fairness way of life residences' (ELS) CEO Marguerite Nader on Q3 2016 effects - profits call Transcript - in quest of Alpha
equity subculture residences, Inc. (NYSE:ELS)
Q3 2016 revenue conference name
October 18, 2016 eleven:00 ET
Executives
Marguerite Nader - President and Chief executive Officer
Paul Seavey - government vp and Chief fiscal Officer
Patrick Waite - govt vice chairman and Chief working Officer
Analysts
Juan Sanabria - bank of the us
Gwen Clark - Evercore ISI
Nicholas Joseph - Citi
Gaurav Mehta - Cantor Fitzgerald
Paul Adornato - BMO Capital Markets
Drew Babin - Robert W. Baird
Todd Stender - Wells Fargo
Ryan Burke - green highway Advisors
Operator
good day, everybody and thank you inquisitive about becoming a member of us to focus on equity way of life residences' Third Quarter 2016 results. Our featured audio system these days are Marguerite Nader, our President and CEO; Paul Seavey, our govt vice chairman and CFO; and Patrick Waite, our executive vice president and COO.
In develop of these days's name, management released salary. nowadays's call will encompass opening remarks and a query-and-reply session with management concerning the enterprise's revenue liberate. As a reminder, this call is being recorded. certain matters discussed all through this conference name might also include ahead-looking statements within the meanings of the federal securities legal guidelines. Our forward-searching statements are field to definite economic possibility and uncertainty. The enterprise assumes no responsibility to update or complement any statements that turn into unfaithful because of subsequent activities.
at this time, i want to turn the call over to Marguerite Nader, our President and CEO.
Marguerite Nader
decent morning and thanks for becoming a member of us these days. nowadays, we could be concentrated on an in depth evaluation of the third quarter, our preliminary 2017 advice and our cause for the suggested 2017 dividend increase. Our third quarter results reveal the energy in our precise property footprint and the merits that our portfolio has from the high quality demographic style from the child boomers. within the third quarter, we had our 28th successive quarter of occupancy growth and our occupancy at our MH property is ninety four%. The occupancy growth in the quarter turned into a hundred and eighty websites. The quarter continued to exhibit the advantageous traits that we've been seeing during the contemporary past, together with an means to develop both the absolute variety of occupied websites in addition to enrich the high-quality of our occupancy through expanded owners and a discount of renters.
we are blissful with the style in our new home revenue. in the quarter, we sold 207 buildings, a 60% boost from 2015. Our general new domestic sale expense for the quarter was $sixty one,000 and over 60% of our new domestic sales have been in Florida and Colorado. Our earnings platform contains the use of open houses, referral classes and focused internet marketing. Our valued clientele are focused on the activities obtainable at our homes and they have a robust need to be part of the ELS group.
From a advertising and marketing perspective, we have now completed our summer time advertising and marketing campaign. As we did final 12 months, we concentrated on the a hundred days of tenting between Memorial Day and Labor Day and ran a social media promotion, which had a social media attain of 3.7 million over the summer time as we motivate consumers to submit photos of themselves enjoying our homes. This campaign leveraged our over 315,000 lovers and followers across distinctive social media systems. according to the previous success of this crusade, we expanded a hundred days of tenting to include a multimedia advertising crusade across channels, together with internet banners, digital adverts, electronic mail, promotional video and property advertising. The transient component, which is the most difficult to foretell, has carried out smartly for us this yr. Our transient business is focused in the summer months with over 50% of the entire yr earnings coming in from Memorial Day via Labor Day. These three key holiday weekends carried out 13% better than ultimate yr.
Turning to 2017, each and every yr, we conclude our funds process in October and provide exact projections for here 12 months. we now have issued guidance of $3.50 for subsequent 12 months, which is a 6.6% increase in FFO per share. definite line objects like seasonal and transient endeavor require greater visibility to be able to forecast with greater accuracy. As is our apply, we can update counsel each and every quarter as we have more knowledge about reservations at the property level. Demand for our product is strong. The demographic trend is in our choose. We count on that we'll continue to peer the identical nice developments from 2016 coming into 2015, together with improve our RV footprint and enhance MH ownership transactions.
i would like to replace you on our proposed 2017 dividend coverage. The surest determination for the dividend policy is a board level determination that's typically achieved at our November Board of directors' assembly. We consider it's helpful to spotlight administration's options and cause with admire to the dividend. every year, to arrive at a suggestion, we evaluate our projected growth in FFO and our brilliant duties, with the aim of guaranteeing our underlying financial flexibility. in addition, we stress verify our future responsibilities, including factory in an multiplied pastime rate environment to make certain that we can proceed to fulfill our duties. The stress test exhibits the electricity of our stability sheet, which has been fortified through the years with longer term maturities. at present, our average term to maturity is 10 years, which is well-nigh double the REIT sector average. This compares to five years in the past when our regular term to maturity become 5 years.
The steadiness and growth of our cash circulation, our solid balance sheet and the powerful underlying tendencies in our enterprise have led our administration to advocate a $0.25 enhance in our dividend to $1.ninety five for 2017. we now have multiplied our dividend significantly over the last few years. To give a little history, during the last 5 years, we have multiplied our dividend ninety five%. Going again in background even additional suggests that this is our thirteenth consecutive 12 months of dividend increase. Please word while here's administration's suggestion, the Board has no longer yet met to talk about it.
Now, i want to touch upon the contemporary typhoon that impacted the East Coast. we're thankful that our residents, visitors and personnel did not suffer any fatalities or accidents. Our response time in the field to the storm turned into magnificent. We organized in develop and had crews ready to start the cleanup efforts presently after the storm passed. i need to express my gratitude to the teams who have worked tirelessly to be sure that the ELS homes impacted with the aid of the storm were returned in operation as right away as possible. The rather minor harm brought about by the storm is a testomony to the balance of the buildings in our communities. through the years, there have been superior constructing requirements for manufactured homes which vastly mitigated the damage as our communities.
i will now turn it over to Paul to walk in the course of the numbers in detail.
Paul Seavey
Thanks, Marguerite and good morning all and sundry. i will review our third quarter effects, stroll through our detailed advice assumptions for the remainder of 2016 and talk about our preliminary tips for 2017. We reported $0.eighty three normalized FFO per share for the third quarter, a $0.01 forward of our information. overall, a moderate miss in core property operations turned into offset by way of lower than expected property administration and G&A fees. all over the quarter, we identified approximately $800,000 of income from settlement of a note receivable that was issued after we bought our Michigan portfolio in 2013.
Core base apartment income was up 4.7% compared to closing 12 months, a little higher than forecast with three.8% coming from prices and 90 groundwork elements coming from occupancy. Our yr-to-date occupancy benefit of 450 websites is the outcomes of increasing our home owner count via 628 and decreasing condominium occupancy via 178. yr-to-date, we've bought 508 new buildings, including 162 through our ECHO three way partnership.
Our core RV revenues had been better than assistance on account of superior than expected annual and transient revenues. 5.eight% boom in annual is the effect of rate increases in our Encore portfolio and occupancy growth in the Thousand Trails property. Our transient revenues extended 11.three% for the quarter compared to final yr. increase drivers include expanded rate in our summer time season houses and occupancy good points in California and the West. Membership dues profits became bigger than suggestions within the quarter. right through the quarter, we bought 4,100 Thousand Trails camping circulate memberships. yr-to-date, we now have sold approximately 10,800 camping passes. improve revenue quantity within the quarter become 740 instruments at a standard fee of approximately $5,000. The internet contribution from membership income and costs was greater than tips above all because of reduce commission rate.
Utility and different revenue is higher than guidance especially from expanded utility recovery related to higher electric and water usage all the way through the quarter. within the quarter, core property operating costs were larger than forecast. here is basically the influence of the improved utility, restore and maintenance and administrative prices. Our utility cost, net of recuperation, become in line with forecast for the quarter. The variance in fix and preservation costs turned into caused partially by means of hobbies that we don't consist of in suggestions. These consist of charges concerning insured losses such because the hearth at one of our locations and modest cleanup charges following hurricane Hermine in early September.
in addition, we incurred higher than expected R&M expenses at certain places involving the brief interruption of water and sewer provider. legal charges and advertising costs had been the leading drivers of the variance in administrative charges. typical, core NOI earlier than property administration grew 5.three% in the quarter. 12 months-to-date, core NOI elevated 5.8%. Core revenues had been up four.5% and core prices have expanded 2.7%. NOI from acquisition houses turned into $1.7 million in the quarter. year-to-date, the acquisition houses have carried out as anticipated and have contributed $three.2 million of NOI. Property management and company G&A prices of $19.2 million were approximately $0.5 million reduce than assistance on account of reduce than expected trip prices from payroll reductions regarding some open position. other earnings and charges were larger than counsel because of the observe receivable agreement i discussed previous. Financing e xpenses of $27.7 million were in accordance with information. 12 months-to-date, normalized FFO turned into $2.50 per share with boom fee of eight.7% over 2015.
the press unencumber and supplemental equipment offers fourth quarter and entire year 2016 information in element in addition to preliminary 2017 advice. As I mentioned suggestions, bear in mind, my remarks are intended to give our existing estimate of future outcomes. All boom costs and earnings and fee projections characterize midpoints in our assistance latitude. Our fourth quarter normalized FFO suggestions is about $seventy two.eight million or $0.78 per share at the midpoint of our suggestions range. We predict core NOI increase of four.6% in the fourth quarter to make a contribution to 5.5% core NOI increase for the whole yr. We count on no core MH occupancy benefit right through the quarter.
searching ahead to the fourth quarter in our RV enterprise, our current annual, seasonal and transient reservation pace is based on our expectations. Our fourth quarter core property working expense boom assumptions don't count on a cloth impact as we finalized our assessment of harm led to by hurricane Matthew. Our current expectation of total restoration cost is according to our preliminary evaluation. For the full 12 months, we expect core salary increase of 4.three%, core fee growth of 2.eight% and core NOI increase of 5.5%. Normalized FFO on the midpoint of our information latitude is ready $304 million or $three.29 per share, a growth rate of eight.2%. The midpoint of our preliminary counsel range for full 12 months 2017 normalized FFO is about $325.8 million or $three.50 per share. This represents a 6.6% boost over 2016 normalized FFO per share.
growth in core NOI before property administration is expected to be about four.4%. Our projections of core NOI and normalized FFO boom for 2017 anticipate fourth quarter 2016 outcomes will be according to our mentioned assistance. according to our previous practice, we plan to update tips on our January name and we may additionally adjust increase prices on certain line gadgets after we finalized effects for 2016. We expect no growth from incremental occupancy we may also benefit in our core MH properties all through 2017. Base appoint is anticipated to grow 4%, with three.5% coming from cost and 50 groundwork aspects from occupancy because of websites we stuffed in 2016.
In our core RV motel company, we expect four.4% boom in 2017. Our annual revenues represent virtually two-thirds of our complete RV revenues and we predict 5% increase peculiarly on account of raises in prices throughout our portfolio. We venture 2% boom at seasonal revenues and four.5% transient profits growth. Our first quarter generates a little more than 50% of our seasonal profits for the yr and 20% of our transient revenue. although the iciness season remains weeks away, we incorporated our seasonal and transient reservation tempo for the primary quarter 2017 into our counsel assumption.
In total, our right-to-use annual funds profits, correct-to-use contract sales and sales and advertising charges are anticipated to make contributions approximately $46.three million in 2017 in comparison to $45.6 million in 2016. We anticipate earnings and activations of 29,800 Thousand Trails camping passes next yr. In 2017, we are expecting to promote approximately 13,100 tenting passes and we predict the RV dealer application to generate sixteen,seven-hundred further memberships.
Core property working renovation and true property tax fees are assumed to boost 1.eight% in 2017. As we constructed our price range for repairs and maintenance costs, we assume standard run-fee operations. traditionally, we haven't assumed expenses involving property hurt or different one-time objects in our guidance. Adjusted for our event in 2016, the 2017 core property preservation and precise estate tax cost growth rate could be about 2.5%.
Our advice for financing fees does not consist of assumptions regarding the secured debt that matures or is eligible for prepayment without penalty after January 2017. Our suggestions for acquisition houses comprises the expected contribution from the Riverside RV property we these days closed. We assume no other acquisition pastime in our 2017 tips model.
i will be able to now deliver some feedback on our stability sheet. Our debt maturity schedule contains about $57 million maturing in 2017. within the following few weeks, we predict to finished our previously introduced 2016 refinancing pastime. here is anticipated to include the early payoff devoid of penalty of approximately $23 million in 2017 maturity. existing secured debt phrases are 10 years at coupons 3.5% to four% latitude, 60% to seventy five% mortgage to cost and 1.35x to 1.5x debt provider coverage. The GSEs and life agencies continue to quote MH RV deals at costs smartly interior CMBS. We persevered to look interest in lengthy-term financing alternatives from existence insurance agencies. excessive great age certified MH belongings continue to demand optimal financing phrases. And we continue to place high significance on stability sheet flexibility. Our activity insurance is four.1x and our line of credit has $400 million of availability.
Now we might want to open it up for questions.
query-and-reply Session
Operator
[Operator Instructions] Our first question comes from Juan Sanabria of bank of the united states. Your line is open.
Juan Sanabria
hi, first rate morning. i used to be simply hoping you may talk a little bit about your income, identical-save core salary tips assumption for '17, it's down a bit bit yr-over-year and that i believe it's as a result of perhaps if I understood as it should be, you aren't assuming any occupancy upside, but how may still we consider about occupancy from here after which come to levers to head higher or decrease or the sensitivities around same-save profits, as a result of I consider you began closing yr to run the an identical number and outperforming?
Paul Seavey
alright. So our information is within the MH three.5% coming from fees and 50 groundwork facets coming from occupancy. And once again, it really is the occupancy that we expect from sites that we are filling in 2016. Our lengthy historical observe isn't to make assumptions concerning the use of free money stream, which includes the purchase of buildings to benefit occupancy right through the portfolio. in order you examine our adventure in 2016, as i discussed, we now have gained 450 websites 12 months-to-date. You could doubtlessly type of examine that and consider the atmosphere and the occupancy features over time, besides the fact that children we haven't dialed that type of boom into our assumptions.
Juan Sanabria
And the place do you see as height occupancy at this aspect?
Patrick Waite
sure. this is Patrick. i will be able to reply that question. As Marguerite outlined in our opening comments, we are at ninety four% occupancy on the MH platform. Our old high watermark is ninety five%. And simply to put into context, Paul framing our occupancy increase lately, over the trailing seven quarters, we have added 900 occupied websites. That's about one hundred thirty foundation features. And that's constructed from an increase of 1,400 homeowners and a lessen of 500 renters. so that's a comparatively within your budget assumption that we are going to continue down that course of expanding occupancy in that eighty groundwork points, 90 groundwork aspects annually. All of that of direction assumes that the market continues to dangle and there's demand to buy buildings.
Juan Sanabria
and then simply ultimately, i was hoping if you can comment on what you are seeing for acquisition opportunities, no matter if single asset or might be some portfolios i do know you guys had been, I think a little bit greater conservative than a few of your peers and simply the way you are thinking about the alternatives of that?
Marguerite Nader
certain. So within the quarter, we closed the one property, an RV property discovered backyard of Tampa. That become the deal, just to give you the specifics of that deal, that become a deal that our acquisition teams have been engaged on for 2 years or three years, simply working with the vendor. so that's now not in contrast to what we see right through our portfolio of opportunities where we are just working with involved marketers and what's the right timing. As to the broader market, there is a powerful demand for our product classification and that we're working with involved marketers, however no longer rather bound when the timing could be.
Juan Sanabria
thanks very much.
Marguerite Nader
thanks.
Operator
thanks. Our next query comes from Gwen Clark with Evercore ISI. Your line is open.
Gwen Clark
hello, first rate morning.
Marguerite Nader
first rate morning Glenn.
Gwen Clark
On the acquisition entrance, I saw you guys got a vacant land slot close Colony Cove, are you able to talk about your plans for that area and how many sites do you feel that could grasp?
Marguerite Nader
certain. So just a little bit of the background, we purchased Colony Cove and Ridgewood in 2011. These properties are located adjoining to each different and they are observed on the Manatee River in Ellenton, Florida. mixed, they've about 2,500 sites. when we bought the properties, they have been at 89% occupancy. these days, that occupancy at those homes is ninety seven% as a result of promoting new buildings over the remaining few years. So the property is in high demand simply from a property point of view and the area. And we now have been negotiating with the purchaser who owns this 25 acres of land – piece of land in between these property and the land become already zoned MH. So it become effortless for us to make that resolution to buy the land and then comprise it into the property. We anticipate that we doubtless get a hundred and twenty sites after you're taking out the wetland in that area and we would assume beginning community in '17.
Gwen Clark
And what would the rent up of those websites be like from a timing standpoint?
Marguerite Nader
You don't – I feel we may give you a bit bit greater readability on that as we improve them. but just to give you the feel, i would type of give you the extensive sense of occupancy increase in that enviornment relatively enormously over the last few years. So there's high demand.
Gwen Clark
ok, first-rate. after which one other quick query, can you simply speak about the efficiency of all age this quarter versus the age restrained asset?
Marguerite Nader
bound. The all age portfolio carried out in a similar fashion to the age certified portfolio. What we see once in a while in the all age is some amount of volatility if there's a shakeup in the local economy. however we haven't viewed them carried out in line with age certified.
Gwen Clark
k, that's amazing. thank you very a great deal.
Marguerite Nader
thank you, Glenn.
Operator
thank you. Our subsequent question comes from Nicholas Joseph with Citi. Your line is open.
Nicholas Joseph
Thanks. Marguerite, you just outlined powerful demand for MH and the product category, is there a chance or expectation in 2017 to get rid of any communities that might be don't healthy together with your lengthy-term plans?
Marguerite Nader
sure. i'd say that we've perhaps a handful or lower than a handful of the properties that we wouldn't mind not possessing simply as a result of they are a little bit greater far off or out. those are onesie twosie property that we bought in a portfolio transaction and so there should be would becould very well be some probability there, however nothing of any awesome scale.
Nicholas Joseph
Thanks. and then in terms of the 2017 expense increase assumes, so placing the occupancy gains which have already took place aside, what percentage of the residences are dictated by using prospectuses and which or what percent I guess are market cost?
Paul Seavey
we have – in the event you look at – i will be able to expand it somewhat to assert that the prospectuses in Florida, they can be market or they can also be mounted boost or tied to CPI. So the manner that we study it, suppose about it is to say that a 3rd of them are tied to CPI in some trend. And here's the leases throughout the portfolio. Half of these have flooring in place. The flooring are correct round three%. i'll say that California appoint control tends to be in response to Western or California CPI. So there is an up-tick there relative to national CPI over the past couple of years. after which the closing two-thirds are market based.
Nicholas Joseph
Thanks.
Operator
thank you. Our subsequent query comes from Gaurav Mehta with Cantor Fitzgerald. Your line is open.
Gaurav Mehta
yes. hi, decent morning. a couple of questions, first on the effect based mostly earnings side, your seasonal revenues came in decrease than your tips, i used to be questioning in case you may comment on what you saw there?
Marguerite Nader
certain. Our seasonal profits represents about I consider 15% of our ordinary RV profits, so it's the smallest piece. And the seasonal revenues in reality concentrated in the first quarter of the year with 50% coming in, in that time from Florida and Arizona. in order we look and we built up our 2017 funds and we checked out our event in 2016 and reviewed our reservation vogue, we would examine where we idea we'd emerge as and then that's what we type of came up within suggestions. in the seasonal bucket, we're definitely focused on the return of our Canadian client and just a few other key markets in Florida and Arizona to power additional reservation. The climate will play a role during this as it gets cold up in north, which we expect doing quickly after which the migration to the south will observe.
Gaurav Mehta
ok. and then on the condominium home revenue facet, you decreased your 2016 increase expectation i was hoping in case you might provide some greater colour on what you're seeing?
Paul Seavey
yes. within the quarter, the internet rental exercise changed into about $200,000 detrimental to our counsel. That's in reality driven through decrease occupancy, as Patrick referred to, the conversion of renters to house owners. There was a bit bit of a timing difference on some charges. the full year assistance for 2016 suggests the net contribution as down a bit of and that's in reality simply the occupancy stage within the condominium application.
Gaurav Mehta
all right, top notch. thank you.
Paul Seavey
Thanks.
Marguerite Nader
Thanks, Gaurav.
Operator
thank you. Our subsequent question comes from Paul Adornato with BMO Capital Markets. Your line is open.
Paul Adornato
yes, hello. Marguerite, I think you pointed out that new buildings are at the $sixty one,000 rate factor, i used to be wondering how that compares historically? I bear in mind sort of going into the recession, you have been variety of emphasizing more upscale homes and then all over the recession, went a little bit greater downscale, so the place are we today within the new domestic income?
Marguerite Nader
sure. So, in 2008, 2007, I guess i might say, we had homes that we are selling on average of about $75,000, $eighty,000 and in some circumstances going the entire means as much as $200,000. Then we had a length of time where we didn't promote any homes, I believe we offered 2 or 3 buildings a yr for several years. And when we type of came lower back on-line and started to peer a pickup in new home income, we truly looked at what become the customer looking for and try to have an realizing of that and it's basically the age qualified side hunting for a two-bedroom, two-tub mannequin. And the pricing on that ended up being in that $60,000 to probably $70,000 latitude and that seems to be the candy spot for our customers for what they are trying to find. In most cases, they nonetheless have their domestic up north, so they are truly overlaying – handling 2 homes. So, it's an outstanding expense factor for us and we think that could proceed into '17.
Paul Adornato
k, amazing. And on the inn facet, the transient – the outlet for the transient company, you do not make any occupancy profit assumptions, I believe in 2017 counsel. Is that to be conservative or do you suppose like you are near maxing out on the resort occupancy?
Marguerite Nader
I believe Paul as you go through – as we go throughout the year through guidance, you see us boost our – we raise our visibility into the transient business and then we alter our counsel. however presently, i know our operations crew suppose like we just entire summer season and to focus on next summer time with that quantity of specificity is elaborate. in order that's basically what it is. It's definitely not having that visibility into how the break weekends are going to show out subsequent year, not in fact a comment on anything aside from we are not fairly there yet. We received to get previous Christmas.
Paul Adornato
And there become a big emphasis on converting that transient to seasonal, seasonal to annual, is there extra juice left in that effort?
Marguerite Nader
yes. I think there all the time is, from a standpoint of bringing a brand new customer in, which is what we're doing a lot of. Our social media crusade, bringing new customer in, they are variety of – they are approaching a trial groundwork. They are looking to understand what we have to offer after which after we diagnosed and type of flagged them as a brand new client it's then that we try to start the conversion technique of working them through seasonal and annual.
Paul Adornato
okay, thank you.
Marguerite Nader
Thanks, Paul.
Operator
thanks. Our subsequent question comes from Drew Babin with Robert W. Baird. Your line is open.
Drew Babin
decent morning. Most of my questions had been answered, however I just had one on the dividend enhance. was that conversation more alongside the strains of, hi there, our AFFO payout ratio is awfully low in comparison to most REITs given the place a steadiness sheet is in our liquidity, we can let it pickup a bit bit or became it – how tons does taxable income accounting possibly aspect into that where the payout ratio type of must go up and more of your earnings over time needs to be paid out? become that part of the conversation as well?
Paul Seavey
sure. simply in terms of the conversation, as we stated it in the past on an annual groundwork, we developed this advice after getting ready our finances due to the fact what our tasks are, considering principal amortization that we need to pay, routine capital expenditures and then simply the alternatives because it relates to funding both in acquisitions or inner the portfolio with expansion opportunities and the like. We don't goal a payout ratio when establishing the suggestion. It's in reality extra about assembly those tasks after which having free cash movement to be in a position to execute on these opportunities. and at last on the taxable earnings front, we do, as a result of some tax planning again in '05 and '06 we do have internet working losses that provide us flexibility with respect to the dividend. So, as we take a seat right here nowadays we don't have pressure coming from that.
Drew Babin
okay, that's valuable. thank you.
Marguerite Nader
Thanks Drew.
Operator
thank you. Our next query comes from Todd Stender with Wells Fargo. Your line is open.
Todd Stender
hi, thanks and thanks for the particulars on the vacant land you got. but simply to get a sense of maybe a value per web page or a total finances, can you guys reveal probably what your cost per web site assumptions are? and then because we see many of the acquisitions this year on the RV side, maybe just to get a good feel of what you purchase out at the moment for MH expense per site?
Marguerite Nader
certain. So on that land, we would anticipate simply the can charge to develop the websites and these would be MH sites, can be about $35,000 per web site to boost that land. and we would get, I feel, the starting site appoint or the rent in that area right now is ready $eight,000 a 12 months. And so it's a matter of getting these sites developed after which we see it as just no longer so lots as a building, however a variety of those existing houses. With appreciate to pricing in the market presently, it's complex to claim, I suggest, we will actually talk about what you have got seen what we have completed this yr, there haven't been a number of different facts features and transactions that are out there, still having conversations with marketers, together with conversations, including OP instruments and that class of thing, however it's elaborate to quote a per website, it definitely runs the gamut across the nation.
Todd Stender
however better than RV, appropriate, I imply in case you analyze your RV price per web page, it feels like a range of about $24,000 as much as possibly $43,000?
Marguerite Nader
yes. I suggest, it's truly – that's in reality just a function of the revenue. And it relies upon even inside the RV, it runs the gamut of no matter if or no longer you have acquired a highly transient RV park versus a highly annualized RV park and that could set the pricing parameters.
Todd Stender
k. Thanks, Marguerite. And only for advantage as we talked to investors in regards to the RV aspect, we are seeing greater transactions. are you able to just focus on if you guys examine it on a cap cost foundation, are you an IRR buyer? can you talk about possibly your return expectations in RV and perhaps if that's trending better or lessen into subsequent yr?
Marguerite Nader
yes. I imply, it's similar to what we do on the MH side, which is we can analyze what's the preliminary yield and what's the growth and we study a yield plus growth form of calculation. We don't contend with reversionary cap costs, since it doesn't – so, the IRR mannequin doesn't necessarily work for us, because we don't seem to be dealers. So, we examine them in doing that and coming up with those sort of going in yields, we are attempting to examine what are we adding, what kind of cost are we adding, is ELS coming to the property, adding to the equation such that we think we will either lift rents or we can reduce expenses. In a lot of instances, there is a heavy payroll load at one of the most homes that we're and we have alternatives to downsize these. So, it's similar on the MH and the RV facet. And it's in reality – if MH and RV can be found in similar areas, you're going to peer cap prices traded in regards to the equal, the expense per we b site will alternate simply because of that income part.
Todd Stender
can you speak concerning the cap cost for the Riverside, probably what the occupancy is? and then any CapEx that you'll deserve to put into it?
Marguerite Nader
bound. The Riverside cap price became 5 cap and that become – it's an RV park. So, in terms of occupancy, it's particularly annualized RV park and in terms of capital, now not lots of capital. The owner did an excellent job of keeping up this property. He built the property from scratch, elevated the property and he's definitely going to continue to consult with us on the property, because he has achieved an outstanding job of working it through the years.
Todd Stender
Thanks. after which eventually you had been tapping insurance enterprise debt these days, are you able to just speak about their aggressive nature presently compared to might be what agency debt is mortgage to values and just get the well-known feel of the appetite for all secured lenders presently?
Paul Seavey
bound. usual, existence companies definitely, at this moment in time, existence businesses have almost exhausted their capability in 2016. so they are looking ahead to the brand new yr when they reset their allocations. however the costs that we were seeing in the third quarter have been, call it seventy five basis features or possibly even a bit bit extra inner of CMBS lenders for 10-year financing. those life organizations do proceed to have interest in lengthy-term debt that we've tapped over the ultimate couple of years. The LTV from the life enterprise is lower than you see from CMBS, name it 60% or sixty five% max from the existence agencies versus CMBS doubtlessly going up to 75%.
Todd Stender
terrific. thanks, Paul.
Paul Seavey
You're welcome.
Operator
thanks. [Operator Instructions] Our next query comes from Ryan Burke with green street Advisors. Your line is open.
Ryan Burke
thanks. This question type of goes hand-in-hand with Paul's last query, Paul I do consider the latitude and simply ordinary lending fees that you just quoted this quarter turned into about 25 groundwork elements above what it became ultimate quarter, is there the rest that you would be on what you simply described in the closing reply which is causing that?
Paul Seavey
No. The up-tick in treasuries that we saw within the ultimate quarter, there have been kind of flooring that have been embedded in price earlier than that. So some amount of circulation on a ahead groundwork, i might expect that costs will beginning to stream more in lockstep with treasuries, however not a lot more than what I actually have described already.
Ryan Burke
ok. and then on the September refi and the October new personal loan that closed, what changed into the approximate LTV on those?
Paul Seavey
That changed into lifestyles enterprise debt, so it's appropriate in the 60% latitude.
Ryan Burke
ok. and then one working query, taking a look at your number of used apartment buildings, that lowered nicely for the quarter, anything like 15% which is the excellent wonderful signal, however the new condominium homes extended via about 10%, what exactly is that play there?
Patrick Waite
smartly as you mentioned, you compare to the identical time ultimate year, that's an increase of your percentages translate to about 240 united statesin new leases and a lower of about 400 used leases. there's a couple of using factors. One is a focus on promoting off used stock over time would simply make experience with appreciate to working the rental business. On the brand new home facet, it's exposing greater consumers to our platform in the lifestyle and focusing on converting these valued clientele.
Ryan Burke
ok. And are these new homes basically coming out of the ECHO JV?
Patrick Waite
there's a combination, but I don't have that in entrance of intellect, but i'd say its representative of the average transaction combine.
Ryan Burke
bought it, ok. thank you.
Marguerite Nader
Thanks Ryan.
Operator
thank you. given that we don't have any more questions about the road, at the moment i would like to turn it lower back to Marguerite Nader for closing comments.
Marguerite Nader
thank you all. And Paul Seavey should be round for any additional questions.
Operator
girls and gents, thank you for taking part in today's convention. This concludes the application and you can all disconnect. everyone, have a superb day.
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