Equity Lifestyle Props (NYSE:ELS) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Equity Lifestyle Properties reported a 4.6% growth in normalized FFO for Q3 2026, aligning with expectations, and maintained full-year guidance with strong future growth anticipated.
The company continues to see high occupancy rates, particularly from Baby Boomers and Gen X, and is investing in capital improvements and community amenities to enhance resident experiences.
Q3 saw an increase in MH occupancy by nearly 100 sites, with significant growth in Florida and Arizona markets, and a successful redesign of the company’s MH community website boosting lead generation.
The company launched a successful social media campaign, 100 Days of Camping, increasing engagement and supporting stable RV occupancy growth.
Financial guidance for 2027 suggests continued growth in both manufactured housing and RV portfolios, with a focus on maintaining a strong balance sheet and capital allocation for potential acquisitions and site expansions.
Management highlighted the durable demand from aging demographics and expressed confidence in the company’s strategic positioning and market resilience.
Full Transcript
OPERATOR
And thank you all for joining us to discuss Equity Lifestyle Props third quarter 2026 results. Our featured speakers today are Marguerite Nader, our Vice Chairman and 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. Today’s call will consist of opening remarks and a question and answer session with management relating to the Company’s earnings release.
For those who would like to participate in the question and answer session, management asks that you limit yourself to one question so everyone who would like to participate has ample opportunity. As a reminder, this call is being recorded. Certain matters discussed during this conference call may contain forward-looking statements under the federal securities 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 Vice Chairman and CEO.
Marguerite Nader (Chief Executive Officer)
Good morning and thank you for joining us today. I am pleased to discuss our third quarter results and share early insights into the momentum we see building into 2027. For the quarter we delivered strong normalized FFO growth of 4.6% in line with our expectations. Our full year guidance reflects continued strength. I will highlight the key demand drivers supporting our annual business as well as the ways we are reaching and engaging new customers.
The strength of our business is reflected in continued occupancy gains. Our teams remain focused on increasing occupancy and we believe we have the right product and price point to continue this growth. Our communities have a long track record of sustaining high occupancy levels with 50% of our communities more than 98% occupied for an extended period. Our customers are seeking a low maintenance lifestyle that offers privacy and control of their home along with opportunities for connection and an active social life.
Our communities meet these needs by offering an amenity-rich environment, strong sense of community and a compelling value compared to other options. For many years we’ve discussed the impact of baby boomers choosing our locations for the lifestyle value and sense of community they offer. We are now seeing Gen X customers make similar decisions with many seeking a community setting that supports a more flexible, low maintenance lifestyle. Over the next 20 years, approximately 10,000 people per day will turn 65, creating a safe source of demand that supports the long term outlook for our communities.
Our customer acquisition platform across both manufactured housing and RV provides a strong lead flow for our teams in the field. Our teams are well versed at identifying prior guests and prospective customers who are interested in annual stays and using data and technology to nurture those relationships over time. For the RV customer, we have long-standing relationships with leading booking platform firms that help us reach travelers as they are planning trips.
Turning to our 2027 expectations, we expect continued growth across both our manufactured housing and RV portfolios. We continue to engage closely with our residents to identify and prioritize capital improvements across our communities including investments in amenities, infrastructure, common areas and other enhancements that support the residents experience. These investments improve the quality and appeal of our communities while also supporting the long term value of our assets.
Our current performance and early outlook for 2027 underscores the durability of our platform. I want to thank our employees for their hard work and commitment to our residents and customers. Their efforts enhance the customer experience and contribute to our record of superior operating performance. I will now turn the call over to Patrick to provide an overview of property operations.
Patrick Waite (Chief Operating Officer)
Thanks Marguerite. We wrapped up a busy summer season in the third quarter and soon we’ll turn our focus to welcoming snowbirds in the Sun Belt. In the quarter, we increased MH occupancy by nearly 100 sites. We sold 97 new homes during the quarter and we continue to meet demand from both buyers and renters. Florida was the primary driver of the occupancy gains, in particular Fort Lauderdale and West Palm Beach markets, the Vero Beach market and the Fort Myers–Punta Gorda markets on the Gulf Coast.
Additional drivers were properties in California and throughout the northern U.S. We continue to fill expansion sites with properties in the Arizona markets of Phoenix and Mesa, contributing to MH occupancy growth year to date. During the quarter, we launched a redesigned website for our MH communities. The new website modernizes the customer experience with improved navigation, search functionality, mobile accessibility and more robust content. Together, these enhancements improve lead generation, making it easier for prospective residents to find the right home in the ideal community. Early results are encouraging, with community and home tour requests up double digits year over year.
Demographics continue to provide a tailwind for MH demand. The Baby Boomers continue to turn 65 at a rate of 10,000 per day and the oldest Gen Xers are now 61 and they are increasingly finding our communities to be an attractive option offering compelling value and an active lifestyle. While the average age of new residents remains stable around 65, the Gen X cohort is following the Baby Boomers as an important core audience. The prospective residents, differing in work status, life stage and communication habits, are prioritizing flexible tour options, clear cost information and a balanced mix of marketing outreach.
Boomer and Gen X residents at our 55-plus communities typically continue to work as the typical new resident in our communities comes to us during their working years and they transition to full-time retirement during their residency. 100 Days of Camping is our annual summer-long social media campaign in which we highlight the peak summer camping season between Memorial Day and Labor Day. This was our 12th annual campaign and was marked by record numbers. The hashtag received more than 100 million views across social channels. We doubled our 2025 views, largely driven by highly engaged social posts. This high level of engagement reflects the strong sense of community found at our RV properties across the country, largely based on the friendships and family connections among our annual campers, which leads to stable occupancy as these customers return season after season.
Annual RV occupancy grew by 444 sites during the quarter, similarly driven by gains in our northern summer-focused RV campgrounds. Last month MHI hosted the 2026 Homes on the Hill showcase, of which ELS is a sponsor. The event showcased several homes on the National Mall in Washington D.C., including a HUD home built without a chassis and a two-story HUD home built without a chassis on the second floor. The event coincided with the 50th anniversary of manufactured housing and came on the heels of the passage of the Road to Housing Act, which removes the permanent chassis requirement for manufactured housing and creates new opportunities for innovation and broader adoption of factory-built housing.
Our communities offer great value and lifestyle to our residents and innovation in home plans and options available to them further supports the value proposition. Now I’ll turn the call over to Paul.
Paul Seavey (Executive Vice President and Chief Financial Officer)
Thanks Patrick and good morning everyone. I will discuss our third quarter and September year to date results, review our guidance assumptions for the full year 2026 with some fourth quarter highlights and close with a discussion of our balance sheet. Third quarter normalized FFO was $0.79 per share in line with our guidance. Continued strong performance in our core portfolio resulted in 6.7% NOI growth in the quarter. Core community-based rental income increased 5.7% for the quarter and for the September year to date period compared to the same periods in 2025. Base rental income growth for the third quarter outperformed the midpoint of our guidance and includes rate growth of 5.6%. Occupied sites increased by 99 during the quarter and 166 year to date.
Core RV and marina base rental income increased 2.1% for the third quarter compared to prior year. Annual base rental income, which represents approximately 75% of total RV and marina base rental income, increased 5.3% for the third quarter, 40 basis points higher than our guidance. Midpoint rental income growth exceeded the midpoint of our guidance estimate mainly as a result of an increase in occupied annual sites for the third quarter. Seasonal and transient rent decreased 4.4% and 5.8%, respectively, slightly better than our guidance expectations.
The net contribution from our total membership business consists of annual subscription and upgrade revenues offset by sales and marketing expenses. Membership dues subscription revenue increased 9.2% and 10.8% for the third quarter and September year to date periods respectively. The growth in dues revenue is the primary contributor to the increase in net contribution from our membership business. That net contribution has grown 9.5% to $52.8 million in the September year to date period compared to prior year.
Core utility and other income increased 2.6% for the third quarter compared to prior year. Our utility income recovery percentage was 48.5% in the third quarter and 49.7% in the year to date period. In 2026 year to date, utility recovery is about 160 basis points higher than the same period in 2025. Core property operating expenses for the year to date period were 2% higher than the same period last year, roughly 135 basis points lower than average CPI over the same period, third quarter.
Core property operating revenues increased 4.4% while core property operating expenses increased 1.3%, resulting in growth in core NOI before property management of 6.7% for the year-to-date period. Core NOI before property management increased 6%. Income from property operations generated by our non-core portfolio was $3 million in the quarter and $8.8 million year to date. Property management and corporate G&A expenses were $92 million in the September year-to-date period compared to prior year.
As I discuss guidance, the following remarks are intended to provide context for our current estimated 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 2026 normalized FFO guidance of $3.18 per share at the midpoint of our range of $3.15 to $3.21 per share. Our fourth-quarter normalized FFO per share remains unchanged with a range of $0.78 to $0.84.
We project full-year core portfolio property operating income growth of 6% at the midpoint of our guidance range. We project the non-core properties will generate between $8.3 million and $12.3 million of NOI during 2026 and our property management and G&A expense guidance range for the year is $118.9 million to $124.9 million. In the core portfolio we project the following full-year growth-rate ranges: 4% to 4.6% for core revenues, 1.6% to 2.2% for core expenses and 5.7% to 6.3% for core NOI. Full-year guidance assumes core MH rent growth in the range of 5.4% to 6%. Our full-year guidance for combined RV and marina rent growth is 90 basis points to 1.5%. We expect RV and marina annual rent growth of 5% at the midpoint of our guidance range. Our assumptions for RV and marina rent growth reflect current seasonal and transient reservation pacing for the fourth quarter.
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 normalized FFO per share in the range of $0.78 to $0.84. Core property operating income growth is projected to be in the range of 5.7% to 6.3% for the fourth quarter. Fourth-quarter growth MH rent is 5.7% at the midpoint of our guidance range. We project fourth-quarter RV and marina rent growth to be approximately 2.8% at the midpoint of our guidance range. Fourth-quarter growth in core property operating expenses is projected to be 1.8% at the midpoint of our 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 with minimal exposure to rent or rate risk. We have no secured debt scheduled to mature until 2028 and our weighted average maturity for all debt is almost seven years. Our debt to EBITDAre is 4.3 times and interest coverage is 5.7 times. We have access to approximately $1.2 billion of capital from our combined line of credit and ATM programs.
We continue to place high importance on balance sheet flexibility. We believe we have multiple sources of capital available to us. 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 6.1% and 6.6%, 55% to 70% loan-to-value and 1.4 to 1.65 times debt service coverage. We continue to see solid interest from life companies and GSEs to lend for 10-year terms.
High-quality MH assets continue to command best financing terms. Now we would like to open it up for questions.
OPERATOR
To ask a question, please press star-11 on your telephone and wait for your name to be announced. To withdraw your question, please press star-11 again. In the interest of time, we ask that you please limit yourself to one question. Please stand by while we compile the Q&A roster. Our first question comes from Yana Gallen with Bank of America. Your line is open.
Yana Gallen (Analyst)
Thank you. Good morning and congrats on a good third quarter. I was curious on the—thanks, Marguerite. On the RV revision for full year, can you kind of help bridge the lower outlook for 4Q given it appears that the RV exceeded expectations on annual, seasonal and transient? And then was there any impact from this most recent hurricane in Florida?
Paul Seavey (Executive Vice President and Chief Financial Officer)
Yeah, with respect to the guidance update, Yana, first there was no impact from the recent hurricane. And then with respect to the guidance view for fourth quarter, the thing to consider in the third quarter to fourth quarter, we’re leaving the summer season and heading into our winter season. And so as we look to this kind of shoulder period in the beginning of the winter season, we reviewed our reservation pacing for seasonal transient as we typically do and we adjusted so that we’re in line with those expectations.
Yana Gallen (Analyst)
Thank you, Paul.
OPERATOR
Thank you. Our next question comes from Jamie Feldman with Wells Fargo. Your line is open.
Jamie Feldman (Analyst)
Great. Good morning and thanks for taking the question. Good morning. So the realized MH rate growth has run ahead of the initial rent increase number at 5.8% in the second quarter. Can you speak to the spread you’re seeing today between market rent on turnover and in-place rent? And how should we think about the potential uplift to the 5.1% you provided as we build our models for next year?
Patrick Waite (Chief Operating Officer)
Yeah, Jamie, it’s Patrick. I’ll speak to the mark-to-market that we’ve been seeing and then maybe Paul can address your second question. What we’re seeing on mark-to-markets for new residents coming in is a 12% increase. That’s just a reminder. Those are new residents that are coming in. They know that their rent’s going to go up to that increased market rate upon the maturity of the lease that they assume. And that’s been the trend over the quarter.
Paul Seavey (Executive Vice President and Chief Financial Officer)
And then I think, Jamie, as it relates to the assumptions we provided in the release. You can kind of think about the mark to market and the incremental occupancy that we mentioned we didn’t include. And I think if you look at our prior history, you can see what our initial quarterly expectations are and how they’ve grown over time and use that as a guide to the impact that we might see in 27.
Jamie Feldman (Analyst)
Okay, thank you.
OPERATOR
Thank you, Jamie. Thank you. Our next question comes from Brad Heffern with RBC. Your line is open.
Brad Heffern (Analyst)
Yeah. Hey everybody. Good morning. For the 2027 MH rate growth number, the 5.1%, it’s the same number that you gave in 3Q last year, of course, but CPI is higher, the COLA adjustment’s higher. I guess I’m wondering, like, is there anything different in terms of how you were thinking about setting those rates or what is the offset that’s keeping rate growth from going up more?
Patrick Waite (Chief Operating Officer)
Hey Brad, it’s Patrick. Let me just walk through the profile of the leases that we have across the portfolio. Fifty percent of our leases are market-based leases. Another 25% are either subject to rent control or a CPI-based lease, and 25% are long-term agreements in Florida. I’ll just walk through those briefly. In Florida, the long-term agreements, typically two- or three-year term, those increases are typically approximate what we would see in the broader market.
And those increases last year were above the 2.8% COLA. Just with respect to the rent control and CPI leases, many of those leases have floors above last year’s 2.8% COLA as well. So just setting the kind of baseline with respect to what we would see from year-over-year increases, the benefit of those floors is that it was captured in the 2026 baseline. And the CPI terms across the portfolio are typically regional and time specific. So they may vary from COLA and typically do.
With respect to the market leases, we’ve spoken often about the process we go through evaluating the competitive set in order to establish those rent increases, so I won’t go through that again. But across the market bands across the portfolio, the band of increases is relatively narrow. It’s about 30 basis points plus or minus from what the overall increases on the markets roll up to.
Brad Heffern (Analyst)
Okay, thank you.
OPERATOR
Thank you. Thank you. Our next question comes from Nick Joseph with Citi. Your line is open.
Eric (Analyst at Citi)
Hey, it’s Eric here with Nick. I just want to make sure I understood the answer to the prior question because my assumption was that the guidance that you gave for 2027 is really base rent income growth, so not sort of like the preliminary rate increase, but sort of the overall rental income growth. I guess I was just curious first if that’s correct and then second if there’s any sort of change in your methodology that you did for the earlier timing, the third quarter, because I think you normally give it in the fourth quarter.
Just curious if the buildup to those numbers is any different from the methodology.
Paul Seavey (Executive Vice President and Chief Financial Officer)
Yeah, Eric, excuse me. It’s Paul. We’re happy to be able to give early insight into our expectations for what 2027 MH & RV annual rent growth might look like. We haven’t completed our 2027 budget process, so we’re not in a position to provide our actual guidance. We do think it’s helpful though, as we have in the past, to share the current view on growth drivers for the main annual revenue streams. So as you think about our process, each year in September and October, we send notices to roughly 50% of our MH customers for increases that will be effective in January.
For the annual RV customers, those rent increases are set for 95% of the customers by October and those increases take effect at the beginning of the winter and then the future summer season. So in our release last night, we provided rent growth assumptions that were developed from those notices along with the impact of mid-year 2026 increases that will continue to generate growth into 2027. So that 2027 rent growth assumption doesn’t include any impact from incremental sites that we might occupy next year or the mark-to-market impact of turnover that may occur in our properties next year.
OPERATOR
Thank you. Our next question comes from Steve Sakwa with Evercore ISI. Your line is open.
Steve Sakwa (Analyst)
Yeah, thanks. Good morning. Maybe just touching on expense growth. It’s obviously been a very positive sort of outcome from kind of where you started the year. And I’m just curious, as you think about the buildup for next year, are there some one-time benefit, one-time headwinds that we should be thinking about or is kind of this year’s sort of figure a reasonable expectation to think about for next year?
Paul Seavey (Executive Vice President and Chief Financial Officer)
Yeah, Steve. So I think that just overall as we think about our expense structure, two-thirds are utilities, R&M and payroll. Those are categories that we’ve seen over time that correlate to CPI. So we’re mindful of the uptick in CPI. The remaining third of our expenses, the primary drivers are real estate taxes and insurance. And we have seen in the past couple of years and talked about quite a bit a softening in that insurance market. And we’ve also had some success in the past few years with some real estate tax appeals and so forth.
So anticipate kind of taking a look at that as we build our budget for next year and thinking that through and including those concepts in our assumptions.
OPERATOR
Thank you. Our next question comes from John Kim with BMO Capital Markets. Your line is open.
John Kim (Analyst)
Thank you. I wanted to follow up on Donna’s question on your RV marina guidance, because if you look at the full-year guidance, it implies fourth quarter for seasonal transient will decline by approximately 7% and that’s down from what you had in the third quarter, third quarter being relatively in line. So I wanted to ask what changed because I think last quarter you mentioned that you were assuming a flat transient RV revenue quarter. And then in relation to that, last call you mentioned contacting winter guests who did not return last year and was wondering if you had achieved that and what the visibility was like on some of those customers potentially returning.
OPERATOR
Thank you. Our next question comes from Jason Wayne with Barclays. Your line is open.
Jason Wayne (Analyst at Barclays)
Thanks for the question. Just on the Q4 transient cut, how much of that is transient versus seasonal and are there any specific markets driving the weakness? And then how have bookings from Canadian customers trended this year?
Marguerite Nader (Chief Executive Officer)
Yeah, it’s largely driven by the seasonal business which is carrying through as we’re starting up the summer season. As you recall, earlier in the year we were down with respect to reservation pace. We were watching as we approached the season and we really haven’t seen an increase in that pace. So I mean that’s really the key driver. And just with respect to color from those guests, as we’ve referenced on previous calls, these seasonal guests typically come back year after year. So our property teams know them and they’ve been reaching out. They continue to do that. We’re hopeful that some of the people who are discussing waiting and booking at a later date will come through over time. But what we’re seeing right now is no real improvements in the pace and what we’re seeing is reflected in what we’ve put forth for our fourth quarter guidance.
OPERATOR
Thank you. Our next question comes from Michael Goldsmith with UBS. Your line is open.
Michael Goldsmith (Analyst)
Good morning. Thanks a lot for taking my question. Morning, Marguerite. We talked a lot about the preliminary MH rent growth for 2027, but we haven’t really dug into the RV side, 4.7% which is lower than the initial preliminary rent growth last year. So can you talk a little bit about what you’re seeing on the annual RV side, customers’ willingness to renew, and just what is driving that? Do you think you’re— Is this a concerted effort to retain annual RV customers or are you losing pricing power?
Just trying to understand the underlying dynamics behind that number.
Patrick Waite (Chief Operating Officer)
Yeah, sure. It’s Patrick. You know, I would just highlight on the RV annual front, we increased occupancy. I mentioned in my opening remarks by about 450 in the quarter. Last year we had a similar result that was a little bit closer to 500. So we feel like the demand is there. And as we go through the process of building up what our rate increase recommendations are, it’s very similar to what I’ve described on the MH front. We review the competitive set, we meet with our property teams and our revenue management teams, and we establish those increases on a go-forward basis. And we are coming off of several years of very robust rate growth, so I think some moderation is in line and that’s really the driver of our initial assumption.
Thank you very much. Sure.
Marguerite Nader (Chief Executive Officer)
Thanks, Michael.
OPERATOR
Thank you. Our next question comes from Hendel St. Just with Mizuho Securities. Your line is open.
Mike (Analyst at Mizuho Securities)
Good morning, this is Mike on with Hendel at Mizuho. Our question is where does management rank capital allocation in terms of reinvesting in site expansion projects, share buybacks or potential acquisition opportunities? And if you have cap rates as well, that’d be—
Marguerite Nader (Chief Executive Officer)
Certainly. So if you think about the acquisition market within the MH and RV universe, these assets are really highly sought after by investors. And then on the other side of it, owners feel very comfortable holding these assets for a really long time. So I think that reflects the strength of the business model. Transaction activity has remained muted and ownership is really highly fragmented. But our teams stay highly engaged with owners as they continue to consider future opportunities and whether or not they are interested in selling.
I think when we think about capital allocation, to the extent that there is a transaction of interest that would be accretive, we would certainly want to pursue that, and our team is pursuing those on a regular basis. Next, I would look to expansion, and you’ve seen our expansion opportunities and development opportunities increase over time, and I think that is a really good use of our capital. So those are the two priorities and where we’re spending our time trying to continue to grow the business.
Mike (Analyst at Mizuho Securities)
Thank you.
Marguerite Nader (Chief Executive Officer)
Thank you.
OPERATOR
Thank you. Our next question comes from David Segal with Green Street. Your line is open.
David Segal (Analyst)
Thanks. Actually, John, to help us think through how annual RV revenue growth could shake out relative to the initial rate increases, can you give us a sense whether you’re expecting higher or lower retention in 2027 versus 2026 and whether you’re expecting higher or lower pace of transient conversions into annuals in 2027 relative to 2026?
Marguerite Nader (Chief Executive Officer)
Yeah, John, maybe Patrick can provide more details, but I think what we’re seeing is better attrition than we saw last year. So that’s a real positive. And we see that continuing into 2027. We’ve been able to grow our annual base, and that’s a function of some of those conversions that Patrick was talking about earlier, and it kind of comes in the different seasons. So you see some of that happening in the snowbird season, and then a pickup in that activity in terms of new annuals happens in April–May timeframe.
So we’d be able to give you a better update as we focus on that season. But maybe, Patrick, you can walk through a little bit of what you’re seeing from a market perspective.
Patrick Waite (Chief Operating Officer)
Yeah. The ability to grow the annuals in the quarter, which again, year over year has been consistent, we feel is indicative of robust demand. I’d highlight on the conversion front that year to date, about 14% of our annual sales and 7% of our new Thousand Trails memberships were conversions from our seasonal and transient customers. So those are guests who enjoyed their time with us and decided to increase their commitment. So that pipeline continues to remain strong, even though we’re addressing some of the recent trends with respect to headwinds on the seasonal and the transient business.
OPERATOR
Thank you. Our next question comes from Jesse Letterman with Zelman. Your line is open.
Jesse Letterman (Analyst)
Hey, good morning. Thanks for taking the question. One quick clarifying question, and then I have one on expenses. The clarifying question is on the RV Annual 2027 preliminary figure you provided. Is that just a like-for-like for the sites you have in place, or is that a revenue figure that includes the increase in the annual sites? And then my question on expenses is your core expenses came in at the top of the third quarter range, of course, but the guidance implies a pretty decent step lower to slowing under 2%.
Would love to know the moving pieces there and what’s driving that. Thank you.
Marguerite Nader (Chief Executive Officer)
Good morning. Thank you. As to the RV number, it does not include occupancy growth in 2027, and that would be anticipated as we just talked about on the prior question. And then Paul, maybe you could walk through the expenses.
Paul Seavey (Executive Vice President and Chief Financial Officer)
Sure. As you noted, the—excuse me, sorry. As you noted, the expenses in the core were about $400,000 higher than guidance in the third quarter, primarily because of utility expenses. We realized higher-than-expected electric and water usage. The electric usage followed the temperature trends across our Northeast and North Central properties where they experienced higher-than-expected cooling degree days during the quarter. And then water expense usage was higher.
There were some leaks that were identified and subsequently repaired. The full-year number—excuse me—the guidance is down. It’s about $600,000 favorable. That’s primarily the result of our expectations for Florida real estate taxes. During the third quarter of each year, Florida counties issue their preliminary TRIM notices with a range of potential increases in real estate tax, and we took a look at those, reviewed the preliminary notices for Florida, and they did show a range of increase that was lower than our prior expectations.
So based on that we adjusted our forecast.
Jesse Letterman (Analyst)
Appreciate it.
OPERATOR
Thank you. Our next question comes from Adam Kramer with Morgan Stanley. Your line is open.
Adam Kramer (Analyst)
Hey, thanks for the time. Can you just provide some color on the pace of transient to annual site conversions this quarter and then how do you sort of think about the conversion pipeline and whether that can sort of backfill any volatility in the transient business?
Patrick Waite (Chief Operating Officer)
Yeah, so you know, our focus is on the longer-term streams and obviously the 75% that’s our very sticky annual revenue. I’ve addressed in the past that, you know, 15% to 20% of our annuals previously stayed with us as seasonal or transients, and that same stat is consistent with seasonals as well. So we’re always looking to migrate that first touch on transient stays to the longer-term stays. I did address this on an earlier question that the conversions year to date are about 14% for annuals, meaning 14% of those sales were to current customers—seasonal, transients.
And that’s about 7% for seasonal/transient moving into our Thousand Trails platform. So that’s been the general trend. We are highly focused with our revenue management teams and our sales teams on engaging seasonal and transient stays when they’re on site so that they have the opportunity to better understand what the longer-term stays offer in an effort to get them to migrate up to the longer-term stays. And I think it’s also important in terms of the conversion, if you think about it, our average annual in the portfolio generates about, I think it’s about $8,000 in revenue per year. And that average transient customer staying with us spends about $80 to $90 a night. So that breakeven point for that is about 90 days. So a 90-day stay equals kind of an annual stay. So it really matters how many nights you’re getting on that transient site in order for whether or not that conversion is positive or a negative.
OPERATOR
Thank you. Our next question comes from John Kim with BMO Capital Markets. Your line is open, John.
John Kim (Analyst)
Sorry about that. Sorry about that. I do like the one-question rule.
Marguerite Nader (Chief Executive Officer)
Yes. No, of course not. You’re sticking to it. I’m glad. We appreciate it. How can we help?
John Kim (Analyst)
Okay, so I wanted to see if you could provide more color on why transient came in lower than what you projected last quarter. And then in relation to that, Thousand Trails—so the membership volume continues to go down, your revenue goes up. I’m wondering how much further can you push rates so that the revenue kind of offsets lower memberships?
Marguerite Nader (Chief Executive Officer)
Sure. So why don’t I take the Thousand Trails piece and maybe Paul can touch on the guide for the quarter. So John, I know you know the Thousand Trails system very well, but it’s—you know, we have 80 properties, 24,000 sites, and 107,000 plus members, as you mentioned. We’ve pushed the rate a little bit, and our entry-level Camping Pass is about $700. And we had success. About half of those memberships are sold online, which we think is a real positive.
And then we introduced the upgrade program where they had the ability to upgrade, have additional reservations. And that came with an increased dues base. That’s been really well received, and I think we’ll continue to see an increase in that activity. And that is the driver of that dues base increase. It’s gone from, I think, on an average dues-paying member of about 580 to 650. So I think that what we’re seeing is the customer is really seeing the benefit of those enhanced benefits and being able to stay at the property longer.
So I think we’re just going to continue to sell through that product and do more of that in 2027. We’ve also launched that product, which is kind of a new thing for us, in an online capacity. So prior to that we were just selling Camping Passes online and now we’re doing the upgrade, which is a much easier way to sell and it’s also more cost effective.
Paul Seavey (Executive Vice President and Chief Financial Officer)
And then, John, with respect to the guidance, as we looked at it, I think we were talking on the July call, the latter half of the year, we assumed to be roughly flat. That did have some assumptions for recovery in the fourth quarter and we call it 15 to 20% of the revenue. When you look at both the seasonal and the transient, 15 to 20% comes in the fourth quarter, so it is a little bit lighter quarter. We did anticipate the season would develop a bit better than it has and we’re reflecting the current reservation pace.
John Kim (Analyst)
Great, thank you.
OPERATOR
Thank you. Our next question comes from Nick Joseph with Citi. Your line is open.
Nick Joseph (Analyst)
Thanks. Hello, Eric, sorry for missing. Sorry. Oh, hey, sorry, we.
OPERATOR
No worries. It’s actually Nick there with Eric now.
Patrick Waite (Chief Operating Officer)
Hello, Nick, how are you?
Nick Joseph (Analyst)
Sorry if I missed it, but. So what is the preliminary MH&RV rate increase for next year? So if it was just apples to apples with what you’ve previously provided in the third quarter in past years.
Patrick Waite (Chief Operating Officer)
Yeah, I think the, you know, maybe the best way to say it, Nick, is the current assumption that we have is based on everything that has been noticed without impact for the potential occupancy or mark to market. So what we’re reporting is the increases that will impact 2027 that have already been noticed. People have it in their hands. They’re either paying that or they will start to pay it in January.
Nick Joseph (Analyst)
Right. Okay. So is it basically the same as what you’ve previously provided? I’m just trying to think about what you’ve normally given in the third quarter versus what you’re giving now and just trying to try to normalize that.
Patrick Waite (Chief Operating Officer)
Yeah, with the exception of the prior indication that we would provide was based on a subset of the in-place occupants because it was based on 50% of the notices, 50% of the residents that received notices for January. And then we will be able to, as we have in the past, Nick, provide more clarity in January.
Nick Joseph (Analyst)
Sounds good. Thank you. Just one, just keep jumping in. But the annual RV guidance, I guess, does that include the marina sort of impact for next year? Is that not included? Because I think earlier this year the marinas that didn’t come online, are you assuming that they come back online?
Patrick Waite (Chief Operating Officer)
You know, actually it’s only RV. It doesn’t include marina. The marina rates kind of vary over the year. So we generally at this point in time only talk about RV, update on the marina rates in the January call. So this is just RV similar, you know, consistent with last year.
OPERATOR
Thank you. Our next question comes from Jamie Feldman with Wells Fargo. Your line open.
Jamie Feldman (Analyst)
Great, thanks for taking the follow up. So maybe just a bigger picture question. Just curious to get your thoughts, latest thoughts on the future of the business and where else fits into the housing landscape. As the industry’s had more time to digest the road to housing bill, also, there’s been some talk, there’s been some press out on investments in the printed housing business. Just kind of curious where your heads are as you think about the longer term big picture of where manufactured housing and ELS fits in.
Marguerite Nader (Chief Executive Officer)
Sure. So we’ve seen certainly the 3D printed homes. We’ve looked at those. I think they’re far different kind of animal than what we offer. We’re also looking at how kind of single family rental, build to rent and multifamily senior fits into the equation inside of our portfolio. We’ve seen kind of an increased activity in single family rentals, senior multifamily around our locations. Kind of note that. But really those products are different from our communities.
If you think about senior multifamily, it may offer some comparable amenities, but it’s still a shared wall living experience. Our residents have their own homes, as you know, they can park their cars, their golf carts at their door and they get to enjoy those resort style amenities and that strong sense of community that I mentioned earlier. All of that at a really attractive price point as compared to some of these other options that you highlight.
So when I think about it, the ability for us to incorporate a single family rental, which we kind of already have in our portfolio, as we have 2,200 rental homes in our portfolio, I think that’s something we’ll continue to look into and see where we can do that for future developments. But what really sets ELS apart from all the offerings that you mentioned and that I’ve mentioned is that we’re not simply offering the housing. It’s about that community.
We’re offering a lifestyle. We’re offering a place for people to go and spend their retirement years. And that is just a really great proposition that we don’t really see out there in other areas.
Jamie Feldman (Analyst)
Okay, thank you for that. And then in terms of road to housing, like anything change in your perspective, thinking about the opportunities or the risk?
Patrick Waite (Chief Operating Officer)
Jamie, the, you know, road’s going to provide innovation in HUD homes. We talked about the chassis and some aesthetics and I think some potential benefit to achieving entitlements in local jurisdictions. That all has to play out over time. Right now we’re in the process. The bill is passed, obviously we’re in the process of rulemaking how the bill is going to be interpreted and states are going through the process of interpreting the bill and tailoring their statutes accordingly.
So this will play out over the next couple few years.
OPERATOR
Thank you. This concludes the question and answer session. At this time I would like to turn it back over to Marguerite Nader for closing comments.
Marguerite Nader (Chief Executive Officer)
Thank you for joining us today. We look forward to updating you on our next call. Thank you.
OPERATOR
This concludes today’s conference call. Thank you for participating. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
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