Equity Lifestyle Earnings: Low Expense Growth Drives Solid NOI Growth and Fourth-Quarter Outlook

Equity Lifestyle reported third-quarter results that were relatively in line with our expectations, giving us confidence in our $76 fair value estimate. Same-store occupancy increased 10 basis points sequentially to 95.0% for the manufactured housing portfolio. The segment saw monthly rent per site increase 5.9% year over year, leading to manufactured housing same-store revenue increasing 6.2% that was slightly better than our 5.7% estimate. While the recreational vehicle segment also saw 6.2% growth from the annual membership segment, the seasonal and transient segments were down 13.3% and 6.1%, respectively. Combined, same-store revenue was up 4.4% for the whole company. However, same-store operating expenses were only up 2.8%, so same-store net operating income for the whole company grew 5.8% and was relatively in line with our 6.2% estimate. Equity Lifestyle reported normalized funds from operations of $0.72 per share for the third quarter, a penny better than our $0.71 estimate and four cents better than the $0.68 figure the company reported in the third quarter of 2023.