Equity Lifestyle Props (NYSE:ELS) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call.
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Summary
Equity Lifestyle Properties reported a 6.5% increase in NOI and a 7.7% growth in normalized FFO per share for the second quarter of 2026, driven by strong annual revenue streams and controlled expenses.
The company raised full-year guidance for normalized FFO per share and highlighted strong demand in its MH and RV portfolios, with MH occupancy at 94% and expansion projects underway to meet demand.
Recent legislation, the 21st Century Road to Housing bill, is expected to positively impact the manufactured housing segment by easing restrictions and promoting expansion.
The Thousand Trails membership platform saw an 11% increase in subscription revenue, and the company completed a launch of new subscription memberships with strong demand.
Guidance for 2026 includes a midpoint FFO per share of $3.18, with core property income growth projected between 5.5% and 6.5%, and the company maintains a strong balance sheet with limited floating-rate exposure.
Full Transcript
Paul Seavey, Executive Vice President and Chief Financial Officer
Good day everyone and thank you all for joining us to discuss Equity Lifestyle Props second quarter 2026 results. Our featured speakers today are Marguerite Nader, our Vice Chairman and CEO; Patrick Waite, our President and COO; and I am Paul Seavey, our Executive Vice President and 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.
For those who would like to participate in the question and answer session, management asks that you limit yourself to one question so everyone who would like to participate has ample opportunity. As a reminder, this call is being recorded. Certain matters discussed during this conference call may contain forward-looking statements in the meaning of 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 become untrue because of subsequent events. In addition, during today's call we will discuss non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release, our supplemental information, and our historical SEC filings. At this time, I'll now turn the call over to Marguerite Nader, our Vice Chairman and CEO.
Marguerite Nader, Chief Executive Officer
Good morning and thank you for joining us today. I am pleased to discuss our operating results for the quarter. Our NOI increased 6.5% as compared to last year. We focused on translating NOI growth to normalized FFO growth driven by continued strength in our annual revenue streams and managed expenses throughout our portfolio. Our normalized per share FFO growth for the quarter is 7.7%. The strength of our portfolio allows us to raise our full year guidance for normalized FFO per share.
Our MH and RV portfolio benefits from powerful long term demographic tailwinds including the aging of the population and the fact that approximately 70% of our MH communities are senior lifestyle oriented. These demand drivers help support the stability of our business and position us well for continued outperformance even in an environment of broader market uncertainty. Our MH core portfolio represents approximately 60% of our total revenue with occupancy of 94%.
We have increased our MH occupancy for two consecutive quarters and have raised guidance for the rest of the year for our largest revenue line item. Our properties are in demand and the teams are executing on our strategy to increase occupancy. The manufactured housing community model benefits from stability driven by long term residency and high occupancy levels. Once communities achieve strong occupancy they tend to remain highly occupied over time.
Our portfolio is further differentiated by our resident base with 97% of MH residents owning their home and choosing our communities as their retirement destination. Beyond housing, our communities foster a strong sense of connection and purpose through resident-led clubs and activities. The activities at our properties promote wellness, creativity, lifelong learning and social engagement, creating neighborhoods where residents can build relationships and remain active and involved.
Annual RV and Marina revenue grew 4.8% year to date driven by strong retention across our RV sites, park models, resort cottages and other RV accommodations. We saw decreased attrition from our customer base as compared to last year and a strong level of engagement from new customers. Our annual RV customer base is split between winter and summer seasons. Approximately 70% of our annual revenue is generated from Sunbelt properties serving active adult customers.
Like our MH residents, they value community, lifestyle and quality amenities. The remaining 30% of revenue is generated from seasonal properties that primarily serve families who return year after year for recreation, traditions and the unique community experience our properties offer. During the quarter, the Thousand Trails portfolio delivered strong performance with membership growth of approximately 800 members and subscription revenue increasing by 11%.
The strength of our membership platform continues to resonate with customers as more guests recognize the value and flexibility it provides. I want to thank our team members for their commitment to our customers and communities. I will now turn the call over to Patrick to provide further details on our financial performance.
Patrick Waite, President and Chief Operating Officer
Thanks, Marguerite. Stable annual revenue streams from MH residents, RV and Marina annual guests, and Thousand Trails members have always been the focus of our business, accounting for more than 90% of our core revenue. Over the last five years, our core MH revenue growth has averaged 5.8% while our core RV revenue growth has averaged 5.7%, led by long term annual RV revenue which makes up more than 70% of total core RV revenue. I'm pleased with the build back of annual customers in our northern markets over the last year.
Occupancy across our MH portfolio remains strong at 94% supported by demand from our 55+ customers to purchase and rent homes in our communities. Year to date, growth of our MH occupancy has come from both sales and rentals. We also typically see approximately 20% of our home sales are to existing renters who choose to become a long term homeowner and current homeowners who want to upgrade or downsize from their existing home. Our Florida markets continue to support long term occupancy growth with our major submarkets of West Palm Beach, Fort Lauderdale, Tampa, St. Pete and Ocala-Daytona all meeting demand for the value that residents find at our active lifestyle 55+ communities, particularly given the cost of alternative housing in those markets. We also continue to see steady demand across our highly occupied California and Arizona markets, while the northern U.S. submarkets in the Midwest, Northeast and Mid-Atlantic are in the middle of the summer home selling season where we see demand contributing to 40% of new home sales in the quarter.
Property expansions are key elements of our MH occupancy growth strategy. As we recognize the substantial demand for affordable 55+ communities in Florida, we will add occupancy through sales and rentals across four recent development projects with close to 500 sites. At another age-qualified expansion project in the Phoenix market, we added more than 20 units of occupancy, growing the occupancy of the property by 4% year over year. The much anticipated 21st Century Road to Housing bill became law earlier this month.
Over the last 10 years, through the work of the Manufactured Housing Institute and members of the industry, manufactured housing has been increasingly recognized at the federal and state levels as a source to address the need for more affordable housing in the U.S., and manufactured housing is specifically addressed in the Road legislation. A few key points to mention. First, manufactured housing is exempt from the institutional investor provision in the act, which preserves investment in the asset class.
Second, HUD Code homes will not be required to have a permanent chassis, which allows manufacturers greater flexibility in home design. They will expand the market for manufactured housing by offering homes that include designs similar to traditional site-built homes as well as two-story configurations. And third, zoning and land use best practices encourage state and local governments to accommodate HUD Code manufactured homes in more locations and developments.
The practical implications for ELS will take some time to materialize, but they include more diversity in the homes we can place in our communities and some further support to secure entitlements as we pursue expansion projects. We completed the launch of our new Thousand Trails subscription memberships a little over a year ago. Since offering these memberships, we've seen strong demand with more than 9,000 Thousand Trails memberships sold, including almost 7,000 over the last 12 months.
Our 12th annual 100 Days of Camping campaign is in full swing across our RV portfolio. The social media campaign celebrates the roughly 100 days between Memorial Day and Labor Day and has 33 million views across the social media channels so far this year. Campers across the country are using their hashtag and sharing photos, posing with their campaign rally towel at 100daysofcamping.com. Now I'll turn it over to Paul.
Paul Seavey, Executive Vice President and Chief Financial Officer
Thanks, Patrick, and good morning, everyone. I will highlight some takeaways from our second quarter and June year-to-date results, review our guidance assumptions for the third quarter and full year 2026, and close with a discussion of our balance sheet. Second quarter normalized FFO was $0.74 per share. Strong core portfolio performance generated 6.5% NOI growth in the quarter compared to the same quarter last year, 120 basis points higher than guidance.
Core community-based rental income increased 5.8% for the second quarter and 5.7% for the June year-to-date period, each compared to the same periods in 2025. In the second quarter, we generated rate growth of 5.8% as a result of noticed increases to renewing residents and market rent paid by new residents. After resident turnover in the first six months of 2026, occupied sites increased by 67. During that same period, we added 140 expansion sites, resulting in occupancy of 93.7% as of the end of June.
Our RV and marina platform offers products with differing features that allow our customers to enjoy our properties. These include annual, seasonal, and transient retail stays as well as our Thousand Trails membership. In aggregate, the growth rates from our core portfolio RV and marina base rent combined with our annual membership subscriptions were 3.1% and 1.6% for the second quarter and year-to-date periods, respectively. Core RV and marina annual base rental income, which represents over 70% of total RV and marina-based rental income, increased 5.4% and 4.8% in the second quarter and year-to-date periods, respectively, compared to prior year.
Seasonal and transient rent was 170 basis points lower than guidance as a result of lower-than-expected transient rent in the quarter, mainly in June. We continue to realize offsetting expense savings. The net contribution from our total membership business consists of annual subscription and upgrade revenues offset by sales and marketing expenses. The membership business contributed $17.1 million and $34.4 million net for the second quarter and June year-to-date periods, respectively, compared to the same periods last year.
The year-to-date growth of 9.6% is mainly attributed to rate growth in our subscription revenue. Year to date, approximately 2,600 upgrade subscriptions were originated by new and existing members. Core utility and other income increased 6% for the June year-to-date period compared to prior year. Our utility income recovery percentage was 50.4% year to date in 2026, about 220 basis points higher than the same period in 2025. June year to date, core operating expenses increased 2.3% compared to the same period in 2025.
Expense growth was 120 basis points lower than guidance in the second quarter, mainly resulting from savings in utility and real estate tax expenses following resolution of appeals at properties in Texas. Second quarter core property operating revenues increased 4.9%, while core property operating expenses increased 2.9%, resulting in growth in core NOI before property management of 6.5%. For the year-to-date period, core NOI before property management increased 5.7%.
Income from property operations generated by our non-core portfolio was $2.9 million in the quarter and $5.9 million year to date. The press release and supplemental package provide an overview of 2026 third quarter and full-year earnings guidance. The following remarks are intended to provide context for our current estimate of 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.
Our guidance for 2026 full-year normalized FFO is $3.18 per share at the midpoint of our guidance range of $3.13 to $3.23. We project core portfolio property operating income growth of 6% at the midpoint of our range of 5.5% to 6.5%. We project the non-core properties will generate between $8.7 and $12.7 million of NOI during 2026. Our property management and G&A expense guidance range is $119.7 million to $125.7 million. In the core portfolio, we project the following full-year growth rate ranges: 3.9% to 4.9% for core revenues, 1.6% to 2.6% for core expenses, and 5.5% to 6.5% for core NOI.
Full-year guidance assumes core MH rent growth in the range of 5.2% to 6.2%. Full-year guidance for combined RV and marina rent growth is 1.1% to 2.1%. Annual RV and marina rent represents approximately 75% of the full-year RV and marina rent, and we expect 4.8% growth in rental income from annuals at the midpoint of our guidance range. Our assumptions for full-year RV and marina rent growth reflect current seasonal and transient reservation pacing for the third quarter.
Our fourth quarter guidance assumes no growth in transient rent compared to prior year. Consistent with our historical practice, we make no assumption for the impact of a material storm event that may occur. Our third quarter guidance assumes normalized FFO per share in the range of $0.76 to $0.82. Core property operating income growth is projected to be in the range of 6.3% to 6.9% for the third quarter. Third quarter growth in MH rent is 5.6% at the midpoint of our guidance range.
We project third quarter annual RV and marina rent growth to be approximately 4.9% at the midpoint of our guidance range. Third quarter growth in core property operating expenses is projected to be 1% 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 insulated from refinance and rate risk and is well positioned to execute on capital allocation opportunities. Our floating-rate exposure is limited to balances on our line of credit.
Our debt to EBITDARE is 4.4 times and interest coverage is 5.6 times. 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, and 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 5.25% and 5.75%, 55% to 70% loan-to-value, and 1.45 to 1.65 times 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
Thank you. At this time we'll conduct a question-and-answer session. As a reminder, to ask a question, you'll need to press Star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 11 again. Please stand by while we compile the Q&A roster. And our first question comes from the line of Michael Goldsmith of UBS. Your line is now open.
Michael Goldsmith, Analyst at UBS
Good afternoon. Thanks a lot for taking my question. Two questions on transient RV and seasonal. I guess, you know, you've updated the guidance there, and so we've got good visibility into third quarter and what's implied for the fourth quarter. So maybe you can kind of walk through your expectations for the rest of the year. Clearly seasonal transient has been under a little bit of pressure, and so is that the expectation for the third quarter? And then also just given your lapping some of the disruption from Canada, maybe in the fourth quarter, on the seasonal side, maybe you can kind of walk through the overall assumptions that you've baked in for the back half.
Paul Seavey, Executive Vice President and Chief Financial Officer
Sure, happy to do that, Michael. So we raised our full-year normalized FFO per share guidance. That reflects our year-to-date outperformance and the changes to guidance in various line items for the remainder of 2026. The main contributor of the change is core NOI improvement of 30 basis points. That is mainly from expenses. We also included changes to our MH rent, our membership subscriptions, in addition to the expenses. With respect to RV- and marina-based rental income growth, we adjusted that down and at the same time raised our annual growth 10 basis points.
The change from our prior guidance reflects our transient expectations for third quarter. That's based on current reservation pace, and we reduced fourth quarter year-over-year growth in transient, and that's flat year over year.
OPERATOR
Thank you. One moment for our next question. And our next question comes from the line of Steve Sakwa of Evercore ISI. Your line is now open.
Steve Sakwa, Analyst at Evercore ISI
Yeah, thanks, I guess. Good morning out there, Marguerite. Could you just maybe talk about the, I guess, the prospects for building occupancy? If I look at page nine and just look at the core portfolio, you're sitting at around 93.8%. And I know on past calls you've talked about some of the storm issues that you've had that kind of knock some of the units offline, but maybe just walk us through your confidence level of building occupancy back towards 95.
And what do you think the right timeframe is to get that portfolio back to 95%?
Marguerite Nader, Chief Executive Officer
Sure. Thanks, Steve. I think Patrick's going to walk you through how we're thinking about growing occupancy. And just to point out that we did grow occupancy—I mentioned it in my opening remarks—for the last two quarters, but maybe, Patrick, you could walk through it.
Patrick Waite, President and Chief Operating Officer
Yeah, Steve. So over the last two quarters we're up about 70 units, and I guess I'd raise a couple points. One is over the last four quarters, the combined new and used home sales have both been increasing. We increased rentals year over year by about 140. So we're meeting demand on both home sales and on rentals. And I see that as an opportunity to continue to grow in future quarters on the path back to 95% occupancy. We're taking it a quarter at a time, and I would expect that over the next few quarters that we'll be putting up occupancy growth that's been favorable to the last few quarters.
As you pointed out, we came through a transition here where we had some impact from storms that requires some recovery, putting inventory into those communities. And broadly across the portfolio, we feel good about demand and feel good about occupancy growth in the back half of the year.
Marguerite Nader, Chief Executive Officer
And, Steve, I would just remind you that over 50% of our properties are 98% occupied and really have been for a number of years. And that it's really sustainable due to the investment that customers are making when they're picking out a community. They make a long-term commitment—and generally a long-term commitment for us and for the home. Our customers are paying cash for their home, which means they really have a strong incentive to keep up the resale value.
So that contributes to our positive outlook on growing occupancy.
OPERATOR
Thank you. One moment for our next question. And our next question comes from the line of Jamie Feldman of Wells Fargo. Your line is now open.
Jamie Feldman, Analyst at Wells Fargo
Great, thanks for taking the question. I know in the third quarter you start to send out renewal rates for the following year. Can you talk through, for your annual business lines, what those are starting to look like or what you're asking and if you have any responses yet?
Patrick Waite, President and Chief Operating Officer
Yeah, Jamie, it's Patrick. As we really move through the third quarter into the fourth and we're going through, you know, our annual budget will start very soon. That happens to occur alongside of us coming up with our MH rates for the upcoming year. And just as a reminder, the majority of those occur in the first quarter. And with, you know, 60 days, 90 days' notice, we'll be sending those out as we approach the fourth quarter and into the fourth quarter.
So we're going through that process right now. I'd say from the perspective of a range, we will be in a position to do that maybe in the next call.
Paul Seavey, Executive Vice President and Chief Financial Officer
And Jamie, one thing to keep in mind as we think about those increases, a couple of metrics that we look to are indications of COLA, which typically comes out a bit later in the year, as well as the CPI that's released in August as well as September.
Jamie Feldman, Analyst at Wells Fargo
Okay, thank you.
Marguerite Nader, Chief Executive Officer
Thanks, Jamie.
OPERATOR
Thank you. One moment for our next question. Our next question comes from the line of Jeffrey Specter of Bank of America Securities. Line is now open.
Jeffrey Spector, Analyst at Bank of America Securities
Great, thank you. You know, just listening to the opening comments and discussion around the 55-plus customer, given you have the expertise, you have the strong brand serving that 55-plus customer, how are you thinking about 55-plus built-to-rent communities? I've seen some articles in that it seems to be an emerging niche area within resi.
Marguerite Nader, Chief Executive Officer
Sure. So, you know, we have within our portfolio, we obviously have rental properties, rental communities. And as we look to opportunities to grow, we'll look at those types of assets, but really focused in on our MH portfolio and we'll continue to look at opportunities to grow inside the MH business.
OPERATOR
Thank you. One moment for our next question. Our next question comes from the line of Eric Wolf of Citi. Your line is now open.
Eric Wolf, Analyst at Citi
Hey, thanks. I just want to go back to your guidance increase for a second. You beat your second quarter by 2 cents. And if I look at the components of your guidance, you raised your core income, as you mentioned earlier, but you also raised your non-core income. I mean, it looks like there's some increase in income from other investments as well. So I was just curious, what's the offset to all that? I guess I would have thought maybe a little bit larger of a guidance increase.
And then could you also talk about what's in the income from other investments and if that's sort of one-time or more recurrent in nature?
Paul Seavey, Executive Vice President and Chief Financial Officer
Thanks, Eric. As you mentioned, we were 2 cents ahead of our guidance. The core portfolio did outperform and that's the main contributor; it's really the result of the lower expenses that we saw in the second quarter. There are a number of things that happen kind of below the line, so to speak, and that includes income from other investments as well as the consolidation of the joint venture that we mentioned. The pickup in the non-core, when you run that through to the bottom line, it's effectively offset by shifts in our expectations for JV income and certain other line items.
So on a net basis, that pickup in non-core is offset. And then with respect to what's included in the income from other investments, net, we have some of our subsidiary businesses there. We also report certain income, you know, related to corporate and other matters that may come from time to time. During the quarter we did recognize income from a settlement of a dispute. We had some income from prior business interruption flow through there. But at the end of the day, kind of as we worked through all of it, the core portfolio is really what drove the outperformance.
Eric Wolf, Analyst at Citi
Thank you.
Paul Seavey, Executive Vice President and Chief Financial Officer
You're welcome.
Marguerite Nader, Chief Executive Officer
Thanks, Eric.
OPERATOR
Thank you. One moment for our next question. Our next question comes from the line of Brad Heffern of RBC. Your line is now open.
Brad Heffern, Analyst at RBC Capital Markets
Yeah. Hey everybody. Thanks. On seasonal transient, you obviously mentioned the weak June, and you've clearly adjusted things for a slower booking pace. Can you talk through just what you think is driving that? I know sometimes it's weather. I would think at the same time, like the Canadian customer comps are getting easier. So just any of the dynamics there would be great.
Patrick Waite, President and Chief Operating Officer
Yeah, sure. It's Patrick. You know, on the transient front, I would just highlight that it continues to reflect volatility. You know, as we work our way through the summer season, we have experienced some challenges with weather. You know, that's had a persistent impact on transient results over our tenure in the industry. You know, looking at the seasonal business, you know, as we mentioned, we wouldn't expect to really get better visibility there for several weeks as we get late into the third quarter and into the fourth quarter as people who are considering booking a reservation for their winter stay in the Sun Belt, you know, start to be more active. I've been in Florida over the last few weeks. I've been on site with our property teams. They are consistently reaching out to seasonal guests who chose not to book with us last year or seasonal guests that were with us last year and chose not to book the early-bird reservation. You know, there's certainly indications that many are considering a return and we are booking some reservations now, but that activity is really not anticipated to pick up for the next several weeks.
And, you know, as we work our way through that, we'll just have better visibility and can share some more insight. Thanks, Brad.
OPERATOR
Thank you. One moment for our next question. Our next question comes online of John Kim of BMO Capital Markets. The line is now open.
John Kim, Analyst at BMO Capital Markets
Thank you. I wanted to ask about the expansion sites in MH and if that's having a direct impact to MH occupancy. So my question is, are these harder to lease up given they require a new, more expensive home, or are they easier to lease up because they're in more established communities? And also wanted to know how you price expansion sites versus a comparable existing site within the community.
Patrick Waite, President and Chief Operating Officer
Yeah, John, it's Patrick. I guess I—first I'd point out that we completed an expansion in Florida: 140 MH sites. That's an expansion on an age-qualified property and it's got a history of expansion. We acquired the property—it's 900 sites. It's in the Greater Tampa–St. Pete MSA. When we acquired it at 900 sites, we expanded by 40 sites in 2019. Having acquired the property in 2016, we acquired an adjacent parcel, the one we just completed for development in 2019, and we just brought that online.
So just using that as an example, the site rents on the expansion sections reflect—to the extent the sites are on water, have a particularly good view or site configuration—they'll reflect a premium rent compared to a standard site even within the expansion section in the original property. So the expansion sites can typically carry a higher rent, but it really depends on the configuration of the community that you're expanding. And then just with respect to the nature of the homes that we place in our expansion sections, you know, they're going to reflect kind of the scope of price points that we put into the broader community that we're expanding. So as we're building occupancy, we may have higher-end homes in that expansion, but it's also going to reflect a standard site plan as well.
OPERATOR
One moment for our next question. Our next question comes from the line of Handell Saint-Juste of Mizuho Securities. Line is now open.
Handell Saint-Juste, Analyst at Mizuho Securities
Hey guys, thanks for taking the question. I was hoping you could share a bit more color on the cadence of RV bookings throughout 2Q and early 3Q. I think you mentioned that Memorial Day was a bit light but within your range of expectations. So I was hoping to get some more color on how the Juneteenth and July Fourth holiday weekends were versus prior year and versus your expectations. And did you see any benefit from the World Cup? Thanks.
Patrick Waite, President and Chief Operating Officer
Yeah, I think with respect to the holiday weekends, they were down slightly to last year. I think that what happened as June developed, there were some fairly significant weather events that occurred. Then as we headed into the Fourth of July and early-July season, what we saw with reservation pacing was weather, but also the smoke from the Canadian wildfires having some impact over the weekend as well. So a couple of different factors. And then, excuse me, with respect to the World Cup, I don't think that we saw a meaningful contribution or pickup related to the World Cup just based on the location of the events and the location of our properties.
Handell Saint-Juste, Analyst at Mizuho Securities
Thank you.
Marguerite Nader, Chief Executive Officer
Thanks, Handell.
OPERATOR
Thank you. One moment for our next question. Our next question comes from the line of Adam Kramer of Morgan Stanley. Your line is now open.
Adam Kramer, Analyst at Morgan Stanley
Hey, great. Good day, guys. Wanted to ask about the membership business. I think you've talked in the past about sort of prioritizing rate over sort of membership count. It looks like it's declined now. So I just wanted to ask sort of what level is maybe sort of the right level for memberships and at what point, you know, maybe you sort of anchor back to membership count versus prioritizing rate.
Marguerite Nader, Chief Executive Officer
Sure, sure. So I think, as you recall, in 2024 we introduced a new dues-based upgrade option. And this program allows members to commit to a higher annual dues for a two- to four-year term with total upgrade costs of approximately $2,000 to $4,000. Those members, they look forward to that because they receive enhanced benefits really designed to increase usage of our properties—ability to stay longer, earlier booking windows, discounts on cabin rentals, et cetera.
So that initiative that we did a couple of years ago has contributed to that strong growth in the annual dues revenue. So on a per dues-paying member base, you've seen an increase of about—from, I think, about $580 to about almost $700 per member. So that really reflects the success of the upgrade and the members' willingness to pay for that additional flexibility. So I'd say what you're seeing as you compare the TT portfolio from a few years ago is really a deliberate trade-off with an emphasis on the higher rate rather than the volume.
OPERATOR
One moment for our next question. Our next question comes online of Jason Wayne of Park Racing. Line is now open.
Jason Wayne, Analyst at Park Racing
Hi, thanks for the question. So you consolidated seven RV communities into the non-core portfolio during the second quarter. Could you just give some color on what was acquired in terms of geography mix, annual and transient, and occupancy?
Patrick Waite, President and Chief Operating Officer
Yeah, sure. It's Patrick. It was seven properties. It's about 1,400 sites. Two of the properties are in the West, California and Colorado. The balance of the properties—five properties—are in the Southeast United States, approximate or adjacent to submarkets where we already have a presence. Of the seven properties, five of them, and 70% of the sites, were developed over the last 10 years. So they're new; they have a very attractive spec and high demand.
And just with respect to the current mix of revenues, it's about 40% longer-term streams at this point. That's been increasing with our focus in our platform on the longer-term revenue streams, and we're optimistic about continuing to grow the long-term revenue streams in that portfolio.
OPERATOR
Thank you. One moment for our next question. Our next question comes from the line of Wesley Golladay of Baird. Your line is now open.
Wesley Golladay, Analyst at Baird
Hey everyone, I just want to go back to the comment about the positive demographics for MH. Would you look to increase your MH expansions and, if so, what is the primary constraint for doing more?
Marguerite Nader, Chief Executive Officer
You know, what we've done over the last few years is look at opportunities within our existing portfolio to do developments adjacent to either with vacant land that we have or purchasing land that is vacant and adjacent next to our properties. So you will see us continue to look for opportunities within our portfolio to buy land adjacent to our properties and do those developments specifically on the MH side. As Patrick pointed out one example, I think that just shows you the strength of those MH developments.
Wesley Golladay, Analyst at Baird
Thank you.
OPERATOR
Thank you. One moment for our next question. Our next question comes from the line of Peter Amerwitz of Deutsche Bank. Your line is now open.
Peter Amerwitz, Analyst at Deutsche Bank
Yes, thank you for taking the question. Just to go back to some of your comments about the expenses, I think you said some savings on utilities and real estate taxes. Any other commentary you could provide or color on other expense items? And I guess as we think about expenses in the back half and into '27, how much of the, I guess, expense downside relative to expectations is sustainable going into the second half in 2017?
Paul Seavey, Executive Vice President and Chief Financial Officer
Sure, sure. Thanks, Peter. So I'll just speak broadly to the guidance for the full year. We've guided to expense growth. Generally, it tracks to CPI with some realized and anticipated savings from a few sources. So when we think about our main three expense line items, utility, payroll and R and M, those represent about two thirds of our core expenses and those we have an assumption for right around a CPI increase for 2026. That is some savings off of our prior guidance as a result of our anticipated occupancy level in our transient properties, where we do see the relationship between our variable rent and our variable expenses.
The remaining third of our expenses include real estate taxes, insurance, membership, sales and marketing, and some other line items. The full-year growth rate assumption for those in aggregate is flat to prior year. That does include the effect of our previously disclosed insurance renewal as well as some successful real estate tax appeals that we saw in the second quarter. As we think about going forward, I would say that, you know, CPI is the key driver on the two thirds of our expenses as it is this year, and then the other line items, the remaining third.
Some of that is dependent on what we see in insurance. That's probably been the largest driver of variability in that third over the last few years.
Peter Amerwitz, Analyst at Deutsche Bank
All right. Thanks for the time.
Paul Seavey, Executive Vice President and Chief Financial Officer
Thank you.
OPERATOR
Thank you. One moment for our next question. Our next question comes from the line of David Siegel of Green Street. Your line is now open.
David Siegel, Analyst at Green Street
Thank you. I'm trying to better understand the slow lease-up pace for MH. I want to, you know, is it due to the lack of available home inventory in properties that have demand? Is it due to a lack of demand in the properties that have the vacant sites, or is it still primarily related to repairing storm damage or other factors?
Patrick Waite, President and Chief Operating Officer
Yeah, I mean, I think I would focus on one, we have good demand. So it's really driven by a recovery from the storms that impacted us in 2024 and into 2025. You know, we're past that and we're gaining momentum. And then it's the timing of getting inventory into the communities, which we're in the process of. And as I mentioned just on a previous question, you know, the up 70 year to date from an occupancy perspective, I feel like we have a favorable trend and good demand to pick up the pace as we go through the back half of the year.
OPERATOR
Thank you. One moment for our next question. Our next question comes online of Jesse Letterman of Zelman. Your line is now open.
Jesse Letterman, Analyst at Zelman
Hey, thanks for taking the question and good morning. I wanted to ask you about kind of the income profile of your renters. You have very healthy rent growth and on the MH side it's been a, you know, great part of the business. Just curious, you know, what their ability to continue to absorb these 5 to 6% increases is. If you see any change in behavior like resident turnover, delinquency or, you know, home sales from residents to compensate for these increases or, you know, anything from a resident health perspective would be great.
Marguerite Nader, Chief Executive Officer
Good morning. Sure. So as you mentioned, you know, over the last number of years we've had increases on the MH side of about, you know, 5% with our current average rent of about $950. But to arrive at that very top blended number every year, we put together a really detailed market survey for each property, which includes what's happening at the customer level and how the customer is able to afford what our offerings, and we compare rents in multifamily, single-family rental, and other manufactured communities in the area.
And we also look at the global basis and consider how our market rates, you know, may compare to what's happening with CPI, as Paul pointed out earlier, and then the prices of new and resale homes in our community. So those are important pieces to consider. And as we think about our long-term levels of delinquency throughout our portfolio, they have been and remain very low.
Jesse Letterman, Analyst at Zelman
I appreciate it. Thank you.
Marguerite Nader, Chief Executive Officer
Thank you.
OPERATOR
Thank you. One moment for our next question. And our next question comes from the line of John Kim of BMO Capital Markets. Your line is now open.
John Kim, Analyst at BMO Capital Markets
Thanks for taking the follow-up. When I look at your site count on page 12, the RV transient sites are now up quarter over quarter and up 20% over the last two years despite the uneven results. And I know you use transient RV sites as a front door to annual and seasonal customers, but are you seeing like a slower conversion rate from transient to annual/seasonal and that's why the site count keeps going up?
Marguerite Nader, Chief Executive Officer
Well, one of the reasons the site count's increased was really as a function of putting our JV properties inside of that site count. So that's really the driver of those differences, John.
John Kim, Analyst at BMO Capital Markets
And when did that happen?
Marguerite Nader, Chief Executive Officer
That happened in the two quarters ago, I believe. So if you're comparing it to a couple of years ago, that's the main driver of the difference.
John Kim, Analyst at BMO Capital Markets
But is there anything about that, the conversion rate or demand in annual and seasonal, a little bit slower than it has been in the past?
Patrick Waite, President and Chief Operating Officer
Yeah. John, it's Patrick. Well, we're seeing good demand on the annual front, and that is reflected in occupancy growth year over year. Mid-200s as Paul addressed, a pickup in our guidance on the annual front. So we see consistent demand there. The transient, to your point, is it's a component in addition to what Marguerite just raised with respect to sites coming online. A transient site's an available site for us for longer-term stays. We see 15 to 20% of our annuals and seasonals previously stayed with us as transient guests.
So it's an introduction to our property for a good chunk of our leads, and we'll continue to meet the longer-term demand. And we're seeing it come through on the annuals and are optimistic about the back half of the year.
John Kim, Analyst at BMO Capital Markets
Okay, thanks for clarifying.
Marguerite Nader, Chief Executive Officer
Thank you, John.
OPERATOR
Thank you. Since we have no more questions off the line at this time, I would like to turn it back over to Marguerite Nader for closing comments.
Marguerite Nader, Chief Executive Officer
Thank you for joining us today. We appreciate you taking the time to discuss our business. Take care.
OPERATOR
Thank you for your participation in today's conference. This concludes the program. You may now disconnect.
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