Good day, everyone, and thank you for joining us to discuss Equity LifeStyle Properties second quarter 2022 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. For those who would like to participate in the question-and-answer session, management asks that you limit yourself to two questions, 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 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 am pleased to report the results for the second quarter of 2022. We continued our record of strong core operations and FFO growth with a 4.5% growth in normalized FFO per share in the quarter and a 9.3% growth year to date. We have often discussed the quality of our portfolio and our cash flow. Over the years, our acquisition strategy has been focused on the quality of cash flow from property operations and buying in locations with long-term positive demographic trends. We see high demand for our key locations with our customers expressing a desire to stay with us on a longer-term basis. Our residents and customers see the benefit of an increased commitment to us from a quality-of-life standpoint. We are well positioned and have benefited from an influx of resident and customer interest into our key states of Florida, Arizona, and California. Our strong top-line performance, coupled with disciplined operating practices, result in continued strength and growth in normalized FFO per share. The revenue from our MH communities represents 60% of our revenue. We have seen a heightened increase in leads and interest in our locations over the past two years. Over the last two years, Florida has seen outsized population growth. Our customers are attracted to the Sun Belt climate. They are taking advantage of the added flexibility in their schedules as well as technology to accelerate the move from their northern location. Our portfolio is well positioned to take advantage of this key demographic movement. Continued evidence of the demand for our product offerings is seen in our new home sales results. During the quarter, our new home sales increased 24%. We sold 365 new homes in the quarter, which was a high watermark for ELS. The primary driver of the new home sales volume increase was our Florida MH sales program, where we saw an increase in the volume of 60%. Over 95% of these new home buyers were cash buyers. This investment is consistent with our entire portfolio, as the vast majority of our residents have made a capital commitment to live in our communities. That commitment from our homeowners results in a pride of ownership and a long-term resident base. Core RV and marina revenue produced strong results with an increase of 6.6% in the quarter. The primary driver of this increase was the strength of our annual revenue stream, which increased by over 9%. Our market surveys provide support for an increase in market rates, and we saw an increase in conversions from transient and seasonal guests. Our transient and seasonal revenue grew by 2.4%. We saw a strong pickup in seasonal revenue demand. Roughly half of the increase in seasonal demand was from our Florida customers who extended their stays in April due to the continued difficult weather conditions in the north. The transient revenue decline was impacted as well by the difficult weather in April and May in key locations. Strong demand for longer-term stays has reduced the number of available transient sites across our portfolio. We were able to increase the rate on the transient sites to combat some of the weather-related declines. Our operating teams have done a great job keeping up with the high demand for our properties. In June, Tripadvisor announced that 63 of our properties received Travelers' Choice Awards, and 23 of those properties are in the Tripadvisor Hall of Fame since they have received the award for five or more consecutive years. Our ELS team members are dedicated to exceeding the needs of our customers. They have done a great job delivering excellent customer service and have continued to focus on safety for our customers, guests, and employees. I will now turn it over to Paul to walk through the numbers in detail. Thank you, Marguerite. Good morning, everyone. I will review our results for the second quarter and June year to date, highlight our guidance assumptions for the third quarter and full year 2022, and discuss debt market conditions as well as our balance sheet. For the second quarter, we reported $0.64 normalized FFO per share. Core and non-core property operations delivered the strong results we expected, while home sales volumes and profits exceeded our expectations in the quarter. Our second quarter core MH rent growth of 5.7% consists of approximately 5.3% rate growth and 40 basis points related to occupancy gains when compared to the same period last year. We have increased occupancy 97 sites since December with an increase in owners of 443, while renters decreased by 346. Core RV and marina base rental income increased 6.6% in the second quarter and 13.9% year to date compared to prior year. Base rental income from annuals represents more than 60% of total RV and marina base rental income, and it increased approximately 9% for the second quarter and year to date periods compared to last year. Annual RV rate increases generated approximately 6.4% growth in the year to date period, with occupancy contributing close to 300 basis points of growth. Our guidance for the second quarter included a range of growth rates for combined seasonal and transient rents, with 4% at the midpoint of the range. The actual result for the second quarter was 2.4% growth, a variance of approximately $500,000. Demand for extended stays resulted in better than expected seasonal rental income during the quarter and offset the lower than expected transient income. Year to date, combined seasonal and transient rent increased almost 23% compared to prior year following recovery of our seasonal RV business during the first quarter of 2022. Membership dues revenue increased 9.3% and 10.1% for the quarter and year to date respectively compared to the prior year. Year to date, we've sold approximately 12,300 Thousand Trails Camping Pass memberships. While this represents a 9% decrease over the same period in 2021, it represents a 20% increase over membership sales in second quarter of 2019. At the end of the second quarter 2022, our member count, excluding RV dealer free trials, was 3.6% higher than the same time last year. Also, during the quarter, members purchased approximately 1,100 upgrades at an average price of approximately $8,700. Core utility and other income was higher than expected during the quarter as a result of utility income that offset higher than expected utility expense. Year to date, our utility recovery rate is approximately 45%, the same rate we experienced in the first six months of last year. The decrease in utility and other income in the second quarter compared to prior year is the result of $2.3 million of hurricane related insurance proceeds that we recognized in 2021. Core property operating expense growth was 7% in the second quarter and 8.6% year to date. The second quarter growth rate was 60 basis points higher than the midpoint of our guidance range, a variance of approximately $800,000. In the second quarter, utility expense, specifically electric expense, was the largest contributor to core property operating expense growth. Rate driven increases in Florida and California caused electric expense to be more than $1 million higher than last year and our guidance. The increase in repair and maintenance expense compared to last year is attributed to inflationary effects on the services of third party contractors we engage for property maintenance and landscaping. Property payroll reflects a modest increase in the number of employees across our portfolio. The percentage growth is mainly the result of wage rate changes with some additional expense for overtime to cover open positions. In summary, second quarter core property operating revenues increased 4.9% and core NOI before property management increased 3.3%. For the year to date period, core property operating revenues increased 7.2% and core NOI before property management increased 6.2%. Income from property operations generated by our non-core portfolio was $8.2 million in the quarter and $18.6 million year to date. These results were in line with our expectations. Revenues generated by our recently acquired assets reflect our strategic focus on long-term revenue streams. During the year to date period, only 8% of our non-core property operating revenues were generated from transient rent. Property management and corporate G&A expenses were $30 million for the second quarter of 2022 and $61 million for the year to date period. Other income and expenses, excluding transaction and pursuit costs, generated a net contribution of $9.4 million for the quarter. New home sales profits, along with our ancillary retail and restaurant operations, generated approximately $4.1 million in the second quarter and $6.7 million year to date. Interest and related amortization expense was $28.1 million for the quarter and $55.5 million for the year to date period. The press release provides an overview of third quarter and full year 2022 earnings guidance. As I provide some context for the information we've provided, keep in mind my remarks are intended to provide our current estimate of future results. All growth rates and revenue and expense projections represent midpoints in our guidance range and are qualified by the risk factors included in our press release and supplemental financial information. A significant factor in our guidance assumptions for the remainder of 2022 is the level of demand for shorter term stays in our RV communities. We have developed guidance based on current customer reservation trends. We provide no assurance that our actual results will be consistent with our guidance, and we assume no obligation to update guidance as conditions change. Our full year 2022 normalized FFO guidance is $2.73 per share at the midpoint of our range of $2.68-$2.78. Full year normalized FFO per share at the midpoint represents an estimated 7.5% growth rate compared to 2021. We expect third quarter normalized FFO per share in the range of $0.66-$0.72. Full year core NOI is projected to increase 6.1% at the midpoint of our guidance range of 5.6%-6.6%. We project a core NOI growth rate range of 4.7%-5.3% for the third quarter and expect NOI for the quarter to represent 25% of full year core NOI. Full year guidance assumes core rent rate growth in the ranges of 5.2%-5.4% for MH and 6.2%-6.4% for annual RV rents. Our guidance assumptions for the third and fourth quarters include MH occupancy gained in the second quarter with no assumed occupancy increase in the second half of the year. Our assumptions for expense growth reflect current expectations based on year-to-date activity and our review of property level and consolidated expense projections for the remainder of the year. As a reminder, we make no assumptions for storm events or other uninsured property losses we may incur. The midpoints of our guidance assumptions for combined seasonal and transient show a decline of 3% in the third quarter and growth of 11.1% for the full year compared to the respective periods last year. Our guidance for the full year and third quarter includes the impact of the acquisition activity we've closed in the first and second quarters, with no assumptions for additional acquisitions during the year. We have repaid all debt with maturity dates in 2022. The full year guidance model makes no assumptions regarding other capital events or the use of free cash flow we expect to generate in the remainder of 2022. Now some comments on debt markets and our balance sheet. During the quarter, we observed significant volatility in the debt capital markets. In April, we closed the previously announced $200 million secured loan at a fixed rate of 3.36% for 12 years. Proceeds were used to repay 2022 maturities that carried a weighted average rate of 4.2%. Shortly after we locked rate on that loan, Treasuries began to rise. The 10-year moved around 175 basis points before it topped out close to 3.5% in the middle of June. During that same time period, we noted varied reactions from lending sources, but they generally behaved in a similar manner by increasing spreads on loans and limiting capacity for new deals. For comparison, the loan we closed in April would likely price around 150 basis points higher if we locked rate today. In the face of extreme volatility and uncertainty, ELS is well-positioned with a debt maturity schedule that shows only 15% of our outstanding debt matures over the next five years. Compared to an average of approximately 45% for REITs. In addition, 23% of our outstanding secured debt is fully amortizing and carries no refinancing risk. Current secured debt terms available for MH and RV assets range from 50%-75% LTV, with rates from 4.25%-5% for 10-year maturities. High quality, age-qualified MH will command best financing terms. RV assets with a high percentage of annual occupancy have access to financing from certain life companies as well as CMBS lenders. Life companies continue to express interest in high quality communities, though some have set limits on capacity and pricing. We continue to place high importance on balance sheet flexibility, and we believe we have multiple sources of capital available to us. Our debt to EBITDAre is 5.3x, and our interest coverage is 5.7x. The weighted average maturity of our outstanding secured debt is approximately 12 years. Now we would like to open it up for questions. Certainly. Ladies and gentlemen, if you have a question at this time, please press star then one. One moment for our first question. Our first question comes from the line of Keegan Carl from Berenberg. Your question, please. Hey, guys. Thanks for the questions. Maybe first, can you help us reconcile the performance a bit on the core seasonal transient RV base rental income? Maybe just what drove the slower growth? Was it a function of the site mix or something larger? Yeah, I think, you know, what we saw, Keegan, as we made our way through the quarter, was, you know, certainly strength in the seasonals, a very strong interest on the part of our customers to spend more time at our properties. We talked quite a bit about the weather in April and May and its impact on the transient business. You know, into June, we didn't quite see the development that we expected in terms of the demand for those shorter-term stays. I think also I mentioned it in my comments, but the seasonal stays in Florida, they were extended just because it was you know it was tough weather up north which caused people to wanna stay in Florida for a longer period of time which we were the beneficiaries of that in the seasonal area. Got it. Just to clarify one thing on that. I saw that the days actually spent in the parks were up. I'm curious, is that just a function of more seasonal stays and less transient, or are you seeing a shift in how people are staying with maybe, you know, less trips but extended stays and going further into the week? I think the overall transient is up slightly by about a half a day. What you're seeing is that shift from transient to seasonal and annual, which is making up the additional nights. Got it. Then, you know, just kinda one more here. Maybe on the July Fourth weekend, what drove the weaker rental income there? Was it particularly, you know, volume or price? Were there any sort of elevated cancellations maybe coming into the weekend? I think you know in terms of cancellations when you think about the booking window you know what we have seen with our customers is when we look overall those customers who make their reservations 90 days in advance that represents about 20% of the reservations at the end of the period. We have a significant portion that are making their decision within eight or nine days of arrival. That represents 55%-60%. You know we've long talked about weather dependency and so forth but that really is the kinda timeframe that we have an indication as to what's happening with that transient the short-term customer and when they're coming to the property. Got it. It's primarily weather and then, you know, I guess there's just from your seat, there's not necessarily anything that's gonna concern you going into Labor Day weekend. You know, as I just said, 60% of the revenue comes from those customers. Yeah. Who are making their reservation, you know, 8-9 days in advance. Labor Day is a ways out. Yeah. Okay. We're up for- Great. Thanks for the time, guys. Thank you. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Liz Doykan from Bank of America. Your question, please. Hi, everyone. Good morning. Hello, Liz. I just wanted to understand the utility recovery rate a bit more, which ticked down this quarter. Historically, what has that number been for 2Q? Just if you could break down how exactly you're passing through these costs to the residents, what specific measures are you guys taking to relieve some of that pressure to utility costs? Yeah. Just overall, I think our long-term history, and you know, we focus really on the full year activity, not so much quarter to quarter. 45% is really kind of the midpoint of the recovery range, and it's consistent with what we saw in the quarter. With regard to our practices, you know, we definitely focus on, we call it unbundling. To the extent that there are charges that are utility in nature that the customers are reimbursing us for the expense, we separate that from the rent and charge that to them separately in, you know, every chance we get, essentially. One of the limiting factors for us in utility recovery relates to our transient RV business. Just that short-term stay, the infrastructure is not there to, you know, measure that activity for a very brief period of time and charge those customers. When customers are annuals or have longer-term stays in those RV communities, we are able to bill them back for their utility usage, but not those shorter-term stays. Liz, that also helps from a conservation standpoint. We find that if people are sub-metered, they will use less, and that just helps from an energy conservation standpoint. Okay, got it. Thank you. My second question is just around the transient demand. What visibility do you have for that, you know, trending into the second half as we go into the third quarter and the fourth quarter, you know, given the nature of bookings, I think, do we expect the third quarter to be the heaviest period for, you know, transients? Yeah. I mean, our third quarter guidance, the 2.5%-3.5% decline in the combined seasonal and transient, that's based on our current pace for seasonal and transient rents. The seasonal pace continues to reflect demand for longer-term stays. That's showing about a mid-teens percent growth compared to last year. Transient pace looks similar to the experience we had in the second quarter, you know, kinda evidenced by what we saw over the Fourth of July weekend. It's down, call it 6%-7%. When we think about that transient pace, particularly in the third quarter, the booking window that I mentioned a minute ago is really important. I'll say it again, just in 2019 and 2021, about 40% of the booked reservations were made more than 90 days in advance of planned arrival. By the end of the third quarter in those years, that reservation category represented about 20%. As we step into the quarter, that reservation made a while ago, you know, represents significantly more than it ends up representing, and that's because those short-term reservations, kinda eight to nine days ahead of arrival, they end up representing 60% in total. Okay. Thank you. Thanks, Liz Doykan. Thank you, Liz. Thank you. One moment for our next question. Our next question comes from the line of Samir Khanal from Evercore ISI. Your question please. Hey, Marguerite or Paul, good morning. I guess I'm just trying to dig a little bit deeper into this transient growth where you brought down the forecast by 300 basis points. Is there a way to quantify between. You know, what we're trying to figure out is how much of that is related to sort of things just slowing here, right? You overearned last year, comps are tougher versus weather or transient conversions here. I'm not sure if you can quantify that. I mean, I guess the way that I think about it, you know, I think you're right. We certainly, when we think about 2021 and the comparison to 2022, and I'll set aside weather because that variable just exists in our business. When you think about the comparison of last year to this year, you certainly had, in 2021, a maximum level of flexibility in terms of our customers' ability to kind of live and work, in most any place they chose. That drove, you know, outsized demand. The other thing that I'll say in comparison last year to this year, certainly the overall, inflationary impact. I think there's been a lot of discussion and questions around gas prices, and I think that you know the response that we have to that question is, it's really kind of all costs that are rising and I think are causing our customers to potentially pause and change their behavior or patterns as compared to last year. When you think about all of this activity and roll it all up compared to 2019, we're showing continued strength relative to that year as a base year. I think, Sameer, we have experience operating RV parks over the last 60 quarters. When you look at the annual, seasonal, and transient results over that time, transient revenue has been the most volatile by far. We've seen periods of negative growth, flat, and then outsized growth. We've continued to focus our business on that annual rental stream to avoid the volatility and, you know, you saw that come through in the quarter. When you think about, I think, over a 10-year period of time, the transient growth has contributed approximately 30 basis points of our overall NOI growth. So it's not a large driver of our operating results by design and the way we've built our portfolio. Okay, got it. I guess my next question is on the MH rate growth side. I mean, you're forecasting sort of low 5% rate increases. I guess, Marguerite, given where inflation is today and costs and yours—what you're seeing as well, what is your ability to push that up further, let's say over the next 12 months? Is there a point at which you start to get pushbacks from the customers? Trying to see how much more upside there is to that growth. Yeah, Samir, it's Patrick. You know, just as a reminder, we're about to enter our budget process for 2023, and We'll have better visibility into the impact of CPI as we work our way through that process. You know, about a quarter of our rents have some tie to CPI. You know, by and large, our portfolio is market driven. We'll keep pace with the market. You know, over time, we do recognize our long-term relationship with our customers, but we tend to track very closely in line with the market and to the extent that CPI has an impact. Based on history, I would expect that we're going to track favorably. I would highlight that Florida with 40,000 MH sites is a driver of our business. Just given the structure of leases and prospectuses in that sub-market, CPI does play a role there. Roughly, year to date, 15% of our sites in Florida, so roughly 6,500, have experienced increases based on CPI. Those CPI increases have rolled through without incident. The thing about our residents that have CPI-linked leases and prospectuses is they're very well versed on CPI, so that they watch it closely, and it tends not to be a surprise with respect to the resulting impact on rent increases. I think it's also helpful that there is going to be a, you know, Social Security increase, so that will benefit our customers as well. Our next question comes from the line of David Toti from Colliers. Your question please. Thank you. Just quickly, Marguerite, maybe you can comment on any differences that you might expect from the next cycle of the MH housing sales and how that might differ from single-family home sales, you know, which is obviously expected to cool. Do you expect MH patterns to be different in terms of sales? No, I think about 50% of our vacant sites and our ability to put homes are in Florida, and Florida is a really high demand market. We have a product that is attractively priced, which I think has been beneficial and really you've seen that in the quarter as we've increased our home sales. I would continue to see robust demand in our well-positioned portfolio. I would caution that in times when it's difficult for one to sell their home up north, you may tend to see, you know, some decline in home sales. I think that we have positioned ourselves well over the years, when we could sell homes and thought we were in a very good position to be able to sell homes. We've done that, and we've reduced our rental pool significantly. So there is some room in that rental pool, should that need to increase. Right now we feel very confident as we look out to the rest of the year. Great. That's helpful. Just one follow-up relative to strategy. Obviously, with the increased price sensitivity among some of your customer segments, gasoline, housing, and so forth, are you planning any strategic shifts in terms of product to meet more sensitive customers or lower price points or higher volumes? Are there any changes coming around those anticipations? We'll always look on the MH side, on the MH home sale side. We're really pushing through some of the costs that we're getting, you know, from the manufacturers. So we'll always look to ways to, you know, maximize, you know, the everything for our customer. But I don't have anything right now that would, you know, that I can highlight, other than making certain that we get the best price from the manufacturer that then we can pass that through to our customer. Great. Thanks for the color. Thanks, David. Thank you. One moment for our next question. Our next question comes from the line of Brad Heffern from RBC. Your question please. Hey, good morning, everyone. Given the limited visibility you have in the transient, I guess, why guide down at this point? Is that based largely on the, you know, the relatively small proportion of forward bookings, or are you seeing some sort of consistent demand erosion, you know, day to day? I think, Brad, it's our practice, our historical custom to take a look at our reservation pace and adjust based on what the information that's available at the time that we, you know, update our guidance. We've followed our historical practice. Okay. That's basically just suggesting that the reservation pace is down, you know, 3% or something like that? Right. Right. Okay. Got it. On the acquisition front, can you just talk about what you've seen in terms of cap rates across the businesses? Sure. In the quarter, we closed on two RV parks. The blend of those purchases from a cap rate perspective is about a five cap. Both properties are oceanside resorts, one on the East Coast, one on the West Coast. I think that's kind of in line with the types of cap rates we've seen for these types of assets. Okay. Any color on, you know, anything that you've seen on MH or marinas as well? I think that we haven't seen a noticeable change in the cap rates for you know, pricing in general. I think cap rates are somewhere in the 4%-5%. There are exceptions with really very high quality age qualified MH trading more aggressively. But other than that, we haven't seen a real change in cap rates. Okay. Thank you. Thank you. One moment for our next question. Our next question comes to the line of Wes Golladay from Baird. Your question please. Hey, good morning, everyone. I just have a quick question on the annual RV. I guess do you think any of the softness in the transient will end up spilling over into the annual side and where you may see some churn pickup? Then maybe a follow-up to that. It's my understanding that the portfolio lags CPI a bit for both the MH and the annual RV. Can you either confirm that and I guess how you capture all the CPI that you missed this year, the rent increase for this year will be maybe a 2023 event? Yeah. I guess I'll go to the latter part of the question first in terms of our rate increase process. On the MH side, as Patrick earlier mentioned, we've started our process for 2023. By the end of September, we'll have sent our first notices to residents for MH rent increases effective January first of 2023. As a reminder, I think we've talked before, 25% of our leases overall have a tie to CPI. The remaining 75% are market driven. By the time of our October earnings call, notices to about 50% of our MH residents will have been sent. We'll take a look and kind of figure that out. On the RV side of the business, the rates will have also been noticed. It's a much greater percentage. It's closer to 95% by November. In this time period right now, the next three months, there's a significant amount of activity related to setting rates that become effective in 2023. We anticipate that we will continue to see that transition from a transient and a seasonal to an annual. If you think about it just from considering the northern locations, our properties are a really attractive vacation opportunity for people to spend the summer, you know, 90 miles from their home, have their resort cottage there. I think that will only become more attractive. Got it. Then I guess for Labor Day, how important is that for the quarter? Then when we look at that, you know, the guidance, how much of that is just to having, you know, fewer sites 'cause of the conversions and then, you know, maybe just demand being down? Would it imply that rate is still low to mid-single digits for the people that do show up? Yeah, I think that. Yes, you're right in terms of the rate increase. In terms of the impact of the weekend, our holiday weekends tend to be kind of a, you know, a $2 million number for the contribution. We anticipate something similar for Labor Day. Got it. Thanks, everyone. Thanks. Thanks. Thank you. One moment for our next question. Our next question comes from the line of John Pawlowski from Green Street. Your question please. Thanks for the time. Paul, the reduction to 2022 revenue growth guidance, after the second quarter beat expectations, is that solely driven by transient, or are there any other business lines that you have some incremental concern over? Yeah. It's really driven by our transient business. Maybe Paul or Marguerite could you remind us the average turnover rate within the total Thousand Trails membership program? Then just in recent years and then historically, during soft economic times, how, you know, how do you see that turnover rate, the attrition rate change? Yeah. Well, we have two pieces inside that business. We have the legacy members, and the attrition associated with them is about 10%. The Camping Pass members have a higher attrition rate. That rate is closer to about 25%. I think on the legacy members, during really through kind of the cycles that we've seen with our legacy membership, their decision-making really is built around the memories that they have at the properties and their desire to camp. Our focus is on encouraging them to camp at the properties because we see that as the greatest indicator of retention, more so than kind of their economic circumstances at a point in time. The Camping Pass membership has, you know, perhaps a bit more sensitivity to changes in the economy. Thank you. One moment for our next question. Our next question comes to the line of Anthony Hau from Truist. Your question please. Hi, everyone. Thanks for taking my question. What is the mark-to-market premium on the MH lot rent when there is a homeowner turnover today? It's going to vary broadly. You know, with respect to Florida, we've been seeing 10%-15%. That's obviously a strong market for us, and it's a major driver of That's born out of a market survey, basically what's happening in and around the community, looking at single-family rental, multi-family, MH. Those are important components which provides then what the market increase should be. Thanks. Where do you think that number will be by year-end? Do you think it will go up to, like, 20% and 25%? I definitely don't think it's going up to 20 or 25%. I think, you know, we look at it on a monthly basis. We look at what's happening in and around our properties, and also, you know, look at our resident base, and understand that we have a long-term relationship with our resident base, and wanna make certain that we're evaluating it from a fair perspective. Thank you. One moment for our next question. Our next question comes from the line of Anthony Powell from Barclays. Your question please. Hi. Good morning. On transient, maybe just some more qualitative, I guess, thoughts on what you think is going on with the customer there. Is it inflation that's maybe impacting some customers? Is it the availability of alternate travel experiences? What do you think may be driving some of the softness? I know it's above 2019, but I guess, what do you think the right baseline is for us as we look at the business in the next several quarters, not just this year, as we try to kind of get a sense of where we should be on a runway basis? Yeah. I mean, I think, you know, I think there's inflationary pressures in all areas which begin to put pressure on incremental or last-minute decisions. The transient line item is a volatile line item. It, it's something that people are deciding, as Paul has walked through, you know, based on, you know, the forward booking. What we've tried to do and lay out for you is our best guess of what we see happening for the rest of the year. I think we've long said that this is a particular area that can surprise us on the negative or the positive, and you've seen that happen over the last 60 quarters within the business. Thanks. Maybe demographically, how does a seasonal and transient customer differ besides geographic origin? Are they similar in income and whatnot? Just maybe, what's your view on that seasonal customer over the next several quarters? Sure. The primary seasonal customer is the customer that stays with us in the South, you know, Florida, Texas, Arizona, and they stay with us. They're snowbirders. They get out, you know, they're getting out of the cold and spending 30- 60- 90 days with us. In the quarter, we saw that group stay with us longer into April because the weather was good in Florida, good in Arizona, and it wasn't so good up north. Thank you. One moment for our next question. Our next question comes from the line of Nick Joseph from Citi. Your question please. Thanks. Marguerite, I wanna go back to your comments about cap rates. It sounds like they haven't moved much. Maybe tie that to Paul's commentary on the volatility in the capital markets. You know, when would you expect to see an impact to cap rates from higher interest rates? How much would they need to move before you think it would actually impact the transaction market? No, it's difficult to answer that question. I think owners have seen really a decrease in the number of interested bidders due to the financing environment, so, you know, potential buyers are pulling back. They're still seeing, you know, sellers are still seeing twice as many bidders as they did six years ago, so they're still seeing, you know, seem like they're very popular. I think the rising interest rate environment could present an incentive to sellers who were, you know, maybe not quite committed to a transaction, and that may get them to move along. One of the deals that we closed in the quarter went to a seller who had developed the property in 1976 and was reaching a period in his life where he just wanted more freedom. I think there might be more opportunities similar to that, just because of the timing of when a lot of the RV parks and manufactured home communities were built. I don't know how long it takes for the cap rates to change and be affected if these assets are in really high demand and we continue to just see really strong demand for them. There's really no change in the cap rates. Hey, Marguerite, it's Michael Bilerman. I just wanted to come back on RVs and transient and just explore a couple of topics. You talked a little bit about sort of alternatives, travel. When you look at the front page of the Journal this morning, air travel's breaking down at all levels this summer. I think air travel was broken. I would have thought, you know, that experience could have driven the opposite for your transient business, more people wanting to get in their cars. Gas prices are down 10%-15% off their peak. You know, travel close and get in your car. Why are you not seeing that if the air travel is so bad? No, I. You know, we've talked about that a lot here, and that, you know, everything in the paper is, you know, you're gonna take a flight, and you're not sure whether or not you're gonna get there. You better book two days, you know, leave two days in advance to try to get there. I agree that that should be a driver, although some people, you know, have their trip planned to Disney World, and that's where they wanna go, and they don't wanna drive from Chicago. But I do, you know, I do think that the comparisons for our transient traffic, you know, looking at it from 2019- 2022, are significant increases. It's just the year-over-year comparisons are difficult. Thank you. One moment for our next question. Our next question comes from the line of Michael Goldsmith from UBS. Your question please. Good morning. Thanks a lot for taking my question. My first question's on the expense expectations for the back half of the year. You know, core operating expenses up 7% in the second quarter. Guidance calls for it to slow in the back half. Like, what are the factors that can help kind of slow the growth of expenses in the back half of the year? And then as you look out, like should expense be growing kind of in the rate of inflation? Is that the right way to think about it? Thanks. Sure. You know, each quarter, as part of our process for determining any updates that we make to our guidance, we review our property level, our consolidated expenses for the quarter and year to date periods, and identify any outliers in terms of expected growth. We then use the information to refine our projection for the remaining quarters in the year. Our second quarter expense results, as well as the increase to our full year property expense expectations, they reflect the rapidly increasing CPI environment that we've been operating in throughout 2022. You know, we saw that. Now in terms of the deceleration, we also test our forecasted growth by reviewing our actual 2021 results. In the latter half of last year, we incurred almost $5 million in R&M, legal, utility and some other expenses that we don't expect to recur. If the expense growth rates were adjusted, you know, you'd see less of that deceleration that you mentioned. Got it. That's helpful. My second question is on the transient revenue. I guess just to try to put the performance in the Fourth of July weekend into perspective, you know, in the weekend surrounding the holiday weekend, you know, this summer travel season, were core transient revenues ex the impact of the conversions, were those up year over year? I'm sorry, Michael. Core transient revenue ex the conversions. Just like essentially, like you've converted a number of transient RV sites, you know, 40% to annual and to other types. I guess what I'm trying to understand is, you know, were the weekends surrounding Fourth of July, which seems like it was impacted by weather among other things, you know, were core RV transient revenues up if you back out impact of some of the conversions? Oh, I think the answer to your question is that the conversions are not the sole reason for the decline in the transient pace. That, you know, there is the factors that we talked about, again, weather is just there as a factor, but then also some of the inflationary pressures, they are impacting the transient customer who would have been a transient customer, you know, last year or the year before and wasn't a transient customer this year impacting their decision. Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Marguerite Nader for closing comments. Thank you for joining us today. We look forward to updating you in next quarter and are available for any questions you may have. Take care. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.