Equity Lifestyle Properties Inc Q3 FY2025 Earnings Call

Good day, everyone, and thank you all for joining us to discuss Equity LifeStyle Properties Third Quarter 2025 Results. Our featured speakers today are Marguerite Nader, our CEO; Patrick Waite, our President and COO; and Paul Seavey, our Executive Vice President and CFO. In advance of today's call, management released earnings. 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 security laws. Our forward-looking statements are subject to certain economic risk and uncertainty. The company assumes no obligation to update or supplement any statements that become untrue because of subsequent events. In addition, during today's call, we will discuss non-GAAP financial measures as defined by SEC Regulation G, reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release, our supplemental information and our historical SEC filings. At this time, I would like to turn the call over to Marguerite Nader, our President and CEO. Please go ahead.

Good morning, and thank you for joining us today. I am pleased to discuss our third quarter results and will provide some insight into the strengths we see in 2026. Turning to the results for the third quarter, we delivered strong normalized FFO growth in line with our expectations of 4.6%. Our full year guidance shows continued strength in property operations and FFO. I would like to highlight some of the key demand drivers for our annual business and the access points for our new customers. There are approximately 7 million manufactured homes across the country, housing over 18 million people, accounting for about 6% of all U.S. housing. Outside of metro areas, this share increases significantly to 14%. New manufactured homes in our communities are designed to meet the needs of our core demographic, offering value both in terms of cost and quality of life. Construction and safety standards for manufactured housing have been meaningfully enhanced over time, making today's homes more durable and cost 60% less than that of a comparable site-built home in the surrounding area. As important as affordability, our residents benefit from amenitized communities that foster a strong sense of belonging, security and connection. We serve a large and expanding market, which includes nearly 70 million Baby Boomers and 65 million members of Gen X within our target demographic. These individuals are increasingly seeking housing options that combine desirable locations, high-quality homes at attractive price points and a welcoming community environment. Our properties deliver on all three fronts, offering a value proposition that resonates with this growing segment of the population. Our marketing efforts focus on leveraging technology and insights into our customers' travel patterns and lifestyles to reach the nation's 8 million RV owners. We listen closely to feedback and adapt to evolving preferences. Our seasonal guests increasingly seek flexibility to book stays and visit multiple locations while Thousand Trails members value our new subscription-based memberships with tiered benefits that they can purchase online. Manufactured home buyers increasingly research and communicate with us online and via text. Our digital tools offer detailed information, virtual tours, online applications and text messaging with local sales agents. Alongside technology, our teams focus on personal outreach. Property managers build relationships with their customers, invite guests to return next season and share new home opportunities that meet their needs. Turning to 2026 expectations. Within our manufactured housing portfolio, we expect to have issued 2026 rent increase notices to 50% of our MA presence by the end of October with an average rate increase of 5.1%. In our RV portfolio, annual rates have already been set for over 95% of our annual sites with an average rate increase of 5.1%. We continue to engage with our residents to identify and prioritize capital improvements within our communities. These efforts not only enhance the resident experience but also support the long-term value of our assets. The anticipated rent increases position us to extend our long-standing track record of REIT-leading revenue growth. Our ability to share strong current results and provide early visibility into 2026 reflects the strength and dedication of our team. Their ongoing commitment to supporting our residents and customers is fundamental to our success. Through their focus on service quality and community, we've been able to consistently deliver superior operating performance over the past two decades. I will now turn the call over to Patrick to provide an overview of property operations.

Thanks, Marguerite. As we wind down the summer season in the north, our Sunbelt properties are gearing up for their winter season. Our MH and RV properties in Florida, Arizona and South Texas are preparing for the inflow of customers and an increase in activities. On-site teams have begun welcoming residents and guests to properties. Our manufactured homes and communities continue to experience consistent demand and offer desirable features and amenities at prices that provide value in their respective markets. In the quarter, we continued to experience a consistent pace of new home sales. Our Florida MH portfolio reached 94% of occupancy. Florida continues to be one of the top states for net in-migration, which supports demand for our key submarkets like Tampa, St. Pete, Fort Lauderdale and West Palm Beach. To meet that demand, we developed more than 900 sites in Florida over the last five years. Florida is also supporting strong rent growth, reflected in mark-to-market rent increases of 13% to new homebuyers. Arizona and California are our next largest markets, which are 95% occupied. Home buyers in our Western markets are attracted to these communities due to their desirable locations, quality amenities and the substantial value they offer in their respective markets, particularly the coastal markets in California. We continue to execute on our expansion strategy, providing opportunities for more customers to enjoy our product offerings. This strategy leverages in-place utility infrastructure, operational efficiencies, zoning and the brand recognition of existing properties. We started the fourth quarter, having completed a 103 site expansion at Clover Leaf Farms MH Community on the Gulf Coast of Florida. This was the second and final phase of development, which added a total of 170 sites plus an amenity core. The first phase of 67 sites is approaching 100% occupancy. We also continue to see growth on the RV side of our business. Our RV annual sites provide an affordable second home, whether it's a lakeside retreat in the summer or a warm weather destination in the winter. In the quarter, we increased annual RV occupancy by 476 sites. With respect to our Canadian customers, many of whom return year after year to their site in one of our properties for the winter season, we're engaging with them through personal outreach as well as our traditional marketing channels. The regional weather outlook for the winter season looks favorable. The NOAA Climate Prediction Center forecasts a La Nina pattern this winter. This season's forecast calls for warmer, drier conditions in the south along with cooler weather conditions in the north, making the Sunbelt particularly attractive for winter getaways. Our operations team has prioritized occupancy and revenue growth while thoughtfully budgeting and executing on expenses. Our on-site teams are focused on providing excellent customer service, and we are leveraging technology to increase efficiency for the staff members. Tools like electronic lease agreements and SMS text customer service platforms have been well received by our customers and help ensure that our teams have more time to focus on delivering memorable experiences. Finally, the third quarter wrapped up our 11th annual 100 days of camping campaign which saw record engagement among our social media fans and followers. The campaign had over 46 million impressions on social media, and we received nearly 1,100 photo entries of our viewers with our signature rally towels, which reflects a strong and active customer base that wants to engage with our properties and brands. Now I'll turn the call over to Paul.

Thanks, Patrick, and good morning, everyone. I will discuss our third quarter and September year-to-date results, review our guidance assumptions for the fourth quarter and full year 2025 and close with the discussion of our balance sheet. Third quarter normalized FFO was $0.75 per share, in line with our guidance. Continued strong performance in our core portfolio resulted in 5.3% NOI growth in the quarter, 40 basis points higher than guidance. Core community-based rental income increased 5.5% for the quarter and for the September year-to-date period compared to the same periods in 2024. In the third quarter, we generated rate growth of 6% as a result of noticed increases to renewing residents and market rent paid by new residents after resident turnover. Core RV and Marina annual base rental income, which represents approximately 70% of total RV and Marina-based rental income increased 3.9% for the third quarter and for the year-to-date period compared to the same periods last year. Year-to-date, in the core portfolio, seasonal rent decreased 7% and transient rent decreased 8.4%. We continue to see offsetting reductions in variable expenses. The net contribution from our total membership business consists of annual subscription and upgrade revenues, offset by sales and marketing expenses. The membership business contributed $16.8 million and $48.2 million net for the third quarter and September year-to-date periods, respectively, compared to the same periods last year. Core utility and other income increased 4.2% for the September year-to-date period compared to prior year. Our utility income recovery percentage was 48.1% year-to-date in 2025, about 150 basis points higher than the same period in 2024. In addition, we recognized higher tax pass-through income, mainly in Florida. Core property operating expenses for the year-to-date period were 60 basis points higher than the same period last year. This includes the change in membership expenses associated with the membership upgrade subscription program that was implemented earlier this year. Expense growth for the third quarter was 40 basis points lower than guidance, mainly resulting from savings in real estate tax expense. Third quarter core property operating revenues increased 3.1%, while core property operating expenses increased 50 basis points, resulting in growth in core NOI before property management of 5.3%. For the year-to-date period, core NOI before property management increased 5.1%. Income from property operations generated by our non-core portfolio was $1.8 million in the quarter and $8.3 million year-to-date. I'll now discuss guidance. As I do so, the following remarks are intended to provide context for our current estimate of future results. All growth rate ranges and revenue and expense projections are qualified by the risk factors included in our press release and supplemental package. We are maintaining our full year 2025 normalized FFO guidance of $3.06 per share at the midpoint of our range of $3.01 to $3.11 per share. Full year normalized FFO per share at the midpoint represents an estimated 4.9% growth rate compared to 2024. We expect fourth quarter normalized FFO per share in the range of $0.75 to $0.81. We project full year core property operating income growth of 4.9% at the midpoint of our range of 4.4% to 5.4%. Full year guidance assumes core base rent growth in the ranges of 5% to 6% for MH and negative 20 basis points to positive 80 basis points for RV and Marina. The midpoint of our guidance assumptions for combined seasonal and transient shows a decline of 13.3% in the fourth quarter and a decline of 8.8% for the full year compared to the respective periods last year. Core property operating expenses are projected to increase 40 basis points to 1.4% for the full year 2025 compared to prior year. Our full year expense growth assumption includes the benefit of savings in payroll expense year-to-date in 2025, reduced membership expenses and the impact of our April 1st 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 fourth quarter guidance assumes core property operating income growth is projected to be 4.4% at the midpoint of our guidance range. In our core portfolio, property operating revenues are projected to increase 3.3%, and expenses are projected to increase 1.6%, both at the midpoint of the guidance range.

First question is on the 2026 rent increases. Can you talk a little bit about the process that goes into setting those? And then I guess historically, RV has been at a higher rate than MH, and it has closed the gap here. So can you talk a little bit about what's going on there? And is there a risk that maybe you're not even conservative enough there? So just trying to get the thought process on that closing of the gap.

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

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

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

On the reservation pace being down 40% for the Canadians, does guidance assume that the actual bookings from those customers will also be down 40%, or do you think they are just taking longer to book, and there's a moderation happening?

Yes. So Brad, I guess I can walk through. As we said, the combined seasonal transient growth is down 13.3% at the midpoint of that range. That compares to our prior guidance update issued in July when we assumed the combined seasonal and transient will be down 1.5%. That difference, the unfavorable development of $2.7 million is primarily related to seasonal and mainly the result of the lower reservations from Canadian customers. And I'll just walk through that to be clear on what's happened. So we've previously said that Canadians represent about 10% of our total RV revenue, 50% from annual customers. So the remaining 50%, which is just over $21 million, is generally split evenly between seasonal and transient. In the fourth quarter, we earn approximately 25% of our seasonal revenue for the year and approximately 15% of our transient revenue for the year. So that was the basis for our prior expectation of approximately $4.3 million of Canadian seasonal and transient in the fourth quarter. Our current Canadian reservation pace, as we said, is down approximately 40% compared to prior year.

Okay. Got it. And then obviously, 4Q typically the lowest combined seasonal transient revenue quarter, first quarter typically the highest. So I'm just curious how much we should read the expectations for the fourth quarter into the first quarter as well?

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

Paul, I was just curious on the core FFO guidance range, fourth quarter, you have $0.06 of variability and full year is still $0.10. So just checking if there's any expectation of greater volatility or share count changes or anything to call out for the difference?

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

Great. And then Marguerite, curious on your MH comments at the beginning of the call and kind of the opportunity there, could you potentially be developing more sites or anything on the acquisition side available in MH that could be interesting?

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

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

I guess I wanted to circle up on the MH rent increase. It's gone to 50% of the customers. But when you sort of look back historically, at the other 50%, how does that bucket trend relative to the first half? And then could you maybe just also comment on the decline in occupancy that we're seeing in the MH portfolio?

Sure, Steve. With respect to the lease agreements with our customers, 50% of those agreements are based on market. The other 50% have some linked to CPI. Half of those are rent control or some other direct CPI link and the other are what we call long-term agreements. There are typically 2- to 3-year agreements, primarily in Florida, that we've entered into in negotiation with our customers. When we think about the first 50% that have been noticed for 2026, it is more heavily weighted towards Florida residents. And we do also have a higher percentage of customers going to market. So the notices in January tend to be slightly higher than what we might see throughout the year, subject to fluctuations in CPI as we issue notices throughout 2026 that are more heavily weighted to the CPI index.

And then, Stephen, just with respect to the occupancy trends. I mean, we increased occupancy in the quarter. Year-to-date through Q1, Q2, we did have some hangover from the impact of hurricanes last year. We're past that now, and the trend is back towards increasing occupancy.

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

Sure, sure. As we think about it, we focus quite a bit on the two-thirds of our expenses that are utilities, payroll and repairs and maintenance. And we have certainly in 2025 benefited with respect to payroll expenses as we've managed through some of the challenges we've seen in the RV transient business. So that for the year is trending close to flat. I wouldn't necessarily anticipate that as a run rate over the long term for payroll. Our insurance renewal that occurred in April of 2025 was favorable, and that was, as a reminder for everybody, down 6% compared to prior year. And then the last thing I'll note is in 2024, we saw some fairly significant increases in real estate taxes, particularly coming from the state of Florida. That, based on our preliminary TRIM notices received for the 2025 tax year, that trend has reversed somewhat, and we've seen some relief from our expectations. Not to say that those taxes have declined necessarily, it's just some relief from our expectations. So we could see volatility in real estate taxes continue into 2026.

I want to clarify the seasonal impact of the Canadian demand being down 40%. If we project that this will remain at 40% into 2026, considering that a significant portion of the income is generated in the fourth and first quarters, should we expect an additional 3% decline next year? Since this has already been factored into our 2025 models, does that mean it's part of the baseline for 2026? Could you help me understand this?

Sure. I mean, I think it's challenging to consider what we're experiencing in the fourth quarter as our run rate for '26 because clearly, the current environment is something that will likely change over the next 12 months. What I'll say about the first quarter is when you think about our expectation to earn 50% of our seasonal rent and 20% of our transient rent in the first quarter, that suggests that the 40% decline would be around $3 million. And what I'll say, as we think about the current environment, and how challenging it is as it relates to U.S. and Canadian relations, when we think about our long history, the only time period that we can see as any sort of reference point is during the pandemic. In late 2020 and early 2021, when there were travel restrictions in place, including the border closures that impacted our expectations for seasonal and transient revenue. In January of '21, we anticipated a decline of $10 million in seasonal and transient revenue during that first quarter of 2021. And when we were on our call in April, the results proved better than that, and we ended up being down $6 million.

; So it is about those last-minute bookings. And as I mentioned, as the weather changes and as the reservations increase and that pace increases.

In this environment, we've all learned not to get hopeful. Who knows what's around the corner? Are there any data points that give you confidence that 40% is not the bottom or that it won't remain around for a while?

Our Canadian customers who have made reservations are looking forward to returning, and based on our experience with reservation trends, this is influenced by local conditions. As snow begins to fall, we typically see an increase in inquiries. We expect this pattern to continue.

Can I ask one more since that was more of a follow-up?

Sure. Sure, Jamie.

Okay. Just got to play by the rules here.

We appreciate that.

So following up on Steve's question regarding expenses, your model has been effective in reducing expenses in response to the decrease in transient revenue. At what point do you think that this strategy could reach its limits, and you might not be able to make further cuts? I understand you've mentioned that you believe 40% is the worst we might see, but hypothetically, if conditions worsen or transient revenue continues to drop, is there a point where fixed expenses prevent you from offsetting the revenue declines?

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

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

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

Eric, regarding our Canadian annual customers, we haven't observed any decline in their interest in staying with us. Additionally, there hasn't been an uptick in home sales among our Canadian annual customers, so everything is trending positively.

Got it. I want to confirm my understanding. During the fourth quarter call earlier this year, you mentioned observing higher turnover in some of the Sunbelt locations. It sounds like you currently have strong visibility for the next three months due to the effective rate increases. I'm trying to clarify at what point you will have that 5.1% rate locked in. Is it by December or January, or has it already been confirmed for the 95% that have accepted it? I'm trying to grasp how turnover might change from the next three months to the next six months and whether there could be any surprises during the fourth-quarter call.

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

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

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

Yes, I think there are a couple of things happening. We’ve heard that customers who did not book this time have lost interest due to political issues. The annual customers, however, are not affected because they have already committed by securing a home at one of our properties. They’ve invested capital, own a home, or possibly an RV on-site, which solidifies their commitment. This is why we’re not seeing the same impact with annual customers. Seasonal customers haven’t made their way down yet; they haven’t driven down with their RVs. The difference we’re observing is largely due to the current political climate.

Okay. Regarding your guidance for the fourth quarter, seasonal trends are expected to decrease by 13% at the midpoint. How do you plan to offset some of that Canadian demand with non-Canadian customers? Additionally, you mentioned the shorter booking window; how much of the demand do you think is booked last minute?

Yes. I would highlight that during COVID we anticipated a certain outcome, which turned out to be much more favorable due to strong U.S. demand filling our properties. The main issue affecting our Canadian properties is a select few, which have significantly contributed to the discrepancy. We are now actively marketing these properties to U.S. customers, which hasn't been our approach in the past. We are focused on providing access to these properties that were previously booked by our Canadian clients.

Just on the RV and Marina annual, that came in a bit weaker than expected, a little lower guidance. You previously mentioned there was an impact from some storm damaged properties. So just wondering that's driving impact, and are the storm properties back online there?

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

Can you talk about the seasonal and transient RV trends ex Canada?

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

Okay. And then when we look at the building blocks for '26 RV revenue growth, it looks like this year, overall revenue growth lagged the rate growth that was set last year. Do you expect similar headwinds this year on occupancy and other items?

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

The most recent data point we have is about the annual growth in RV sites for the quarter.

I was hoping you can kind of provide a little more color on how you can backfill the missing demand from Canadian customers with domestic and domestic customers and whether that might involve discounted rates in order to spur demand?

Sure. It's really about exposing those customers to the property. Our marketing strategy focuses on engaging with previous guests to give them exposure to the new properties through social media posts. It's important to make these posts relevant and timely. We have over 2.2 million followers on Facebook, Instagram, and Twitter, and we use pictures and videos of the locations to help customers make the decision to book. We're also focused on leveraging the current news cycle for topical material in our marketing, including sporting events and local festivals, to draw people in to experience the properties. We see it as a sample of the property—if you try it and like it, you'll want to book again. We've had success with this approach in the past. Additionally, we collaborate with online travel agents like Expedia and Booking.com to feature our properties on their websites.

Okay. So you're not necessarily trying to cut rates to fill demand, it's more of a marketing play.

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

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

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

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

I'll just mention the typical trends we observe. Approximately 15% to 20% of our annual customers have previously been transient or seasonal guests. This also applies to our seasonal customers, with around 15% to 20% having stayed with us as transient customers before. Therefore, the transition from an initial transient stay to longer-term stays for us falls within the 20% range, which has remained fairly stable. Our focus is on ensuring that guests on site receive a high level of customer service and are encouraged to consider a longer-term stay.

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

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

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