Equity Lifestyle Properties, Inc.

Good day, everyone, and thank you all for joining us to discuss Equity Lifestyles Properties' fourth quarter and full year 2023 results. Our featured speakers today are Marguerite Nader, our president and CEO, Paul Seavey, our executive vice president and CFO, and Patrick Waite, our executive vice president and COO. In advance of today's call, management release 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 yourselves to two questions 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 in the meaning of the federal securities laws. Our forward-looking statements are subject to certain economic risks and uncertainties. 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.

Good morning, and thank you for joining us today. I am pleased to report the final results for 2023. The strength of ELS can be seen in all facets of our business. We continued our record of strong core operations and FFO growth with full year growth in NOI of 5% and a 4.7% increase in normalized FFO per share. Our MH portfolio is 95% occupied. Importantly, more than 96% of our MH sites are occupied by homeowners. The underlying customer demand remains solid and core operating revenue increased by 5.8% for the full year 2023 compared to 2022. During the fourth quarter 2023, occupancy increased by 65 sites and we ended the year with stable occupancy levels comparable to year end 2022. We continue to experience robust demand for the lifestyle our communities provide with 905 new home sales during 2023. Our strategy of converting existing residents to homebuyers continues to be successful, with almost a quarter of our home sales coming from individuals who already reside in our communities. Homebuying leads during the fourth quarter were up 7% compared to last year, driven by the availability of popular new home models and leveraging new technology to expand awareness of our homes for sale online. Due to the strength of our operating markets, we continue to see demand for new homes in our communities, where we are selling homes on average for approximately $100,000. Our strongest performing communities for home sales were in Florida, which accounted for over 50% of total new home sales, with an average sale price of more than $105,000. While home prices are $100,000 on average, they remain significantly lower than other housing options in the immediate vicinity of our communities. In 2023, the mark-to-market rent increase for new homeowners has been approximately 13%. In 2023, our RV revenue from annual or seasonal customers increased 7.2% as compared to 2022. We saw continued strength in Florida and Arizona. Our transient business continued to be a large driver of our new customer base for both annual and seasonal revenue. We had over 1,000 transient customers convert to an annual or seasonal customer. Continuing to expose new customers to our properties through the transient stay is an important building block for our revenue streams. Turning to 2024, we have issued guidance of $2.88 at the midpoint for next year. The demand for our MH communities continues to increase. Over the last five years, we have sold over 3,500 new homes in our communities. These new homes further enhance the look of the community as new and existing homeowners throughout the portfolio showcase their pride of ownership. Our guidance for 2024 reflects the strength in our business. Our guidance is built based on the operating environment at each property and continuous communication with our residents. Next, I would like to update you on our 2024 dividend policy. The board has approved setting the annual dividend rate of $1.91 per share a 6.7% increase. The stability and growth of our cash flow, our solid balance sheet, and the strong underlying trends in our business are the primary drivers of the decision to increase the dividend. Historically, we've been able to take advantage of opportunities due to the free cash flow generated from our operations. That will continue in 2024 as this dividend increase of $23.5 million is roughly equivalent to our anticipated increase in FFO for 2024. In 2024, we expect to have approximately $100 million of discretionary capital after meeting our obligations for dividend payments, recurring capital expenditures, and principal payments. Over the past 10 years, we have increased our dividend by an average of 11% per year, and this year's dividend marks the 20th consecutive year of annual dividend growth. I want to take a moment to express my gratitude to our dedicated team members who have worked tirelessly to drive our success. I am proud of their hard work and commitment that contributed to the results for 2023. I will now turn it over to Patrick to provide more details about property operations.

Thanks, Marguerite. In 2023, long-term residents and guests at our core MHRV and Marina properties continued to demonstrate consistent demand, which supported occupancy and strong rate growth. As we approach the February peak of our winter Sunbelt season, I want to provide some additional color the drivers of the nearly 70% of our revenue that comes from residents and guests at our Sunbelt properties in Florida, California, and Texas. Since our IPO in February 1993, we've been talking about the aging of the baby boomers and migration trends to the Sunbelt. In 2023, baby boomers celebrated birthdays ranging from the ages of 59 to 77, and we're in the midst of 69 million baby boomers supporting a pace of 10,000 people turning 65 every day in the U.S. That trend spans the 19-year period from 2010 to 2029. Given our core residents and guests stay with us 10 years or more, we have another 15 to 20 years of engagement with the baby boomers as a key driver of demand at our properties. I'd also point out that subsequent generational cohorts, Gen X, Millennials, and Gen Z, follow similar aging trends as the baby boomers. Note that millennials will start to retire in 20 years, and they represent a population of 74 million, or 5 million more than the baby boom generation. Overall, the U.S. population, 55 plus, is projected to increase 6.4% over the next five years, while our Sembel properties in Florida, California, Arizona, and Texas are projected to increase 8.5%, outpacing the national growth rate by 200 basis points. The leader in our Sunbelt states is Florida, our largest state, with strong 55 plus population growth of 9.4% over the next five years, outpacing the national average by approximately 300 basis points. Our second largest state is California, with a 55 population projected to grow in line with the nation at 6.4% over the next five years. Two important points about California. First, MH&RV properties offer great value to customers given high-quality locations and high demand. And second, the sub-markets where our properties are concentrated are projected to outpace the 55-plus population in California by 70 basis points, emphasizing the strength of our locations within the state. For these key Sunbelt markets that represent nearly 75% of ELS total property revenue, MH, RV, and Marina annual customers comprise more than 90% of that revenue, while seasonal and transient guests represent 10%. That makes us consistent with the balance of our portfolio. These revenues in our Sunbelt markets benefit from baby boomer demand and associated population growth trends. Over the last five years, across the Sunbelt, our MH portfolio has produced 6% revenue growth and our RV portfolio 6.3% revenue growth. Those stable long-term revenue streams have consistently been our priority and have consistently provided year-over-year NOI growth. For perspective, our portfolio footprint and current operating characteristics are the result of an investment focus starting in 1993. We focused our acquisition strategy on key sub-markets in Florida, California, Arizona, and Texas, and those markets have represented two-thirds of our growth through acquisitions over the last 30 years. A couple final key points to highlight, the contribution of our long-term Sunbelt investments. Over the last five years, 70% of our new home sales and two-thirds of our completed development expansion have been from our Sunbelt portfolio. Those are among the many contributors to the stable operating results referenced above. I'll now turn it over to Paul.