Cuộc họp báo cáo kết quả kinh doanh Q3/2026 của ELS: NOI cốt lõi tăng 6,7%, duy trì dự báo FFO

Điểm tin chính

• FFO chuẩn hóa tăng 4,6% so với cùng kỳ năm ngoái lên 0,79 USD/cổ phiếu, phù hợp với dự báo của ban lãnh đạo.
• NOI cốt lõi trước chi phí quản lý bất động sản tăng 6,7%, do doanh thu hoạt động bất động sản cốt lõi tăng 4,4% và chi phí tăng 1,3%.
• Tỷ lệ lấp đầy nhà ở lắp ghép tăng thêm 99 vị trí trong quý. Thu nhập từ cho thuê cơ bản nhà ở lắp ghép bao gồm mức tăng giá 5,6%, trong khi người cư ngụ mới chịu mức tăng theo giá thị trường trung bình 12%.
• Tỷ lệ lấp đầy khu cắm trại RV theo năm tăng thêm 444 vị trí, hỗ trợ mức tăng trưởng 5,3% trong thu nhập từ cho thuê cơ bản bến thuyền và RV theo năm. Doanh thu cho thuê theo mùa và vãng lai lần lượt giảm 4,4% và 5,8%.
• ELS duy trì dự báo FFO chuẩn hóa cho cả năm 2026 ở mức 3,15 USD đến 3,21 USD/cổ phiếu, với mức trung bình là 3,18 USD. Tăng trưởng NOI cốt lõi tiếp tục được dự báo ở mức 5,7% đến 6,3%.
• Các giả định sơ bộ cho năm 2027 cho thấy giá thuê nhà ở lắp ghép tăng 5,1% và giá thuê RV theo năm tăng 4,7%. Các con số này không bao gồm mức tăng tỷ lệ lấp đầy tiềm năng và lợi ích điều chỉnh theo giá thị trường từ việc thay đổi người cư ngụ.

Dữ liệu tài chính cốt lõi

Kết quả hoạt động kinh doanh

Nhà ở lắp ghép tiếp tục là động lực tăng trưởng hoạt động chính. Số lượng vị trí MH có người ở đã tăng thêm 99 vị trí trong quý và 166 vị trí tính từ đầu năm đến nay. ELS đã bán được 97 căn nhà mới, trong đó các thị trường Florida bao gồm Fort Lauderdale, West Palm Beach, Vero Beach, Fort Myers và Punta Gorda dẫn đầu về mức tăng tỷ lệ lấp đầy. Các bất động sản ở California, miền bắc nước Mỹ, Phoenix và Mesa cũng đóng góp vào mức tăng này.

Trang web MH được thiết kế lại đã mang lại kết quả ban đầu khả quan, với các yêu cầu tham quan nhà và cộng đồng tăng ở mức hai chữ số so với cùng kỳ năm ngoái. Ban lãnh đạo cho biết cầu tiếp tục hưởng lợi từ các khách hàng thuộc thế hệ Baby Boomer và Gen X đang tìm kiếm nhà ở ít tốn chi phí bảo trì cùng các tiện ích cộng đồng.

Tỷ lệ lấp đầy RV theo năm tăng 444 vị trí, chủ yếu tại các khu cắm trại tập trung vào mùa hè ở miền Bắc. Doanh thu theo năm chiếm khoảng 75% tổng thu nhập từ cho thuê cơ bản RV và bến thuyền. Ban lãnh đạo cho biết tỷ lệ sụt giảm khách hàng đã cải thiện so với năm trước và dự kiến xu hướng này sẽ tiếp tục kéo dài sang năm 2027.

Việc chuyển đổi hợp đồng tiếp tục là nguồn cầu hàng năm quan trọng. Từ đầu năm đến nay, khoảng 14% doanh số RV hàng năm và 7% thẻ hội viên Thousand Trails mới đến từ khách hàng theo mùa hoặc vãng lai. ELS cho biết một khách hàng RV hàng năm trung bình tạo ra khoảng 8.000 USD doanh thu mỗi năm, so với khoảng 80 đến 90 USD mỗi đêm đối với một khách hàng vãng lai.

Doanh thu phí hội viên Thousand Trails hưởng lợi từ việc nâng cấp sản phẩm và mức phí trung bình cao hơn. Mức phí trung bình trên mỗi hội viên trả phí đã tăng từ khoảng 580 USD lên 650 USD. ELS cũng đã bắt đầu bán các gói nâng cấp trực tuyến, điều mà ban lãnh đạo mô tả là dễ dàng và tiết kiệm chi phí hơn.

Triển vọng của ban lãnh đạo

ELS duy trì dự báo FFO chuẩn hóa cho cả năm 2026 ở mức 3,15 USD đến 3,21 USD/cổ phiếu, với mức trung bình là 3,18 USD. Dự báo FFO chuẩn hóa quý 4 vẫn ở mức 0,78 USD đến 0,84 USD/cổ phiếu.

Trong quý 4, ban lãnh đạo dự báo tăng trưởng thu nhập hoạt động bất động sản cốt lõi đạt 5,7% đến 6,3%, tăng trưởng giá thuê MH khoảng 5,7%, tăng trưởng giá thuê RV và bến thuyền khoảng 2,8%, và tăng trưởng chi phí hoạt động bất động sản cốt lõi khoảng 1,8% tại các mức trung bình tương ứng.

ELS cũng đưa ra các giả định sớm về giá thuê cho năm 2027 là 5,1% đối với MH và 4,7% đối với RV hàng năm. Các giả định này phản ánh thông báo giá thuê đã phát hành và tác động chuyển tiếp của các đợt tăng giá vào giữa năm 2026. Chúng không bao gồm việc tăng tỷ lệ lấp đầy vị trí bổ sung và mức tăng điều chỉnh theo giá thị trường từ việc chuyển nhượng trong tương lai. Con số RV hàng năm không bao gồm bến thuyền.

Bảng cân đối kế toán và Phân bổ vốn

ELS báo cáo tỷ lệ Nợ/EBITDAre đạt 4,3 lần và tỷ lệ khả năng thanh toán lãi vay đạt 5,7 lần. Thời hạn đáo hạn nợ bình quân có trọng số là gần bảy năm, không có khoản nợ có thế chấp nào đến hạn cho đến năm 2028. Công ty có thể tiếp cận khoảng 1,2 tỷ USD thông qua hạn mức tín dụng và các chương trình bán cổ phiếu theo giá thị trường (ATM).

Ban lãnh đạo xác định các thương vụ thâu tóm gia tăng giá trị và mở rộng hoặc phát triển vị trí là ưu tiên phân bổ vốn chính. Tuy nhiên, hoạt động giao dịch vẫn trầm lắng do các tài sản MH và RV được săn đón mạnh mẽ và các chủ sở hữu hiện tại về cơ bản đều hài lòng với việc nắm giữ chúng.

Rủi ro và các vấn đề cần theo dõi

Nhu cầu RV theo mùa và vãng lai vẫn là điểm áp lực rõ ràng nhất trong ngắn hạn. Ban lãnh đạo đã giảm các giả định trong quý 4 sau khi tốc độ đặt phòng không cải thiện như mong đợi vào đầu mùa đông. Mức suy yếu này được mô tả chủ yếu mang tính mùa vụ, trong khi nhu cầu RV hàng năm vẫn mạnh mẽ.

Dự báo của công ty dựa trên giả định không có tác động nào từ các sự kiện bão lớn. Ban lãnh đạo cho biết trận bão Florida gần đây không ảnh hưởng đến quý này.

Chi phí hoạt động có thể chịu áp lực từ lạm phát do chi phí điện nước, sửa chữa và bảo trì, cùng chi phí tiền lương chiếm khoảng hai phần ba cơ cấu chi phí. Trong quý 3, chi phí đã vượt dự báo khoảng 400.000 USD chủ yếu do lượng sử dụng điện và nước cao hơn. Các điểm rò rỉ đã được phát hiện và sửa chữa. Các thông báo thuế bất động sản sơ bộ ở Florida thấp hơn dự kiến đã giúp bù đắp cho triển vọng cả năm.

Các khoản vay có thế chấp kỳ hạn 10 năm hiện tại được chào lãi suất từ 6,1% đến 6,6%, với tỷ lệ cho thuê trên giá trị (LTV) từ 55% đến 70% và tỷ lệ thanh toán gốc và lãi vay từ 1,4 đến 1,65 lần.

Điểm nhấn phần Hỏi & Đáp với chuyên gia phân tích

• Định giá MH: Ban lãnh đạo cho biết những cư dân mới đang ký hợp đồng với mức giá thuê cao hơn khoảng 12% so với mức hiện tại. Giả định sơ bộ về MH năm 2027 không bao gồm lợi ích điều chỉnh theo giá thị trường liên quan đến việc thay đổi cư dân này.
• Triển vọng RV: Việc điều chỉnh quý 4 phản ánh tốc độ đặt phòng theo mùa yếu hơn chứ không phải do sự suy giảm nhu cầu RV hàng năm. Ban lãnh đạo báo cáo không có sự cải thiện đáng kể nào trong lượng đặt phòng từ các khách quay lại vào mùa đông.
• Định giá RV hàng năm năm 2027: Ban lãnh đạo cho rằng giả định tăng trưởng sơ bộ 4,7% là do sự hạ nhiệt sau nhiều năm tăng giá mạnh, chứ không phải do thiếu cầu. Tỷ lệ lấp đầy tăng thêm không được tính vào con số này.
• Triển vọng chi phí: Việc sử dụng dịch vụ tiện ích cao hơn đã ảnh hưởng đến quý 3, trong khi mức tăng thuế bất động sản sơ bộ thấp hơn ở Florida đã cải thiện dự báo cả năm. Ban lãnh đạo sẽ đưa xu hướng CPI, điều kiện bảo hiểm và các khiếu nại về thuế vào quá trình lập ngân sách năm 2027.
• Chính sách nhà ở lắp ghép: Ban lãnh đạo cho biết Đạo luật ROAD to Housing có thể hỗ trợ đổi mới sáng tạo nhà ở HUD và các cơ hội cấp phép tại địa phương, nhưng việc ban hành quy định và triển khai ở cấp tiểu bang dự kiến sẽ mất nhiều năm.

Toàn văn Biên bản cuộc họp báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day, everyone, and thank you all for joining us to discuss Equity Lifestyle Properties Third Quarter 2026 Results. Our featured speakers today are Marguerite Nader, our Vice Chairman and CEO; Patrick Waite, our President and CEO; and Paul Seavey, our Executive Vice President, 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. [Operator Instructions] As a reminder, this call is being recorded.

Certain matters discussed during 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 risks and uncertainty. The company assumes no obligation to update or supplement any statements that come 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

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 have 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 steady 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 plan 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 to 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

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 Sunbelt. 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 games, 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 our 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 and make 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 440 sites -- 444 sites during the quarter, similarly driven by gains in our Northern summer-focused RV campgrounds. Last month, MH 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 build without a chassis and a 2-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 Housing Act, which removes the permanent chasse requirement for manufactured housing and creates new opportunities for innovation and broader adoption of factory built housing. Our communities offer great value and livestock 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

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 based 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 noncore 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 noncore 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 in MH rent is 5.7% to 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 refinance our rate risk. We have no secured debt scheduled to mature until 2028 and our weighted average maturity for all debt is almost 7 years. Our debt-to-EBITDA RV is 4.3x and interest coverage is 5.7x. 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 1.65x debt service coverage. We continue to see solid interest from life companies and GSEs to lend for 10-year terms. High-quality, age-qualified MH assets continue to command best financing terms.

Now we would like to open it up for questions.

Operator

[Operator Instructions] Our first question comes from Jana Galan with Bank of America.

Phần hỏi đáp

Jana Galan

Congrats on a good third quarter. I was curious -- on the RV revision for full year, can you kind of help bridge the lower outlook for 4Q, given it appears that the 3Q exceeded expectations on annual, seasonal and transient? And then was there any impact from this most recent hurricane in Florida?

Paul Seavey

Yes. With respect to the guidance update, Jana, 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.

Operator

Our next question comes from Jamie Feldman with Wall Fargo.

James Feldman

Great. 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 a spread you're seeing today between market rent and turnover and in-place rents? 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

Yes, 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-market for new residents coming in is a 12% increase. So that's -- just a reminder, those are new residents that are coming in. They know that their markets -- their rent is 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

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.

Operator

Our next question comes from Brad Heffern with RBC.

Brad Heffern

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 coal adjustments 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

Brad, it's Patrick. Let me just walk through the profile of the leases that we have across the portfolio. 50% of our leases are market-based leases another 25%, maybe 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 a 2- or 3-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 that -- those floors is that 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 than 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 increase is relatively narrow. It's about 30 basis points, plus or minus, from what the overall increase on the markets roll out to.

Operator

Our next question comes from Nick Joseph with Citi.

Eric Wolfe

It's Eric here with Nick. I just want to make sure I understood the answer to the prior question. Just my assumption was that the guidance that you gave for 2027 is really base rent income growth or 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 in 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 previous methodology.

Paul Seavey

Yes, Eric, it's Paul. We're happy to be able to give early insight into our expectations for what 2027 MH and 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 released last night, we provided rent growth assumptions that were developed from those notices, along with the impact of midyear 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

Our next question comes from Steve Sakwa with Evercore ISI.

Steve Sakwa

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 onetime benefits or onetime headwinds that we should be thinking about? Or is kind of this year sort of your reasonable expectation to think about for next year?

Paul Seavey

Yes, Steve. So I think that just overall, as we think about our expense structure, 2/3 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 1/3 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 of 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 it, including those concepts in our assumptions.

Operator

Our next question comes from John Kim with BMO Capital Markets.

John Kim

I wanted to follow up on Jana'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, the third quarter being relatively in line. So I wanted to ask what changed? Because I think last gee, 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 I was wondering if you had achieve that and what the visibility was like on some of those customers potentially returning?

Paul Seavey

Yes. I think when we talked last quarter, the assumption for flat covered the latter half of the year. We had some assumption for some recovery that we didn't realize in terms of the early start to the winter season.

Operator

Our next question is from Jason Wayne with Barclays.

Jason Wayne

Just on the 4Q 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?

Patrick Waite

Yes. 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 the ration 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 gases, we've referenced on previous calls, these seasonal gas 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 were discussing, waiting and booking at a later date will come through over time. But what we're seeing right now is known real improvements in the pace.

Marguerite Nader

And what we're seeing is reflected in what we've put forth for our fourth quarter guidance.

Operator

Our next question comes from Michael Goldsmith with UBS.

Michael Goldsmith

We've talked a lot about the preliminary MH rent growth for 27, but we haven't really dug into the RV side, 4.7%, which is lower than the initial report 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 like 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

Yes, sure. It's Patrick. 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.

Operator

Our next question comes from Haendel St. Juste with Mizuho Securities.

Unknown Analyst

This is Mike on with Haendel 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 would be great.

Marguerite Nader

Certainly. So if you think about the acquisition market within the MH and kind of 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 kind of reflects the strength of the business model. So 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 what -- when we think about capital allocation, to the extent that there is a transaction of interest, we would certainly -- 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 we've -- 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 kind of the 2 priorities and where we're spending our time trying to continue to grow the business.

Operator

Our next question comes from David Segal with Green Street.

John Pawlowski

It's actually John on for David. 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 '27 versus '26 and whether you're expecting higher or lower pace of transient conversions into annuals in '27 relative to '26?

Marguerite Nader

Yes. 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 '27. And 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 that it kind of comes in a different season. 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 time frame. So we'd be able to give you a better update as we focus on that season.

But maybe Patrick, you could walk through a little bit of the -- of what you're seeing from a market perspective.

Patrick Waite

Yes. I mean, the ability to grow the annuals in the quarter, which, again, year-over-year has been consistent. We feel it's 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

Our next question comes from Jesse Lederman with Zelman.

David Eldersveld

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 does that include -- 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%. I would love to know the moving pieces there and what's driving that?

Marguerite Nader

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

Sure. As you noted, the expenses in the core were about -- it was about $400,000 higher than guidance in the third quarter, primarily because of utility expenses. We've 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 that 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, the 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 expectation. So based on that, we adjusted our forecast.

Operator

Our next question comes from Adam Kramer with Morgan Stanley.

Adam Kramer

Can you just provide some color on the pace of trends into 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

Yes. So our focus is on the longer-term streams. And obviously, the 75% of that is our very sticky annual revenue. I've addressed in the past that 15% to 20% of our annuals previously stayed with us as seasonal or transient and that same stats consistent with seasonal as well. So we're always looking to migrate that first touch on transient stays to the longer-term stays. I did address just on an earlier question that the conversions year-to-date are about 14% for annuals, meaning 14% of those sales were to current customer seasonal transient, and that's about 7% for season transient moving into our Thousand Trails platform. So that's been that general trend. We are highly focused with our revenue management teams and our sales teams on engaging seasonal changing stays when they're on site. So that they have the opportunity to better understand what the longer-term stays offer and an effort to get them to -- up to the longer-term stays.

Marguerite Nader

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 is 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 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 a positive or a negative.

Operator

Our next question comes from John Kim with BMO Capital Markets.

Marguerite Nader

John, sorry about that. Sorry about the Q4.

John Kim

I do like 1 question -- no, you're sticking to it. I'm glad.

Marguerite Nader

Yes. We appreciate it. How can we not?

John Kim

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 offset loan membership?

Marguerite Nader

Sure. So why don't I take the Thousand Trails piece and maybe, Paul, you can touch on the guide for the quarter. So John, I know you know the Thousand Trails system very well, but it's -- 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've 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 customers really seeing the benefit of that -- 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 '27. We've also launched that product, which is kind of a new thing for us on an online capacity. So prior to that, we were just selling camp 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

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 assume to be roughly flat. That did have some assumption for recovery in the fourth quarter. And we have, 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.

Operator

Our next question comes from Nick Joseph with Citi.

Nicholas Joseph

Sorry if I missed it, but -- so what is the preliminary MH and RV rate increase for next year? So if it was just apples-to-apples with what you've previously provided in the third quarter and past years?

Paul Seavey

Yes. I think 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.

Marguerite Nader

That has already been noticed, people have it in their hands, they're either paying that or they will start to pay it in January.

Nicholas Joseph

Okay. So is it basically the same as what you previously provided? I'm just trying to think about what you've normally given in the third quarter versus what you're giving now? I'm just trying to normalize that.

Paul Seavey

Yes. With the exception of the prior indication that we would provide was based on a subset of the in-place occupancy because it was based on 50% of the notices, 50% of the residents that received notices for January.

Marguerite Nader

And then we will be able to, as we have in the past, Nick, provide more clarity in January.

Nicholas Joseph

Sounds good. Just 1 -- I'll just keep jumping in. But the annual RV guidance, I guess, is that -- does that include the marina sort of impact for next year? Is that not included? Because I think earlier this year, right, you had the marinas didn't come online. Are you assuming that they come back online?

Marguerite Nader

Actually, it's only RV. It doesn't include marina. The marina rates kind of vary over the years. So we generally, at this point in time, only talk about RV. So we'll update on the marina rates in the January cost. So this is just RV -- still consistent with last year.

Operator

Our next question comes from Jamie Feldman with Wells Fargo.

James Feldman

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 has had more time to digest the wrote housing bill, Also, there's been some talk that -- 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

Sure. So we've seen certainly in 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 sing 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. I kind of know that. But really, those products are different from our communities. If you think about senior multifamily, it kind of -- 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 car, their golf carts at their door, and they get to enjoy those resort-style amenities in 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.

James Feldman

Okay. And then in terms of road to housing, like anything changed in your perspective, thinking about the opportunities or the risk?

Patrick Waite

Jamie, it's Patrick. The road is 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 bills passed. Obviously, we're in the process of rulemaking, 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 of 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

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.