Equity LifeStyle Properties Inc. (ELS) announced a slight increase in net income for the company’s first quarter, ended March 31.
Chicago-based ELS, a self-administered, self-managed, real estate investment trust (REIT), which owns or has an interest in 290 RV, park model and manufactured home properties in 28 states and British Columbia, said net income available to common shareholders totaled $10.1 million for the quarter, compared to $8.7 million a year earlier. First quarter property operating revenues were about $90.4 million, compared to $85.2 million in the first quarter of 2005.
“Our core business continues to enjoy a favorable operating environment and this is reflected in our top line performance,” ELS President and CEO Thomas Heneghan said in a statement. “With the first quarter winter season nearing completion, our focus has already shifted to the summer season at our northern resort destinations. Although early, we are ahead of last year’s pace and the operating environment is positive.”
Heneghan noted that ELS’s sales of park models and manufactured homes exceeded prior year comparisons in sales volumes, but increases in sales expenses during the first quarter resulted in flat profitability comparisons. “The increase in sales expenses reflects new sales programs initiated at some of our newly acquired properties,” he said.
These expenses stem from improvements made in the appearance of the company’s resort cottages and the introduction of new high quality resort homes of 600 to 900 square feet, which are designed for people who want something between a 400-square foot park model and a larger manufactured home.
Heneghan said ELS had also approved the transfer of the Thousand Trails campground membership business to Privileged Access, a six-month-old Frisco, Texas-based company founded by Joe McAdams, a former ELS board member who previously served for 18 years as CEO of Ventura, Calif.-based Affinity Group Inc. (AGI).
ELS, which owns the 59 campgrounds used by the Thousand Trails campground membership club, had waived an existing right of first offer on the Thousand Trails business, which allowed the Privileged Access acquisition to take place. ELS also loaned Privileged Access $12 million to facilitate the closing of the transaction. The loan, payable in one year at a rate of prime plus 1.5%, is secured by $17 million worth of Thousand Trails membership sales contract receivables. Thousand Trails generates about $100 million in revenue annually.