The upgrade gives you advanced booking windows, ability to increase length of stay, discounts to rental cabins, cottages, etc., and access to other vacation options.

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

With regard to the occupancy loss within the annual RV segment, it seems the guidance for the rest of the year does not imply backfilling that lost occupancy. So I'm curious what you think the timeline would be for reconverting those spots from transient back to annual paying?

Yes. The impact that we saw in the quarter was for the summer-focused properties. So that's occupancy that we would get back next year. Those are customers who have left, and we would be marketing to bring them back next year. So that's the impact for the rest of the year.

Yes. The expense change is primarily from compensation expense savings from open positions in 2025 and then expected savings from legal and some other administrative items. There's timing of resolution and spend on some of these matters, and it can change over time. So we've adjusted our guidance to reflect our current view on expenses for '25.

Our next question will come from the line of Michael Goldsmith from UBS.

First question is on the annual RV and what's implied for the back half. Annual RV was up in the first quarter by 4.1%, and then it slowed to 3.7% in the second quarter, but it seems like the guidance is implying that it accelerates to 4.3% in the third quarter and implied 5.1% in the fourth quarter. So can you just kind of talk about what gives you confidence in the re-acceleration of the annual RV business?

Yes, I believe there are some assumptions regarding the recent rate increases that occurred as part of the usual process. We previously discussed the timing of these rate hikes. There is some effect expected in the third and fourth quarters, which is mainly what is influencing those projections.

Got it. My follow-up question is about the MH occupancy. You're adding sites, but there seems to be a lag before they are filled, which affects occupancy negatively. How long does it typically take to fill a site? What is the timeline from when a site enters the pool and starts to negatively impact occupancy to when it becomes occupied and positively contributes to occupancy? I'm trying to understand the timeline of this negative impact and when we can expect the positive impact to support the business and drive revenues.

Yes, on the MH side, it's lease-up rates can be in the 25 to 50 sites on an annual basis. We tend to scale our developments so that they're in line with occupying the sites and call it a 3- or 4-year period. So that's the basic math. Depending on the projects, it could vary slightly.

Thank you very much. Good luck with the back half.

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

Most of my questions have been asked and answered. But just as I think about the transient RV, marina business, I guess, pre-COVID, that business was running maybe in the high 40s to low 50s in terms of millions of dollars. During COVID, it got up into the 70s, and it's kind of coming back down to earth. Is it your expectation that this business settles back in and around that $50 million mark? Or is there something structural about that business, whether you've added more sites because that kind of gives it a higher floor, if you will?

Yes. I mean, I think that the transient business, we've always talked about how that transient business is a volatile income stream. I think that's going to continue. It is the feeder for our annual business. So it's difficult to point to what the number is going to be because we'll be bringing new properties into the portfolio. We'll be converting transient to annual. But I think that the strength of the transient on a good weather weekend, we see the strength of the transient continue, and we continue to be able to convert those transient customers to annual, which is our primary goal.

Okay. And maybe just, I guess, one quick follow-up on expenses. I mean, obviously, this year, you've done a really good job containing expense growth. Some of the things you talked about, plus the insurance renewal was very favorable. Just as we think about the comp into next year, is there anything else to think about just kind of the mix of expense growth, thinking about '26 at this point?

Yes. I think 2/3 of our expense base that is utilities, payroll and repairs and maintenance, those are certainly expense line items that have experienced pressure over time. I think in an era of uncertainty with respect to increases in costs resulting from tariffs and other drivers, and potentially how CPI might impact wages, those are absolutely considerations that we're focused on.

And since we have no more questions on the line, at this time, I would like to turn the call back over to Marguerite Nader for closing remarks.

Thank you for participating in today's call. We look forward to updating you next quarter. Take care.

Thank you for your participation in today's conference call. This concludes the program. You may now disconnect. Everyone, have a great day.