Equity Lifestyle Properties NYSE: ELS reported third-quarter normalized funds from operations of $0.79 per share, in line with its guidance, as growth in manufactured housing occupancy, annual RV stays and membership revenue supported operating results.
Chief Executive Officer Marguerite Nader said normalized FFO increased 4.6% from a year earlier. The company recorded 6.7% growth in core net operating income before property management during the quarter, supported by revenue growth that outpaced a modest rise in operating expenses.
“Our current performance and early outlook for 2027 underscores the durability of our platform,” Nader said, pointing to sustained demand for low-maintenance, amenity-rich communities among baby boomers and an emerging Gen X customer base.
Manufactured Housing Occupancy and Rent Growth
Manufactured housing occupancy increased by nearly 100 sites during the third quarter, with the company reporting 99 occupied-site gains for the period and 166 year-to-date. Patrick Waite, president and chief operating officer, said Florida drove much of the quarterly increase, including markets in Fort Lauderdale, West Palm Beach, Vero Beach, Fort Myers and Punta Gorda. Properties in California and the Northern U.S. also contributed, along with expansion sites in Phoenix and Mesa, Arizona.
The company sold 97 new homes during the quarter and said it continues to see demand from both buyers and renters. Waite said the company’s redesigned manufactured housing website has produced early signs of stronger customer engagement, with community and home-tour requests up by double digits year over year.
Core community-based rental income rose 5.7% in the third quarter, including 5.6% rate growth. Waite said new residents moving into communities are paying rents about 12% above in-place rents, though those residents are aware that their rent will increase to market rates when assumed leases mature.
For 2027, management provided an early view of rent growth based on notices already sent to residents and on increases that will carry over from midyear 2026. The company indicated preliminary manufactured housing rent growth of 5.1%, excluding potential occupancy gains and mark-to-market benefits from turnover. Management said it has not yet completed its 2027 budget process and plans to provide additional clarity in January.
Annual RV Growth Offsets Seasonal Pressure
Annual RV occupancy increased by 444 sites in the third quarter, driven primarily by northern summer-focused campgrounds. Waite said the company’s annual RV customer base remains a stable source of revenue, as many guests return to the same properties year after year.
Core RV and marina base rental income increased 2.1% from the prior-year quarter. Annual base rental income, which represents roughly 75% of total RV and marina base rental income, increased 5.3%, exceeding the midpoint of the company’s guidance by 40 basis points.
Seasonal and transient rental revenue, however, declined 4.4% and 5.8%, respectively, during the quarter. Management reduced its fourth-quarter outlook for the RV and marina business based on current reservation pacing as the company enters the early portion of its winter season. Paul Seavey, executive vice president and chief financial officer, said the adjustment was not related to a recent hurricane in Florida.
Waite said the outlook reflects weaker seasonal reservation pacing rather than broad deterioration in annual demand. The company continues to contact returning guests and is hopeful that some customers who have delayed booking will reserve stays later. Still, management said it had not seen a meaningful improvement in the pace of those bookings.
For 2027, the company cited an initial annual RV rent-growth assumption of 4.7%, also excluding occupancy growth. Waite said the figure reflects moderation after several years of strong rate growth rather than a loss of demand.
Membership Revenue and Expense Trends
The company’s Thousand Trails membership business remained a contributor to results. Membership dues subscription revenue rose 9.2% in the third quarter and 10.8% through September. Net contribution from the membership business increased 9.5% to $52.8 million year-to-date.
Nader said the company has raised dues and expanded its upgrade program, allowing members to receive additional reservations and other benefits. Average dues per paying member increased from about $580 to $650, she said. The company has also begun selling upgrades online, after previously selling primarily camping passes through that channel.
Core property operating expenses rose 1.3% in the third quarter, while core operating revenue increased 4.4%. Year-to-date expenses were 2% higher than the prior-year period. Seavey said third-quarter expenses were about $400,000 above guidance, largely because of higher electric and water usage. Higher-than-expected temperatures increased cooling demand in Northeast and North Central properties, while water leaks increased usage before repairs were completed.
The company lowered its full-year expense outlook by about $600,000, citing lower-than-expected preliminary Florida real estate tax notices.
Guidance and Capital Allocation
Equity LifeStyle maintained its full-year 2026 normalized FFO guidance range of $3.15 to $3.21 per share, with a midpoint of $3.18 per share. Fourth-quarter normalized FFO guidance remained $0.78 to $0.84 per share.
- Full-year core revenue growth is projected at 4% to 4.6%.
- Core expense growth is projected at 1.6% to 2.2%.
- Core NOI growth is projected at 5.7% to 6.3%.
- Full-year manufactured housing rent growth is expected at 5.4% to 6%.
- Combined RV and marina rent growth is projected at 0.9% to 1.5%.
On capital allocation, Nader said acquisitions and expansion projects remain the company’s main priorities. She characterized transaction activity in manufactured housing and RV properties as muted, with owners generally inclined to hold assets for long periods. The company continues to engage with owners while pursuing potential acquisitions that would be accretive, she said.
Seavey said the balance sheet has limited near-term refinancing risk, with no secured debt maturing until 2028 and a weighted average debt maturity of nearly seven years. Debt to EBITDA stood at 4.3 times and interest coverage was 5.7 times. The company said it has approximately $1.2 billion of available capital through its line of credit and at-the-market equity programs.
About Equity Lifestyle Properties (NYSE:ELS)
Equity LifeStyle Properties, Inc NYSE: ELS is a real estate investment trust that owns, operates and manages manufactured housing communities, recreational vehicle resorts and campgrounds, and marinas. Its properties are designed to provide residential and vacation accommodations, with offerings that range from long-term manufactured home sites to seasonal and transient RV sites and boat storage.
The company serves residents, vacationers and boat owners across the United States. Its portfolio is concentrated in locations with favorable climates, recreational appeal and access to coastal, lakefront or other leisure destinations.
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