Sun Communities, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sun Community's first quarter 2026 earnings conference call. At this time, management would like me to inform you that certain statements made during this call, which are not historical facts, may be deemed forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. Factors of risk that could cause actual results in different materials from expectations are detailed in today's press release and from time to time in the company's periodic filings with the SEC. The company undertakes no obligation to advise or update any forward-looking statements to reflect events or circumstances after the date of this release. Having said that, I'd like to introduce management with us today. Charles Young, Chief Executive Officer. John McLaren. President and Chief Operating Officer, Fernando Castro Caratini, Chief Financial Officer, and Aaron Weiss, Executive Vice President and Chief Investment Officer. After the remarks, there will be an opportunity to ask questions. For those who would like to participate in the question and answer session, management asks that you please limit yourselves to one question so that everyone who would like to participate has ample opportunity. As a reminder, this call is being recorded. Now I'll turn the call over to Charles Young, Chief Executive Officer. Mr. Young, you may begin.

Good morning, and thank you for joining us to discuss our first quarter 2026 earnings and updated guidance. We are pleased with our performance this quarter, building on the strong momentum established in 2025. Our simplified platform, strengthened balance sheet, and clear positioning as a leading MH and RV operator continues to support our progress. Across manufactured housing and RV, our communities benefit from their affordability and limited supply dynamics, which continue to support strong demand, high occupancy, and stable recurring income. We entered the year from a position of strength and remain confident in the long-term opportunity ahead, as Sun plays an important role in addressing broader affordability needs, with manufactured housing serving as a critical housing solution and RV offering flexible value-oriented options, which together reinforces the durability of our business. Our momentum is clearly reflected in our first quarter performance, where we delivered core FFO per share of $1.40, exceeding the high end of our expectations, and by raising our full-year guidance range. By driving MH and RV outperformance, maximizing our core portfolio, and leveraging our strong financial position, this quarter highlights the durability, consistency, and underlying value proposition our platform delivers, while also reflecting execution on our three core pillar strategy. First, disciplined capital allocation, where we continue to maintain a strong and flexible balance sheet while pursuing selective value-enhancing growth opportunities. we continue to execute our investment strategy acquiring select assets that align with our portfolio and operating footprint. Over the past several quarters, we actively deployed capital into our core MH&RB platform, including the integration of over $450 million of acquisitions completed in late 2025, along with additional investments in the first quarter. At the same time, we have remained committed to returning capital to shareholders demonstrating both confidence in the business and a disciplined approach to capital allocation, with over $1.5 billion returned to shareholders since the beginning of 2025, including continued share repurchases in the first quarter of 2026. The second pillar, optimizing our operating platform, was evident in the outperformance of our North American portfolio, where same-property MH and RV NOI increased 6.3%. well ahead of our expectations, and performance in our UK segment was in line with plan. These results reflect continued progress in driving consistency, accountability, and execution across the organization, building on our strong foundation. We are laser-focused on maximizing the performance of our core platform, where we see the most attractive long-term growth, margin expansion, and capital allocation opportunities. And third, targeted investment in our communities, infrastructure, and digital capabilities, which continues to enhance the resident guest and team member experience while supporting more efficient data-driven decision-making across the platform. Importantly, these investments are focused on directly enhancing the resident value proposition, including the quality of our communities and the overall resident and guest experience. Our greatest strength remains our culture, and our people. I want to thank the team members for their continued dedication and for the role they play in driving our results. I'll now turn the call over to John and Fernando to discuss our results in more detail. John? Thank you, Charles. In the first quarter, our North American same-property MH and RV NOI increased 6.3% compared to the prior year, driven by a 5.9% increase in revenue partially offset by a 5.2% increase in expenses. same-property occupancy remains strong at over 98 percent, reflecting continued demand across our communities. Within manufactured housing, same-property NOI increased 6.3 percent with revenues up 6.6 percent, primarily driven by site rent growth. Expense growth was consistent with our expectations, reflecting ongoing progress on payroll efficiencies and procurement initiatives. This outperformance demonstrates the continued execution of our operating strategy with a strong focus on discipline expense management while driving sustainable top-line growth. Building on the foundation we established last year, we are seeing the benefits of our operating discipline, accountability across the organization, and continued focus on service and execution at the property level. Turning to our RV segment, Same property NOI also increased 6.3% for the quarter, with revenues up 4.2% and expenses increasing by 2.3%. We enter the year with a strong focus on securing RV annual renewals earlier in the cycle, and the team has done an excellent job accelerating that pacing in the first quarter. This positions us well to enhance the annual and transient revenue mix as we move into peak season. On the transient side, we are encouraged by what we're seeing. Demand trends are stable and pacing is ahead of where we were at this point last year. That said, it is early in the season, and the first quarter represents a relatively small portion of transient's contribution to our full year results. So while we are pleased with transient's early 2026 performance and outlook, we remain appropriately measured in our expectations and will provide additional color as we progress through the second and third quarters. Consistent with our strategic pillar to optimize our operating platform, one key area of focus is to enhance data analytics and asset management to make better, more proactive decisions and optimize our portfolio and maximize performance across all segments of the business. Turning to the UK, we are very pleased with our team's performance this quarter and appreciate their continued focus on execution and operational excellence. Same property NOI increased 1.6%, with revenues up 5.3% and expenses in line with guidance. We are incredibly proud of the unmatched team we have across the organization, whose continued dedication and execution drove strong performance throughout 2025 and the first quarter of 2026, and I want to thank everyone for their ongoing service, hard work, and commitment to delivering for all of our stakeholders. I'll now turn the call over to Fernando to walk through our financial results and 2026 guidance updates. Fernando? Thank you, John. As Charles highlighted, 4 FFO per share for the quarter came in at $1.40, exceeding the high end of our guidance range. The outperformance was primarily driven by the continued strength in our manufactured housing fundamentals, complemented by better than expected performance in RV transient within our North America MH and RV segments. The first quarter represents a seasonally smaller portion of our full-year earnings, primarily due to RV contribution, and we remain thoughtful in how we translate this outperformance into our full-year outlook. From a capital allocation perspective, we continue to remain disciplined. During the quarter, we bought back approximately half a million shares at an average price of $126 per share for a total of $60 million repurchased. As of March 31st, Sun's debt balance stood at $4.3 billion, with a weighted average interest rate of 3.4% and a weighted average maturity of 6.8 years. Our net debt to trailing 12-month recurring EBITDA ratio was 3.7 times, and we continue to maintain a strong and flexible balance sheet with $492 million of debt maturing in 2026. Turning to guidance, As detailed in yesterday's release, we are raising our full year 2026 core FFO per share guidance range to 687 to 707 with a midpoint of 697, a four cent increase above the prior range, reflecting a strong start to the year and continued outperformance in our core manufactured housing business. At the midpoint, within North America, we now expect full year same property NOI growth of approximately 4.7%. with manufactured housing increasing to 6.2 percent, up from prior guidance, while RV remains unchanged at 0.9 percent growth. Beyond MH, the incremental uplift of guidance is driven by modest improvements in interest income, lower expected interest expense, and contributions from brokerage and other income streams. All other guidance assumptions and ranges remain unchanged. For additional details on our outlook and key assumptions, please refer to our supplemental disclosures. Our guidance reflects completed acquisitions, dispositions, and capital markets activity through April 27th. It does not assume future acquisitions, additional share purchases, or other capital markets activity, which is often reflected in analyst estimates for the year. With that, I'll turn the call back to Charles for closing remarks. Thank you, Fernando. Before opening line for questions, I want to highlight how encouraged we are by the momentum we are seeing across the business. This follows our solid 2025 results, and we are well positioned to sustain our strong performance moving through 2026. We are very excited about the opportunity in front of us, supported by the strength of our platform, the quality of our team, the flexibility of our balance sheet, and the favorable fundamentals across our business. We remain focused on our three core pillars of disciplined capital allocation, optimization of our operating platform, and strategic investment, which together position us to deliver consistent, durable growth and long-term value for our stakeholders. With that, we'll open the line for questions.

Thank you. Well, now we conduct your question and answer session. If you'd like to be placed in the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to move your question from the queue. As a reminder, management asks that you please limit yourselves to one question so everyone who would like to participate has ample opportunity. Our first question today is coming from Eric Wolf from Citi. Your line is now live.

Hey, thanks for taking my questions. There were some news articles recently that suggested you might sell park holidays, including the 400 million of ground leases you recently purchased at pretty big discounts. Can you just comment on this at all? Were there any of those sort of numbers in that article were accurate at all in just the go-forward strategy on the UK?

Hi, Eric. This is Charles. Thanks for the question. We regularly review all parts of our business to ensure they're optimally positioned. We see that as just good capital discipline. And what I can tell you is UK business, high-quality business, I've talked about that before, with a strong team, solid asset base, and it continues to perform in line with expectation. Our near-term focus is to maximize value through execution, strengthening performance, driving growth where we can, and maintaining cost control and flexibility. Park holiday team is strong. and performing well, you know, given the UK backdrop. So I'll leave it there.

Okay. And then if I look at your 10K, it looks like there's about 2.4 billion in gross assets. I'm just trying to get a better sense for sort of what's included in that. I guess are all of those properties that are listed there managed by Park Holidays? Are some of them still under development and not generating much NOI. You have sort of a miscellaneous category, which I think includes sort of the headquarters. Could you just talk through sort of what's in that $2.4 billion, how much of it isn't really generating much NOI? And then I guess just one last question I'll lay on there is, if you were to try to borrow against these assets, do you have a sense for sort of how much you could borrow and what rate you could get?

Hey, Eric. This is Fernando. The majority of that amount is the operating assets for Park Holidays. We do have some development land that came to us from a loan that we had made. But again, about $1.9 billion of that value is the operating assets.

And is there, regarding the financing opportunities and options, as we talked about and further the earlier question, we did acquire the ground leases at attractive yields, which gives us incremental strategic and financial flexibility. As of now, Park Holidays is financed against our corporate credit facility. And so to the extent we wanted to pursue additional financing options, we could, but we haven't focused on the financing alternatives for the business. We just wanted to maintain full strategic and financial flexibility.

Thank you. Our next question is from Jamie Feldman from Wells Fargo. Your line is now live.

Great. Thank you. I guess just a follow-up on Park Holiday. So it looks like you bought an asset in the UK during the quarter. I think a lot of people reacted to that thinking that means, you know, why would you be buying something if you're eventually going to sell the platform? So how should we think about how that asset fits into the broader Park Holiday portfolio? And then just how should people be reacting to the The view, you know, how's people reacting to that activity of buying, even though, you know, a lot of people are expecting a sale here.

Great question. It's Aaron speaking. As you alluded to, we did acquire Kingfisher, which is an attractive park in the UK. It's consistent with our strategy here, which is it's complementary to existing operating assets and efficient from an operational perspective. It has some growth opportunities to the extent we want to invest. I think when you think about the aggregate investment we have overall in the UK, it's pretty de minimis from an overall investment perspective, but it does you know, enhance the growth opportunity there. And we believe longer term will continue to drive incremental value in the platform, which, as Charles alluded to earlier, is the long-term focus. But I don't believe it affects any overall strategic planning or impacts that in any way to the extent we see other value-optimizing opportunities. We'll assess them and execute on them. We have, over the past couple years, sold a couple single assets in the U.K. as well that did not meet our return on investment objective. So you'll continue to see us look to maximize the overall value of the business.

Okay, thank you for that. And then maybe a question for John. Just, you know, where are you on the expense savings focus? You know, it seems like you had some success in the quarter, but, you know, how far are you through the process? I know it's continuous, but any kind of major leaps and bounds so far, or you think there's still a lot of wood to chop ahead?

Yeah, that's a good question, Jamie. I appreciate it. You know, it's just, I mean, you kind of covered it. I mean, to put it bluntly, It's just part of the core of what we do. I mean, expense discipline is a big piece of it. We are always and always will be looking for efficiencies that we can pick up in all the various expense categories, ways that we can do things better, more that we can move into our procurement platform, which continues to grow, okay, and those sorts of things. It's a fundamental thing both on the expense discipline side as well as the focus, as I've shared many times, on top line in growing the company.

Thank you. Next question today is coming from Brad Hefford from RBC Capital Marketers.

Your line is now live.

Yeah. Hey, everybody. Thanks. On the FFO guidance, you beat more during the quarter than the overall guidance went up. So I was just wondering, was some of the beat timing related, or why was the outperformance not read forward more?

Hi, Brad. As disclosed, we did increase our guidance by 4 cents, a nearly 60 basis point increase at the midpoint for a full year. As detailed on the call, from a contribution perspective, the first quarter is... has a lower contribution related to the rest of the year. And so we want to remain thoughtful as it relates to the rest, to the second and third quarters. As you know, relative contribution on the RV side is higher during the summer months. So we're being prudent with our guidance increase.

Okay, got it. Thanks for that. And then on GNA, you know, it was a relatively high number on the income statement this quarter. I'm sure there was some noise in there from the CFO changes, but can you give what the comparable 1Q number is to guidance and just talk about your overall comfort hitting that guide with the 1Q number in context?

Yeah, happy to provide some color there. And as you mentioned, the majority of the of the ad back activity in the in the quarter is related to executive leadership transitions that have been publicly disclosed and discussed. Specifically, this primarily reflects Gary's transition after 40 years with the organization, which constitutes the majority of the amount, in addition to costs associated with recent CFO and COO changes. As you'd expect, these costs are largely concentrated in the first quarter, given the timing of those transitions. And importantly, these are non-recurring in nature and not reflective of the ongoing cost structure. To address your question as far as the 1Q comparable, that would be Our 1Q GNA was about $61 million in the first quarter. That did include some marina, and the comparable would be $51 million for the first quarter of this year.

Thank you. Our next question today is coming from Hondo St. Just from Missouri Hosted Courage.

Your line is now live.

Hey, guys. Thanks for taking my question. My question is on the buybacks, stock buybacks during the quarter. I guess I'm curious, why not buy back more? You seem to buy back less than $5 million of the $60 million during the quarter, during the month of March. So was there any reason you paused in March? Anything holding you back? You have a lot of cash on the bounty, obviously. So curious kind of on the thought process. And then perhaps, what does stock buybacks rank today in terms of capital allocation priorities? Thanks.

Thanks, Andel. It's Charles. Appreciate the question. You know, from a broader, if you kind of zoom out, you know, our objective on capital allocation is pretty straightforward. We want to allocate capital where it generates the best long-term risk-adjusted returns for stakeholders. And, you know, as you point out, we're in a very strong position here in 26 with a strengthened balance sheet, reduced leverage, and real flexibility in terms of maturities and liquidity. So as we think about our of tools in the toolkit if you will it's a kind of a balance of options of investing in our communities and our operating platform which we're doing it's pursuing thoughtful discipline and creative external growth opportunities that align with our strategy which we're also done that in the first quarter and we'll continue to look at that and as well as return capital shareholders either through dividends or share buybacks which we also did this quarter so i think going forward to your question we're going to be balanced we're going to expect us to use our flexibility to stay balanced and use all those tools and be thoughtful about when and how with the idea that we're going to evaluate and make the decision that it's going to be best for shareholder value.

Thank you for that. Much appreciated. Maybe some color incrementally. I'm just the capital deployment opportunities beyond the buybacks, maybe on the transaction market, what you're seeing in terms of maybe availability, pricing ranges in the different sub-segments, MH, RV. Just curious what the market is looking like out there, if you're sensing any incremental change in opportunity or pricing or just color more broadly on that side of the business. Thanks.

Hi, Theron. Great question. I think what you'll hear is consistent with what we've talked about over the last few quarters and last couple years. It remains challenging to acquire high-quality, attractive MH and annual RV communities. We felt really good about what we were able to achieve through the latter part of 2025 with about $450 million of acquisitions across 14 communities. We did acquire one more in the first quarter, in our disclosure, in Michigan. i think we want to highlight we're very focused on assets that overlay nicely with our operational platform with synergies have nice geographic overlay with what we're looking to do our pipeline remains reasonably strong and consistent it does appear that there probably will be a little more activity it's been pretty muted over the last few years but i don't think We're looking for a massive change in the outlook. I think we've talked before that MH opportunities tend to be found in the sort of low to mid 4% cap rate range, and we want to underwrite those for, as Charles alluded to, attractive long-term risk-adjusted growth. So we're seeing these more in one-off and small portfolio transactions. We remain optimistic. very active and underwriting, and we do believe there will be opportunities to continue to add to our portfolio thoughtfully, and we remain very active in the market, and we'll continue to provide that color and hopefully continue to add to the portfolio in a meaningful way over the course of 26.

Thank you. Our next question is coming from Yana Galan from Bank of America.

Your line is now live.

Thank you. Good morning, and congrats on the strong start to the year. I'm curious on your focus to enhance data analytics. Can you kind of share, you know, some early wins in the process and other areas, you know, where you are and is there kind of more opportunity in the MH and RV annuals or is this really to kind of help kind of that visibility for booking windows and transient?

Yeah, this is Charles. I'll start and if John wants to jump in, he can add some color. As we talked about, You know, this is a focus in our three kind of core pillars around optimizing the portfolio and investing in our infrastructure and specifically around building a unified digital backbone. And as we look at that and, you know, it's exciting to see how it's starting to show up in the first quarter. Again, it's early, a lot more to be done, a lot of year left. But, you know, I talked about this on the last call. You know, with our ERP implementation a couple years ago, we have more real-time access to data than we've ever had. And those benefits are starting to show. Like I said, it's early. We're focused in on the customer journey where we're enhancing the system and centralizing some of the services that eventually will allow for better data and AI to help out. And you know, taking all of this and building off that solid foundation is the investment and focus that we're making this year. You know, long term, what we're really trying to get to is, you know, we have this kind of special position as being in the business for decades. And as we unlock that data and really focused in on the data architecture and infrastructure will allow us to, you know, continuously improve how we make capital allocation decisions in terms of dispositions and acquisitions, and it's a real opportunity to kind of build off the execution and the resident experience. John, if you want to add anything specifically, but that's our focus for this year, and it's still early. A lot more to build off of that as we go. Yeah, yeah, I appreciate the question. You know, and to give you sort of the operational perspective on it a little bit more is that I would say, as I've shared before, we have data like we've never had. And what we're seeing actually start to take place here is, I like to call it the intersection of data, discipline, accountability, and performance transparency that ultimately is leading us to better conversion of our long and short-term prospect funnels across the board. Those are the things that are happening. And we can unlock things in the customer journey, whether it's the visibility from prospects, ease in the booking process, conversion of that funnel, those sorts of things. I mean, Specific to the RV side, you look at our booking platform that we have, we literally have, you know, heat maps. I mean, they're actually heat maps. When you look at a property itself on the screen and you can tell an individual property show the individual site revenue and occupancy at any point in time. And that actually will inform our revenue management practices, our focused marketing investments. and our guest conversion strategy to maximize mixed margin and long-term value.

Thanks, John and Charles. And then just a quick accounting question. The long-term lease termination losses that are an adjustment to core FFO, I know those are UK-related, but can you kind of help explain what those are? And, you know, they were helping last year but hurting this year.

The... The lease termination charge relates to us acquiring a long-term lease in the UK. This is a non-cash when acquired, non-cash accounting charge as it relates to the transaction itself. It has nothing to do with the operations of that asset or the portfolio.

Thank you. Thank you.

Next question is coming from Michael Goldsmith from UBS. Your line is now live.

Good morning. Thanks a lot for taking my question. I'm here with Amy Provan. Can you talk about the acquisition opportunities in the U.K.? You stepped into the market this quarter. Is there competition from other buyers on individual properties or portfolios, and do you have a cap rate or EBITDA multiple on the property that you purchased? Thanks.

Thanks. It's Aaron. Good question. I think we remain active in the observation and underwriting of opportunities in the UK and the US. I think we're going to remain highly selective. As alluded to earlier, we did sell a couple of single assets over the last couple of years. This was a pretty unique opportunity to acquire an asset, as we mentioned earlier, about 8 million pounds, a little over $10 million. We view this as pretty one-off in terms of what we're looking to do. There might be one or two other opportunities we'll look at and underwrite. And the opportunity set exists, but we're going to be highly selective about what we're looking to do. We would suggest that the cap rates and yields we see in the UK are higher than what we talked about earlier related to USFMH, and our underwriting targets in terms of returns are also higher. So we'll remain highly selective, and I would suggest that this opportunity was more one-off for, excuse me, in terms of our long-term strategy in the UK.

Thanks for that, Aaron. And just as a follow-up, you know, there's been some macro challenges in the UK. It's a no secret. Does that mean people are doing more domestic vacations or, and so that should drive more transient demand there, or is that kind of offset by the slower home sales? Just trying to kind of piece together those two moving pieces, which may offset each other.

Yeah. My focus is John. I mean, obviously, I mean, you said the macro has been challenging. You know, that has been, you know, had some effects in terms of, you know, home sale volumes. But what we've seen is that, you know, people are, to your point, you know, vacationing locally and things like that. So we have seen positive trends on some of the short-term stays, which can ultimately lead to more home sales down the road. But I think, you know, the macro does continue to be a little bit challenging from that perspective. But once again, I think our team is doing extraordinarily well. against that backdrop, as you're seeing in the results as we put within our plan.

Thank you. Our next question today is coming from Adam Kramer from Morgan Stanley.

Your line is now live.

Hey, great. Thanks for the time. I just wanted to ask about the revenue from real property for North America, sort of guidance for the full year. It looks like that was raised. It looks like that stems from core MH. Just want to talk about sort of the drivers of that raise. If you can maybe break down, you know, occupancy versus rates, sort of the assumptions today and if they differ from, I guess, from the prior assumptions and just overall what changed in the guidance there.

Sure. Raise expectations remain unchanged with the guidance we provided back in October with MH guidance increase of about 5%. And RV at 4. We were slightly higher than that for MH for the first quarter at 5.2. And just below that on the RV side for 3.6. But over the course of the year, that is expected to catch up given the cadence of the rental increases. From an occupancy gain perspective, we are also modeling about a 1,200 site or occupancy gain from a site perspective. And that is split pretty evenly between manufactured housing and RV. And other strengths that we saw in the first quarter from a revenue perspective would be fees related to the rental income, lower discounts. that have been provided for UBINs or from an occupancy perspective.

Great, that's helpful. And then maybe just a similar question on the expense side. You know, a little bit higher there, sort of guidance midpoint change. Maybe just break that down in terms of, you know, some of the different line items there. You know, how they compare to the prior guidance. And I think a peer sort of talked about their insurance sort of renewal and the result there. So we'd love to hear sort of the latest thoughts on the insurance market and what you guys are seeing there as well.

Sure. So expense growth was in line with our expectations for the first quarter. Higher growth items included supplies and repair given a colder, snowier winter in our portfolio, as well as real estate taxes. we did have some offsets on the utilities front. Importantly, year-over-year expense growth expectations for our MH and RV portfolio is expected to moderate for the rest of the year, as we do guide to a mid-3% full-year expense growth at the midpoint.

And then, Sarah, as it relates to the insurance question, we do have a full year renewal. So we renew at the end of December for the full year. So our insurance expectations were embedded in our full year guidance. So we don't have much new insight into the insurance market because we've had the same program in place since December. So our insurance expectations were embedded and I think are consistent moving forward from a guidance perspective.

Thank you. Next question today is coming from Steve Sackwell from Evercore ISI. Your line is now live.

Yeah, thanks. I just wanted to circle back on the home sales, and in particular, maybe the UK, and just see if you guys have tweaked the program. Are you changing the prospects of trying to drive sales? It was interesting to see the volume was actually up modestly while it was down in North America. Pricing was actually up 6%. So have you guys made any major tweaks to that in order to drive occupancy in that market?

Yeah, Steve, John, I appreciate the question. I mean, I think it really just sort of falls in line with what we've talked about for a number of years in the UK, which is, you know, we want to we want to see more volume, OK, as opposed to the margin side so we can drive more real property income. And that shift of the revenue mix that has taken place over the course of the last several years in the UK.

So what you're seeing there is really illustrative of that strategy just continuing. Okay, thanks.

And maybe one for Charles. I just didn't know if you could provide an update on the CFO search. It's been a few months since Mark departed, and I just wasn't sure kind of where you and the board were in that process.

Yeah, thanks, Steve. Look, we're conducting a thorough blood expedient process. It's a broad search. We've engaged a third party. We're going to be thoughtful about this. This is a critical leadership role for Sun, and I'm focused on assuring we have the right long-term partner to support both the strategy and execution of the business going forward. And it's important we get it right. So we're moving with urgency, but we're not going to rush. To be clear, we have strong continuity within the finance organization, and we remain fully focused on execution. So the goal is identify the right person expeditiously as possible. And we'll provide updates as the process involves.

Thank you. Next question is from Anthony Howe from Truist Securities. Your line is now live.

Hey, guys. Thanks for taking my question. I noticed that RV revenue producing site net gain was down this quarter. Can you help us understand what's driving that, whether it's demand driven or pricing related? And how are you thinking about offsetting that pressure going forward?

Yeah, hey, Anthony, it's John. Great question. It's timing is what it is. This has been more due to our timing strategy for new RV annuals in 2026. Our performance for the quarter is in line with plan as a result of our focus on retention, which you've heard me talk about before, and our pace on renewals is actually ahead of our Q1 expectations. You know, it's sort of like, you know, we use our data. I think our team approached 2026 smartly with respect to the timing. of conversions during peak season, lending to higher revenue transient stays resulting in a better revenue mix between annual and transient in the quarter. So, you know, we walked in the year really thoughtful in terms of the run increases, our competitive positioning, targeted retention efforts. I think what you see in here is just, you know, these are the things that when you're looking at like a winter season for January through March, you know, there's a right time to make these conversions. And so we've taken the data that we have to make that shift and expect to, you know, continue to expect to deliver what we said within guidance for RV conversions for 2026. Thank you.

Thank you.

The next question is coming from Wes Colliday from Bear Grylls. Hey, good morning, everyone. I want to stick with the annual RV.

The rate is moderate and occupancy was up a little bit. but you're still producing pretty solid same-store revenue growth around 6.5% this quarter. What is driving that? As detailed earlier, some of that additional income driving growth has been fewer discounts provided, and there are some additional fee income included in those numbers. Okay, and just a quick follow-up on that. Will that be a similar tailwind for the rest of the year, or should we expect that to moderate? There's potential, but we're being thoughtful around what we are expecting from the annual side of our portfolio for the remainder of the year. Okay. Thank you very much.

Thank you.

The next question is going to be from David Segal from Green Street. Your line is now live.

Hi. Thank you. I'm curious if you can help us walk through the expected deceleration in North American NOI growth from 1Q to 2Q. Is that related to bringing back more discounts that you took away in the first quarter?

No, David. Actually, this is from a comp perspective, I think you'll recall. For our RV portfolio, we had a 21% decline in transient RV revenue in the in the first quarter, so that was a better comp for us on a year-over-year basis for 401Q. As it relates to our guide for the second quarter, we're expecting just above 4% growth at the midpoint for MH and RV. It really is the components of that are about 6.5% growth for manufactured housing and about a 2% decline on the RV side. So again, it's more so comp on a year-over-year basis than a decel of discounts, for example.

Great. Thank you. And then I'm curious what share of your annual G&A load is attributable to park holidays?

We estimate for park holidays, our G&A load is in the high $30 million contribution from a full-year perspective.

Great. Thank you.

Thank you. Next question is coming from Peter Abramowitz from Deutsche Bank. Your line is now live. Yeah, thanks for taking the questions, and I appreciate the comments there about the comps becoming more difficult into the second quarter and the rest of the year.

I guess just digging into the RV guide a little bit more, So in addition to the comps, could you talk about kind of the expected ramp in revenue growth in transient throughout the year? I think last quarter you mentioned that you had embedded in the guide around negative one and a half percent top line growth in transient revenues for the year. So has that changed at all or is that kind of still what you're expecting? So our expectations are unchanged as it relates to our expected growth on the transient RV side. For the first quarter, we did a 1.7% decline year over year. For the full year, our guidance at the midpoint is a 1.9% decline. We are, for the second quarter, we're expecting about a 3.7, so a moderation in the second half is expected to hit that midpoint of a 1.9 decline for the full year.

Okay, that's helpful. I appreciate that.

And if I could ask one more, just curious about your view in the road to housing bill that passed in the Senate in March and the proposed removal of the permanent chassis requirement for manufactured homes.

I guess, could you help us think through how that could impact your communities in terms of the look and feel and then also potentially your capital allocation plans if the bill is passed as it's been proposed?

Yeah, Mr. Charles, I'll start on the broader kind of road to housing bill that I'll give it to John to speak specifically to the chassis provision. Broadly or kind of stepping back, hugely supportive of anything that supports attainable housing that's going to be constructive for housing policy. So we're watching the situation closely, taking it seriously, working with our industry groups to watch these proposals. Seems like there's been a little bit of slowing on the momentum there. But if you step back before I give it to John, really what this is about is around housing affordability. And that said, the industry that we're in, manufactured housing, is a part of the solution for housing affordability. When you look at our industry relative to other housing options, there's real value there. The last thing I'll note is that from a federal perspective, We get the intent, but much of this is local. And when you think about production of new housing, local dynamics are what matter most. And so, you know, we're paying attention to kind of how that plays out. With that, I'll turn it over to John to get specifically into the chassis. Yeah. No, thanks, Charles. I think that, you know, the chassis, the removal of the chassis requirement creates some really interesting opportunities potentially. both in the form of what cost savings, to Charles' point about affordability and making the product even more affordable, but at the same time, being able to build houses that have a different spec level and those sorts of things that are more appealing not just to consumers, but to the powers that be at the local level that ultimately provide the approvals for development that we may do someday. We're obviously, we think all this is positive. We remain optimistic and encouraged by the progress with it.

We'll have to see how it plays out, though.

Thank you. The next question today is coming from John Kim from BMO Capital Markets, your line is now live.

Thank you. I know there's been a couple of questions on this, but it's not really clear to me what you're doing with the UK. I know you've been saying it's a high-quality business, it performs well. but you did market it for sale and you bought an asset recently. Is the takeaway that all options are on the table and you're going to keep those options open, or would you prefer to exit and focus North America?

Yeah, look, I appreciate the question, John. Look, as I said at the beginning, we continually evaluate our portfolio to determine how best to create long-term shareholder value. As discipline at Capital Allocators, that's kind of what we do in all parts of our business, and the UK is no different. I'm not going to repeat it. It's a high-quality business, great team, executing well, and we're focused in on making sure that we're maximizing value by execution and strengthening performance and supporting the team the best we can.

Okay. And then just sticking to the U.K., you maintain guidance both on seamstress NOI and home sales, but occupancy on annuals did slip a bit this quarter. So I'm just wondering how much visibility do you have on the seasonally more important second and third quarters at this point?

John, you were breaking up at the beginning. Can you just repeat that first part?

Sure. You just maintain your U.K. guidance. but you alluded to the kind of weak economy and the annual occupancy did slip in the UK this quarter. So I'm just wondering how much visibility do you have on the second and third quarters at this point?

The occupancy dip comes from the contribution of new expansion sites that we build when the parks are closed over the course of the fourth quarter last year. So that really is the driver as far as a quarter-on-quarter occupancy decline.

Thank you.

The next question is coming from Jason Wade from Barclays. Your line is now live.

Hi. Thanks for the question. Just in the Northeast, some sites shifted from annual to transient there. Just curious if that relates to the strategy of pulling forward RV renewals, and could you give any color on forward booking trends for the summer?

Yeah, I can give you – absolutely, Jason.

Appreciate the question. You know, I think what we're seeing, as I shared in my prepared remarks, is, you know, we're encouraged by current pacing and trends, okay, but You know, to reiterate, it's still early in the year. As you know, the first quarter is relatively small compared to the other quarters. And so, as a result, we've remained measured in our outlook, and we're not changing any expectations at this point. But RV is an affordable vacationing option. We'll continue to focus on our performance, optimizing revenue, and bottom-line contribution.

But we will provide more color as things progress. All right. Thank you. Thank you. Next question is coming from Jesse Letterman from Zellman and Associates.

Your line is now live.

Hey, thanks for taking the question. I know obviously municipality approval has been probably the largest headwind in terms of new community development. So there's bills in Texas and Kentucky slated to go into effect this year to kind of level the playing field a bit from a municipality approval perspective. So are you seeing or expecting anything or hearing anything from local municipalities in those states that may provide you with more, you know, potential expansion or development opportunities in Texas and Kentucky?

Yeah, Jesse, that would pertain to us from the Texas perspective, but, you know, it's it's one of those things where there really does need to be meaningful work in the linkage between federal and local. You know, we'll be optimistic about it, but, you know, we were pretty refined, okay, when we were doing a lot of development in the past, okay, with our process. I was at a lot of those meetings, okay, and shared a lot of things with municipalities that, you know, frankly, to some degree, we had to educate them on what, you know, affordable housing needs and help them with that. But You know, as I've often maybe even, you know, sort of joked before, the impact that they had was instead of it taking 24 months to get entitlement, it might take 23 months. Okay, so it's like marginal improvement. You know, this is why we are so interested in seeing what progresses in terms of how homes are built with the chassis removal requirement and what kind of impact that has on designs that locals might find more attractive and further unlock what you're talking about.

Awesome. Thanks. Appreciate that. And one quick follow-up on the kind of guidance increase question from earlier, it does imply that 2Q to 4Q outlook was lowered by $0.08, and you did note a higher contribution from RV in the summer months. It sounds like also your expectations were maintained for kind of RV moving forward. So just trying to understand the conservatism, I suppose, in the guidance for the rest of the year.

We're remaining thoughtful about the relative contribution. As you can see in our guidance tables, RV specifically during the first quarter is only about 16% of the contribution for the full year. So we are working through that. John has shared his thoughts and what we're seeing from a pacing perspective for the pleased with the trends that we are seeing. But yes, inherently, given that we raised guidance by less than the beat in the first quarter, there is some additional expenses or performance changes for the remainder of the year.

Thank you. Our next question is coming from Eric Wolf from City. Your line is now live.

Hey, thanks. I actually was going to ask that same exact question, but maybe I'll follow up. You just said that there's going to be some performance changes for the rest of the year. Could you just talk about what that is and maybe where you beat so much in the first quarter? Because it was obviously a large $0.12 beat, and you are just raising by $0.04. So just trying to understand exactly what the offset is.

Yeah, we beat the high end of our range by $0.08. So we increased our range by four. So the remainder of the performance. We did outperform in manufactured housing. We had some small outperformance in RV. You saw the guidance increase for MH for the full year. And RV guidance is remaining the same. So some of that outperformance. is in the more seasonally higher contribution orders. Thank you.

Just to reiterate, Eric, this is John.

I mean, from the RV perspective, you know, I'll say it again. We're encouraged by what we're seeing on pacing and trends, okay? It is prudent for us to be measured in our outlook, okay, as we come into the bigger months ahead of us.

So that's a big contributor to what we're talking about. Thank you.

We reached the end of our question and answer session. I'd like to turn the floor back over to Mr. Young for any further closing comments.

Yeah, thank you for joining us. I wanted to give a quick shout out to the Sun team for strong execution in the quarter. For all of you joining the call today, thank you and look forward to talking to you again on the Q2 call.

Thank you. That does conclude today's teleconference. We just connect your line at this time and have a wonderful day. We thank you for your participation today.