Good day, everyone, and thank you all for joining us to discuss Equity LifeStyle Properties’ First Quarter 2019 Results. Our featured speakers today are Marguerite Nader, our President and CEO; Paul Seavey, our Executive Vice President and CFO; and Patrick Waite, our Executive Vice President and COO. 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. 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 become untrue because of subsequent events. In addition, during today’s call, we will discuss non-GAAP financial measures as defined by the 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’d like to turn the call over to Marguerite Nader, our President and CEO.

Good morning, and thank you for joining us today. I’m pleased to report the results for the first quarter of 2019. Our key operating statistics continued to show strength. We have increased occupancy for the last 38 quarters. Occupancy in our MH portfolio increased 78 sites, with an increase in our homeowners of 64. Our overall occupancy level is 95% with over 50% of our communities 98% occupied or more. Our residents are generally buying their homes for cash and making a long-term commitment to ELS. The continued strength in the retail market is evident in the homeowners’ transfers throughout our portfolio. New home sales for the quarter were 91. The decline from last year is attributed to filling community. Our conversion rate for new and used homes continues to increase with the 35% conversion rate for the quarter. Our RV revenue performed in line with our expectations for our annual and seasonal revenue streams. Our transient revenue was flat to last year, mainly attributed to weather-related park closures. We see continued growth in our membership base within our Thousand Trails portfolios. Our customers have the flexibility to choose their length of commitment to us. We now turn to our summer season, where we will start our 100 Days of Camping campaign and expect to host over 1 million guests and members at our property during this busy season. Across the organization, we are focused on improving the customer experience. We place a high priority in customer feedback and surveyed responses, including using online rating tools such as TripAdvisor, Google, Facebook and customer feedback shared directly on the property. As we encourage customer feedback and people have new channels to communicate with us, we have seen the feedback volume increased by 86% over the past three years. We’ve received over 140,000 completed surveys and reviews over the past year, allowing us to have regular discussions with our leadership team across the portfolio about what is working well and where we can invest in ways that further improve our customer experience. Our customers are increasingly choosing self-service options to complete their transactions with us. In the quarter, our RV revenue through digital channels increased 32% and our online sales of campaign passes increased by 33%. We have significantly increased our video library over the last year. Many customers are making the buying decision after taking an online tour of the community and the homes. Our customers continue to migrate toward booking on their mobile devices. For the year, mobile revenue increased 68% and now accounts for 29% of our total transient revenue. Turning to acquisitions, since our last call, we purchased three RV parks for a total purchase price of $35 million. The properties contain 1,100 sites and will complement our existing assets in nearby locations. I will now turn it over to Paul to walk through the numbers in detail.

Thank you, Marguerite. Good morning, everyone. I will provide an overview of our first quarter results and walk through our detailed guidance for the second quarter and the full year 2019. Before I complete my remarks and turn the call over to the operator to start Q&A, I will discuss our balance sheet. As you review our press release and supplemental package released yesterday afternoon, you will note some changes to our GAAP income statement as a result of adopting the lease accounting guidance changes. You will also see that our non-GAAP financial measures continue to be presented in our historical format. For ease of understanding comparative periods, our non-GAAP financial measures also reflect our historical classification of revenues and expenses, including bad debt expense. For the first quarter, normalized FFO was approximately $1.2 million higher than our guidance as a result of core and non-core property operating income outperforming our expectations. Core MH rent growth of 5%, includes 4.4% rate growth and approximately 60 basis points related to occupancy gains. Core RV rental income from annuals and seasonals performed in line with the expectations for the quarter. Our transient revenues were less than guidance as a result of weather events at a limited number of properties, including our Yosemite Lakes property in California. First quarter membership dues revenue as well as the net contribution from upgrade sales were higher than guidance. Dues revenues increased 6.9% as a result of rate increases and an increase in our paid member count of 3%. During the quarter, we sold approximately thirty six hundred thousand trails camping passes, an increase of 16% over the first quarter of 2018. We upgraded 634 members during the quarter, 9% more than the first quarter last year. Core utility and other income was higher than guidance as…

Certainly. [Operator Instructions] Our first question comes from the line of Nick Joseph from Citi. Your question, please.

Going back to the transient RV revenues in the quarter, what’s the cancellation policy if there is inclement weather? And then is there any residual impact to any of the properties going forward from those weather issues?

Sure, Nick. It’s Patrick. Our cancellation policy typically reflects an opportunity for – that reservation to be booked forward to another period in order to provide some flexibility for the customer and to maintaining a good relations with our customers that if they are unfortunate enough to be impacted by unfavorable weather. We wanted to give an opportunity to come back. At this point, I would say we don’t expect to see an impact go forward with respect to any inclement weather, Wisconsin as an example. Once we get past those flooding events, we typically see the business to return to normalized.

Thanks. And then for the RV acquisitions in March and April, what’s the mix of annual seasonal in transient within the RV currently? And then what’s your cap rate on the acquisitions?

Sure. The mix is about 60% to 70% annual and the cap rate was 5.5 cap, I think it is about $33,000 of site. This is the acquisition that we closed on with the seller that we’ve been talking about for a while and that we’ve known for 20 years and done a lot of deals with this seller.

Thanks.

Thanks, Nick.

Thank you. Our next question comes from the line of John Kim from BMO Capital Markets. Your question, please.

Just a follow-up on the CapEx question. Just given the strength of your organic growth that you’ve had historically as well as lower CapEx. Are you surprised that cap rates have been compressed below 5%?

Well, in this particular property of this particular seller, like I said, we had long-term relationship with them. So I think that that was a function of the relationship that we were able to get that kind of cap rate and the location. So I think it really depends on the location and you’ve seen in prior periods where we’ve repurchased something closer to a 5 cap.

On the Thousand Trails, looking at your guidance for the year, the growth in your members exceed the change in originations, I know that’s not quite apples-to-apples, but I was wondering are you expecting a higher retention rate on members going forward?

I think, overall, what we’re seeing is an increase. We are seeing an increase in the originations and we’re seeing an increase in the retention of the customers across the Thousand Trails footprint.

And we’ve really seen that we’ve transformed the way our customers using that footprint, we’re selling our membership or really our subscription model online to much success. Our customers have become accustomed to the subscription process in general and other walks of life for themselves and they’ve increasingly adopted in online purchase. So we see that channel as an efficient way to distribute our product and we’re going to invest more time and resources to improve that channel.

And what do you attribute the higher retention rate and the higher number of upgrade sales to?

I think some of the upgrade activity that we’ve seen is additional sales channel, including phone sales and web pitches. So that’s part of what we’re seeing there and I think the retention is really a function of the experience that the customer, the member has at the property and we’re seeing that they have a very positive experience and want to continue to renew with us.

Okay. And then, finally, on your RV guidance, you lowered it slightly on the same-store revenue side by 20 basis points to 4.8% yet you said it’s basically performing in line with expectations. Can you just comment on that dynamic?

Sure. I think when you – in touching on Thousand Trails as you have here, when you’re reviewing our RV result, I think it’s important to look at the whole picture. So our membership, our subscription model saw increases in the quarter. So where previously someone may have stayed with us on the transient basis, they may have decided to purchase a membership and that revenues picked up in the right to use annual number and it’s just the – on the absolute line items on transient, I think we’re up flat to last year.

Okay, but just different bucket.

Right.

Thank you.

Thank you. Our next question comes from the line of Drew Babin from Baird. Your question, please.

Hey, good morning.

Good morning.

Good morning.

Digging in a little further on the transient RV. Obviously, you mentioned the weather impact in the first quarter as well as potentially more membership type customers rather than transient, I guess I’ll ask this question, are you seeing any slackening or just kind of pull back in the consumer appetite for RV? RV shipments industry-wide were down a little bit in the second half of last year, I’m not sure if that’s just yours kind of – maybe with a little more inventory left over from prior years than they wanted. Are you seeing any impact whatsoever other than weather in that business that maybe causing us slowing relative to past year?

Yes. We certainly look at – we look at sales and we look at shipments, but that is not as impactful to us as weather and certainly where properties are closed – I mean, you had California issues where the properties are closed and now you have some flooding issues in Wisconsin, which is why when you break down our portfolio, it’s really comprised primarily of longer-term customers and that’s where we – by design, that’s the way we’ve – we’ll intend for our properties to run and our RV annual customers generally staying with us in average of 10 years. And so, for us, we haven’t seen a change other than in those areas where there has been weather impact. In fact, if you look at our Keys properties, which are not in core anymore, as you know, because of the hurricanes from last year, from 2017, we’ve seen an increase, if you consider 2017 over 2019, a significant increase which was – the last year that we had a full quarter of operations for those properties. So – and they are primarily transient and we saw a significant increase in activity and revenue, which is reflected in our non-core measurements.

Okay. That’s helpful. And I guess just one last thing. If you look at the reduction in same-property NOI growth guidance for the year just between the RV impact and between the expense items that you mentioned, would it be fair to say that really the only thing that changed was just the weather in the first quarter with – for both the top line and expense perspective?

Well, those are drivers in the first quarter. I think the important thing to keep in mind as we think about the full year is the impact of the insurance renewal that I mentioned in my opening remarks.

Okay. Which is also somewhat indirectly correlated to weather?

It’s all about weather.

It’s all about weather. It’s the only real weather. Great. That’s all for me. Appreciate the color. Thank you.

Thanks, Drew.

Thank you. [Operator Instructions] Our next question comes from the line of Todd Stender from Wells Fargo. Your question, please.

Hi, thanks. So the acquisitions made in the quarter, you said that that’s the same seller, how about the one already made in Q2?

Those are the same. That’s three from the same seller.

All from the same seller. Okay.

We probably over the last 20 years with this seller, we’ve purchased or somehow been in – he’s been in contact with us on acquisitions of 20, 30 properties. So it’s a great relationship we have with this seller.

And no tax advantageous OP units, nothing like that tucked in there?

No, it was not. It was a cash transaction.

Okay. Sure. Thanks. Any comments on the rent – on the in-place rents versus market? And maybe just comments there? And then how do you kind of compute your – the cap rate every quarter? Is that a forward cap rate and maybe an assumption, a growth assumption?

Yes. That’s an in-place what we’re expecting for the next – the forward 12 months. And in terms of market rents or in-place rents, they’re effectively at market rents. I think there’s some opportunity for synergies in the expenses, but the market rates are pretty much set for those properties.

Okay. How about adjacent land available in these communities? What kind of upside do you see around just the surrounding communities?

On the – in the ones we – on the ones we purchased, there isn’t adjacent land. There is a small piece of expansion within the properties that we bought up, it’s a very small piece, but there isn’t anything in these particular locations. We certainly are working on transactions throughout our portfolio with land, adjacent to our existing properties working through some of the entitlement issues with that.

All right. Thanks. And just, finally, you gave a conversion rate. This goes back to the renters converting to homeowners, Paul you said it was about 35% conversion rate. Do you have any metrics around that, maybe average length of stay as they rented, before they bought, and do you have a third general range that you see maybe counted in months?

Sure. Yes. What we typically see is renters converting after a stay of two to three years. They can blend a little longer or little shorter, but typically within that range. And just with respect to the 35% overall, 25% of the overall 35% conversion, those are new and used home sales to existing ELS renters. And if we include all conversions across the portfolio, there’s renters that either purchased on other than the one that they were renting or homeowners that decided to upsize or downsize, that’s what brings that overall number up to 35%. It reflects the behavior, the sticky nature of our customers and not only with our renters overall but also with existing homeowners.

Okay. Thank you.

Thanks, Todd.

Thank you. Our next question comes from the line of John Pawlowski from Green Street Advisors. Your question, please.

Thanks. Sticking with the RV acquisitions, I was just hoping to get a sense for the long-term NOI growth you’d underwrite on these type of, I guess, secondary markets versus the best RV markets in your portfolio, how wide is that range?

I think it – certainly very fine location. These particular locations, I would say, you’d have moderate growth as compared to where – if you’re talking about Florida or the Keys, Arizona, California, something along those lines, I think – as I mentioned earlier, I think that the rate increase that you see, it really comes from operating them in concert with properties that are close to these existing locations, which is one of the attractive features of these properties. So if there is a little bit of – there is certainly a difference in growth rates as you move away from the coasts.

Sure. Is moderate growth in your mind, is it 1% inflation and inflation plus?

I’d say it’s little bit more than inflation.

Okay. And then I know private equity isn’t new in this space, but it is growing in this space, so are the big private equity firms making your lives a bit more difficult on the acquisition side as 2019 rolls along?

I think that there’s certainly over the year and this has been over the last four or five years, so there really isn’t, as you say, anything new, but there are certainly more people showing up at the auction tent or calling potential sellers. But I think in some instances that’s created some of – yes, it certainly created some of the cap rate compression that we’ve seen over the years.

Okay. Great. And then last one for me. Paul, I apologize if I missed it, but our property taxes in the – expected – the end of this year or the balance of this year, are they trending in line with what you expect at the beginning of the year?

Yes. They’re trending in line with our expectation.

Could you remind me what that expectation is in terms of the 2019 growth rate?

Yes. It’s kind of mid single-digit growth rate in 2019.

Okay. Thank you.

Sure.

Thank you. Since we have no more questions on the line at this time, I would like to turn it back over to Marguerite Nader for closing comments.

Thank you. We look forward to updating you on next quarter’s call.

Thank you. Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.