EQUITY LIFESTYLE PROPERTIES INC 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes thereto included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”), as well as information in Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K. Overview and Outlook We are a self-administered and self-managed real estate investment trust (“REIT”) with headquarters in Chicago, Illinois. We are a fully integrated owner of lifestyle-oriented properties (“Properties”) consisting of property operations and home sales and rental operations primarily within manufactured home (“MH”) and recreational vehicle (“RV”) communities and marinas. As of March 31, 2026, we owned or had an ownership interest in a portfolio of 453 Properties located throughout the United States and Canada containing 173,419 individual developed areas (“Sites”). These Properties are located in 35 states and British Columbia. We invest in properties in sought-after locations near retirement and vacation destinations and urban areas across the United States with a focus on delivering an exceptional experience to our residents and guests that results in delivery of value to stockholders. Our business model is intended to provide an opportunity for increased cash flows and appreciation in value. We seek growth in earnings, Funds from Operations (“FFO”), Normalized Funds from Operations (“Normalized FFO”) and cash flows by enhancing the profitability and operation of our Properties and investments. We accomplish this by attracting and retaining high quality customers to our Properties, who take pride in our Properties and in their homes and efficiently managing our Properties by increasing occupancy, maintaining competitive market rents and controlling expenses. We also actively pursue opportunities that fit our acquisition criteria and are currently engaged in various stages of negotiations relating to the possible acquisition of additional properties. We believe the demand from baby boomers for MH and RV communities will continue to be strong over the long term. It is estimated that approximately 10,000 Americans turn 65 years old every day and all baby boomers will be at least age 65 by 2030. These individuals, seeking an active lifestyle, will continue to drive the market for second-home sales as vacation properties, investment opportunities or retirement retreats. We expect it is likely that we will continue to see high levels of second-home sales and that manufactured homes and cottages in our Properties will continue to provide a viable second-home alternative to site-built homes. We also believe the Millennial and Generation Z demographic will contribute to our future long-term customer pipeline. After conducting a comprehensive study of RV ownership, according to the Recreational Vehicle Industry Association (“RVIA”), data suggested that RV sales are expected to benefit from an increase in demand from those born in the United States from 1980 to 2003, or Millennials and Generation Z, over the coming years. We believe the demand from baby boomers and these younger generations will continue to outpace supply for MH and RV communities. The entitlement process to develop new MH and RV communities is extremely restrictive. As a result, there have been limited new communities developed in our target geographic markets. We generate the majority of our revenues from customers renting our Sites or entering into right-to-use contracts, also known as membership subscriptions, which provide them access to specific Properties for limited stays. MH Sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and marina Sites are leased on an annual basis to customers who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina Sites are leased to customers generally for one to six months. Transient RV and marina Sites are leased to customers on a short-term basis. The revenue from seasonal and transient Sites is generally higher during the first and third quarters. We consider the transient revenue stream to be our most volatile as it is subject to weather conditions and other factors affecting the marginal RV customer’s vacation and travel preferences. We also generate revenue from customers renting our marina dry storage. Additionally, we have interests in joint venture Properties for which revenue is classified as Equity in income/(loss) of unconsolidated joint ventures on the Consolidated Statements of Income and Comprehensive Income. 18 Management’s Discussion and Analysis (continued) The following table shows the breakdown of our Sites by type (amounts are approximate): Total Sites as of March 31, 2026 MH Sites (1) 75,700 RV Sites: Annual (1) 34,600 Seasonal 9,800 Transient (1) 20,500 Marina Slips 6,900 Membership (2) 26,000 Total (3) 173,400 _________________________ (1) MH, Annual RV and Transient RV sites include approximately 2,100, 300 and 1,500 joint venture sites, respectively. (2) Primarily utilized to service approximately 107,100 members. Includes approximately 6,000 Sites rented on an annual basis. (3) Total does not foot due to rounding. In our Home Sales and Rentals Operations business, our revenue streams include home sales, home rentals and brokerage services and ancillary activities. We generate revenue through home sales and rental operations by selling or leasing manufactured homes and cottages that are located in Properties owned and managed by us. We believe renting our vacant homes represents an attractive source of occupancy and an opportunity to convert the renter to a homebuyer in the future. Additionally, home sale brokerage services are offered to our residents who may choose to sell their homes rather than relocate them when moving from a Property. At certain Properties, we operate ancillary facilities, such as golf courses, pro shops, stores and restaurants. In the manufactured housing industry, options for home financing, also known as chattel financing, are limited. Chattel financing options available today include community owner-funded programs or third-party lender programs that provide subsidized financing to customers and often require the community owner to guarantee customer defaults. Third-party lender programs have stringent underwriting criteria, sizable down payment requirements, short term loan amortization and high interest rates. In addition to net income computed in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), we assess and measure our overall financial and operating performance using certain Non-GAAP supplemental measures, which include: (i) FFO, (ii) Normalized FFO, (iii) Income from property operations, (iv) Income from property operations, excluding property management, and (v) Core Portfolio income from property operations, excluding property management (operating results for Properties owned and operated in both periods under comparison). We use these measures internally to evaluate the operating performance of our portfolio and provide a basis for comparison with other real estate companies. Definitions and reconciliations of these measures to the most comparable GAAP measures are included below in this discussion. Results Overview (amounts in thousands) Quarters Ended March 31, 2026 2025 $ Change % Change (1) Net Income per fully diluted Common Share $ 0.56 $ 0.57 $ (0.01) (2.6) % FFO per fully diluted Common Share and OP Unit $ 0.83 $ 0.83 $ — (0.4) % Normalized FFO per fully diluted Common Share and OP Unit $ 0.84 $ 0.83 $ 0.01 0.3 % _____________________ 1. Calculations prepared using actual results without rounding. For the quarter ended March 31, 2026, property operating revenues in our Core Portfolio increased 3.7% and property operating expenses in our Core Portfolio, excluding property management, increased 1.8% from the same period in 2025, resulting in increased Income from property operations, excluding property management, of 4.9%. 19 Management’s Discussion and Analysis (continued) While we continue to focus on increasing the number of manufactured homeowners in our Core Portfolio, we also believe that renting our vacant homes represents an attractive source of occupancy and an opportunity to potentially convert the renter to a new homebuyer in the future. We continue to expect there to be fluctuations in the sources of occupancy gains depending on local market conditions, availability of vacant sites and success with converting renters to homeowners. Our Core Portfolio average occupancy includes both homeowners and renters in our MH communities and was 93.8% for the quarter ended March 31, 2026, 94.4% for the quarter ended March 31, 2025 and 94.0% for the quarter ended December 31, 2025. The decline in average occupancy compared to the quarter ended March 31, 2025 was primarily driven by 362 expansion sites that were added since March 31, 2025. During the quarter ended March 31, 2026, our Core Portfolio occupancy increased by 54 sites, which included increases in rental occupancy of 24 sites and homeowner occupancy of 30 sites compared to December 31, 2025. As of March 31, 2026, we had 2,135 occupied rental homes in our Core MH communities. RV and marina base rental income in our Core Portfolio decreased 1.4% for the quarter ended March 31, 2026, compared to the same period in 2025, due to an increase in Core Annual RV and marina rental income of 4.2%, offset by decreases in Core Seasonal and Transient RV and marina rental income of 14.8% and 6.9%, respectively. The increase in Core Annual RV and marina base rental income was driven by a 5.1% increase in rate, offset by a 0.9% decline in occupancy since the quarter ended March 31, 2025. The decreases in Core Seasonal and Transient RV and marina rental income were driven by a moderation in demand driven in part by the loss of Canadian guests. We closed 87 new home sales during the quarter ended March 31, 2026 compared to 117 new home sales during the quarter ended March 31, 2025. The decrease in new home sales during the quarter ended March 31, 2026 was driven by timing of supply of new homes resulting in fewer homes being sold this quarter as compared to the quarter ended March 31, 2025. Our gross investment in real estate increased $55.6 million to $8,234.3 million as of March 31, 2026 from $8,178.7 million as of December 31, 2025, primarily due to capital improvements during the quarter ended March 31, 2026. The following chart lists the Properties acquired from January 1, 2025 through March 31, 2026 and Sites added through expansion opportunities at our existing Properties: Location Type of Property Transaction Date Sites Total Sites as of January 1, 2025 (1) 173,200 Expansion Site Development: Sites added (reconfigured) in 2025 440 Sites added (reconfigured) in 2026 48 Dispositions: Desert Vista Salome, Arizona RV October 1, 2025 (125) Valley Vista Benson, Arizona RV October 1, 2025 (145) Total Sites as of March 31, 2026 (1) 173,400 ______________________ (1) Sites are approximate. Non-GAAP Financial Measures Management’s discussion and analysis of financial condition and results of operations include certain Non-GAAP financial measures that in management’s view of the business are meaningful as they allow investors the ability to understand key operating details of our business that may not always be indicative of recurring annual cash flow of the portfolio. These Non-GAAP financial measures as determined and presented by us may not be comparable to similarly titled measures reported by other companies, and include Income from property operations and Core Portfolio, FFO and Normalized FFO. We believe investors should review Income from property operations and Core Portfolio, FFO and Normalized FFO, along with GAAP net income and cash flows from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. A discussion of Income from property operations and Core Portfolio, FFO and Normalized FFO, and a reconciliation to net income are included below. 20 Management’s Discussion and Analysis (continued) Income from Property Operations and Core Portfolio We use Income from property operations, Income from property operations, excluding property management, and Core Portfolio income from property operations, excluding property management, as alternative measures to evaluate the operating results of our Properties. Income from property operations represents rental income, membership subscriptions and upgrade revenue, utility and other income less property and rental home operating and maintenance expenses, real estate taxes, membership sales and marketing expenses and property management expenses. Income from property operations, excluding property management, represents Income from property operations excluding property management expenses. Property management represents the expenses associated with indirect costs such as off-site payroll and certain administrative and professional expenses. We believe exclusion of property management expenses is helpful to investors and analysts as a measure of the operating results of our Properties, excluding items that are not directly related to the operation of the Properties. For comparative purposes, we present bad debt expense within Insurance and other in the current and prior periods. We believe that this Non-GAAP financial measure is helpful to investors and analysts as a measure of the operating results of our Properties. Our Core Portfolio consists of our Properties owned and operated during all of 2025 and 2026. Core Portfolio income from property operations, excluding property management, is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations. Our Non-Core Portfolio includes all Properties that were not owned and operated during all of 2025 and 2026, including six Properties in Florida impacted by Hurricane Ian and two Properties in California that were impacted by storm and flooding events. FFO and Normalized FFO We define FFO as net income, computed in accordance with GAAP, excluding gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges and adjustments to reflect our share of FFO of unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. We compute FFO in accordance with our interpretation of standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. We believe FFO, as defined by the Board of Governors of NAREIT, is generally a measure of performance for an equity REIT. While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance. We define Normalized FFO as FFO excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties, defeasance costs, transaction/pursuit costs and other, and other miscellaneous non-comparable items. Normalized FFO presented herein is not necessarily comparable to Normalized FFO presented by other real estate companies due to the fact that not all real estate companies use the same methodology for computing this amount. We believe that FFO and Normalized FFO are helpful to investors as supplemental measures of the performance of an equity REIT. We believe that by excluding the effect of gains or losses from sales of properties, depreciation and amortization related to real estate and impairment charges, which are based on historical costs and may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We further believe that Normalized FFO provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our normal operations. For example, we believe that excluding the early extinguishment of debt and other miscellaneous non-comparable items from FFO allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. In some cases, we provide information about identified non-cash components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those items. Our definitions and calculations of these Non-GAAP financial and operating measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These Non-GAAP financial and operating measures do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flows from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions. 21 Management’s Discussion and Analysis (continued) The following table reconciles Net income available for Common Stockholders to Income from property operations: Quarters Ended March 31, (amounts in thousands) 2026 2025 Computation of Income from Property Operations: Net income available for Common Stockholders $ 107,904 $ 109,192 Income allocated to non-controlling interests – Common OP Units 3,587 5,201 Consolidated net income 111,491 114,393 Equity in (income)/loss of unconsolidated joint ventures 877 (4,901) Gross revenues from home sales, brokered resales and ancillary services (19,096) (20,923) Interest income (2,191) (2,238) Income from other investments, net (1,774) (2,018) Property management 18,671 20,430 Depreciation and amortization 53,136 50,942 Cost of home sales, brokered resales and ancillary services 13,600 13,692 Home selling expenses and ancillary operating expenses 6,823 6,168 General and administrative 11,101 9,239 Casualty-related charges/(recoveries), net 68 217 Other expenses 1,233 1,878 Interest and related amortization 33,645 31,136 Income from property operations, excluding property management 227,584 218,015 Property management (18,671) (20,430) Income from property operations $ 208,913 $ 197,585 The following table presents a calculation of FFO available for Common Stock and OP Unitholders and Normalized FFO available for Common Stock and OP Unitholders: Quarters Ended March 31, (amounts in thousands) 2026 2025 Computation of FFO and Normalized FFO: Net income available for Common Stockholders $ 107,904 $ 109,192 Income allocated to non-controlling interests – Common OP Units 3,587 5,201 Depreciation and amortization 53,136 50,942 Depreciation on unconsolidated joint ventures 1,477 1,331 FFO available for Common Stock and OP Unit holders 166,104 166,666 Insurance proceeds due to catastrophic weather event 67 — Other items (1) 1,125 — Normalized FFO available for Common Stock and OP Unit holders $ 167,296 $ 166,666 Weighted average Common Shares outstanding – Fully Diluted 200,176 200,074 _____________________ (1) Represents expenses of $1.1 million related to non-operating legal expenses during the quarter ended March 31, 2026. 22 Management’s Discussion and Analysis (continued) Results of Operations This section discusses the comparison of our results of operations for the quarters ended March 31, 2026 and 2025. Our Core Portfolio could change from time-to-time depending on acquisitions, dispositions and significant transactions or unique situations. Our Core Portfolio consists of our Properties owned and operated during all of 2025 and 2026. Our Non-Core Portfolio includes all Properties that were not owned and operated during all of 2025 and 2026, including six Properties in Florida impacted by Hurricane Ian and two Properties in California that were impacted by storm and flooding events. For the comparison of our results of operations for the quarters ended March 31, 2025 and March 31, 2024 and discussion of our operating activities, investing activities and financing activities for the quarters ended March 31, 2025 and March 31, 2024, refer to Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2025, filed with the SEC on April 30, 2025. Comparison of the Quarter Ended March 31, 2026 to the Quarter Ended March 31, 2025 Income from Property Operations The following table summarizes certain financial and statistical data for our Core Portfolio and total portfolio: Core Portfolio Total Portfolio Quarters Ended March 31, Quarters Ended March 31, (amounts in thousands) 2026 2025 Variance % Change 2026 2025 Variance % Change MH base rental income (1) $ 195,077 $ 184,521 $ 10,556 5.7 % $ 195,296 $ 184,704 $ 10,592 5.7 % Rental home income (1) 3,771 3,382 389 11.5 % 3,794 3,393 401 11.8 % RV and marina base rental income (1) 114,484 116,111 (1,627) (1.4) % 121,258 121,565 (307) (0.3) % Annual membership subscriptions 18,066 16,204 1,862 11.5 % 18,299 16,342 1,957 12.0 % Membership upgrade revenue (2)(3) 3,120 2,985 135 4.5 % 3,120 3,052 68 2.2 % Utility and other income (1) 34,152 32,387 1,765 5.4 % 34,515 34,649 (134) (0.4) % Property operating revenues 368,670 355,590 13,080 3.7 % 376,282 363,705 12,577 3.5 % Utility expense 40,147 39,461 686 1.7 % 41,183 40,269 914 2.3 % Payroll 27,459 27,483 (24) (0.1) % 28,440 28,271 169 0.6 % Repairs and maintenance 23,695 22,264 1,431 6.4 % 24,425 22,889 1,536 6.7 % Insurance and other (1)(4) 26,116 26,253 (137) (0.5) % 27,360 27,539 (179) (0.6) % Real estate taxes 21,476 21,068 408 1.9 % 22,100 21,643 457 2.1 % Rental home operating and maintenance 1,347 1,146 201 17.5 % 1,353 1,148 205 17.9 % Membership sales and marketing (5) 3,822 3,874 (52) (1.3) % 3,837 3,931 (94) (2.4) % Property operating expenses, excluding property management 144,062 141,549 2,513 1.8 % 148,698 145,690 3,008 2.1 % Income from property operations, excluding property management (6) 224,608 214,041 10,567 4.9 % 227,584 218,015 9,569 4.4 % Property management 18,671 20,430 (1,759) (8.6) % 18,671 20,430 (1,759) (8.6) % Income from property operations (6) $ 205,937 $ 193,611 $ 12,326 6.4 % $ 208,913 $ 197,585 $ 11,328 5.7 % _____________________ (1) Rental income consists of the following total portfolio income items in this table: 1) MH base rental income, 2) Rental home income, 3) RV and marina base rental income and 4) Utility income, which is calculated by subtracting Other income on the Consolidated Statements of Income and Comprehensive Income from Utility and other income in this table. The difference between the sum of the total portfolio income items and Rental income on the Consolidated Statements of Income and Comprehensive Income is bad debt expense, which is presented in Insurance and other in this table. (2) Membership upgrade product offerings consist of two- to four-year term subscription products, which are recognized in Annual membership subscriptions. Prices for two-year products range between $4,000 to $8,000 and between approximately $7,000 to $14,000 for the four-year product, which results in approximately $2,500 to $3,000 of earned revenue on an annual basis. (3) Membership upgrade revenue is net of deferrals of $0.9 million for the quarter ended March 31, 2025. (4) Includes bad debt expense for all periods presented. (5) Membership sales and marketing expense is net of sales commission deferrals of $0.9 million and $0.3 million for the quarters ended March 31, 2026 and 2025, respectively. (6) See Non-GAAP Financial Measures section of the Management’s Discussion and Analysis for definitions and reconciliations of these Non-GAAP measures to Net Income available for Common Stockholders. Total Portfolio income from property operations for the quarter ended March 31, 2026 increased $11.3 million, or 5.7%, from the same period in 2025 driven by an increase of $12.3 million, or 6.4%, from our Core Portfolio, offset by a decrease of $1.0 million from our Non-Core Portfolio. 23 Management’s Discussion and Analysis (continued) Property Operating Revenues MH base rental income in our Core Portfolio for the quarter ended March 31, 2026 increased $10.6 million, or 5.7%, from the same period in 2025, which reflects 5.9% growth from rate increases. The average monthly MH base rental income per Site in our Core Portfolio increased to approximately $948 for the quarter ended March 31, 2026 from approximately $895 for the quarter ended March 31, 2025. RV and marina base rental income is comprised of the following: Core Portfolio Total Portfolio Quarters Ended March 31, Quarters Ended March 31, (amounts in thousands) 2026 2025 Variance % Change 2026 2025 Variance % Change Annual $ 79,574 $ 76,334 $ 3,240 4.2 % $ 82,300 $ 78,353 $ 3,947 5.0 % Seasonal 22,806 26,776 (3,970) (14.8) % 25,343 28,623 (3,280) (11.5) % Transient 12,104 13,001 (897) (6.9) % 13,615 14,589 (974) (6.7) % RV and marina base rental income $ 114,484 $ 116,111 $ (1,627) (1.4) % $ 121,258 $ 121,565 $ (307) (0.3) % RV and marina base rental income in our Core Portfolio for the quarter ended March 31, 2026 decreased $1.6 million, or 1.4%, from the same period in 2025 due to an increase in Core Annual RV and marina base rental income of 4.2%, offset by decreases in Core Seasonal and Transient RV and marina base rental income of 14.8% and 6.9%, respectively. The decreases in Core Seasonal and Transient RV and marina base rental income were primarily due to softer demand driven in part by a loss of Canadian customers. Utility and other income in our Core Portfolio for the quarter ended March 31, 2026 increased $1.8 million, or 5.4%, from the same period in 2025. The increase was primari ly due to increases of $1.4 million and $0.3 million in utility income and pass-through income, respectively. The increase in utility income was driven by higher expenses driving additional recovery primarily in sewer, trash, water and cable recovery income. The utility recovery rate (utility income divided by utility expenses) for the quarters ended March 31, 2026 and 2025 were approximately 50% and 48%, respectively. The increase in pass-through income was primarily driven by increases in real estate tax pass-throughs to customers in Florida. Property Operating Expenses Property operating expenses, excluding property management, in our Core Portfolio for the quarter ended March 31, 2026 increased $2.5 million, or 1.8%, from the same period in 2025, driven by increases in Repairs and maintenance of $1.4 million, Utility expense of $0.7 million and Real estate taxes of $0.4 million. The increase in Repairs and maintenance was primarily driven by higher extraordinary repair and maintenance, lawn and common area maintenance expenses and contract repairs, partially offset by lower security guard expenses. The increase in Utility expense was due to increases in trash, water and sewer expense, partially offset by a decrease in electric expense. The increase in Real estate taxes was primarily due to an increase in real estate taxes in our Florida portfolio. 24 Management’s Discussion and Analysis (continued) Home Sales and Other The following table summarizes certain financial and statistical data for our Home Sales and Other Operations: Quarters Ended March 31, (amounts in thousands, except home sales volumes) 2026 2025 Variance % Change Gross revenues from new home sales $ 7,708 $ 9,429 $ (1,721) (18.3) % Cost of new home sales 8,014 8,582 (568) (6.6) % Gross revenues from used home sales 828 774 54 7.0 % Cost of used home sales 1,235 530 705 133.0 % Gross revenues from brokered resales and ancillary services 10,560 10,720 (160) (1.5) % Cost of brokered resales and ancillary services 4,351 4,580 (229) (5.0) % Home selling and ancillary operating expenses 6,823 6,168 655 10.6 % Home sales volumes: New home sales 87 117 (30) (25.6) % Used home sales 142 57 85 149.1 % Brokered home resales 113 98 15 15.3 % Gross revenues from new home sal es decreased $1.7 million a nd Cost of new home sales decreased $0.6 million dur ing the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025 as a result of a change in overall sales mix, resulting in a higher percentage of lower priced homes being sold during the quarter ended March 31, 2026 as compared to the same period in 2025. Rental Operations The following table summarizes certain financial and statistical data for our MH Rental Operations: Quarters Ended March 31, (amounts in thousands, except rental unit volumes) 2026 2025 Variance % Change Rental operations revenue (1) $ 9,721 $ 8,395 $ 1,326 15.8 % Rental home operating and maintenance 1,347 1,146 201 17.5 % Depreciation on rental homes (2) 2,642 2,245 397 17.7 % Gross investment in new manufactured home rental units $ 265,369 $ 214,484 $ 50,885 23.7 % Gross investment in used manufactured home rental units $ 14,084 $ 11,136 $ 2,948 26.5 % Net investment in new manufactured home rental units $ 222,842 $ 175,858 $ 46,984 26.7 % Net investment in used manufactured home rental units $ 11,055 $ 7,376 $ 3,679 49.9 % Number of occupied rentals – new, end of period 1,951 1,724 227 13.2 % Number of occupied rentals – used, end of period 184 194 (10) (5.2) % ______________________ (1) Consists of Site rental income and home rental income. Approximat ely $6.0 million an d $5.0 million of Site rental income is included in MH base rental income in the Core Portfolio Income from Property Operations table for the quarters ended March 31, 2026 and 2025, respectively. The remainder of home rental income is included in rental home income in our Core Portfolio Income from Property Operations table. (2) Presented in Depreciation and amortization in the Consolidated Statements of Income and Comprehensive Income. Rental operations revenues were $1.3 million, or 15.8%, hig her during the quarter ended March 31, 2026 compared to the same period in 2025 primarily due to a 12.1% growth in occupancy and a 3.7% growth in rate. 25 Management’s Discussion and Analysis (continued) Other Income and Expenses The following table summarizes Other income and expenses, net: Quarters Ended March 31, (amounts in thousands, expenses shown as negative) 2026 2025 Variance % Change Depreciation and amortization $ (53,136) $ (50,942) $ (2,194) (4.3) % Interest income 2,191 2,238 (47) (2.1) % Income from other investments, net 1,774 2,018 (244) (12.1) % General and administrative (11,101) (9,239) (1,862) (20.2) % Other expenses (1,233) (1,878) 645 34.3 % Interest and related amortization (33,645) (31,136) (2,509) (8.1) % Total other income and expenses, net $ (95,150) $ (88,939) $ (6,211) (7.0) % Total other income and expenses, net decreased $6.2 million, or 7.0%, for the quarter ended March 31, 2026 compared to the same period in 2025 primarily due to higher Interest and related amortization, Depreciation and amortization and General and administrative expense. Equity in income/(loss) of unconsolidated joint ventures Equity in income/(loss) of unconsolidated joint ventures was $5.8 million lower during the quarter ended March 31, 2026 compared to the same period in 2025, primarily due to a distribution from an unconsolidated joint venture that refinanced a secured loan and distributed proceeds in 2025. Liquidity and Capital Resources Liquidity Our primary demands for liquidity include payment of operating expenses, dividend distributions, debt service, including principal and interest, capital improvements on Properties, home purchases and property acquisitions. We expect similar demand for liquidity will continue for the short-term and long-term. Our primary sources of cash include operating cash flows, proceeds from financings, borrowings under our unsecured Line of Credit (“LOC”) and proceeds from issuance of equity and debt securities, including issuances under our at-the-market (“ATM”) equity offering program. One of our stated objectives is to maintain financial flexibility. Achieving this objective allows us to take advantage of strategic opportunities that may arise. When investing capital, we consider all potential uses, including returning capital to our stockholders or the conditions under which we may repurchase our stock. These conditions include, but are not limited to, market price, balance sheet flexibility, alternative opportunistic capital uses and capital requirements. We believe effective management of our balance sheet, including maintaining various access points to raise capital, managing future debt maturities and borrowing at competitive rates, enables us to meet this objective. Accessing long-term, low-cost secured debt continues to be our focus. As of March 31, 2026 and December 31, 2025, secured debt encumbered a total of 112 of our Properties, and the gross carrying value of such Properties was approximately $3,284.3 million and $3,266.6 million, respectively. On November 1, 2024, we entered into our current ATM equity offering program with certain sales agents, pursuant to which we may sell, from time-to-time, shares of our common stock, par value $0.01 per share, having an aggregate offering price of up to $700.0 million. As of March 31, 2026, the full capacity of our current ATM equity offering program remained available for issuance. As of March 31, 2026, we had available liquidity in the form of approximately 406.1 million shares of authorized and unissued common stock, par value $0.01 per share, and 10.0 million shares of authorized and unissued preferred stock registered for sale under the Securities Act of 1933, as amended. We also utilize interest rate swaps to add stability to our interest expense and to manage our exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of the designated derivative are recorded in Accumulated other comprehensive income/(loss) on the Consolidated Balance Sheets and subsequently reclassified into earnings on the Consolidated Statements of Income and Comprehensive Income in the period that the hedged forecasted transaction affects earnings. For additional information 26 Management’s Discussion and Analysis (continued) regarding our interest rate swaps, see Part I. Item 1. Financial Statements—Note 7. Derivative Instruments and Hedging Activities . We expect to meet our short-term liquidity requirements, including principal payments, capital improvements and dividend distributions for the next twelve months, generally through available cash, net cash provided by operating activities, issuances of equity under our ATM equity offering program and our LOC. As of March 31, 2026, our LOC had a remaining borrowing capacity of $410.4 million with the option to increase the borrowing capacity by $200.0 million, subject to certain conditions. The LOC bears interest at a rate of SOFR plus 0.10% plus 1.25% to 1.65% and requires an annual facility fee of 0.20% to 0.35%. We expect to meet certain long-term liquidity requirements, such as scheduled debt maturities, property acquisitions and capital improvements, using long-term collateralized and uncollateralized borrowings, including the existing LOC and the issuance of debt securities or the issuance of equity including under our ATM equity offering program. The following table summarizes our cash flows activity: For the quarters ended March 31, (amounts in thousands) 2026 2025 Net cash provided by operating activities $ 194,232 $ 193,390 Net cash used in investing activities (44,296) (42,321) Net cash used in financing activities (136,832) (128,169) Net increase (decrease) in cash and restricted cash $ 13,104 $ 22,900 Operating Activities Net cash provided by operating activities increased $0.8 million to $194.2 million for the quarter ended March 31, 2026 from $193.4 million for the quarter ended March 31, 2025. The increase in net cash provided by operating activities was primarily due to an increase in cash inflows related to accounts payable and other liabilities, partially offset by an increase in cash outflows related to manufactured homes, net, a decrease in cash inflows in other assets, net and a decrease in net income. The following table summarizes our purchase and sale activity of manufactured homes: For the quarters ended March 31, (amounts in thousands) 2026 2025 Purchase of manufactured homes $ (21,962) $ (11,273) Sale of manufactured homes 7,649 8,199 Manufactured homes, net $ (14,313) $ (3,074) Investing Activities Net cash used in investing activities increased $2.0 million to $44.3 million for the quarter ended March 31, 2026 from $42.3 million for the quarter ended March 31, 2025. The increase was primarily driven by cash outflows related to capital improvements and decreases in distributions of capital from unconsolidated joint ventures and proceeds from insurance claims, net, offset by a decrease in investment in unconsolidated joint ventures. Capital Improvements The following table summarizes capital improvements: For the quarters ended March 31, (amounts in thousands) 2026 2025 Asset preservation (1) $ 9,989 $ 9,755 Improvements and renovations (2) 8,165 6,383 Property upgrades and development (3) 20,012 25,461 Site development (4) 4,640 1,671 Total property improvements 42,806 43,270 Corporate 2,479 1,932 Total capital improvements $ 45,285 $ 45,202 ______________________ 27 Management’s Discussion and Analysis (continued) (1) Includes upkeep of property infrastructure including utilities and streets and replacement of community equipment and vehicles. (2) Includes enhancements to amenities such as buildings, common areas, swimming pools and replacement of furniture and site amenities. (3) Includes $3.2 million and $7.4 million of restoration and improvement capital expenditures related to hurricane events for the quarters ended March 31, 2026 and 2025, respectively. (4) Includes capital expenditures to improve the infrastructure required to set manufactured homes. Financing Activities Net cash used in financing activities increased $8.6 million to $136.8 million for the quarter ended March 31, 2026 from $128.2 million for the quarter ended March 31, 2025. The increase was primarily due to an increase in distributions to common stock holders of $8.6 million. Contractual Obligations Significant ongoing contractual obligations consist primarily of long-term borrowings, interest expense, operating leases, LOC maintenance fees and ground leases. For a summary and complete presentation and description of our ongoing commitments and contractual obligations, see Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations in our 2025 Form 10-K. Off-Balance Sheet Arrangements As of March 31, 2026, we have no off-balance sheet arrangements. Critical Accounting Policies and Estimates Refer to Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K for a discussion of our critical accounting policies. There have been no significant changes to our critical accounting policies and estimates during the quarter ended March 31, 2026. Forward-Looking Statements This Quarterly Report on Form 10-Q includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “estimate,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include, without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement due to a number of factors, including, but not limited to: • our ability to control costs , and real estate market conditions, our ability to retain customers, the actual use of Sites by customers and our success in acquiring new customers at our Properties (including those that we may acquire); • our ability to maintain historical or increase future rental rates and occupancy with respect to properties currently owned or that we may acquire; • our ability to attract and retain customers entering, renewing and upgrading membership subscriptions; • our assumptions about rental and home sales markets; • our ability to manage counterparty risk; • our ability to renew our insurance policies at existing rates and on consistent terms; • home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility; • results from home sales and occupancy will continue to be impacted by local economic conditions, including an adequate supply of homes at reasonable costs, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing; • impact of government intervention to stabilize site-built single-family housing and not manufactured housing; • impact of public health crises, such as highly infectious or contagious diseases on our business operations, our residents, our customers, our employees and the economy generally; • effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions; • our ability to execute expansion/development opportunities in the face of changes impacting the supply chain or labor markets; • the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto; • unanticipated costs or unforeseen liabilities associated with recent acquisitions; • the effect of potential damage from natural disasters, including hurricanes and other weather-related events, which could result in substantial costs to our business; 28 Management’s Discussion and Analysis (continued) • our ability to obtain financing or refinance existing debt on favorable terms or at all; • the effect of inflation and interest rates, including the impact of changes in tariffs, as well as costs associated with supply chain disruptions; • the effect from any breach of our, or any of our vendors’ data management systems; • the dilutive effects of issuing additional securities; • the potential impact of material weaknesses, if any, in our internal control over financial reporting; • the outcome of pending or future lawsuits or actions brought by or against us, including those disclosed in our filings with the Securities and Exchange Commission; and • other risks indicated from time to time in our filings with the Securities and Exchange Commission. For further information on these and other factors that could impact us and the statements contained herein, refer to Part I. Item 1A. Risk Factors in the 2025 Form 10-K and Part II. Item 1A. Risk Factors herein . These forward-looking statements are based on management’s present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. 29 Item 3. Quantitative and Qualitative Disclosures About Market Risk We disclosed a quantitative and qualitative analysis regarding market risk in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our 2025 Form 10-K. There have been no material changes in the assumptions used or results obtained regarding market risk since December 31, 2025.