Equity Lifestyle Properties Q2 Earnings Call Highlights

Key Points

• Equity Lifestyle Properties raised its full-year outlook after a stronger-than-expected Q2, with normalized FFO per share at $0.74 and management lifting 2026 guidance to a midpoint of $3.18 per share. Core NOI growth and expense control also came in better than expected.
• Manufactured housing remained the main growth engine, with occupancy rising to 94% and increasing for a second straight quarter. Management said demand is being supported by senior-oriented communities, especially in Florida, and expects further occupancy gains.
• RV, marina, and membership businesses added support, but transient RV demand was uneven due to weather and wildfire impacts. Thousand Trails membership revenue continued to expand, while the company also highlighted a strong balance sheet and ongoing expansion opportunities in manufactured housing.

Equity Lifestyle Properties NYSE: ELS raised its full-year outlook after reporting stronger-than-expected second-quarter 2026 results, with management citing continued strength in manufactured housing, annual RV and marina revenues, and expense controls across the portfolio.

Vice Chairman and CEO Marguerite Nader said the company’s net operating income increased 6.5% from a year earlier in the quarter, while normalized funds from operations per share rose 7.7%. Executive Vice President and CFO Paul Seavey said second-quarter normalized FFO was $0.74 per share.

“The strength of our portfolio allows us to raise our full year guidance for normalized FFO per share,” Nader said on the call. She said the company continues to benefit from long-term demographic trends, including an aging population and the fact that approximately 70% of its manufactured housing communities are oriented toward senior lifestyles.

Manufactured Housing Occupancy Improves

Manufactured housing remains the company’s largest business line, representing about 60% of total revenue. Nader said the manufactured housing core portfolio had occupancy of 94%, and that occupancy had increased for two consecutive quarters.

President and COO Patrick Waite said year-to-date manufactured housing occupancy growth came from both home sales and rentals. He said demand remained supported by the company’s 55-and-older customer base, particularly in Florida markets such as West Palm Beach, Fort Lauderdale, Tampa, St. Pete and Ocala-Daytona, where residents see value compared with alternative housing options.

Waite also said the company continues to see steady demand in California and Arizona, while northern U.S. markets were in the middle of the summer home-selling season. He noted that roughly 40% of new home sales in the quarter came from the Midwest, Northeast and Mid-Atlantic markets.

In response to an analyst question about returning occupancy toward 95%, Waite said the company added about 70 units over the last two quarters and expects continued growth in coming quarters. He said prior storm impacts required recovery work and the placement of inventory into affected communities, but added that management feels good about demand in the back half of the year.

Nader added that more than 50% of the company’s properties are 98% occupied and have been for several years, which she attributed to customers’ long-term commitments and homeownership. She said 97% of manufactured housing residents own their homes.

RV and Marina Annual Revenue Grows, While Transient Stays Remain Uneven

Nader said annual RV and marina revenue increased 4.8% year to date, driven by retention across RV sites, park models, resort cottages and other RV accommodations. She said the company saw lower customer attrition than last year and engagement from new customers.

Seavey said core RV and marina annual base rental income, which represents more than 70% of total RV and marina-based rental income, rose 5.4% in the second quarter and 4.8% year to date. However, he said seasonal and transient rent came in 170 basis points below guidance, mainly due to lower-than-expected transient rent in June.

Management lowered its expectations for RV and marina-based rental income growth while raising its outlook for annual RV and marina rent growth by 10 basis points. Seavey said the change reflected current transient reservation pacing for the third quarter and an assumption that fourth-quarter transient rent will be flat year over year.

Waite said transient demand continues to show volatility, with weather affecting results during the summer. He also said smoke from Canadian wildfires had an impact around the Fourth of July period. Asked about holiday performance, Waite said Juneteenth and July Fourth weekends were down slightly from last year, and that the company did not see a meaningful contribution from the World Cup.

Thousand Trails Membership Platform Continues to Add Revenue

The Thousand Trails portfolio also contributed to the quarter’s performance. Nader said the membership platform added approximately 800 members during the quarter, while subscription revenue increased 11%.

Waite said the company completed the launch of new Thousand Trails subscription memberships a little more than a year ago. Since then, more than 9,000 memberships have been sold, including almost 7,000 over the last 12 months.

Seavey said the net contribution from the total membership business was $17.1 million in the second quarter and $34.4 million year to date. Year-to-date growth of 9.6% was mainly attributable to rate growth in subscription revenue. Approximately 2,600 upgrade subscriptions were originated by new and existing members year to date.

In response to a question about membership count versus pricing, Nader said the company made a deliberate trade-off emphasizing higher rates rather than volume. She said per dues-paying member revenue increased from about $580 to almost $700, reflecting demand for upgraded benefits such as longer stays, earlier booking windows and cabin rental discounts.

Guidance Raised on Core NOI and Expense Control

Seavey said full-year 2026 normalized FFO is now expected to be $3.18 per share at the midpoint of a $3.13 to $3.23 range. The company projects core portfolio property operating income growth of 6% at the midpoint of its 5.5% to 6.5% range.

For the full year, the company expects:

• Core revenue growth of 3.9% to 4.9%;
• Core expense growth of 1.6% to 2.6%;
• Core NOI growth of 5.5% to 6.5%;
• Core manufactured housing rent growth of 5.2% to 6.2%;
• Combined RV and marina rent growth of 1.1% to 2.1%.

Seavey said second-quarter core property operating revenues increased 4.9%, while core property operating expenses rose 2.9%, resulting in 6.5% core NOI growth before property management. Year-to-date core NOI before property management increased 5.7%.

Expense growth was 120 basis points below guidance in the second quarter, mainly due to savings in utility and real estate tax expenses following the resolution of appeals at properties in Texas. Seavey said utility income recovery improved to 50.4% year to date, about 220 basis points higher than the same period in 2025.

For the third quarter, the company expects normalized FFO per share of $0.76 to $0.82, with core property operating income growth projected at 6.3% to 6.9%.

Balance Sheet and Expansion Plans

Seavey said the company’s balance sheet is insulated from refinance and rate risk, with floating-rate exposure limited to balances on its line of credit. Debt to EBITDAre stood at 4.4 times, and interest coverage was 5.6 times. He said the company has access to approximately $1.2 billion of capital through its combined line of credit and ATM programs.

Management also discussed expansion opportunities in manufactured housing. Waite said property expansions are a key part of the company’s occupancy growth strategy, citing four recent Florida development projects with nearly 500 sites and an age-qualified expansion project in the Phoenix market where the company added more than 20 units of occupancy.

Waite also highlighted the 21st Century ROAD to Housing bill, which he said became law earlier in the month. He said the legislation includes provisions affecting manufactured housing, including an exemption from an institutional investor provision, greater flexibility in HUD-code home design and zoning best-practice guidance encouraging more accommodation of manufactured homes.

Nader said the company will continue looking for opportunities to buy land adjacent to existing properties and pursue manufactured housing developments within its portfolio.

About Equity Lifestyle Properties (NYSE:ELS)

Equity Lifestyle Properties, Inc NYSE: ELS is a publicly traded real estate investment trust specializing in the acquisition, development, ownership and operation of manufactured home communities and recreational vehicle resorts. The company's portfolio includes more than 450 properties across the United States and Canada, serving over 200,000 residents and visitors. ELS organizes its operations into two primary segments: manufactured housing communities, which provide long-term housing solutions, and upscale RV and seasonal resorts designed for leisure travelers and seasonal patrons.

In its manufactured home division, ELS offers home-site leases combined with community amenities such as landscaped common areas, clubhouses, swimming pools and organized resident events.

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