Equity LifeStyle Properties, Inc. Q2 FY2026 earnings call

Demand and Demographic Tailwinds

• 70% of MH communities are senior-lifestyle oriented, serving the fast-growing 55+ demographic, which creates strong stable demand with 97% of MH residents owning their homes and committing to long-term residency
• Florida, California, and Arizona markets all see steady high demand, with Florida markets particularly benefiting from the affordable 55+ housing option relative to alternative local housing
• 70% of annual RV revenue comes from Sunbelt properties serving active adult customers, matching the same core demographic as MH communities

Operational Progress

• MH occupancy has increased for 2 consecutive quarters, growing by 70 occupied sites year-to-date after storm-related inventory disruptions in 2024-2025, with over 50% of all properties already sustaining 98% occupancy
• Property expansion is a core MH growth strategy: 4 Florida development projects added nearly 500 new sites, and a Phoenix expansion added 20+ units, growing that property's occupancy 4% year-over-year
• The 100 Days of Camping social media marketing campaign for RV properties has reached 33 million views year-to-date
• Seven RV properties totaling 1,400 sites (70% developed in the last 10 years, 5 in existing Southeastern US markets) were moved from joint venture to the non-core portfolio in Q2

Policy Update

• The 21st Century R.O.A.D. to Housing Act was recently signed into law, which includes three key benefits for the MH business: (1) manufactured housing is exempt from the act's institutional investor provisions, preserving existing investment in the asset class; (2) HUD code homes are no longer required to have a permanent chassis, allowing more flexible designs including two-story homes matching site-built home styles; (3) the act encourages state and local governments to zone for more HUD code manufactured housing, which will support future expansion permitting

Balance Sheet Health

• The balance sheet has minimal interest rate and refinancing risk, with floating rate exposure limited only to line of credit balances
• Debt-to-EBITDAre is 4.4x, interest coverage is 5.6x, and the company has $1.2 billion in available capital from combined lines of credit and ATM programs, maintaining strong financial flexibility
• High-quality age-qualified MH assets continue to receive favorable financing terms from life insurance companies and GSEs, with current 10-year loan rates between 5.25% and 5.75%

1. Manufactured Housing (MH): Represents approximately 60% of total company revenue. MH occupancy reached 94% at quarter end, up 2 consecutive quarters, with 67 net additional occupied sites year-to-date on 140 new expansion sites. Full year core MH rent growth is projected between 5.2% and 6.2%, and core MH revenue has averaged 5.8% annual growth over the past 5 years. Second quarter core community rental income for the overall portfolio increased 5.8% year-over-year, with 5.8% rate growth from renewals and new move-ins.
2. RV and Marina: Accounts for the majority of remaining core revenue, with more than 70% of total RV and marina revenue coming from long-term annual rentals. Core RV revenue has averaged 5.7% annual growth over the past 5 years. Annual RV and marina rent grew 5.4% year-over-year in Q2 2026 and 4.8% year-over-year year-to-date. Combined RV and marina core rental and membership subscription growth was 3.1% in Q2 and 1.6% year-to-date. Seasonal and transient rent underperformed guidance by 170 basis points in Q2 due to lower-than-expected June transient bookings. Full year combined RV and marina rent growth is projected between 1.1% and 2.1%, with 4.8% annual rental growth expected at the midpoint.
3. Thousand Trails Membership: Membership grew by 800 members in Q2, and subscription revenue increased 11% year-over-year. More than 9,000 new memberships have been sold since the new membership program launched over a year ago, including almost 7,000 in the last 12 months. The membership business contributed $17.1 million in net revenue in Q2 and $34.4 million year-to-date, representing 9.6% year-over-year growth year-to-date, driven primarily by subscription rate growth and paid upgrade programs.
4. Non-core Portfolio: Generated $2.9 million in property operating income in Q2 2026 and $5.9 million year-to-date, and is projected to generate $8.7 million to $12.7 million in full year 2026 NOI.

• Full year 2026 normalized FFO per share guidance is a range of $3.01 to $3.23, with a $3.18 midpoint, representing an upward revision from prior guidance driven by year-to-date operational outperformance
• Core portfolio property operating income growth is projected between 5.5% and 6.5% for full year 2026, with a 6% midpoint
• Full year core revenue growth is projected 3.9% to 4.9%, core expense growth 1.6% to 2.6%, and core NOI growth 5.5% to 6.5%
• Third quarter 2026 normalized FFO per share guidance is a range of $0.76 to $0.82, with core property operating income growth projected 0.3% to 6.9%, 5.6% MH rent growth at the midpoint, and 4.9% annual RV and marina rent growth at the midpoint
• Full year guidance assumes flat year-over-year fourth quarter transient RV rent, with no assumptions for potential material storm events
• Core operating expenses are projected to grow 2.3% full year, 120 basis points lower than prior guidance, driven by savings in utility costs and successful real estate tax appeals in Texas

• Transient and seasonal RV revenue is volatile and subject to unexpected pressures: Q2 2026 transient revenue came in lower than guidance primarily due to poor June weather and Canadian wildfire smoke impacting popular recreational regions
• MH occupancy recovery from 2024-2025 storm damage is gradual, and current occupancy of ~94% remains below the 95% target the company has historically achieved
• Long-term regulatory and permitting risk remains for MH expansion projects, even with recent federal policy support, as zoning changes still require state and local approval
• Insurance costs have been a key source of unexpected expense variability over the past several years, and remain a source of uncertainty for future expense projections

Q: What is driving lower-than-expected seasonal and transient RV revenue, and what are your assumptions for the back half of 2026? / A: Management raised full year normalized FFO guidance overall due to core outperformance and lower-than-expected expenses, but modestly lowered combined RV and marina guidance to reflect weaker current transient reservation pacing. Fourth quarter 2026 transient revenue is assumed to be flat year-over-year. Weak performance so far this year is primarily driven by adverse weather and Canadian wildfire smoke impacting key northern recreational markets, and Winter Sunbelt seasonal booking activity is not expected to pick up for several more weeks, so visibility remains limited.

Q: What is the timeline for returning MH occupancy to 95%, and what is the current demand backdrop? / A: MH occupancy has already grown by 70 units over the past two quarters, with rising new and used home sales and 140 additional rental units year-over-year. Demand remains strong, with over half of all properties already sustaining 95%+ occupancy, supported by long-term resident commitments and high home ownership rates. Management expects continued favorable occupancy growth over the next few quarters as storm-related inventory recovery is completed, and is confident in back half 2026 occupancy gains.

Q: Why wasn't the full year normalized FFO guidance increased more after Q2 outperformance, and what drives the noncore/other investment income line? / A: Q2 outperformance was driven by lower-than-expected core operating expenses. Increases to noncore portfolio income and other investment income were fully offset by downward shifts to joint venture income and other below-the-line line items. The other investment income line includes ongoing subsidiary business income, plus one-time items such as a recent legal dispute settlement and past business interruption insurance proceeds in Q2.

Q: How does the company approach pricing and lease-up for new MH expansion sites, and are expansion sites harder to fill due to higher home costs? / A: Expansion sites are almost always added adjacent to existing, established MH communities, which have already proven strong demand. Expansion site rents are typically set at a small premium to comparable existing sites, particularly if new sites have desirable features like waterfront access. New homes placed in expansions follow the same price point mix as the broader existing community, and lease-up follows the same healthy demand trajectory as the rest of the portfolio.