EQUITY LIFESTYLE PROPERTIES INC (ELS)

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes thereto included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”), as well as information in Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K.

Overview and Outlook

We are a self-administered and self-managed real estate investment trust (“REIT”) with headquarters in Chicago, Illinois. We are a fully integrated owner of lifestyle-oriented properties (“Properties”) consisting of property operations and home sales and rental operations primarily within manufactured home (“MH”) and recreational vehicle (“RV”) communities and marinas. As of June 30, 2026, we owned or had an ownership interest in a portfolio of 453 Properties located throughout the United States and Canada containing 173,559 individual developed areas (“Sites”). These Properties are located in 35 states and British Columbia.

We invest in properties in sought-after locations near retirement and vacation destinations and urban areas across the United States with a focus on delivering an exceptional experience to our residents and guests that results in delivery of value to stockholders. Our business model is intended to provide an opportunity for increased cash flows and appreciation in value. We seek growth in earnings, Funds from Operations (“FFO”), Normalized Funds from Operations (“Normalized FFO”) and cash flows by enhancing the profitability and operation of our Properties and investments. We accomplish this by attracting and retaining high quality customers to our Properties, who take pride in our Properties and in their homes and efficiently managing our Properties by increasing occupancy, maintaining competitive market rents and controlling expenses. We also actively pursue opportunities that fit our acquisition criteria and are currently engaged in various stages of negotiations relating to the possible acquisition of additional properties.

We believe the demand from baby boomers for MH and RV communities will continue to be strong over the long term. It is estimated that approximately 10,000 Americans turn 65 years old every day and all baby boomers will be at least age 65 by 2030. These individuals, seeking an active lifestyle, will continue to drive the market for second-home sales as vacation properties, investment opportunities or retirement retreats. We expect it is likely that we will continue to see high levels of second-home sales and that manufactured homes and cottages in our Properties will continue to provide a viable second-home alternative to site-built homes. We also believe the Millennial and Generation Z demographic will contribute to our future long-term customer pipeline. After conducting a comprehensive study of RV ownership, according to the Recreational Vehicle Industry Association (“RVIA”), data suggested that RV sales are expected to benefit from an increase in demand from those born in the United States from 1980 to 2003, or Millennials and Generation Z, over the coming years. We believe the demand from baby boomers and these younger generations will continue to outpace supply for MH and RV communities. The entitlement process to develop new MH and RV communities is extremely restrictive. As a result, there have been limited new communities developed in our target geographic markets.

We generate the majority of our revenues from customers renting our Sites or entering into right-to-use contracts, also known as membership subscriptions, which provide them access to specific Properties for limited stays. MH Sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and marina Sites are leased on an annual basis to customers who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina Sites are leased to customers generally for one to six months. Transient RV and marina Sites are leased to customers on a short-term basis. The revenue from seasonal and transient Sites is generally higher during the first and third quarters. We consider the transient revenue stream to be our most volatile as it is subject to weather conditions and other factors affecting the marginal RV customer’s vacation and travel preferences. We also generate revenue from customers renting our marina dry storage. Additionally, we have interests in joint venture Properties for which revenue is classified as Equity in income/(loss) of unconsolidated joint ventures in the Consolidated Statements of Income and Comprehensive Income.

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Management’s Discussion and Analysis (continued)

The following table shows the breakdown of our Sites by type (amounts are approximate):

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(1)MH, Annual RV and Transient RV sites include approximately 2,100, 200 and 300 joint venture sites, respectively.

(2)Primarily utilized to service approximately 107,900 members. Includes approximately 6,000 Sites rented on an annual basis.

In our Home Sales and Rentals Operations business, our revenue streams include home sales, home rentals and brokerage services and ancillary activities. We generate revenue through home sales and rental operations by selling or leasing manufactured homes and cottages that are located in Properties owned and managed by us. We believe renting our vacant homes represents an attractive source of occupancy and an opportunity to convert the renter to a homebuyer in the future. Additionally, home sale brokerage services are offered to our residents who may choose to sell their homes rather than relocate them when moving from a Property. At certain Properties, we operate ancillary facilities, such as golf courses, pro shops, stores and restaurants.

In the manufactured housing industry, options for home financing, also known as chattel financing, are limited. Chattel financing options available today include community owner-funded programs or third-party lender programs that provide subsidized financing to customers and often require the community owner to guarantee customer defaults. Third-party lender programs have stringent underwriting criteria, sizable down payment requirements, short term loan amortization and high interest rates.

In addition to net income computed in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), we assess and measure our overall financial and operating performance using certain Non-GAAP supplemental measures, which include: (i) FFO, (ii) Normalized FFO, (iii) Income from property operations, (iv) Income from property operations, excluding property management, and (v) Core Portfolio income from property operations, excluding property management (operating results for Properties owned and operated in both periods under comparison). We use these measures internally to evaluate the operating performance of our portfolio and provide a basis for comparison with other real estate companies. Definitions and reconciliations of these measures to the most comparable GAAP measures are included below in this discussion.

Results Overview

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1.Calculations prepared using actual results without rounding.

For the quarter ended June 30, 2026, property operating revenues in our Core Portfolio increased 4.9% and property operating expenses in our Core Portfolio, excluding property management, increased 2.9% from the same period in 2025, resulting in increased Income from property operations, excluding property management, of 6.5%.

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Management’s Discussion and Analysis (continued)

While we continue to focus on increasing the number of manufactured homeowners in our Core Portfolio, we also believe that renting our vacant homes represents an attractive source of occupancy and an opportunity to potentially convert the renter to a new homebuyer in the future. We continue to expect there to be fluctuations in the sources of occupancy gains depending on local market conditions, availability of vacant sites and success with converting renters to homeowners. Our Core Portfolio average occupancy includes both homeowners and renters in our MH communities and was 93.8% for the quarter ended June 30, 2026, 94.3% for the quarter ended June 30, 2025 and 94.0% for the quarter ended December 31, 2025. The decline in average occupancy compared to the quarter ended June 30, 2025 was primarily driven by 503 expansion sites that were added since June 30, 2025. During the quarter ended June 30, 2026, our Core Portfolio occupancy increased by 13 sites, which included increases in rental occupancy of 11 sites and homeowner occupancy of 2 sites compared to March 31, 2026. As of June 30, 2026, we had 2,146 occupied rental homes in our Core MH communities.

RV and marina base rental income in our Core Portfolio increased 1.8% for the quarter ended June 30, 2026, compared to the same period in 2025, due to an increase in Core Annual RV and marina base rental income of 5.4%, offset by decreases in Core Seasonal and Transient RV and marina base rental income of 11.2% and 8.9%, respectively. The increase in Core Annual RV and marina base rental income was driven by a 5.3% increase in rate and a 0.1% gain in occupancy since the quarter ended June 30, 2025. The decreases in Core Seasonal and Transient RV and marina base rental income were primarily due to lower occupancy.

We closed 98 new home sales during the quarter ended June 30, 2026 compared to 117 new home sales during the quarter ended June 30, 2025.

Our gross investment in real estate increased $234.3 million to $8,413.0 million as of June 30, 2026 from $8,178.7 million as of December 31, 2025, primarily due to the consolidation of our investments in certain RVC joint ventures of $103.3 million and capital improvements during the six months ended June 30, 2026.

The following chart lists the Properties acquired from January 1, 2025 through June 30, 2026 and Sites added through expansion opportunities at our existing Properties:

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying footnotes thereto included in this Annual Report on Form 10-K.

2025 Highlights

We continued our strong performance in 2025, as marked by these key operational and financial accomplishments:

•Net income per share of common stock (“Common Share”) on a fully diluted basis was $2.01 for the year ended December 31, 2025, 2.6% higher than the year ended December 31, 2024.

•FFO per Common Share on a fully diluted basis was $3.08 for the year ended December 31, 2025, 1.5% higher than the year ended December 31, 2024.

•Normalized FFO per Common Share on a fully diluted basis was $3.06 for the year ended December 31, 2025, 5.0% higher than the year ended December 31, 2024.

•7.9% dividend increase in 2025 contributes to 5-year compounded annual dividend growth of 8.5%. This compares to average growth of 5.2% across the residential REIT sector (1) over the same 5-year period.

•Added 362 expansion sites during the year ended December 31, 2025.

•New home sales of 439 for the year ended December 31, 2025.

•During the year ended December 31, 2025, we repaid $86.9 million of secured debt at maturity.

•During the year ended December 31, 2025, we entered into a $240.0 million unsecured term loan agreement with an effective fixed interest rate of 4.74% maturing on May 15, 2030.

Core Portfolio

•Core portfolio generated growth of 4.8% in income from property operations, excluding property management, for the year ended December 31, 2025, compared to the year ended December 31, 2024, exceeding our long-term quarterly average of 4.5%.(2)

•Core MH base rental income for the year ended December 31, 2025 increased by $39.2 million, or 5.5%, compared to the year ended December 31, 2024.

•Core Annual RV and marina base rental income for the year ended December 31, 2025 increased by $12.2 million, or 4.1%, compared to the year ended December 31, 2024. During the second half of 2025, we increased Annual RV occupancy by 506 sites on a net basis.

•Core property operating expenses, excluding property management, for the year ended December 31, 2025 increased by $5.8 million, or 1.0%, compared to the year ended December 31, 2024.

Overview and Outlook

We are a self-administered and self-managed real estate investment trust (“REIT”) with headquarters in Chicago, Illinois. We are a fully integrated owner of lifestyle-oriented properties (“Properties”) consisting of property operations and home sales and rental operations primarily within manufactured home (“MH”) and recreational vehicle (“RV”) communities and marinas. As of December 31, 2025, we owned or had an ownership interest in a portfolio of 453 Properties located throughout the United States and Canada containing 173,371 individual developed areas (“Sites”). These Properties are located in 35 states and British Columbia.

We invest in properties in sought-after locations near retirement and vacation destinations and urban areas across the United States with a focus on delivering an exceptional experience to our residents and guests that results in delivery of value to stockholders. Our business model is intended to provide an opportunity for increased cash flows and appreciation in value. We seek growth in earnings, Funds from Operations (“FFO”) and cash flows by enhancing the profitability and operation of our Properties and investments. We accomplish this by attracting and retaining high quality customers to our Properties, who take pride in our Properties and in their homes and efficiently managing our Properties by increasing occupancy, maintaining competitive market rents and controlling expenses. We also actively pursue opportunities that fit our acquisition criteria and are currently engaged in various stages of negotiations relating to the possible acquisition of additional properties.

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(1)Includes all publicly traded single family home, multi-family home and manufactured housing U.S equity REITs, with a market capitalization of $3.0 billion or greater.

(2)Average quarterly growth from Q3 1998 through Q3 2025.

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Management’s Discussion and Analysis (continued)

We believe the demand from baby boomers for MH and RV communities will continue to be strong over the long term. It is estimated that approximately 10,000 Americans turn 65 years old every day and all baby boomers will be at least age 65 by 2030. These individuals, seeking an active lifestyle, will continue to drive the market for second-home sales as vacation properties, investment opportunities or retirement retreats. We expect it is likely that we will continue to see high levels of second-home sales and that manufactured homes and cottages in our Properties will continue to provide a viable second-home alternative to site-built homes. We also believe the Millennial and Generation Z demographic will contribute to our future long-term customer pipeline. After conducting a comprehensive study of RV ownership, according to the Recreational Vehicle Industry Association (“RVIA”), data suggested that RV sales are expected to benefit from an increase in demand from those born in the United States from 1980 to 2003, or Millennials and Gen Z, over the coming years. We believe the demand from baby boomers and these younger generations will continue to outpace supply for MH and RV communities. The entitlement process to develop new MH and RV communities is extremely restrictive. As a result, there have been limited new communities developed in our target geographic markets.

We generate the majority of our revenues from customers renting our Sites or entering into right-to-use contracts, also known as membership subscriptions, which provide them access to specific Properties for limited stays. MH Sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and marina Sites are leased on an annual basis to customers who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina Sites are leased to customers generally for one to six months. Transient RV and marina Sites are leased to customers on a short-term basis. The revenue from seasonal and transient Sites is generally higher during the first and third quarters. We consider the transient revenue stream to be our most volatile as it is subject to weather conditions and other factors affecting the marginal RV customer’s vacation and travel preferences. We also generate revenue from customers renting our marina dry storage. Additionally, we have interests in joint venture Properties for which revenue is classified as Equity in income from unconsolidated joint ventures on the Consolidated Statements of Income and Comprehensive Income.

Approximately one quarter of our rental agreements on MH Sites contain rent increase provisions that are directly or indirectly connected to published CPI statistics. Approximately half of these rental agreements are subject to a CPI floor of approximately 2.0% to 6.0%.

State and local rent control regulations or rent-regulating governmental bodies affect 33 wholly-owned Properties, including 14 of our 47 California Properties, our 1 Connecticut Property, all 7 of our Delaware Properties, 1 of our 2 Maryland Properties, 1 of our 5 Massachusetts Properties, 1 of our 11 New Jersey Properties, 1 of our 7 New York Properties, 1 of our 14 Washington Properties, and 6 of our 11 Oregon Properties. These rent control regulations govern rent increases and generally permit us to increase rates by either a defined percentage or a percentage of the increase in the national, regional or local CPI, depending on the rent control ordinance, which CPI-based increases generally range from 60.0% to 100.0% of CPI with certain limits depending on the jurisdiction.

The following table shows the breakdown of our Sites by type (amounts are approximate):

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(1)Primarily utilized to service the approximately 108,700 members. Includes approximately 6,000 Sites rented on an annual basis.

(2)Joint ventures have approximately 2,400 MH and RV annual Sites and 1,500 transient Sites.

(3)Total does not foot due to rounding

Membership Sites are primarily utilized to service approximately 108,700 annual subscription members, including 20,700 free trial members added through our RV dealer program. The majority of the remaining 88,000 have purchased a Thousand Trails Camping (“TTC”) membership, which is an annual subscription providing the member access to our Properties in one to five geographic regions of the United States. In 2025, a TTC membership for a single geographic region required an

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Management’s Discussion and Analysis (continued)

annual payment of $755. In addition, members are eligible to upgrade their subscriptions, which increase usage rights during the membership term. Beginning in the first quarter of 2025, we introduced subscription-based upgrade products with two- to four-year terms. Prior to the introduction of subscription-based upgrade products, membership upgrades required non-refundable upfront payments. Members who purchased an upgrade with a non-refundable upfront payment and remain in good standing are entitled to enhanced benefits for as long as they choose to remain in the program.

In our Home Sales and Rentals Operations business, our revenue streams include home sales, home rentals and brokerage services and ancillary activities. We generate revenue through home sales and rental operations by selling or leasing manufactured homes and cottages that are located in Properties owned and managed by us. We believe renting our vacant homes represents an attractive source of occupancy and an opportunity to convert the renter to a homebuyer in the future. Additionally, home sale brokerage services are offered to our residents who may choose to sell their homes rather than relocate them when moving from a Property. At certain Properties, we operate ancillary facilities, such as golf courses, pro shops, stores and restaurants.

In the manufactured housing industry, options for home financing, also known as chattel financing, are limited. Chattel financing options available today include community owner-funded programs or third-party lender programs that provide subsidized financing to customers and often require the community owner to guarantee customer defaults. Third-party lender programs have stringent underwriting criteria, sizable down payment requirements, short term loan amortization and high interest rates. We have a limited program under which we purchase loans made by an unaffiliated lender to homebuyers at our Properties.

The Federal Housing Finance Agency (the “FHFA”), overseer of Fannie Mae, Freddie Mac (the “GSEs”) and the Federal Home Loan Banks, focuses on equitable access to affordable and sustainable housing. Since 2017, the FHFA has developed programs for the GSEs that address leadership in developing loan products and flexible underwriting guidelines in underserved markets to facilitate a secondary market for mortgages on manufactured homes titled as real property or personal property, blanket loans for certain categories of manufactured housing communities, preserving the affordability of housing for renters and homebuyers, and housing in rural markets. While the FHFA and the current programs may have a positive impact on our custome

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