Equity Lifestyle Properties, Inc.

Good day, everyone, and thank you for joining us to discuss Equity Lifestyle Properties first quarter 2024 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 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 two questions, so everyone who would like to participate has ample opportunity. As a reminder, this call is being recorded. Certain matters discussed today on this conference call may contain forward-looking statements in the meanings of 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 President and CEO.

Good morning, and thank you for joining us today. I am pleased to report the results for the first quarter of 2024. Quality of our cash flow, our in-demand locations, the lack of new supply, and the strength of our balance sheet continue to allow us to report impressive results. In times of macroeconomic uncertainty, we continue to deliver strong revenue growth as well as expense controls throughout our portfolio. Our core NOI for the quarter was strong with a 7.1% increase compared to last year, supported by MH and RV rate growth and controlling expenses. Our results for the first quarter and our view for the continued strength for the remainder of 2024 support our guidance rates. Over a 10-year period of time, we have increased the dividend on average 14% compared to the REIT average of 5.5%. Our balance sheet is in great shape with an average term to maturity of nine years. 18% of our debt is fully amortizing and not subject to refinance risk, And our debt maturity schedule through 2026 shows only 11% of our debt coming due compared to the REIT average of 29%. We have spent the last 30 years building a portfolio focused on high-quality coastal and Sunbelt retirement and vacation destinations. We are in locations where active adults want to be. Our customer base is seeking a place to escape from the cold winter and lead an active lifestyle in locations such as Florida, Arizona, and California. We are in states where there is outsized growth in seniors, and we appeal to the right demographic. The population of people age 55 and older in the U.S. is expected to grow 15% from now until 2039, with 10,000 baby boomers turning 65 each day for the near future. Our MH portfolio comprises approximately 60% of our total revenue, and our properties are 95% occupied. The MH business is unique in that once an elevated level of occupancy is achieved at a property, the occupancy is sustainable for a long time. For ELS, the key to that stickiness is an elevated level of homeowners in the portfolio. Our portfolio is 96% occupied by homeowners. This composition of our resident base is important to protect an uninterrupted cash flow stream as new residents are welcome to our communities. Our residents enjoy the community found in our properties and spend time focused on building new relationships with their fellow residents. We continue to engage our existing customers and attract new prospects through media outreach, engaging in social media campaigns, and targeted digital advertising. Our public relations strategy helps build awareness and credibility through coverage of the lifestyle offered at our properties and interesting stories about our customers who make a difference in the communities in which we operate. Our social media strategy seeks to engage both customers and prospects in a wide variety of platforms so we can reach people where they spend time. We have almost 2 million fans and followers across social media networks. Over the past 10 years, we have grown our social media fans and followers by an average of 19% annually. Our property teams in the north are gearing up to open the summer season. This year, Thousand Trails will celebrate its 55th anniversary. Thousand Trails is one of America's most well-known camping brands, and we have earned strong customer loyalty with hundreds of thousands of our viewers making memories with families and friends throughout the company's long history. We have closed another successful quarter, and our teams will now begin to focus on welcoming our residents to our northern locations as we kick off the summer season. I would like to thank all of our team members for their hard work in making this winter season so successful. I will now turn it over to Patrick to provide an operational overview.

Thank you, Marguerite. As we wind down the 2023-2024 Sun Belt season and look forward to the 2024 summer season, I will provide color on the Sun Belt season results and a view into the summer season, including drivers of demand. Overall, we continue to see consistent demand across each of our lifestyle property types, reflecting the high quality of our property locations. I will start by highlighting our MH business. Over my 30 years in the industry, my responsibilities have ranged from acquisitions to asset management to operations. And regardless of my area of focus, the consistency of our high-quality MH portfolio has been a constant. MH properties operate year-round, and seasonality is not a consideration. Our MH portfolio maintains high occupancy, and each year approximately 10% of our resident needs turns over. This turnover results in an uninterrupted revenue stream for ELS, as a current homeowner sells their home to an incoming home buyer and the new resident pays market rent. Year to date, we have seen an average rent increase of 5.6% to renewing residents. Our resident base generally consists of retired individuals who are cash buyers. Due to the high homeowner base in our portfolio, occupancy is resilient and the delinquency rate is very low. which is reflected in bad debt that is typically 40 to 45 basis points of revenue. This low level of delinquency has been consistent over the last 30 years in all economic cycles. Moving to the RV portfolio, the Sunbelt season runs from December to April, peaking in February, and demand is largely comprised of snowbirds from the northern U.S. and Canada seeking out the temperate climate of Florida, California, Arizona, and Texas. and Q1 annuals delivered steady occupancy and strong rate growth. Combined seasonal and transient increased in line with expectations supported by demand with consistent rate growth. I'd also note that nearly 50% of our seasonal revenue for the full year comes to us in Q1 during the Sun Belt season, while Q1 transient represents less than 20% of the full year transient revenue. We are now looking forward to the summer season which is comprised of the 100 days of camping from Memorial Day to Labor Day and spans 14 weeks. This is the time that our annual customers at 125 summer resorts and campgrounds visit their getaways on weekends, holidays, and summer vacations. Summer season annuals have a vacation or lake house, basically their resort cottage or park model, located at one of our properties. The resorts are now active with customers focused on spring cleaning and and getting their homes ready for summer activities. These customers are from the local or regional submarkets and are typically a one hour to one and a half hour drive from their homes to their campgrounds. In contrast to the overweight of seasonal revenue in the Sunbelt season, during the summer season, approximately two thirds of our transient revenue for the full year is earned in the second and third quarters. Our reservation pace is similar to last year with the holiday weekends in demand. While booking windows are similar to last year, the booking window is short and therefore we have limited visibility. More than 50% of transient reservations are booked within 10 days of arrival and are subject to short-term disruptors like weather. Finally, I would like to focus on our home sales efforts. Over the last five years, we've sold 4,500 new homes. Investing in these new homes is an upgrade for the community. The new home's construction quality meets stick-built construction standards, including primary bedrooms with walk-in closets, open floor plan kitchens with high-end, high-efficiency appliances, and exterior finishes like gable roofs and architectural shingles. And they remain affordable when compared to other housing options. We've been able to sell our homes for an average price of about $100,000 with limited concessions. Demand for these homes and our locations is evident from new leads and referrals from current residents, all supporting an 8.5% increase in Q1 new home sales year-over-year and a more than 100% increase from the pre-COVID timeframe in Q1 2019. The aging trends from 70 million baby boomers who are currently moving through their retirement years to almost 140 million combined Gen Xers and Millennials who will follow the boomers into their own retirement years all support generational demand for MH and all of our property offerings for decades to come. I'll now turn it over to Paul.