Edgar Filing: EQUITY LIFESTYLE PROPERTIES INC

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2007


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-11718

EQUITY LIFESTYLE PROPERTIES, INC.

(Exact name of registrant as specified in its charter)


Maryland		36-3857664
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Two North Riverside Plaza, Suite 800, Chicago, Illinois		60606
(Address of principal executive offices)		(Zip Code)

(312) 279-1400
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Common Stock, $.01 Par Value		New York Stock Exchange
(Title of Class)		(Name of exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
	(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The aggregate market value of voting stock held by non-affiliates was approximately $1,155.8 million as of June 29, 2007 based upon the closing price of $52.19 on such date using beneficial ownership of stock rules adopted pursuant to Section 13 of the Securities Exchange Act of 1934 to exclude voting stock owned by Directors and Officers, some of whom may not be held to be affiliates upon judicial determination.

At February 22, 2008, 24,391,282 shares of the Registrant’s common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Part III incorporates by reference the Registrant’s Proxy Statement relating to the Annual Meeting of Stockholders to be held on May 8, 2008.

Equity LifeStyle Properties, Inc.

TABLE OF CONTENTS


		Page

PART I.

Item 1.	Business		3
Item 1A.	Risk Factors		8
Item 1B.	Unresolved Staff Comments		13
Item 2.	Properties		14
Item 3.	Legal Proceedings		22
Item 4.	Submission of Matters to a Vote of Security Holders		27


PART II.

Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		28
Item 6.	Selected Financial Data		29
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		51
	Forward-Looking Statements		51
Item 8.	Financial Statements and Supplementary Data		52
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		52
Item 9A.	Controls and Procedures		52
Item 9B.	Other Information		53

PART III.

Item 10.	Directors and Executive Officers of the Registrant		53
Item 11.	Executive Compensation		53
Item 12.	Security Ownership of Certain Beneficial Owners and Management		53
Item 13.	Certain Relationships and Related Transactions		53
Item 14.	Principal Accountant Fees and Services		53

PART IV.

Item 15.	Exhibits and Financial Statement Schedules		54

PART I

Item 1. Business

Equity LifeStyle Properties, Inc.

General

Equity LifeStyle Properties, Inc., a Maryland corporation, together with MHC Operating Limited Partnership (the “Operating Partnership”) and other consolidated subsidiaries (“Subsidiaries”), is referred to herein as the “Company,” “ELS,” “we,” “us,” and “our.” ELS has elected to be taxed as a real estate investment trust (“REIT”), for U.S. federal income tax purposes commencing with its taxable year ended December 31, 1993.

The Company is a fully integrated owner and operator of lifestyle-oriented properties (“Properties”). The Company leases individual developed areas (“sites”) with access to utilities for placement of factory built homes, cottages, cabins or recreational vehicles (“RVs”). The Company was formed in December 1992 to continue the property operations, business objectives and acquisition strategies of an entity that had owned and operated Properties since 1969. As of December 31, 2007, we owned or had an ownership interest in a portfolio of 311 Properties located throughout the United States and Canada containing 112,779 residential sites. These Properties are located in 28 states and British Columbia (with the number of Properties in each state or province shown parenthetically) — Florida (87), California (48), Arizona (35), Texas (15), Pennsylvania (13), Washington (13), Colorado (10), Oregon (9), North Carolina (8), Virginia (8), Delaware (7), Maine (6), Nevada (6), Wisconsin (6), Indiana (5), New York (5), Illinois (4), Massachusetts (4), New Jersey (4), Michigan (3), South Carolina (3), New Hampshire (2), Ohio (2), Tennessee (2), Utah (2), Alabama (1), Kentucky (1), Montana (1), and British Columbia (1).

Properties are designed and improved for several home options of various sizes and designs that are produced off-site, installed and set on designated sites (“Site Set”) within the Properties. These homes can range from 400 to over 2,000 square feet. The smallest of these are referred to as “Resort Cottages”. Properties may also have sites that can accommodate a variety of RVs. Properties generally contain centralized entrances, internal road systems and designated sites. In addition, Properties often provide a clubhouse for social activities and recreation and other amenities, which may include restaurants, swimming pools, golf courses, lawn bowling, shuffleboard courts, tennis courts, laundry facilities and cable television service. In some cases, utilities are provided or arranged for by us; otherwise, the customer contracts for the utility directly. Some Properties provide water and sewer service through municipal or regulated utilities, while others provide these services to customers from on-site facilities. Properties generally are designed to attract retirees, empty-nesters, vacationers and second home owners; however, certain of the Properties focus on affordable housing for families. We focus on owning properties in or near large metropolitan markets and retirement and vacation destinations.

Employees and Organizational Structure

We have approximately 1,600 full-time, part-time and seasonal employees dedicated to carrying out our operating philosophy and strategies of value enhancement and service to our customers. The operations of each Property are coordinated by an on-site team of employees that typically includes a manager, clerical and maintenance workers, each of whom works to provide maintenance and care of the Properties. Direct supervision of on-site management is the responsibility of our regional vice presidents and regional and district managers. These individuals have significant experience in addressing the needs of customers and in finding or creating innovative approaches to maximize value and increase cash flow from property operations. Complementing this field management staff are approximately 100 full-time corporate employees who assist on-site management in all property functions.

Formation of the Company

The operations of the Company are conducted primarily through the Operating Partnership. The Company contributed the proceeds from its initial public offering and subsequent offerings to the Operating Partnership for a general partnership interest. In 2004, the general partnership interest was contributed to MHC Trust, a private REIT subsidiary owned by the Company. The financial results of the Operating Partnership and the Subsidiaries are consolidated in the Company’s consolidated financial statements. In addition, since certain activities, if performed by the Company, may not be qualifying REIT activities under the Internal Revenue Code of 1986, as amended (the “Code”), the Company has formed taxable REIT subsidiaries, as defined in the Code, to engage in such activities.

Several Properties are wholly owned by taxable REIT subsidiaries of the Company. In addition, Realty Systems, Inc. (“RSI”) is a wholly owned taxable REIT subsidiary of the Company that is engaged in the business of purchasing and selling site set homes that are located in Properties owned and managed by the Company. RSI also provides brokerage services to residents at such Properties for those residents who move from a Property but do not relocate their homes. RSI may provide brokerage services, in competition with other local brokers, by seeking buyers for the site set homes. RSI also leases

inventory homes to prospective residents with the expectation that the tenant eventually will purchase the home. Subsidiaries of RSI also lease from the Operating Partnership certain real property within or adjacent to certain Properties consisting of golf courses, pro shops, stores and restaurants.

Business Objectives and Operating Strategies

Our strategy seeks to maximize both current income and long-term growth in income. We focus on properties that have strong cash flow and we expect to hold such properties for long-term investment and capital appreciation. In determining cash flow potential, we evaluate our ability to attract and retain high quality customers in our Properties who take pride in the Property and in their home. These business objectives and their implementation are determined by our Board of Directors and may be changed at any time. Our investment, operating and financing approach includes:

	•		Providing consistently high levels of services and amenities in attractive surroundings to foster a strong sense of community and pride of home ownership;

	•		Efficiently managing the properties to increase operating margins by controlling expenses, increasing occupancy and maintaining competitive market rents;

	•		Increasing income and property values by continuing the strategic expansion and, where appropriate, renovation of the Properties;

	•		Utilizing management information systems to evaluate potential acquisitions, identify and track competing properties and monitor customer satisfaction;

	•		Selectively acquiring properties that have potential for long-term cash flow growth and to create property concentrations in and around major metropolitan areas and retirement or vacation destinations to capitalize on operating synergies and incremental efficiencies; and

	•		Managing our debt balances such that we maintain financial flexibility, minimize exposure to interest rate fluctuations, and maintain an appropriate degree of leverage to maximize return on capital.

Our strategy is to own and operate the highest quality properties in sought-after locations near urban areas, retirement and vacation destinations across the United States. We focus on creating an attractive residential environment by providing a well-maintained, comfortable Property with a variety of organized recreational and social activities and superior amenities as well as offering a multitude of lifestyle housing choices. In addition, we regularly conduct evaluations of the cost of housing in the marketplaces in which our Properties are located and survey rental rates of competing properties. From time to time we also conduct satisfaction surveys of our customers to determine the factors they consider most important in choosing a property. We improve site utilization and efficiency by tracking types of customers and usage patterns and marketing to those specific customer groups.

Acquisitions and Dispositions

Over the last decade our portfolio of Properties has grown significantly from owning or having an interest in 121 Properties with over 44,000 sites to owning or having an interest in 311 Properties with over 112,000 sites. We continually review the Properties in our portfolio to ensure that they fit our business objectives. Over the last five years we sold 13 Properties, and we redeployed capital to markets we believe have greater long-term potential. In that same time period we acquired 181 Properties located in high growth areas such as Florida, Arizona and California. We believe that opportunities for property acquisitions are still available. Increasing acceptability of and demand for a lifestyle that includes Site Set homes and RVs as well as continued constraints on development of new properties continue to add to their attractiveness as an investment. We believe we have a competitive advantage in the acquisition of additional properties due to our experienced management, significant presence in major real estate markets and substantial capital resources. We are actively seeking to acquire additional properties and are engaged in various stages of negotiations relating to the possible acquisition of a number of properties.

We anticipate that new acquisitions will generally be located in the United States, although we may consider other geographic locations provided they meet our acquisition criteria. We utilize market information systems to identify and evaluate acquisition opportunities, including a market database to review the primary economic indicators of the various locations in which we expect to expand our operations. Acquisitions will be financed from the most appropriate sources of capital, which may include undistributed funds from operations, issuance of additional equity securities, sales of investments, collateralized and uncollateralized borrowings and issuance of debt securities. In addition, the Company may acquire properties in transactions that include the issuance of limited partnership interests in the Operating Partnership (“Units”) as consideration for the acquired properties. We believe that an ownership structure that includes the Operating Partnership will permit us to acquire additional properties in transactions that may defer all or a portion of the sellers’ tax consequences.

When evaluating potential acquisitions, we consider such factors as:

	•		The replacement cost of the property including land values, entitlements and zoning,

	•		The geographic area and type of the property,

	•		The location, construction quality, condition and design of the property,

	•		The current and projected cash flow of the property and the ability to increase cash flow,

	•		The potential for capital appreciation of the property,

	•		The terms of tenant leases or usage rights, including the potential for rent increases,

	•		The potential for economic growth and the tax and regulatory environment of the community in which the property is located,

	•		The potential for expansion of the physical layout of the property and the number of sites,

	•		The occupancy and demand by customers for properties of a similar type in the vicinity and the customers’ profile,

	•		The prospects for liquidity through sale, financing or refinancing of the property, and

	•		The competition from existing properties and the potential for the construction of new properties in the area.

When evaluating potential dispositions, we consider such factors as:

	•		The ability to sell the Property at a price that we believe will provide an appropriate return for our stockholders,

	•		Our desire to exit certain non-core markets and recycle the capital into core markets, and

	•		Whether the Property meets our current investment criteria.

When investing capital we consider all potential uses of the capital including returning capital to our stockholders. Our Board of Directors continues to review the conditions under which we will repurchase our stock. These conditions include, but are not limited to, market price, balance sheet flexibility, other opportunities and capital requirements. On January 16, 2004, we paid a special dividend of $8.00 per share using proceeds from a recapitalization.

Property Expansions

Several of our Properties have available land for expanding the number of sites available to be utilized by our customers. Development of these sites (“Expansion Sites”) is evaluated based on the following: local market conditions; ability to subdivide; accessibility through the Property or externally; infrastructure needs including utility needs and access as well as additional common area amenities; zoning and entitlement; costs; topography; and ability to market new sites. When justified, development of Expansion Sites allows us to leverage existing facilities and amenities to increase the income generated from the Properties. Where appropriate, facilities and amenities may be upgraded or added to certain Properties to make those Properties more attractive in their markets. Our acquisition philosophy has included the desire to own Properties with potential Expansion Site development. Approximately 83 of our Properties have expansion potential, with approximately 5,600 acres available for expansion.

Leases or Usage Rights

At our Properties, a typical lease entered into between the owner of a home and the Company for the rental of a site is for a month-to-month or year-to-year term, renewable upon the consent of both parties or, in some instances, as provided by statute. These leases are cancelable, depending on applicable law, for non-payment of rent, violation of Property rules and regulations or other specified defaults. Non-cancelable long-term leases, with remaining terms ranging up to ten years, are in effect at certain sites within 29 of the Properties. Some of these leases are subject to rental rate increases based on the Consumer Price Index (“CPI”), in some instances taking into consideration certain floors and ceilings and allowing for pass-throughs of certain items such as real estate taxes, utility expenses and capital expenditures. Generally, market rate adjustments are made on an annual basis. At Properties zoned for RV use, long-term customers typically enter into right to use agreements and many typically prepay for their stay. Many resort customers will also leave deposits to reserve a site for the following year. Generally these customers cannot live full time on the Property.

Regulations and Insurance

General. Our Properties are subject to various laws, ordinances and regulations, including regulations relating to recreational facilities such as swimming pools, clubhouses and other common areas, regulations relating to providing utility services — such as electricity — to our customers, and regulations relating to operating water and wastewater treatment facilities at certain of our Properties. We believe that each Property has the necessary permits and approvals to operate.

Rent Control Legislation. At certain of our Properties, state and local rent control laws, principally in California, limit our ability to increase rents and to recover increases in operating expenses and the costs of capital improvements. Enactment of such laws has been considered from time to time in other jurisdictions. We presently expect to continue to maintain Properties, and may purchase additional properties, in markets that are either subject to rent control or in which rent-limiting legislation exists or

may be enacted. For example, Florida has enacted a law that generally provides that rental increases must be reasonable. Also, certain jurisdictions in California in which we own Properties limit rent increases to changes in the CPI or some percentage thereof. As part of our effort to realize the value of our Properties subject to restrictive regulation, we have initiated lawsuits against several municipalities imposing such regulation in an attempt to balance the interests of our stockholders with the interests of our customers (see Item 3 — Legal Proceedings).

Insurance. The Properties are covered against fire, flood, property damage, earthquake, windstorm and business interruption by insurance policies containing various deductible requirements and coverage limits. Recoverable costs are classified in other assets as incurred. Insurance proceeds are applied against the asset when received. Recoverable costs relating to capital items are treated in accordance with the Company’s capitalization policy. The book value of the original capital item is written off once the value of the impaired asset has been determined. Insurance proceeds relating to the capital costs are recorded as income in the period they are received.

INDUSTRY

We believe that modern properties similar to ours provide an opportunity for increased cash flows and appreciation in value. These may be achieved through increases in occupancy rates and rents, as well as expense controls, expansion of existing Properties and opportunistic acquisitions, for the following reasons:

	•		Barriers to Entry: We believe that the supply of new properties in locations targeted by the Company will be constrained due to barriers to entry. The most significant barrier has been the difficulty of securing zoning from local authorities. This has been the result of (i) the public’s historically poor perception of manufactured housing, and (ii) the fact that properties generate less tax revenue because the homes are treated as personal property (a benefit to the homeowner) rather than real property. Another factor that creates substantial barriers to entry is the length of time between investment in a property’s development and the attainment of stabilized occupancy and the generation of revenues. The initial development of the infrastructure may take up to two or three years. Once a property is ready for occupancy, it may be difficult to attract customers to an empty property. Substantial occupancy levels may take several years to achieve.

	•		Industry Consolidation: According to various industry reports, there are approximately 65,000 properties in the United States, and approximately 10% or approximately 6,000 of the properties have more than 200 sites and would be considered investment-grade. We believe that this relatively high degree of fragmentation provides us, as a national organization with experienced management and substantial financial resources, the opportunity to purchase additional properties.

	•		Customer Base: We believe that properties tend to achieve and maintain a stable rate of occupancy due to the following factors: (i) customers typically own their own homes, (ii) properties tend to foster a sense of community as a result of amenities such as clubhouses and recreational and social activities, (iii) since moving a Site Set home from one property to another involves substantial cost and effort, customers often sell their home in-place (similar to site-built residential housing) with no interruption of rental payments to us.

	•		Lifestyle Choice: According to the Recreational Vehicle Industry Association, nearly 1 in 10 U.S. vehicle-owning households owns an RV. The 78 million people born from 1946 to 1964 or “baby boomers” make up the fastest growing segment of this market. Every day 11,000 Americans turn 50 according to U.S. Census figures. We believe that this population segment, seeking an active lifestyle, will provide opportunities for future cash flow growth for the Company. Current RV owners, once finished with the more active RV lifestyle, will often seek more permanent retirement or vacation establishments. The Site Set housing choice has become an increasingly popular housing alternative for retirement, second-home, and “empty-nest” living. According to a Fannie Mae survey, the baby-boom generation will constitute 18% of the U.S. population within the next 30 years and more than 32 million people will reach age 55 within the next ten years. Among those individuals who are nearing retirement (age 40 to 54), approximately 33% plan on moving upon retirement.

			We believe that the housing choices in our Properties are especially attractive to such individuals throughout this lifestyle cycle. Our Properties offer an appealing amenity package, close proximity to local services, social activities, low maintenance and a secure environment. In fact, many of our Properties allow for this cycle to occur within a single Property.

	•		Construction Quality: Since 1976, all factory built housing has been required to meet stringent federal standards, resulting in significant increases in quality. The Department of Housing and Urban Development’s (“HUD”) standards for Site Set housing construction quality are the only federally regulated standards governing housing quality of any type in the United States. Site Set homes produced since 1976 have received a “red and silver” government seal certifying that they were built in compliance with the federal code. The code regulates Site Set home design and construction, strength and durability, fire resistance and energy efficiency, and the installation and performance of heating, plumbing, air conditioning, thermal and electrical systems. In newer homes, top grade lumber and dry wall materials are common. Also, manufacturers are required to follow the same fire codes as builders of site-built structures. In addition, although Resort Cottages do not come under the same regulation, many of the manufacturers of Site Set homes also produce Resort Cottages with many of the same quality standards.

	•		Comparability to Site-Built Homes: The Site Set housing industry has experienced a trend towards multi-section homes. Many modern Site Set homes are longer (up to 80 feet, compared to 50 feet in the 1960’s) and wider than earlier models. Many such homes have nine-foot ceilings or vaulted ceilings, fireplaces and as many as four bedrooms, and closely resemble single-family ranch style site-built homes.

	•		Second Home Demographics: According to 2007 National Association of Realtors (“NAR”) reports, sales of second homes in 2006 accounted for 36% of residential transactions, or 2.72 million second-home sales in 2006. There were approximately 6.8 million vacation homes in 2006. The typical vacation-home buyer is 44 years old and earned $102,200 in 2006. Approximately 57% of vacation home-owners prefer to be near an ocean, river or lake; 38% close to boating activities; 32% close to hunting or fishing activities; and 17% close to winter recreations. In looking ahead, NAR believes that baby boomers are still in their peak earning years, and the leading edge of their generation is approaching retirement. As they continue to have the financial wherewithal to purchase second homes as a vacation property, investment opportunity, or perhaps as a retirement retreat, those baby boomers will continue to drive the market for second-homes. We believe it is likely that over the next decade we will continue to see historically high levels of second home sales and resort homes and cottages in our Properties will also continue to provide a viable second home alternative to site-built homes.

Available Information

We file reports electronically with the Securities and Exchange Commission (“SEC”). The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy information and statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. We maintain an Internet site with information about the Company and hyperlinks to our filings with the SEC at http://www.equitylifestyle.com. Requests for copies of our filings with the SEC and other investor inquiries should be directed to:

Investor Relations Department
Equity LifeStyle Properties, Inc.
Two North Riverside Plaza
Chicago, Illinois 60606
Phone: 1-800-247-5279
e-mail: investor_relations@mhchomes.com

Item 1A. Risk Factors

Our Performance and Common Stock Value Are Subject to Risks Associated With the Real Estate Industry.

Adverse Economic Conditions and Other Factors Could Adversely Affect the Value of Our Properties and Our Cash Flow. Several factors may adversely affect the economic performance and value of our Properties. These factors include:

•

changes in the national, regional and local economic climate;

•

local conditions such as an oversupply of lifestyle-oriented properties or a reduction in demand for lifestyle-oriented properties in the area, the attractiveness of our Properties to customers, competition from manufactured home communities and other lifestyle-oriented properties and alternative forms of housing (such as apartment buildings and site-built single family homes);

•

the ability of our potential customers to sell their existing site-built residence in order to purchase a resort home or cottage in our properties and heightened price sensitivity for seasonal and second homebuyers.

•

availability and price of gasoline, especially for our transient customers.

•

our ability to collect rent from customers and pay maintenance, insurance and other operating costs (including real estate taxes), which could increase over time;

•

the failure of our assets to generate income sufficient to pay our expenses, service our debt and maintain our Properties, which may adversely affect our ability to make expected distributions to our stockholders;

•

our inability to meet mortgage payments on any Property that is mortgaged, in which case the lender could foreclose on the mortgage and take the Property;

•

interest rate levels and the availability of financing, which may adversely affect our financial condition; and

•

changes in laws and governmental regulations (including rent control laws and regulations governing usage, zoning and taxes), which may adversely affect our financial condition.

•

poor weather, especially on holiday weekends in the summer, could reduce the economic performance of our Northern resort Properties.

New Acquisitions May Fail to Perform as Expected and Competition for Acquisitions May Result in Increased Prices for Properties. We intend to continue to acquire properties. Newly acquired properties may fail to perform as expected. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position. Difficulties in integrating acquisitions may prove costly or time-consuming and could divert management attention. Additionally, we expect that other real estate investors with significant capital will compete with us for attractive investment opportunities. These competitors include publicly traded REITs, private REITs and other types of investors. Such competition increases prices for properties. We expect to acquire properties with cash from secured or unsecured financings, proceeds from offerings of equity or debt, undistributed funds from operations and sales of investments. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms.

Because Real Estate Investments Are Illiquid, We May Not be Able to Sell Properties When Appropriate. Real estate investments generally cannot be sold quickly. We may not be able to vary our portfolio promptly in response to economic or other conditions, forcing us to accept lower than market value. This inability to respond promptly to changes in the performance of our investments could adversely affect our financial condition and ability to service debt and make distributions to our stockholders.

Some Potential Losses Are Not Covered by Insurance. We carry comprehensive insurance coverage for losses resulting from property damage, liability claims and business interruption on all of our Properties. There are certain types of losses, such as lease and other contract claims that generally are not insured. Should an uninsured loss or a loss in excess of coverage limits occur, we could lose all or a portion of the capital we have invested in a Property, as well as the anticipated future revenue from the Property. In such an event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the Property.

Our current property and casualty insurance policies expire March 31, 2008. We have a $100 million property insurance program. The program limits coverage to $10 million annually for losses associated with earthquakes and floods. In addition, losses resulting from hurricanes are limited to $10 million per occurrence. The deductibles related to named windstorms, earthquakes, and floods are five percent of insurable value (property values plus 25 percent of business interruption) per occurrence. The deductibles expose us to potential uninsured losses.

Debt Financing, Financial Covenants and Degree of Leverage Could Adversely Affect Our Economic Performance.

Scheduled Debt Payments Could Adversely Affect Our Financial Condition. Our business is subject to risks normally associated with debt financing. The total principal amount of our outstanding indebtedness was approximately $1.7 billion as of December 31, 2007. Our substantial indebtedness and the cash flow associated with serving our indebtedness could have important consequences, including the risks that:

•

our cash flow could be insufficient to pay distributions at expected levels and meet required payments of principal and interest;

•

we will be required to use a substantial portion of our cash flow from operations to pay our indebtedness, thereby reducing the availability of our cash flow to fund the implementation of our business strategy, acquisitions, capital expenditures and other general corporate purposes;

•

our debt service obligations could limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

•

we may not be able to refinance existing indebtedness (which in virtually all cases requires substantial principal payments at maturity) and, if we can, the terms of such refinancing might not be as favorable as the terms of existing indebtedness;

•

if principal payments due at maturity cannot be refinanced, extended or paid with proceeds of other capital transactions, such as new equity capital, our cash flow will not be sufficient in all years to repay all maturing debt; and

•

if prevailing interest rates or other factors at the time of refinancing (such as the possible reluctance of lenders to make commercial real estate loans) result in higher interest rates, increased interest expense would adversely affect cash flow and our ability to service debt and make distributions to stockholders.

Financial Covenants Could Adversely Affect Our Financial Condition. If a Property is mortgaged to secure payment of indebtedness and we are unable to meet mortgage payments, the mortgagee could foreclose on the Property, resulting in loss of income and asset value. The mortgages on our Properties contain customary negative covenants, which among other things, limit our ability, without the prior consent of the lender, to further mortgage the Property and to discontinue insurance coverage. In addition, our credit facilities contain certain customary restrictions, requirements and other limitations on our ability to incur indebtedness, including total debt to assets ratios, debt service coverage ratios and minimum ratios of unencumbered assets to unsecured debt. Foreclosure on mortgaged Properties or an inability to refinance existing indebtedness would likely have a negative impact on our financial condition and results of operations.

Our Degree of Leverage Could Limit Our Ability to Obtain Additional Financing. Our debt to market capitalization ratio (total debt as a percentage of total debt plus the market value of the outstanding common stock and Units held by parties other than the Company) is approximately 55% as of December 31, 2007. The degree of leverage could have important consequences to stockholders, including an adverse effect on our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, development or other general corporate purposes, and makes us more vulnerable to a downturn in business or the economy generally.

We Depend on Our Subsidiaries’ Dividends and Distributions.

Substantially all of our assets are indirectly held through the Operating Partnership. As a result, we have no source of operating cash flow other than from distributions from the Operating Partnership. Our ability to pay dividends to holders of common stock depends on the Operating Partnership’s ability first to satisfy its obligations to its creditors and make distributions payable to third party holders of its preferred Units and then to make distributions to MHC Trust and common Unit holders. Similarly, MHC Trust must satisfy its obligations to its creditors and preferred stockholders before making common stock distributions to us.

Stockholders’ Ability to Effect Changes of Control of the Company is Limited.

Provisions of Our Charter and Bylaws Could Inhibit Changes of Control. Certain provisions of our charter and bylaws may delay or prevent a change of control of the Company or other transactions that could provide our stockholders with a premium over the then-prevailing market price of their common stock or which might otherwise be in the best interest of our stockholders. These include the Ownership Limit described below. Also, any future series of preferred stock may have certain voting provisions that could delay or prevent a change of control or other transaction that might involve a premium price or otherwise be beneficial to our stockholders.

Maryland Law Imposes Certain Limitations on Changes of Control. Certain provisions of Maryland law prohibit “business combinations” (including certain issuances of equity securities) with any person who beneficially owns ten percent or more of the voting power of outstanding common stock, or with an affiliate of the Company who, at any time within the two-year period prior to the date in question, was the owner of ten percent or more of the voting power of the outstanding voting stock (an “Interested Stockholder”), or with an affiliate of an Interested Stockholder. These prohibitions last for five years after the most recent date on which the Interested Stockholder became an Interested Stockholder. After the five-year period, a business combination with an Interested Stockholder must be approved by two super-majority stockholder votes unless, among other conditions, our common stockholders receive a minimum price for their shares and the consideration is received in cash or in the same form as previously paid by the Interested Stockholder for its shares of common stock. The Board of Directors has exempted from these provisions under the Maryland law any business combination with Samuel Zell, who is the Chairman of the Board of the Company, certain holders of Units who received them at the time of our initial public offering, the General Motors Hourly Rate Employees Pension Trust and the General Motors Salaried Employees Pension Trust, and our officers who acquired common stock at the time we were formed and each and every affiliate of theirs.

We Have a Stock Ownership Limit for REIT Tax Purposes. To remain qualified as a REIT for U.S. federal income tax purposes, not more than 50% in value of our outstanding shares of capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the federal income tax laws applicable to REITs) at any time during the last half of any taxable year. To facilitate maintenance of our REIT qualification, our charter, subject to certain exceptions, prohibits Beneficial Ownership (as defined in our charter) by any single stockholder of more than 5% (in value or number of shares, whichever is more restrictive) of our outstanding capital stock. We refer to this as the “Ownership Limit.” Within certain limits, our charter permits the Board of Directors to increase the Ownership Limit with respect to any class or series of stock. The Board of Directors, upon receipt of a ruling from the IRS, opinion of counsel, or other evidence satisfactory to the Board of Directors and upon fifteen days prior written notice of a proposed transfer which, if consummated, would result in the transferee owning shares in excess of the Ownership Limit, and upon such other conditions as the Board of Directors may direct, may exempt a stockholder from the Ownership Limit. Absent any such exemption, capital stock acquired or held in violation of the Ownership Limit will be transferred by operation of law to us as trustee for the benefit of the person to whom such capital stock is ultimately transferred, and the stockholder’s rights to distributions and to vote would terminate. Such stockholder would be entitled to receive, from the proceeds of any subsequent sale of the capital stock transferred to us as trustee, the lesser of (i) the price paid for the capital stock or, if the owner did not pay for the capital stock (for example, in the case of a gift, devise of other such transaction), the market price of the capital stock on the date of the event causing the capital stock to be transferred to us as trustee or (ii) the amount realized from such sale. A transfer of capital stock may be void if it causes a person to violate the Ownership Limit. The Ownership Limit could delay or prevent a change in control of the Company and, therefore, could adversely affect our stockholders’ ability to realize a premium over the then-prevailing market price for their common stock.

Conflicts of Interest Could Influence the Company’s Decisions.

Certain Stockholders Could Exercise Influence in a Manner Inconsistent With the Stockholders’ Best Interests. As of December 31, 2007, Mr. Samuel Zell and certain affiliated holders beneficially owned approximately 14.2% of our outstanding common stock (in each case including common stock issuable upon the exercise of stock options and the exchange of Units). Mr. Zell is the chairman of the Company’s Board of Directors. Accordingly, Mr. Zell has significant influence on our management and operation. Such influence could be exercised in a manner that is inconsistent with the interests of other stockholders.

Mr. Zell and His Affiliates Continue to be Involved in Other Investment Activities. Mr. Zell and his affiliates have a broad and varied range of investment interests, including interests in other real estate investment companies involved in other forms of housing, including multifamily housing. Mr. Zell and his affiliates may acquire interests in other companies. Mr. Zell may not be able to control whether any such company competes with the Company. Consequently, Mr. Zell’s continued involvement in other investment activities could result in competition to the Company as well as management decisions, which might not reflect the interests of our stockholders.

Agreements with Privileged Access May Not Have Been and May Not Be in the Future, Negotiated at Arm’s Length. Privileged Access is the largest tenant of the Company. Privileged Access leases approximately 24,100 sites at 81 of our resort Properties. These leases will provide for annual lease payments to us of approximately $25.5 million in the year ended December 31, 2008. Privileged Access operates the 81 Properties, which represented approximately 92 % of Privileged Access gross revenues for the year ended December 31, 2007. Privileged Access also leases 130 sites at Tropical Palms RV Resort for an annual lease payment of approximately $1.4 million. See Note 12 in the Notes to Consolidated Financial Statements contained in this Form 10-K for a discussion of all agreements between us and Privileged Access.

Mr. McAdams is our President and is also a director and 100% owner of Privileged Access. While the contracts with Privileged Access for the 81 Properties discussed above were reviewed and approved by a special committee of our board of directors, which is comprised of three independent directors, they may not be the result of arm’s length negotiations and, therefore, there can be no assurance that the terms and conditions are not less favorable than those which could be obtained from third parties providing comparable services. In addition, to the extent that we choose to enforce our rights under any of these agreements, we may determine to pursue available remedies, such as actions for damages or injunctive relief, less vigorously than we otherwise might because of our desire to maintain our ongoing relationship with Mr. McAdams.

Members of Management May Have a Conflict of Interest Over Whether To Enforce Terms of Mr. McAdams’s Employment and Noncompetition Agreement. Mr. McAdams entered into employment and noncompetition agreement with us. For the most part these restrictions apply to him both during his employment and for two years thereafter. Mr. McAdams is also prohibited from otherwise disrupting or interfering with our business through the solicitation of our employees or clients or otherwise. To the extent that we choose to enforce our rights under any of these agreements, we may determine to pursue available remedies, such as actions for damages or injunctive relief, less vigorously than we otherwise might because of our desire to maintain our ongoing relationship with Mr. McAdams. Additionally, the non-competition provisions of his agreement, despite being limited in scope and duration, could be difficult to enforce, or may be subject to limited enforcement, should litigation arise over it in the future. See Note 12 in the Notes to Consolidated Financial Statements contained in this Form 10-K.

Risk of Eminent Domain and Tenant Litigation.

We own Properties in certain areas of the country where real estate values have increased faster than rental rates in our Properties either because of locally imposed rent control or long term leases. In such areas, we have learned that certain local government entities have investigated the possibility of seeking to take our Properties by eminent domain at values below the value of the underlying land. While no such eminent domain proceeding has been commenced, and we would exercise all of our rights in connection with any such proceeding, successful condemnation proceedings by municipalities could adversely affect our financial condition. Moreover, certain of our Properties located in California are subject to rent control ordinances, some of which not only severely restrict ongoing rent increases but also prohibit us from increasing rents upon turnover. Such regulation allows customers to sell their homes for a premium representing the value of the future discounted rent-controlled rents. As part of our effort to realize the value of our Properties subject to rent control, we have initiated lawsuits against several municipalities in California. In response to our efforts, tenant groups have filed lawsuits against us seeking not only to limit rent increases, but to be awarded large damage awards. If we are unsuccessful in our efforts to challenge rent control ordinances, it is likely that we will not be able to charge rents that reflect the intrinsic value of the affected Properties. Finally, tenant groups in non-rent controlled markets have also attempted to use litigation as a means of protecting themselves from rent increases reflecting the rental value of the affected Properties. An unfavorable outcome in the tenant group lawsuits could have an adverse impact on our financial condition.

Environmental and Utility-Related Problems Are Possible and Can be Costly.

Federal, state and local laws and regulations relating to the protection of the environment may require a current or previous owner or operator of real estate to investigate and clean up hazardous or toxic substances or petroleum product releases at such property. The owner or operator may have to pay a governmental entity or third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with the contamination. Such laws typically impose clean-up responsibility and liability without regard to whether the owner or operator knew of or caused the presence of the contaminants. Even if more than one person may have been responsible for the contamination, each person covered by the environmental laws may be held responsible for all of the clean-up costs incurred. In addition, third parties may sue the owner or operator of a site for damages and costs resulting from environmental contamination emanating from that site.

Environmental laws also govern the presence, maintenance and removal of asbestos. Such laws require that owners or operators of property containing asbestos properly manage and maintain the asbestos, that they notify and train those who may come into contact with asbestos and that they undertake special precautions, including removal or other abatement, if asbestos would be disturbed during renovation or demolition of a building. Such laws may impose fines and penalties on real property owners or operators who fail to comply with these requirements and may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos fibers.

Utility-related laws and regulations also govern the provision of utility services and operations of water and wastewater treatment facilities. Such laws regulate, for example, how and to what extent owners or operators of property can charge renters for provision of, for example, electricity, and whether and to what extent such utility services can be charged separately from the base rent. Such laws also regulate the operations and performance of water treatment facilities and wastewater treatment facilities. Such laws may impose fines and penalties on real property owners or operators who fail to comply with these requirements.

We Have a Significant Concentration of Properties in Florida and California, and Natural Disasters or Other Catastrophic Events in These or Other States Could Adversely Affect the Value of Our Properties and Our Cash Flow.

As of December 31, 2007, we owned or had an ownership interest in 311 Properties located in 28 states and British Columbia, including 87 Properties located in Florida and 48 Properties located in California. Florida accounted for approximately 44% and California accounted for approximately 17% of property operating revenues for the year ended December 31, 2007. The occurrence of a natural disaster or other catastrophic event in any of these areas may cause a sudden decrease in the value of our Properties. While we have obtained insurance policies providing certain coverage against damage from fire, flood, property damage, earthquake, wind storm and business interruption, these insurance policies contain coverage limits, limits on covered property and various deductible amounts that the Company must pay before insurance proceeds are available. Such insurance may therefore be insufficient to restore our economic position with respect to damage or destruction to our Properties caused by such occurrences. Moreover, each of these coverages must be renewed every year and there is the possibility that all or some of the coverages may not be available at a reasonable cost. In addition, in the event of such natural disaster or other catastrophic event, the process of obtaining reimbursement for covered losses, including the lag between expenditures incurred by us and reimbursements received from the insurance providers, could adversely affect our economic performance.

Market Interest Rates May Have an Effect on the Value of Our Common Stock.

One of the factors that investors consider important in deciding whether to buy or sell shares of a REIT is the distribution rates with respect to such shares (as a percentage of the price of such shares) relative to market interest rates. If market interest rates go up, prospective purchasers of REIT shares may expect a higher distribution rate. Higher interest rates would not, however, result in more funds for us to distribute and, in fact, would likely increase our borrowing costs and potentially decrease funds available for distribution. Thus, higher market interest rates could cause the market price of our publicly traded securities to go down.

We Are Dependent on External Sources of Capital.

To qualify as a REIT, we must distribute to our stockholders each year at least 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding any net capital gain). In addition, we intend to distribute all or substantially all of our net income so that we will generally not be subject to U.S. federal income tax on our earnings. Because of these distribution requirements, it is not likely that we will be able to fund all future capital needs, including for acquisitions, from income from operations. We therefore will have to rely on third-party sources of debt and equity capital financing, which may or may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of things, including conditions in the capital markets generally and the market’s perception of our growth potential and our current and potential future earnings. Moreover, additional equity offerings may result in substantial dilution of stockholders’ interests, and additional debt financing may substantially increase our leverage.

Our Qualification as a REIT is Dependent on Compliance With U.S. Federal Income Tax Requirements.

We believe we have been organized and operated in a manner so as to qualify for taxation as a REIT, and we intend to continue to operate so as to qualify as a REIT for U.S. federal income tax purposes. Qualification as a REIT for U.S. federal income tax purposes, however, is governed by highly technical and complex provisions of the Code for which there are only limited judicial or administrative interpretations. In connection with certain transactions, we have received, and relied, on advice of counsel as to the impact of such transactions on our qualification as a REIT. Our qualification as a REIT requires analysis of various facts and circumstances that may not be entirely within our control, and we cannot provide any assurance that the Internal Revenue Service (the “IRS”) will agree with our analysis or the analysis of our tax counsel. If the IRS were to disagree with our analysis or our tax counsel’s analysis of facts and circumstances, our ability to qualify as a REIT may be adversely affected. These matters can affect our qualification as a REIT. In addition, legislation, new regulations, administrative interpretations or court decisions might significantly change the tax laws with respect to the requirements for qualification as a REIT or the U.S. federal income tax consequences of qualification as a REIT.

If, with respect to any taxable year, we fail to maintain our qualification as a REIT (and specified relief provisions under the Code were not applicable to such disqualification), we could not deduct distributions to stockholders in computing our

net taxable income and we would be subject to U.S. federal income tax on our net taxable income at regular corporate rates. Any U.S. federal income tax payable could include applicable alternative minimum tax. If we had to pay U.S. federal income tax, the amount of money available to distribute to stockholders and pay indebtedness would be reduced for the year or years involved, and we would no longer be required to distribute money to stockholders. In addition, we would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost, unless we were entitled to relief under the relevant statutory provisions. Although we currently intend to operate in a manner designed to allow us to qualify as a REIT, future economic, market, legal, tax or other considerations may cause us to revoke the REIT election.

Interpretation of and Changes to Accounting Policies and Standards Could Adversely Affect Our Reported Financial Results.

Our Accounting Policies and Methods Are the Basis on Which We Report Our Financial Condition and Results of Operations, and They May Require Management to Make Estimates About Matters that Are Inherently Uncertain. Our accounting policies and methods are fundamental to the manner in which we record and report our financial condition and results of operations. Management must exercise judgment in selecting and applying many of these accounting policies and methods in order to ensure that they comply with generally accepted accounting principles and reflect management’s judgment as to the most appropriate manner in which to record and report our financial condition and results of operations. In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which might be reasonable under the circumstances yet might result in reporting materially different amounts than would have been reported under a different alternative.

One policy that will be critical to the presentation of our financial condition and results of operations in 2008 and beyond is our policy related to Privileged Access. Since April 14, 2006, Privileged Access has been our largest tenant leasing 81 resort Properties from us. Effective January 1, 2008, the 100 percent owner of Privileged Access, Mr. Joe McAdams, became our President and we amended and restated the leases for the 81 Properties. Under generally accepted accounting principles, effective January 1, 2008, Mr. McAdams, Privileged Access and the Company are considered related parties. Due to the materiality of the leasing arrangement and the related party nature of the arrangement, the Company has analyzed whether the operations of Privileged Access should be consolidated with ours. We have determined under FIN 46 that it would not be appropriate to consolidate Privileged Access as we do not control Privileged Access and are not the primary beneficiary of Privileged Access. This conclusion required management to make certain judgments. As a result of the complex nature of the arrangements, on February 15, 2008, we submitted a letter to the Office of the Chief Accountant at the SEC describing the relationship and asking for the SEC’s concurrence with our conclusions that we should not consolidate the operations of Privileged Access. As of the date of filing this Form 10-K, we do not have a response from the SEC. If the SEC disagrees with our conclusions and requires us to consolidate the operations of Privileged Access beginning January 1, 2008, such consolidation may significantly impact the presentation of our financial condition and results of operations. Additionally, the SEC may choose not to review our submission at this time. If they do not and we do not consolidate, the SEC may choose to review our position at a later time and may require us to consolidate the operations of Privileged Access beginning January 1, 2008.

Changes in Accounting Standards Could Adversely Affect Our Reported Financial Results. The bodies that set accounting standards for public companies, including the Financial Accounting Standards Board (“FASB”), the SEC and others, periodically change or revise existing interpretations of the accounting and reporting standards that govern the way that we report our financial condition and results of operations. These changes can be difficult to predict and can materially impact our reported financial results. In some cases, we could be required to apply a new or revised accounting standard, or a revised interpretation of an accounting standard, retroactively, which could have a negative impact on reported results or result in the restatement of our financial statements for prior periods.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

General

Our Properties provide attractive amenities and common facilities that create a comfortable and attractive home for our customers, with most offering a clubhouse, a swimming pool, laundry facilities and cable television service. Many also offer additional amenities such as sauna/whirlpool spas, golf courses, tennis, shuffleboard and basketball courts, exercise rooms and various social activities such as concerts. Since most of our customers generally rent our sites on a long-term basis, it is their responsibility to maintain their homes and the surrounding area. It is our role to ensure that customers comply with our Property policies and to provide maintenance of the common areas, facilities and amenities. We hold periodic meetings with our Property management personnel for training and implementation of our strategies. The Properties historically have had, and we believe they will continue to have, low turnover and high occupancy rates.

Property Portfolio

As of December 31, 2007, we owned or had an ownership interest in a portfolio of 311 Properties located throughout the United States and British Columbia containing 112,779 residential sites.

The distribution of our Properties throughout the United States reflects our belief that geographic diversification helps insulate the portfolio from regional economic influences. We intend to target new acquisitions in or near markets where our Properties are located and will also consider acquisitions of Properties outside such markets. Refer to Note 2(c) of the Notes to Consolidated Financial Statements contained in this Form 10-K.

Bay Indies located in Venice, Florida and Westwinds located in San Jose, California accounted for approximately 2.4% and 2.2%, respectively, of our total property operating revenues for the year ended December 31, 2007.

The following table sets forth certain information relating to the Properties we owned as of December 31, 2007, categorized by our major markets (excluding membership campground Properties leased to Privileged Access and Properties owned through joint ventures).


														Total
												Total		Number		Annual			Annual
												Number		of Annual		Site			Site			Annual		Annual
								Develo-		Expan-		of Sites		Sites		Occupancy			Occupancy			Rent		Rent
								pable		sion		as of		as of		as of			as of			as of		as of
Property	Address	City	State	ZIP	MH/RV	Acres (c)		Acres (d)		Sites (e)		12/31/07		12/31/07		12/31/07			12/31/06			12/31/07		12/31/06
Florida
East Coast:
Sunshine Key	38801 Overseas Hwy	Big Pine Key	FL	33043	RV		54						409		11		100.0	%		—		$	4,505		—
Carriage Cove	Five Carriage Cove Way	Daytona Beach	FL	32119	MH		59						418		418		92.6	%		93.5	%	$	5,342	$	5,138
Coquina Crossing	4536 Coquina Crossing Dr.	Elkton	FL	32033	MH		316		26		145		597		562		88.1	%		86.7	%(b)	$	5,268	$	4,931
Bulow Plantation	3165 Old Kings Road South	Flagler Beach	FL	32136	MH		323		180		722		276		276		98.6	%		98.9	%(b)	$	5,034	$	4,673
Bulow RV	3345 Old Kings Road South	Flagler Beach	FL	32136	RV								352		107		100.0	%		100.0	%(f)	$	4,779	$	4,496
Carefree Cove	3273 N.W. 37th St	Ft. Lauderdale	FL	33309	MH		20						163		163		92.0	%		90.2	%	$	6,047	$	5,772
Park City West	10550 W. State Road 84	Ft. Lauderdale	FL	33324	MH		60						363		363		89.5	%		89.5	%	$	5,367	$	5,155
Sunshine Holiday	2802 W. Oakland Park Blvd.	Ft. Lauderdale	FL	33311	MH		32						269		269		91.8	%		90.0	%	$	5,590	$	5,343
Sunshine Holiday RV	2802 W. Oakland Park Blvd.	Ft. Lauderdale	FL	33311	RV								131		58		100.0	%		100.0	%(f)	$	5,280	$	5,143
Maralago Cay	6280 S. Ash Lane	Lantana	FL	33462	MH		102		5				602		602		90.9	%		92.9	%	$	6,284	$	5,973
Coral Cay	2801 NW 62nd Avenue	Margate	FL	33063	MH		121						819		819		82.2	%		82.7	%	$	5,818	$	5,854
Lakewood Village	3171 Hanson Avenue	Melbourne	FL	32901	MH		68						349		349		86.8	%		87.7	%	$	5,488	$	5,292
Holiday Village	1335 Fleming Ave Box 228	Ormond Beach	FL	32174	MH		43						301		301		86.7	%		87.0	%	$	4,666	$	4,446
Sunshine Holiday	1701 North US Hwy 1	Ormond Beach	FL	32174	RV		69						349		132		100.0	%		100.0	%	$	4,069	$	3,744
The Meadows	2555 PGA Boulevard	Palm Beach Gardens	FL	33410	MH		55						379		379		83.9	%		85.2	%(b)	$	5,936	$	5,615
Breezy Hill RV	800 NE 48th Street	Pompano Beach	FL	33064	RV		52						762		363		100.0	%		100.0	%	$	5,557	$	5,230
Highland Wood RV	900 NE 48th Street	Pompano Beach	FL	33064	RV		15						148		3		100.0	%		100.0	%	$	5,583	$	5,820
Lighthouse Pointe	155 Spring Drive	Port Orange	FL	32129	MH		64						433		433		86.8	%		86.8	%(b)	$	4,613	$	4,446
Pickwick	4500 S. Clyde Morris Blvd	Port Orange	FL	32119	MH		84		4				432		432		99.5	%		99.1	%	$	4,686	$	4,606
Indian Oaks	780 Barnes Boulevard	Rockledge	FL	32955	MH		38						208		208		100.0	%		100.0	%	$	4,014	$	3,827
Countryside	8775 20th Street	Vero Beach	FL	32966	MH		125						643		645		89.3	%		89.3	%(b)	$	5,117	$	4,929
Heritage Plantation	1101 Ranch Road	Vero Beach	FL	32966	MH		64						435		436		82.6	%		84.4	%	$	5,185	$	4,901
Holiday Village	1000 S.W. 27th Avenue	Vero Beach	FL	32968	MH		20						128		128		35.2	%		39.8	%	$	4,233	$	4,190
Sunshine Travel	9455 108th Avenue	Vero Beach	FL	32967	RV		30		6		48		300		195		100.0	%		100.0	%	$	4,058	$	3,787
Central:
Clerbook	20005 U.S. Highway 27	Clermont	FL	34711	RV		288						1,255		506		100.0	%		98.1	%	$	3,574	$	3,194
Lake Magic	9600 Hwy 192 West	Clermont	FL	34714	RV		69						471		146		100.0	%		100.0	%	$	3,933	$	3,411
Southern Palms	One Avocado Lane	Eustis	FL	32726	RV		120						950		385		100.0	%		100.0	%	$	3,933	$	3,269
Grand Island	13310 Sea Breeze Lane	Grand Island	FL	32735	MH		35						359		359		61.6	%		59.1	%(b)	$	4,527	$	4,378
Sherwood Forest	5302 W. Irlo Bronson Hwy	Kissimmee	FL	34746	MH		124						767		754		95.0	%		94.2	%(b)	$	4,613	$	5,004
Sherwood Forest RV	5300 W. Irlo Bronson Hwy	Kissimmee	FL	34746	RV		107		43		149		513		153		100.0	%		100.0	%	$	4,574	$	4,403
Tropical Palms	2650 Holiday Trail	Kissimmee	FL	34746	RV		59						541		53		100.0	%		50.0	%	$	5,514	$	4,096
Coachwood Colony	2610 Dogwood Place	Leesburg	FL	34748	MH		29						202		202		92.1	%		92.6	%	$	3,687	$	3,460
Mid-Florida Lakes	199 Forest Dr.	Leesburg	FL	34788	MH		290						1,225		1,225		81.9	%		82.5	%(b)	$	5,204	$	4,996
Southernaire	1700 Sanford Road	Mt. Dora	FL	32757	MH		14						108		108		86.1	%		86.1	%	$	4,051	$	3,945
Oak Bend	10620 S.W. 27th Ave.	Ocala	FL	34476	MH		62		3				262		262		88.9	%		89.3	%(b)	$	4,227	$	4,023
Villas at Spanish Oaks	3150 N.E. 36th Avenue	Ocala	FL	34479	MH		69						459		459		86.5	%		87.6	%	$	4,176	$	4,327
Winter Garden	13905 W. Colonial Dr.	Winter Garden	FL	34787	RV		27						350		232		100.0	%		—	(a)	$	3,827		—


														Total
												Total		Number		Annual			Annual
												Number		of Annual		Site			Site			Annual		Annual
								Develo-		Expan-		of Sites		Sites		Occupancy			Occupancy			Rent		Rent
								pable		sion		as of		as of		as of			as of			as of		as of
Property	Address	City	State	ZIP	MH/RV	Acres (c)		Acres (d)		Sites (e)		12/31/07		12/31/07		12/31/07			12/31/06			12/31/07		12/31/06
Gulf Coast (Tampa/Naples):
Toby’s RV	3550 N.E. Hwy 70	Arcadia	FL	34266	RV		44						379		318		100.0	%		100.0	%	$	2,333	$	2,026
Manatee	800 Kay Road NE	Bradenton	FL	34212	RV		42						415		240		100.0	%		100.0	%	$	4,549	$	4,092
Windmill Manor	5320 53rd Ave. East	Bradenton	FL	34203	MH		49						292		292		95.5	%		93.8	%	$	5,241	$	5,034
Glen Ellen	2882 Gulf to Bay Blvd	Clearwater	FL	33759	MH		12						106		106		94.3	%		95.3	%	$	4,431	$	4,239
Hillcrest	2346 Druid Road East	Clearwater	FL	33764	MH		25						278		278		93.9	%		87.8	%	$	5,103	$	4,838
Holiday Ranch	4300 East Bay Drive	Clearwater	FL	33764	MH		12						150		150		92.7	%		91.3	%	$	4,125	$	4,800
Silk Oak	28488 US Highway 19 N	Clearwater	FL	33761	MH		19						181		181		92.3	%		91.7	%	$	4,455	$	5,124
Crystal Isles	11419 W. Ft. Island Drive	Crystal River	FL	34429	RV		32						260		38		100.0	%		100.0	%	$	4,385	$	3,502
Lake Haven	1415 Main Street	Dunedin	FL	34698	MH		48						379		379		91.3	%		89.2	%	$	6,194	$	5,756
Fort Myers Beach Resort	16299 San Carlos Blvd.	Fort Myers	FL	33908	RV		31						306		102		100.0	%		100.0	%	$	5,520	$	5,054
Gulf Air Resort	17279 San Carlos Blvd. SW	Fort Myers	FL	33931	RV		25						246		156		100.0	%		100.0	%	$	4,515	$	4,283
Barrington Hills	9412 New York Avenue	Hudson	FL	34667	RV		28						392		267		100.0	%		100.0	%	$	2,678	$	2,464
Down Yonder	7001 N. 142nd Avenue	Largo	FL	33771	MH		50						361		361		99.4	%		99.2	%	$	5,734	$	5,515
East Bay Oaks	601 Starkey Road	Largo	FL	33771	MH		40						328		328		97.9	%		97.9	%	$	5,470	$	5,247
Eldorado Village	2505 East Bay Drive	Largo	FL	33771	MH		25						227		227		99.6	%		98.2	%	$	4,442	$	5,208
Shangri La	249 Jasper Street N.W.	Largo	FL	33770	MH		14						160		160		91.9	%		96.9	%	$	5,056	$	4,809
Vacation Village	6900 Ulmerton Road	Largo	FL	33771	RV		29						293		191		100.0	%		100.0	%	$	3,942	$	3,760
Pasco	21632 State Road 54	Lutz	FL	33549	RV		27						255		167		100.0	%		100.0	%	$	3,356	$	3,182
Buccaneer	2210 N. Tamiami Trail N.E.	N. Ft. Myers	FL	33903	MH		223		39		162		971		971		98.2	%		98.2	%	$	5,490	$	5,269
Island Vista MHC	3000 N. Tamiami Trail	N. Ft. Myers	FL	33903	MH		121						616		542		100.4	%		100.0	%	$	3,834	$	3,809
Lake Fairways	19371 Tamiami Trail	N. Ft. Myers	FL	33903	MH		259						896		896		99.6	%		99.7	%	$	5,559	$	5,295
Pine Lakes	10200 Pine Lakes Blvd.	N. Ft. Myers	FL	33903	MH		314						584		584		100.0	%		100.0	%	$	6,595	$	6,282
Pioneer Village	7974 Samville Rd.	N. Ft. Myers	FL	33917	RV		90						733		408		100.0	%		100.0	%	$	3,675	$	3,521
The Heritage	3000 Heritage Lakes Blvd.	N. Ft. Myers	FL	33917	MH		214		22		132		455		455		98.0	%		98.0	%(b)	$	4,930	$	4,734
Country Place	2601 Country Place Blvd.	New Port Richey	FL	34655	MH		82						515		515		99.8	%		100.0	%	$	3,844	$	3,672
Hacienda Village	7107 Gibraltar Ave	New Port Richey	FL	34653	MH		66						505		505		97.6	%		97.4	%	$	4,564	$	4,319
Harbor View	6617 Louisna Ave	New Port Richey	FL	34653	MH		69						471		471		97.5	%		98.5	%	$	3,823	$	3,462
Bay Lake Estates	1200 East Colonia Lane	Nokomis	FL	34275	MH		34						228		228		95.2	%		95.6	%	$	5,963	$	5,692
Royal Coachman	1070 Laurel Road East	Nokomis	FL	34275	RV		111						546		414		100.0	%		100.0	%	$	5,804	$	5,531
Windmill Village	16131 N. Cleveland Ave.	N. Ft. Myers	FL	33903	MH		69						491		491		93.1	%		92.9	%	$	4,889	$	4,294
Silver Dollar	12515 Silver Dollar Drive	Odessa	FL	33556	RV		412						385		389		100.0	%		100.0	%	$	4,420	$	3,953
Terra Ceia	9303 Bayshore Road	Palmetto	FL	34221	RV		18						203		131		100.0	%		100.0	%	$	3,449	$	2,951
Lakes at Countrywood	745 Arbor Estates Way	Plant City	FL	33565	MH		122						424		424		92.0	%		91.3	%(b)	$	3,785	$	3,596
Meadows at Countrywood	745 Arbor Estates Way	Plant City	FL	33565	MH		140		13		110		737		799		94.9	%		94.6	%(b)	$	4,510	$	4,261
Oaks at Countrywood	745 Arbor Estates Way	Plant City	FL	33565	MH		44				—		168		168		76.8	%		75.0	%(b)	$	3,804	$	3,710
Harbor Lakes	3737 El Jobean Road #294	Port Charlotte	FL	33953	RV		80						528		292		100.0	%		100.0	%	$	4,221	$	3,905
Gulf View	10205 Burnt Store Road	Punta Gorda	FL	33950	RV		78						206		44		100.0	%		100.0	%	$	3,950	$	3,872
Tropical Palms MHC	17100 Tamiami Trail	Punta Gorda	FL	33955	MH		50						297		297		85.2	%		85.9	%	$	3,167	$	3,053
Winds of St. Armands No	4000 N. Tuttle Ave.	Sarasota	FL	34234	MH		74						471		471		94.7	%		95.1	%	$	5,364	$	5,121
Winds of St. Armands So	3000 N. Tuttle Ave.	Sarasota	FL	34234	MH		61						306		306		99.3	%		99.0	%	$	5,610	$	5,090
Topics	13063 County Line Road	Spring Hill	FL	34609	RV		35						230		197		100.0	%		100.0	%	$	2,739	$	2,576
Pine Island	5120 Stringfellow Road	St. James City	FL	33956	RV		31						363		65		100.0	%		—	(a)	$	4,701		—
Bay Indies	950 Ridgewood Ave	Venice	FL	34285	MH		210						1,309		1,309		95.8	%		96.2	%	$	6,419	$	6,054
Ramblers Rest	1300 North River Rd.	Venice	FL	34293	RV		117						647		470		100.0	%		100.0	%	$	4,350	$	4,008
Sixth Avenue	39345 6th Avenue	Zephyrhills	FL	33542	MH		14						134		134		90.3	%		91.0	%	$	2,343	$	2,271
Total Florida Market:							6,797		341		1,468		35,155		28,413		94.2	%		93.8	%	$	4,655	$	4,444


														Total
												Total		Number		Annual			Annual
												Number		of Annual		Site			Site			Annual		Annual
								Develo-		Expan-		of Sites		Sites		Occupancy			Occupancy			Rent		Rent
								pable		sion		as of		as of		as of			as of			as of		as of
Property	Address	City	State	ZIP	MH/RV	Acres (c)		Acres (d)		Sites (e)		12/31/07		12/31/07		12/31/07			12/31/06			12/31/07		12/31/06
California
Northern California:
Monte del Lago	13100 Monte del Lago	Castroville	CA	95012	MH		54						310		310		93.2	%		96.1	%(b)	$	11,759	$	10,892
Colony Park	3939 Central Avenue	Ceres	CA	95307	MH		20						186		186		89.8	%		90.9	%	$	6,881	$	6,494
Four Seasons	3138 West Dakota	Fresno	CA	93722	MH		40						242		242		88.0	%		89.7	%	$	4,065	$	3,967
Tahoe Valley	1175 Melba Drive	Lake Tahoe	CA	96150	RV		86		20		200		413		5		100	%		—			—		—
Sea Oaks	1675 Los Osos Valley Rd., #221	Los Osos	CA	93402	MH		18						125		125		98.4	%		99.2	%	$	5,861	$	5,793
Coralwood	331 Coralwood	Modesto	CA	95356	MH		22						194		194		85.1	%		95.9	%	$	8,083	$	7,596
Concord Cascade	245 Aria Drive	Pacheco	CA	94553	MH		31						283		283		100.0	%		99.3	%	$	7,495	$	7,258
San Francisco RV	700 Palmetto Ave	Pacifica	CA	94044	RV		12						182		—		—			—			—		—
Quail Meadows	5901 Newbrook Drive	Riverbank	CA	95367	MH		20						146		146		98.6	%		100.0	%	$	8,039	$	7,706
California Hawaiian	3637 Snell Avenue	San Jose	CA	95136	MH		50						418		418		99.0	%		92.8	%	$	9,920	$	9,120
Sunshadow	1350 Panoche Avenue	San Jose	CA	95122	MH		30						121		121		97.5	%		95.9	%	$	9,444	$	8,903
Village of the Four Seasons	200 Ford Road	San Jose	CA	95138	MH		30						271		271		92.6	%		90.4	%	$	8,847	$	8,414
Westwinds (4 Properties)	500 Nicholson Lane	San Jose	CA	95134	MH		88						723		723		92.3	%		89.2	%	$	10,584	$	9,945
Laguna Lake	1801 Perfumo Canyon Road	San Luis Obispo	CA	93405	MH		100						290		290		99.7	%		99.7	%	$	5,406	$	5,219
Contempo Marin	400 Yosemite Road	San Rafael	CA	94903	MH		63						396		396		98.2	%		98.5	%	$	8,311	$	8,082
DeAnza Santa Cruz	2395 Delaware Avenue	Santa Cruz	CA	95060	MH		30						198		198		94.9	%		95.5	%	$	9,676	$	9,004
Santa Cruz Ranch RV Resort	917 Disc Drive	Scotts Valley	CA	95066	RV		6.65						106		—		—			—	(a)		—		—
Royal Oaks	415 Akers Drive N.	Visalia	CA	93291	MH		20						149		149		92.6	%		88.6	%	$	4,953	$	4,456
Southern California:
Date Palm Country Club	36-200 Date Palm Drive	Cathedral City	CA	92234	MH		232		3		24		538		538		98.1	%		97.8	%	$	10,240	$	9,932
Date Palm RV	36-100 Date Palm Drive	Cathedral City	CA	92234	RV				—		—		140		—		—			—	(f)		—		—
Pacific Dunes Ranch	1205 Silver Spur Place	Oceana	CA	93445	RV		48						215		1		100.0	%		100.0	%		—	$	5,355
Rancho Mesa	450 East Bradley Ave.	El Cajon	CA	92021	MH		20						158		158		70.3	%		81.0	%	$	10,839	$	10,529
Rancho Valley	12970 Hwy 8 Business	El Cajon	CA	92021	MH		19						140		140		95.0	%		97.1	%	$	10,922	$	10,843
Royal Holiday	4400 W Florida Ave	Hemet	CA	92545	MH		22						179		179		57.5	%		58.1	%	$	4,770	$	4,503
Las Palmas	1025 S. Riverside Ave.	Rialto	CA	92376	MH		18						136		136		100.0	%		100.0	%	$	5,175	$	4,796
Parque La Quinta	350 S. Willow Ave. #120	Rialto	CA	92376	MH		19						166		166		100.0	%		100.0	%	$	5,172	$	4,922
Meadowbrook	8301 Mission Gorge Rd.	Santee	CA	92071	MH		43						338		338		98.2	%		97.9	%	$	9,065	$	8,918
Lamplighter	10767 Jamacha Blvd.	Spring Valley	CA	91978	MH		32						270		270		94.8	%		98.1	%	$	11,213	$	11,104
Santiago Estates	13691 Gavina Ave. #632	Sylmar	CA	91342	MH		113		9				300		300		100.0	%		100.0	%	$	10,067	$	9,601
Total California Market							1,287		32		224		7,333		6,283		93.1	%		94.1	%	$	8,199	$	7,734

Arizona
Countryside RV	2701 S. Idaho Rd	Apache Junction	AZ	85219	RV		53						560		330		100.0	%		100.0	%	$	2,843	$	2,748
Golden Sun RV	999 W Broadway Ave	Apache Junction	AZ	85220	RV		33						329		209		100.0	%		100.0	%	$	2,738	$	2,711
Casita Verde RV	2200 N. Trekell Rd.	Casa Grande	AZ	85222	RV		14						192		110		100.0	%		100.0	%	$	2,148	$	2,086
Fiesta Grande RV	1511 East Florence Blvd.	Casa Grande	AZ	85222	RV		77						767		507		100.0	%		100.0	%	$	2,546	$	2,451
Foothills West RV	10167 N. Encore Dr.	Casa Grande	AZ	85222	RV		16						188		132		100.0	%		100.0	%	$	2,106	$	1,998
Monte Vista	8865 E. Baseline Road	Mesa	AZ	85209	RV		142		56		515		832		774		100.0	%		100.0	%	$	5,456	$	5,296
Viewpoint	8700 E. University	Mesa	AZ	85207	RV		332		55		467		1,952		1,486		100.0	%		100.0	%	$	4,528	$	4,278
Venture In	270 N. Clark Rd.	Show Low	AZ	85901	RV		26						389		271		100.0	%		100.0	%	$	2,561	$	2,511
Paradise	10950 W. Union Hill Drive	Sun City	AZ	85373	RV		80						950		847		100.0	%		100.0	%	$	3,823	$	3,623
Araby	6649 E. 32nd. St.	Yuma	AZ	85365	RV		25						337		299		100.0	%		100.0	%	$	2,850	$	2,686
Cactus Gardens	10657 S. Ave. 9-E	Yuma	AZ	85365	RV		43						430		269		100.0	%		100.0	%	$	1,962	$	1,798
Capri RV	3380 South 4th Ave	Yuma	AZ	85365	RV		20						303		229		100.0	%		100.0	%	$	2,668	$	2,560


														Total
												Total		Number		Annual			Annual
												Number		of Annual		Site			Site			Annual		Annual
								Develo-		Expan-		of Sites		Sites		Occupancy			Occupancy			Rent		Rent
								pable		sion		as of		as of		as of			as of			as of		as of
Property	Address	City	State	ZIP	MH/RV	Acres (c)		Acres (d)		Sites (e)		12/31/07		12/31/07		12/31/07			12/31/06			12/31/07		12/31/06
Desert Paradise	10537 South Ave., 9E	Yuma	AZ	85365	RV		26						260		126		100.0	%		100.0	%	$	1,980	$	1,859
Foothill	12705 E. South Frontage Rd.	Yuma	AZ	85367	RV		18						180		68		100.0	%		100.0	%	$	2,011	$	1,908
Mesa Verde	3649 & 3749 South 4th Ave.	Yuma	AZ	85365	RV		28						345		318		100.0	%		—	(a)	$	2,272		—
Suni Sands	1960 East 32nd Street	Yuma	AZ	85365	RV		34						336		185		100.0	%		100.0	%	$	2,426	$	2,217
Casa del Sol East II	10960 N. 67th Avenue	Glendale	AZ	85304	MH		29						239		239		78.7	%		80.3	%	$	6,864	$	6,697
Casa del Sol East III	10960 N. 67th Avenue	Glendale	AZ	85304	MH		28						236		236		82.6	%		84.3	%	$	6,832	$	6,696
Palm Shadows	7300 N. 51st. Avenue	Glendale	AZ	85301	MH		33						294		294		81.3	%		80.3	%	$	5,473	$	5,293
Hacienda de Valencia	201 S. Greenfield Rd.	Mesa	AZ	85206	MH		51						365		365		93.7	%		90.4	%	$	5,659	$	5,497
The Highlands at Brentwood	120 North Val Vista Drive	Mesa	AZ	85213	MH		45						273		273		96.3	%		97.8	%	$	6,842	$	6,559
The Mark	625 West McKellips	Mesa	AZ	85201	MH		60		4				410		410		57.6	%		56.1	%	$	5,146	$	5,084
Apollo Village	10701 N. 99th Ave.	Peoria	AZ	85345	MH		29		3				236		236		91.5	%		85.6	%(b)	$	5,535	$	5,369
Casa del Sol West I	11411 N. 91st Avenue	Peoria	AZ	85345	MH		31						245		245		93.5	%		87.8	%	$	6,403	$	6,309
Carefree Manor	19602 N. 32nd Street	Phoenix	AZ	85050	MH		16						130		130		80.8	%		78.9	%	$	4,868	$	4,601
Central Park	205 West Bell Road	Phoenix	AZ	85023	MH		37						293		293		95.6	%		88.1	%	$	5,810	$	5,623
Desert Skies	19802 N. 32 Street	Phoenix	AZ	85024	MH		24						165		165		98.8	%		98.2	%	$	4,999	$	4,864
Sunrise Heights	17801 North 16th Street	Phoenix	AZ	85022	MH		28						199		199		91.0	%		84.4	%	$	5,720	$	5,532
Whispering Palms	19225 N. Cave Creek Rd.	Phoenix	AZ	85024	MH		15						116		116		95.7	%		94.0	%	$	4,368	$	4,234
Sedona Shadows	6770 W. U.S. Hwy 89A	Sedona	AZ	86336	MH		48		6		10		198		197		99.5	%		100.0	%	$	6,702	$	6,316
The Meadows	2401 W. Southern Ave.	Tempe	AZ	85282	MH		60						391		391		90.0	%		85.2	%	$	6,242	$	5,989
Fairview Manor	3115 N. Fairview Avenue	Tucson	AZ	85705	MH		28						235		235		80.0	%		75.7	%	$	4,533	$	4,506
Total Arizona Market							1,529		124		992		12,375		10,184		94.0	%		92.5	%	$	4,279	$	4,190

Colorado
Golden Terrace South RV	17801 West Colfax Ave.	Golden	CO	80401	RV								80		—		—			—			—		—
Hillcrest Village	1600 Sable Boulevard	Aurora	CO	80011	MH		72						601		601		76.9	%		74.2	%	$	6,540	$	6,477
Cimarron	12205 North Perry	Broomfield	CO	80020	MH		50						327		327		84.1	%		85.3	%	$	6,351	$	6,142
Holiday Village	3405 Sinton Road	Co. Springs	CO	80907	MH		38						240		240		78.3	%		78.8	%	$	6,697	$	6,468
Bear Creek	3500 South King Street	Denver	CO	80236	MH		12						122		122		92.6	%		94.3	%	$	6,212	$	6,173
Holiday Hills	2000 West 92nd Avenue	Denver	CO	80260	MH		99						736		736		83.8	%		86.1	%	$	6,397	$	6,145
Golden Terrace	17601 West Colfax Ave.	Golden	CO	80401	MH		32						265		265		84.2	%		84.9	%	$	6,949	$	6,667
Golden Terrace South	17601 West Colfax Ave.	Golden	CO	80401	MH		15						80		80		72.5	%		70.0	%	$	6,864	$	6,506
Golden Terrace West	17601 West Colfax Ave.	Golden	CO	80401	MH		39		7				316		316		81.0	%		82.9	%	$	6,776	$	6,556
Pueblo Grande	999 Fortino Blvd. West	Pueblo	CO	81008	MH		33						251		251		88.0	%		90.0	%	$	4,141	$	3,899
Woodland Hills	1500 W. Thornton Pkwy.	Thorton	CO	80260	MH		55						434		434		82.7	%		82.9	%	$	5,902	$	5,523
Total Colorado Market							445		7		0		3,452		3,372		82.4	%		82.9	%	$	6,283	$	6,056

Northeast
Waterford	205 Joan Drive	Bear	DE	19701	MH		159						731		731		95.2	%		94.7	%(b)	$	5,915	$	5,663
Whispering Pines	32045 Janice Road	Lewes	DE	19958	MH		67		2				393		393		85.8	%		86.7	%	$	4,343	$	4,205
Mariners Cove	35356 Sussex Lane #1	Millsboro	DE	19966	MH		101						375		375		94.9	%		94.7	%(b)	$	6,734	$	6,534
Aspen Meadows	303 Palace Lane	Rehoboth	DE	19971	MH		46						200		200		100.0	%		100.0	%	$	4,921	$	4,757
Camelot Meadows	303 Palace Lane	Rehoboth	DE	19971	MH		61						301		302		99.0	%		98.7	%	$	4,598	$	4,412
McNicol	303 Palace Lane	Rehoboth	DE	19971	MH		25						93		93		98.9	%		100.0	%	$	4,434	$	4,215
Sweetbriar	83 Big Burn Lane	Rehoboth	DE	19958	MH		38						146		146		98.6	%		97.3	%	$	4,485	$	4,335
Old Chatham RV	310 Old Chatham Road	South Dennis	MA	02660	RV		47		11				312		274		100.0	%		100.0	%	$	3,434	$	3,055
Mount Desert Narrows	1219 State Highway 3	Bar Harbor	ME	04609	RV		42		12				206		—		—			—	(a)		—		—
Patten Pond	1470 Bucksport Road	Ellsworth	ME	04605	RV		90		60				137		—		—			—	(a)		—		—


														Total
												Total		Number		Annual			Annual
												Number		of Annual		Site			Site			Annual		Annual
								Develo-		Expan-		of Sites		Sites		Occupancy			Occupancy			Rent		Rent
								pable		sion		as of		as of		as of			as of			as of		as of
Property	Address	City	State	ZIP	MH/RV	Acres (c)		Acres (d)		Sites (e)		12/31/07		12/31/07		12/31/07			12/31/06			12/31/07		12/31/06
Pinehurst RV Park	7 Oregon Avenue, P.O. Box 174	Old Orchard Beach	ME	04064	RV		58						550		519		100.0	%		100.0	%	$	2,501	$	2,403
Narrows Too	1150 Bar Harbor Road	Trenton	ME	04605	RV		43						207		—		—			—	(a)		—		—
Scenic	1314 Tunnel Rd.	Asheville	NC	28805	MH		28						205		205		78.0	%		79.5	%	$	3,435	$	3,261
Waterway RV	850 Cedar Point Blvd.	Cedar Point	NC	28584	RV		27						336		334		100.0	%		100.0	%	$	2,969	$	2,755
Twin Lakes	1618 Memory Lane	Chocowinity	NC	27817	RV		132		14		54		400		291		100.0	%		100.0	%	$	2,439	$	2,255
Lake Myers RV	2862 US Highway 64 West	Mocksville	NC	27028	RV		74						425		283		100.0	%		100.0	%	$	1,993	$	2,004
Goose Creek	350 Red Barn Road	Newport	NC	28570	RV		92		10		92		598		585		100.0	%		100.0	%	$	3,039	$	2,842
Sandy Beach RV	677 Clement Hill Road	Contoocook	NH	03229	RV		40						190		123		100.0	%		100.0	%	$	3,050	$	2,870
Tuxbury Resort	88 Whitehall Road	South Hampton	NH	03827	RV		193		100				305		223		100.0	%		—	(a)	$	2,969		—
Alpine Lake	78 Heath Road	Corinth	NY	12822	RV		200		54				500		235		100.0	%		100.0	%	$	2,608	$	2,391
Lake George Escape	175 E. Schroon River Road, P.O. Box 431	Lake George	NY	12845	RV		178		30				576		—		—			100.0	%		—		—
Greenwood Village	370 Chapman Boulevard	Manorville	NY	11949	MH		79		14		7		512		512		100.0	%		99.8	%	$	6,516	$	6,189
Brennan Beach	80 Brennan Beach	Pulaski	NY	13142	RV		201						1,377		1,164		100.0	%		100.0	%	$	1,714	$	1,605
Green Acres	8785 Turkey Ridge Road	Breinigsville	PA	18031	MH		149						595		595		93.3	%		93.6	%	$	6,315	$	5,871
Spring Gulch	475 Lynch Road	New Holland	PA	17557	RV		114						420		83		100.0	%		100.0	%	$	3,711	$	3,571
Appalachian	60 Motel Drive	Shartlesville	PA	19554	RV		86		30		200		357		190		100.0	%		100.0	%	$	2,693	$	2,561
Inlet Oaks	5350 Highway 17	Murrells Inlet	SC	29576	MH		35						178		178		94.9	%		94.4	%	$	3,354	$	3,348
Meadows of Chantilly	4200 Airline Parkway	Chantilly	VA	22021	MH		82						500		500		90.8	%		91.4	%	$	9,381	$	8,850
Total Northeast Market							2,487		337		353		11,125		8,534		97.1	%		97.1	%	$	4,065	$	3,911

Midwest
O’Connell’s	970 Green Wing Road	Amboy	IL	61310	RV		286		100		600		668		349		100.0	%		100.0	%	$	2,497	$	2,375
Willow Lake Estates	161 West River Road	Elgin	IL	60123	MH		111						617		617		71.3	%		75.4	%	$	9,223	$	9,082
Golf Vista Estates	25807 Firestone Drive	Monee	IL	60449	MH		144		4				408		408		98.0	%		99.0	%(b)	$	6,713	$	6,309
Twin Mills RV	1675 W SR 120	Howe	IN	46746	RV		137		5		50		501		241		100.0	%		100.0	%	$	1,922	$	1,812
Windsong	3050 S Lynhurst Dr	Indianapolis	IN	46241	MH								—		—		—			—			—		—
Lakeside	7089 N. Chicago Road	New Carlisle	IN	46552	RV		13						91		67		100.0	%		100.0	%	$	2,069	$	1,958
Oak Tree Village	254 Sandalwood Ave.	Portage	IN	46368	MH		76						361		361		73.4	%		74.2	%	$	4,836	$	4,616
Creekside	5100 Clyde Pk. Ave. SW	Wyoming	MI	49509	MH		29						165		165		67.3	%		67.3	%	$	5,582	$	5,219
Caledonia	8425 Hwy 38	Caledonia	WI	53108	RV		76						247		—		—			—			—		—
Fremont	E. 6506 Highway 110	Fremont	WI	54940	RV		98		5				325		58		100.0	%		100.0	%	$	2,595	$	2,495
Yukon Trails	N2330 Co Rd. HH	Lyndon Station	WI	53944	RV		150		30				214		118		100.0	%		100.0	%	$	1,520	$	1,448
Tranquil Timbers	3668 Grondin Road	Sturgeon Bay	WI	54235	RV		125						270		110		100.0	%		100.0	%	$	1,649	$	1,569
Arrowhead	W1530 Arrowhead Road	Wisconsin Dells	WI	53965	RV		166		40		200		377		136		100.0	%		100.0	%	$	1,512	$	1,415
Total Midwest Market							1,411		184		850		4,244		2,630		91.8	%		88.8	%	$	3,647	$	3,461


														Total
												Total		Number		Annual			Annual
												Number		of Annual		Site			Site			Annual		Annual
								Develo-		Expan-		of Sites		Sites		Occupancy			Occupancy			Rent		Rent
								pable		sion		as of		as of		as of			as of			as of		as of
Property	Address	City	State	ZIP	MH/RV	Acres (c)		Acres (d)		Sites (e)		12/31/07		12/31/07		12/31/07			12/31/06			12/31/07		12/31/06
Nevada, Utah, New Mexico
Bonanza	3700 East Stewart Ave	Las Vegas	NV	89110	MH		43						353		353		62.3	%		65.2	%	$	6,545	$	6,310
Boulder Cascade	1601 South Sandhill Rd	Las Vegas	NV	89104	MH		39						299		299		78.3	%		80.6	%	$	6,396	$	5,975
Cabana	5303 East Twain	Las Vegas	NV	89122	MH		37						263		263		98.9	%		99.2	%	$	6,404	$	6,107
Flamingo West	8122 West Flamingo Rd.	Las Vegas	NV	89147	MH		37						258		258		99.2	%		100.0	%	$	6,887	$	6,654
Villa Borega	1111 N. Lamb Boulevard	Las Vegas	NV	89110	MH		40						293		293		86.0	%		86.0	%	$	6,405	$	6,171
Westwood Village	1111 N. 2000 West	Farr West	UT	84404	MH		46						314		314		94.3	%		93.3	%(b)	$	4,191	$	3,874
All Seasons	290 N. Redwood Rd	Salt Lake City	UT	84116	MH		19						121		121		84.3	%		83.5	%	$	5,173	$	4,949
Total Nevada, Utah, New Mexico Market							261		0		0		1,901		1,901		86.2	%		77.4	%	$	6,000	$	5,606

Northwest
Casa Village	14 Goldust Dr	Billings	MT	59102	MH		63						490		490		73.3	%		74.7	%	$	4,102	$	3,934
Mt. Hood	65000 E Highway 26	Welches	OR	97067	RV		115		30		202		436		80		100.0	%		100.0	%	$	4,830	$	4,570
Shadowbrook	13640 S.E. Hwy 212	Clackamas	OR	97015	MH		21						156		156		96.2	%		97.4	%	$	7,242	$	6,789
Falcon Wood Village	1475 Green Acres Road	Eugene	OR	97408	MH		23						183		183		86.3	%		84.2	%	$	5,605	$	5,371
Quail Hollow	2100 N.E. Sandy Blvd.	Fairview	OR	97024	MH		21						137		137		94.2	%		94.2	%	$	7,083	$	6,668
Kloshe Illahee	2500 S. 370th Street	Federal Way	WA	98003	MH		50						258		258		98.8	%		97.7	%	$	8,509	$	8,112
Total Northwest Market							293		30		202		1,660		1,304		91.5	%		91.4	%	$	6,229	$	5,907

Texas
Lakewood	4525 Graham Road	Harlingen	TX	78552	RV		30						301		105		100.0	%		100.0	%	$	1,886	$	1,821
Paradise Park RV	1201 N. Expressway 77	Harlingen	TX	78552	RV		60						563		304		100.0	%		100.0	%	$	2,858	$	2,728
Sunshine RV	1900 Grace Avenue	Harlingen	TX	78550	RV		84						1,027		411		100.0	%		100.0	%	$	2,257	$	2,160
Paradise South	9909 N. Mile 2 West Rd.	Mercedes	TX	78570	RV		49						493		172		100.0	%		100.0	%	$	1,999	$	1,904
Fun n Sun RV	1400 Zillock Rd	San Benito	TX	78586	RV		135		40				1,435		632		100.0	%		100.0	%	$	2,780	$	2,633
Southern Comfort	1501 South Airport Drive	Weslaco	TX	78596	RV		40						403		336		100.0	%		100.0	%	$	2,539	$	2,403
Tropic Winds	1501 N Loop 499	Harlingen	TX	78550	RV		112		74				531		105		100.0	%		100.0	%	$	2,644	$	2,635
Country Sunshine	1601 South Airport Road	Weslaco	TX	78596	RV		37						390		194		100.0	%		100.0	%	$	2,499	$	2,365
Total Texas Market							547		114		0		5,143		2,259		100.0	%		100.0	%	$	2,433	$	2,331

Grand Total All Markets							15,057		1,169		4,089		82,388		64,880		92.2	%		90.9	%	$	5,088	$	5,001


(a)		Represents Properties acquired in 2007.

(b)		The process of filling Expansion Sites at these Properties is ongoing. A decrease in occupancy may reflect development of additional Expansion Sites.

(c)		Acres are approximate. Acreage for some recent acquisitions was estimated based upon 10 sites per acre.

(d)		Acres are approximate. There can be no assurance that developable acres will be developed. Development is contingent on many factors including, but not limited to, cost, ability to subdivide, accessibility, infrastructure needs, zoning, entitlement and topography.

(e)		Expansion sites are approximate and only represent sites that could be developed and is further dependent upon necessary approvals. Certain Properties with expansion sites noted may have vacancy and therefore, expansion sites may not be added.

(f)		Acres for this RV park are included in the acres for the adjacent manufactured home community listed directly above this Property.

The following table sets forth certain information relating to membership campground Properties owned as of December 31, 2007 and leased to Privileged Access.


													Total
													Number
													of Sites as
							Acres		Developable		Expansion		of
Property	Address		City	State	ZIP		(a)		Acres (b)		Sites (c)		12/31/07


Hidden Cove Outdoor Resort	687 Country Road 3916		Arley	AL		35541		81		60		200		79
Verde Valley	6400 Thousand Trails Rd, SP # 16		Cottonwood	AZ		86326		273		129		515		352
Cultus Lake (Canada)	1855 Columbia Valley Hwy		Lindell Beach	BC		V2R 4W6		15						178
Idyllwild	24400 Canyon Trail Drive		Idyllwild	CA		92549		191		52		120		287
Lake Minden	1256 Marcum Rd		Nicolaus	CA		95659		165		82		540		323
Lake of the Springs	14152 French Town Rd		Oregon House	CA		95962		954		507		1,014		541
Morgan Hill	12895 Uvas Rd		Morgan Hill	CA		95037		62						339
Oakzanita	11053 Highway 79		Descanso	CA		91916		145		5				146
Palm Springs	77500 Varner Rd		Palm Desert	CA		92211		35						401
Pio Pico	14615 Otay Lakes Rd		Jamul	CA		91935		176		10				512
Ponderosa	7291 Highway 49		Lotus	CA		95651		22						170
Rancho Oso	3750 Paradise Rd		Santa Barbara	CA		93105		310		40				187
Russian River	33655 Geysers Rd		Cloverdale	CA		95425		41						135
San Benito	16225 Cienega Rd		Paicines	CA		95043		199		23				523
Snowflower	41776 Yuba Gap Dr		Emigrant Gap	CA		95715		551		200				268
Soledad Canyon	4700 Crown Valley Rd		Acton	CA		93510		273		45		182		1,251
Turtle Beach	703 E Williamson Rd		Manteca	CA		95337		39						79
Wilderness Lakes	30605 Briggs Rd		Menifee	CA		92584		73						529
Yosemite Lakes	31191 Harden Flat Rd		Groveland	CA		95321		403		30		111		299
Orlando	2110 US Highway 27 S		Clermont	FL		34714		270		30		136		850
Peace	2555 US Highway 17		South Wauchula	FL		33873		72		38				454
Three Flags RV Resort	1755 E State Rd 44		Wildwood	FL		34785		23						221
Pine Country	5710 Shattuck Road		Belvidere	IL		61008		131						126
Horsehoe Lakes		12962 S. 225 W.	Clinton	IN		47842		289		96		96		123
Indian Lakes	7234 E. SR Highway 46		Batesville	IN		47006		545		159		318		1,000
Diamond Caverns Resort	1878 Mammoth Cave Pkwy		Park City	KY		42160		714		350		469		220
Gateway to Cape Cod	90 Stevens Rd PO Box 217		Rochester	MA		02770		80						194
Sturbridge	19 Mashapaug Rd		Sturbridge	MA		01566		223						155
Moody Beach	266 Post Road		Moody	ME		04054		48						203
Bear Cave Resort	4085 N. Red Bud Trail		Buchanan	MI		49107		26		10				136
Saint Claire	1299 Wadhams Rd		Saint Claire	MI		48079		210		100				229
Forest Lake	192 Thousand Trails Dr		Advance	NC		27006		306		81				305
Green Mountain Park	2495 Dimmette Rd		Lenoir	NC		28645		1077		400		360		447
Lake Gaston	561 Fleming Dairy Road		Littleton	NC		27850		69						235
Chestnut Lake	631 Chestnut Neck Rd		Port Republic	NJ		08241		32						185
Lake & Shore	545 Corson Tavern Rd		Ocean View	NJ		08230		162						401
Sea Pines	US Route #9 Box 1535		Swainton	NJ		08210		75						549
Las Vegas	4295 Boulder Highway		Las Vegas	NV		89121		11						217
Rondout Valley Resort	105 Mettachonts Rd		Accord	NY		12404		184		94				398
Kenisee Lake	2021 Mill creek Rd		Jefferson	OH		44047		143		50				119
Wilmington		1786 S.R. 380	Wilmington	OH		45177		109		41				169
Pacific City	30000 Sandlake Rd		Cloverdale	OR		97112		105						307
Seaside Resort	1703 12th Ave		Seaside	OR		97138		80						251
South Jetty	05010 South Jetty Rd		Florence	OR		97439		57						204
Thousand Trails Bend	17480 S Century Dr		Bend	OR		97707		289		100		145		351
Whaler’s Rest Resort	50 SE 123rd St		South Beach	OR		97366		39						170
Circle M	2111 Millersville Road		Lancaster	PA		17603		103						380
Gettysburg Farm	6200 Big Mountain Rd		Dover	PA		17315		124						265
Hershey Preserve	493 S. Mt. Pleasant Rd		Lebanon	PA		17042		196		20				297
PA Dutch County	185 Lehman Road		Manheim	PA		17545		102						269
Scotrun	PO Box 428 Route 611		Scotrun	PA		18355		66						178
Timothy Lake South	RR #6,Box 6627 Timothy Lake Rd		East Stroudsburg	PA		18301		65						327
Timothy Lake North	RR #6,Box 6627 Timothy Lake Rd		East Stroudsburg	PA		18301		98						323


												Total
												Number of
						Acres		Developable		Expansion		Sites as of
Property	Address	City	State	ZIP		(a)		Acres (b)		Sites (c)		12/31/07

Carolina Landing	120 Carolina Landing Dr	Fair Play	SC		29643		73						192
The Oaks at Point South	1292 Campground Rd	Yemassee	SC		29945		10						93
Cherokee Landing	PO Box 37	Middleton	TN		38052		254		124				339
Natchez Trace	1363 Napier Rd	Hohenwald	TN		38462		672		140				531
Bay Landing	2305 Highway 380 W	Bridgeport	TX		76426		443		235				293
Colorado River	1062 Thousand Trails Lane	Columbus	TX		78934		218		51				132
Lake Conroe	11720 Old Montgomery Rd	Willis	TX		77318		129		30		300		363
Lake Tawakoni	1246 Rains Co. Rd 1470	Point	TX		75472		480		11				320
Lake Texoma	209 Thousand Trails Dr	Gordonville	TX		76245		201		79				301
Lake Whitney	417 Thousand Trails Dr	Whitney	TX		76692		403		158				261
Medina Lake	215 Spettle Rd	Lakehills	TX		78063		208		50				387
Chesapeake Bay	12014 Trails Lane	Gloucester	VA		23061		282		80				392
Harbor View	15 Harbor View Circle	Colonial Beach	VA		22443		76						146
Lynchburg	405 Mollies Creek Rd	Gladys	VA		24554		170		59				222
Virginia Landing	40226 Upshur Neck Rd	Quinby	VA		23423		839		178				233
Williamsburg	4301 Rochambeau Drive	Williamsburg	VA		23188		65						211
Birch Bay	8418 Harborview Rd	Blaine	WA		98230		31						246
Cascade Resort	34500 SE 99th St	Snoqualmie	WA		98065		20						163
Chehalis	2228 Centralia-Alpha Rd	Chehalis	WA		98532		309		85				360
Crescent Bar Resort	9252 Crescent Bar Rd NW	Quincy	WA		98848		14						115
La Conner	16362 Snee Oosh Rd	La Conner	WA		98257		106		5				319
Leavenworth	20752-4 Chiwawa Loop Rd	Leavenworth	WA		98826		300		50				266
Little Diamond	1002 McGowen Rd	Newport	WA		99156		360		119				520
Long Beach	2215 Willows Rd	Seaview	WA		98644		17						144
Mt. Vernon	5409 N. Darrk Ln	Bow	WA		98232		311		200		600		251
Oceana Resort	2733 State Route 109	Oceana City	WA		98569		16						84
Paradise Resort	173 Salem Plant Rd	Silver Creek	WA		98585		60						214
Thunderbird Resort	26702 Ben Howard Rd	Monroe	WA		98272		45		2				136

							16,243		4,408		5,106		24,091


(a)		Acres are approximate.

(b)		Acres are approximate. There can be no assurance that developable acres will be developed. Development is contingent on many factors including, but not limited to, cost, ability to subdivide, accessibility, infrastructure needs, zoning, entitlement and topography.

(c)		Expansion sites are approximate and only represent sites that could be developed and is further dependent upon necessary approvals. Certain Properties with expansion sites noted may have vacancy and therefore, expansion sites may not be added.

Item 3. Legal Proceedings

California Rent Control Litigation

As part of the Company’s effort to realize the value of its Properties subject to rent control, the Company has initiated lawsuits against several municipalities in California. The Company’s goal is to achieve a level of regulatory fairness in California’s rent control jurisdictions, and in particular those jurisdictions that prohibit increasing rents to market upon turnover. Regulations in California allow tenants to sell their homes for a premium representing the value of the future discounted rent-controlled rents. In the Company’s view, such regulation results in a transfer of the value of the Company’s stockholders’ land, which would otherwise be reflected in market rents, to tenants upon the sales of their homes in the form of an inflated purchase price that cannot be attributed to the value of the home being sold. As a result, in the Company’s view, the Company loses the value of its asset and the selling tenant leaves the Property with a windfall premium. The Company has discovered through the litigation process that certain municipalities considered condemning the Company’s Properties at values well below the value of the underlying land. In the Company’s view, a failure to articulate market rents for sites governed by restrictive rent control would put the Company at risk for condemnation or eminent domain proceedings based on artificially reduced rents. Such a physical taking, should it occur, could represent substantial lost value to stockholders. The Company is cognizant of the need for affordable housing in the jurisdictions, but asserts that restrictive rent regulation does not promote this purpose because the benefits of such regulation are fully capitalized into the prices of the homes sold. The Company estimates that the annual rent subsidy to tenants in these jurisdictions may be in excess of $15 million. In a more well balanced regulatory environment, the Company would receive market rents that would eliminate the subsidy and homes would trade at or near their intrinsic value.

In connection with such efforts, the Company announced it has entered into a settlement agreement with the City of Santa Cruz, California and that, pursuant to the settlement agreement, the City amended its rent control ordinance to exempt the Company’s Property from rent control as long as the Company offers a long term lease which gives the Company the

ability to increase rents to market upon turnover and bases annual rent increases on the CPI. The settlement agreement benefits the Company’s stockholders by allowing them to receive the value of their investment in this Property through vacancy decontrol while preserving annual CPI based rent increases in this age-restricted Property.

The Company has filed two lawsuits in federal court against the City of San Rafael, challenging its rent control ordinance on constitutional grounds. The Company believes that one of those lawsuits was settled by the City agreeing to amend the ordinance to permit adjustments to market rent upon turnover. The City subsequently rejected the settlement agreement. The Court initially found the settlement agreement was binding on the City, but then reconsidered and determined to submit the claim of breach of the settlement agreement to a jury. In October 2002, the first case against the City went to trial, based on both breach of the settlement agreement and the constitutional claims. A jury found no breach of the settlement agreement; the Company then filed motions asking the Court to rule in its favor on that claim, notwithstanding the jury verdict. The Court postponed decision on those motions and on the constitutional claims, pending a ruling on certain property rights issues by the United States Supreme Court.

The Company also had pending a claim seeking a declaration that the Company could close the Property and convert it to another use which claim was not tried in 2002. The United States Supreme Court issued the property rights rulings in 2005 and subsequently on January 27, 2006, the Court hearing the San Rafael cases issued a ruling that granted the Company’s motion for leave to amend to assert alternative takings theories in light of the United States Supreme Court’s decisions. The Court’s ruling also denied the Company’s post trial motions related to the settlement agreement and dismissed the park closure claim without prejudice to the Company’s ability to reassert such claim in the future. As a result, the Company filed a new complaint challenging the City’s ordinance as violating the takings clause and substantive due process. The City of San Rafael filed a motion to dismiss the amended complaint. On December 5, 2006, the Court denied portions of the City’s motion to dismiss that had sought to eliminate certain of the Company’s taking claims and substantive due process claims. The Company’s claims against the City were tried in a bench trial during April 2007. On July 26, 2007, the United States District Court for the Northern District of California issued Preliminary Findings of Facts and Legal Standards, Preliminary Conclusions of Law and Request for Further Briefing (“Preliminary Findings”) in this matter. The Company has filed the Preliminary Findings on Form 8-K on August 2, 2007. In August 2007, the Company and the City filed the further briefs requested by the Court. On January 29, 2008, the Court issued its Findings of Facts, Conclusions of Law and Order Thereon (the “Order”). The Company filed the Order on Form 8-K on January 31, 2008.

The Company’s efforts to achieve a balanced regulatory environment incentivize tenant groups to file lawsuits against the Company seeking large damage awards. The homeowners association at Contempo Marin (“CMHOA”), a 396 site Property in San Rafael, California, sued the Company in December 2000 over a prior settlement agreement on a capital expenditure pass-through after the Company sued the City of San Rafael in October 2000 alleging its rent control ordinance is unconstitutional. In the Contempo Marin case, the CMHOA prevailed on a motion for summary judgment on an issue that permits the Company to collect only $3.72 out of a monthly pass-through amount of $7.50 that the Company believed had been agreed to by the CMHOA in a settlement agreement. The CMHOA continued to seek damages from the Company in this matter. The Company reached a settlement with the CMHOA in this matter which allows the Company to recover $3.72 of the requested monthly pass-through and does not provide for the payment of any damages to the CMHOA. Both the CMHOA and the Company brought motions to recover their respective attorneys’ fees in the matter, which motions were heard by the Court in January 2007. On January 12, 2007, the Court granted CMHOA’s motion for attorneys’ fees in the amount of $347,000 and denied the Company’s motion for attorneys’ fees. These fees have been fully accrued by the Company as of December 31, 2006. The Company has appealed both decisions. The Company believes that such lawsuits will be a consequence of the Company’s efforts to change rent control since tenant groups actively desire to preserve the premium value of their homes in addition to the discounted rents provided by rent control. The Company has determined that its efforts to rebalance the regulatory environment despite the risk of litigation from tenant groups are necessary not only because of the $15 million annual subsidy to tenants, but also because of the condemnation risk.

In June 2003, the Company won a judgment against the City of Santee in California Superior Court (case no. 777094). The effect of the judgment was to invalidate, on state law grounds, two (2) rent control ordinances the City of Santee had enforced against the Company and other property owners. However, the Court allowed the City to continue to enforce a rent control ordinance that predated the two invalid ordinances (the “prior ordinance”). As a result of the judgment the Company was entitled to collect a one-time rent increase based upon the difference in annual adjustments between the invalid ordinance(s) and the prior ordinances and to adjust its base rents to reflect what the Company could have charged had the prior ordinance been continually in effect. The City of Santee appealed the judgment. The court of appeal and California Supreme Court refused to stay enforcement of these rent adjustments pending appeal. After the City was unable to obtain a stay, the City and the tenant association each sued the Company in separate actions alleging the rent adjustments pursuant to the judgment violate the prior ordinance (Case Nos. GIE 020887 and GIE 020524). They seek to rescind the rent adjustments, refunds of amounts paid, and penalties and damages in these separate actions. On January 25, 2005, the California Court of Appeal reversed the judgment in part and affirmed it in part with a remand. The Court of Appeal affirmed that one ordinance was unlawfully adopted and therefore void and that the second ordinance contained

unconstitutional provisions. However, the Court ruled the City had the authority to cure the issues with the first ordinance retroactively and that the City could sever the unconstitutional provisions in the second ordinance. On remand, the trial court is directed to decide the issue of damages to the Company from these ordinances, which the Company believes is consistent not only with the Company receiving the economic benefit of invalidating one of the ordinances, but also consistent with the Company’s position that it is entitled to market rent and not merely a higher amount of regulated rent. The remand action was tried to the court in the third quarter of 2007. On January 25, 2008, the trial court issued a preliminary ruling determining that the Company had not incurred any damages from these ordinances and actions primarily on the grounds that the ordinances afforded the Company a fair rate of return. The Company has sought clarification of this ruling and will appeal.

In addition, the Company has sued the City of Santee in federal court alleging all three of the ordinances are unconstitutional under the Fifth and Fourteenth Amendments to the United States Constitution. Thus, it is the Company’s position that the ordinances are subject to invalidation as a matter of law in the federal court action. Separately, the Federal District Court granted the City’s Motion for Summary Judgment in the Company’s federal court lawsuit. This decision was based not on the merits, but on procedural grounds, including that the Company’s claims were moot given its success in the state court case. The Company appealed the decision, and on May 3, 2007 the United States Court of Appeals for the Ninth Circuit affirmed the District Court’s decision on procedural grounds. The Company intends to continue to pursue an adjudication of its rights on the merits in Federal Court through claims that are not subject to such procedural defenses.

In October 2004, the United States Supreme Court granted certiorari in State of Hawaii vs. Chevron USA, Inc., a Ninth Circuit Court of Appeal case that upheld the standard that a regulation must substantially advance a legitimate state purpose in order to be constitutionally viable under the Fifth Amendment. On May 24, 2005 the United States Supreme Court reversed the Ninth Circuit Court of Appeal in an opinion that clarified the standard of review for regulatory takings brought under the Fifth Amendment. The Supreme Court held that the heightened scrutiny applied by the Ninth Circuit is not the applicable standard in a regulatory takings analysis, but is an appropriate factor for determining if a due process violation has occurred. The Court further clarified that regulatory takings would be determined in significant part by an analysis of the economic impact of the regulation. The Company believes that the severity of the economic impact on its Properties caused by rent control will enable it to continue to challenge the rent regulations under the Fifth Amendment and the due process clause.

As a result of the Company’s efforts to achieve a level of regulatory fairness in California, a commercial lending company, 21^st Mortgage Corporation, a Delaware corporation, sued MHC Financing Limited Partnership. Such lawsuit asserts that certain rent increases implemented by the partnership pursuant to the rights afforded to the property owners under the City of San Jose’s rent control ordinance were invalid or unlawful. 21^st Mortgage has asserted that it should benefit from the vacancy control provisions of the City’s ordinance as if 21^st Mortgage were a “homeowner” and contrary to the ordinance’s provision that rents may be increased without restriction upon termination of the homeowners’ tenancy. In each of the disputed cases, the Company believes it had terminated the tenancy of the homeowner (21^st Mortgage’s borrower) through the legal process. The Court, in granting 21^st Mortgage’s motion for summary judgment, has indicated that 21^st Mortgage may be a “homeowner” within the meaning of the ordinance. The Company does not believe that 21^st Mortgage can show that it has ever applied for tenancy, entered into a rental agreement or been accepted as a homeowner in the communities. A bench trial in this matter concluded in January 2008 with the trial court determining that the Company had validly exercised its rights under the rent control ordinance, that the Company had not violated the ordinance and that 21^st Mortgage was not entitled to the benefit of rent control protection in the circumstances presented.

Dispute with Las Gallinas Valley Sanitary District

In November 2004, the Company received a Compliance Order (the “Compliance Order”) from the Las Gallinas Valley Sanitary District (the “District”), relating to the Company’s Contempo Marin Property in San Rafael, California. The Compliance Order directed the Company to submit and implement a plan to bring the Property’s domestic wastewater discharges into compliance with the applicable District ordinance (the “Ordinance”), and to ensure continued compliance with the Ordinance in the future.

Without admitting any violation of the Ordinance, the Company promptly engaged a consultant to review the Property’s sewage collection system and prepare a compliance plan to be submitted to the District. The District approved the compliance plan in January 2005, and the Company promptly took all necessary actions to implement same.

Thereafter, the Company received a letter dated June 2, 2005 from the District’s attorney (the “June 2 Letter”), acknowledging that the Company has “taken measures to bring the Property’s private sanitary system into compliance” with the Ordinance, but claiming that prior discharges from the Property had damaged the District’s sewers and pump stations in the amount of approximately $368,000. The letter threatened legal action if necessary to recover the cost of repairing such damage. By letter dated June 23, 2005, counsel for the Company denied the District’s claims set forth in the June 2 Letter.

On July 1, 2005, the District filed a Complaint for Enforcement of Sanitation Ordinance, Damages, Penalties and Injunctive Relief in the California Superior Court for Marin County, and on August 17, 2005, the District filed its First Amended Complaint (the “Complaint”). On September 26, 2005, the Company filed its Answer to the Complaint, denying each and every allegation of the Complaint and further denying that the District is entitled to any of the relief requested therein.

The District subsequently issued a Notice of Violation dated December 12, 2005 (the “NOV”), alleging additional violations of the Ordinance. By letter dated December 23, 2005, the Company denied the allegations in the NOV.

The Company settled this matter in May 2007 by agreeing to make certain improvements to the operation of the Property’s sanitary collection system and without the payment of any monetary damages to the District.

Countryside at Vero Beach

The Company previously received letters dated June 17, 2002 and August 26, 2002 from Indian River County (“County”), claiming that the Company owed sewer impact fees in the amount of approximately $518,000 with respect to the Property known as Countryside at Vero Beach, located in Vero Beach, Florida, purportedly under the terms of an agreement between the County and a prior owner of the Property. In response, the Company advised the County that these fees are no longer due and owing as a result of a 1996 settlement agreement between the County and the prior owner of the Property, providing for the payment of $150,000 to the County to discharge any further obligation for the payment of impact or connection fees for sewer service at the Property. The Company paid this settlement amount (with interest) to the County in connection with the Company’s acquisition of the Property. In February 2006, the Company was served with a complaint filed by the County in Indian River County Circuit Court, requesting a judgment declaring a lien against the Property for allegedly unpaid impact fees, and foreclosing said lien. On March 30, 2006, the Company served its answer and affirmative defenses, and the case is now in the discovery stage. In the fourth quarter of 2007 the Company settled this matter by agreeing to pay impact fees in the amount of approximately $360,000 to Indian River County. The $360,000 was capitalized in land improvements on the Company’s Consolidated Balance Sheet and will be depreciated over the useful life of the asset. All legal fees incurred to settle this matter will be expensed.

On January 12, 2006, the Company was served with a complaint filed in Indian River County Circuit Court on behalf of a purported class of homeowners at Countryside at Vero Beach. The complaint includes counts for alleged violations of the Florida Mobile Home Act and the Florida Deceptive and Unfair Trade Practices Act, and claims that the Company required homeowners to pay water and sewer impact fees, either to the Company or to the County, “as a condition of initial or continued occupancy in the Park”, without properly disclosing the fees in advance and notwithstanding the Company’s position that all such fees were fully paid in connection with the settlement agreement described above. On February 8, 2006, the Company served its motion to dismiss the complaint. In May 2007, the Court granted the Company’s motion to dismiss, but also allowed the plaintiff to amend their complaint. The plaintiff filed an amended complaint, which the Company has also moved to dismiss. The Company will vigorously defend the lawsuit.

Colony Park

On December 1, 2006, a group of tenants at the Company’s Colony Park Property in Ceres, California filed a complaint in the California Superior Court for Stanislaus County alleging that the Company has failed to properly maintain the Property and has improperly reduced the services provided to the tenants, among other allegations. On March 2, 2007, the Company filed a demurrer to the complaint, along with a motion to strike portions of the complaint (“motion to strike”) and a motion to compel arbitration and stay action (“motion to compel”). After a hearing on March 28, 2007, the Court issued a ruling on April 5, 2007, which overruled the demurrer, took the motion to compel under submission, and granted the motion to strike in part and denied it in part. The Court subsequently issued a ruling on April 6, 2007, denying the motion to compel. The Company has filed an interlocutory appeal, which is pending, of the denial of the motion to compel. On April 11, 2007, the plaintiff tenant group filed their first amended complaint in the case. On September 19, 2007, the Company filed an answer denying all material allegations of the first amended complaint and filed a counterclaim for declaratory relief and damages. Discovery has commenced. The Court has set a trial date for October 21, 2008. The Company believes that the allegations in the first amended complaint are without merit, and intends to vigorously defend the lawsuit.

California’s Department of Housing and Community Development (“HCD”) issued a Notice of Violation dated August 21, 2006 regarding the sewer system at Colony Park. The notice ordered the Company to replace the Property’s sewer system or show justification from a third party explaining why the sewer system does not need to be replaced. The Company has provided such third party report to HCD and believes that the sewer system does not need to be replaced. Based upon information provided by the Company to HCD to date, HCD has indicated that it agrees that the entire system does not need to be replaced.

Hurricane Claim Litigation

On June 22, 2007 the Company filed suit, in the Circuit Court of Cook County, Illinois (Case No. 07CH16548), against its insurance carriers, Hartford Fire Insurance Company, Essex Insurance Company, Lexington Insurance Company, and Westchester Surplus Lines Insurance Company, regarding a coverage dispute arising from losses suffered by the Company as a result of hurricanes that occurred in Florida in 2004 and 2005. The Company also brought claims against Aon Risk Services, Inc. of Illinois, the Company’s insurance broker, regarding the procurement of appropriate insurance coverage for the Company. The Company is seeking declaratory relief establishing the coverage obligations of its carriers, as well as a judgment for breach of contract, breach of the covenant of good faith and fair dealing, unfair settlement practices and, as to Aon, for failure to provide ordinary care in the selling and procuring of insurance. The claims involved in this action exceed $11 million.

In response to motions to dismiss, the trial court dismissed: (1) the requests for declaratory relief as being duplicative of the claims for breach of contract and (2) certain of the breach of contract claims as being not ripe until the limits of underlying insurance policies have been exhausted. On or about January 28, 2008, the Company filed its Second Amended Complaint. Written discovery proceedings have commenced.

Since filing the lawsuit, the Company has received additional payments from Essex Insurance Company and Lexington Insurance Company of approximately $2.2 million. In addition, in January 2008 the Company entered a settlement with Hartford Fire Insurance Company pursuant to which Hartford paid the Company the remaining disputed limits of Hartford’s insurance policy, in the amount of $516,499, and the Company dismissed and released Hartford from additional claims for interest and bad faith claims handling.

Brennan Beach

The Company has learned that the Law Enforcement Division of the New York Department of Environmental Compliance (“DEC”) is investigating certain allegations relating to the operation of the onsite wastewater treatment plant and the use of adjacent wetlands at Brennan Beach, which is located in Pulaski, New York. The Company attended a meeting with the DEC in November 2007 at which certain alleged violations were discussed. No formal notices have been issued to the Company asserting specific violations and the Company is cooperating with the DEC investigation.

Appalachian RV

The Company has learned that the U.S. Environmental Protection Agency (“EPA”) is investigating potential soil contamination at Appalachian RV, which is located in Shartlesville, Pennsylvania, reportedly stemming from observations of remnants of old auto battery parts at the Property. In late November and early December 2007, the EPA conducted an assessment by soil sampling at the Property. The laboratory results of that soil sampling have not yet been made available to the Company. The Company is cooperating with the EPA investigation.

Florida Utility Operations

The Company received notice from the Florida Department of Environmental Protection (“DEP”) that as a result of a compliance inspection it is alleging violations of Florida law relating to the operation of onsite water plants and wastewater treatment plants at seven properties in Florida. The alleged violations relate to record keeping and reporting requirements, physical and operating deficiencies and permit compliance. The Company has investigated each of the alleged violations, including a review of a third party operator hired to oversee such operations. The Company met with the DEP in November 2007 to respond to the alleged violations and as a follow-up to such meeting provided a written response to the DEP in December 2007. In light of the Company’s written response, in late January 2008 the DEP conducted a follow-up compliance inspection at each of the seven properties. While the outcome of this investigation remains uncertain, the Company expects to resolve the issues raised by the DEP by entering into a consent decree in which the Company will agree to make certain improvements in its facilities and operations to resolve the issues and pay certain costs and penalties associated with the violations. While the outcome is still uncertain, the amount of the costs and penalties to be paid to the DEP is not expected to be material. The Company has also replaced its third party operator hired to oversee onsite water and wastewater operations at each of the seven properties. The Company is evaluating the costs of any improvements to its facilities, which would be capital expenditures depreciated over the estimated useful life of the improvement.

Other

The Company is involved in various other legal proceedings arising in the ordinary course of business. Such proceedings include, but are not limited to, notices, consent decrees and other similar enforcement actions by governmental agencies relating to the Company’s water and wastewater treatment plants. Additionally, in the ordinary course of business,

the Company’s operations are subject to audit by various taxing authorities. Management believes that all proceedings herein described or referred to, taken together, are not expected to have a material adverse impact on the Company. In addition, to the extent any such proceedings or audits relate to newly acquired Properties, the Company considers any potential indemnification obligations of sellers in favor of the Company.

Item 4. Submission of Matters to a Vote of Security Holders

None.

PART II


Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol ELS. On February 22, 2008, the reported closing price per share of ELS common stock on the NYSE was $46.75 and there were approximately 6,349 beneficial holders of record. The high and low sales prices and closing sales prices on the NYSE and distributions for our common stock during 2007 and 2006 are set forth in the table below:


							Distributions
	Close		High		Low		Declared
2007
1st Quarter	$	54.01	$	59.67	$	51.00	$	0.150
2nd Quarter		52.19		56.47		49.60		0.150
3rd Quarter		51.80		54.25		43.79		0.150
4th Quarter		45.67		55.65		43.72		0.150

2006
1st Quarter	$	49.75	$	51.81	$	44.30	$	0.075
2nd Quarter		43.83		50.00		40.91		0.075
3rd Quarter		45.71		47.27		41.45		0.075
4th Quarter		54.43		56.00		44.90		0.075

Issuer Purchases of Equity Securities

Total Number of Shares

Maximum Number of

Purchased as Part of

Shares that May Yet

Total Number of

Average Price Paid

Publicly Announced

be Purchased Under

Period

Shares Purchased(a)

per Share(a)

Plans or Programs

the Plans or Programs

12/1/07-12/31/07

18,821

45.25

None


(a)		Of the common stock repurchased on December 31, 2007, 18,821 shares were repurchased at the open market price and represent common stock surrendered to the Company to satisfy income tax withholding obligations due as a result of the vesting of Restricted Share Grants. Certain executive officers of the Company may from time to time adopt non-discretionary, written trading plans that comply with Commission Rule 10b5-1, or otherwise monetize their equity-based compensation. Commission Rule 10b5-1 provides executives with a method to monetize their equity-based compensation in an automatic and non-discretionary manner over time.

Item 6. Selected Financial Data

The following table sets forth selected financial and operating information on a historical basis. The historical operating data has been derived from the historical financial statements of the Company. The following information should be read in conjunction with all of the financial statements and notes thereto included elsewhere in this Form 10-K.

Equity LifeStyle Properties, Inc.
Consolidated Historical Financial Information
(Amounts in thousands, except for per share and property data)


	(1) Years ended December 31,
	2007			2006			2005			2004			2003
Property Operations:
Community base rental income	$	236,933		$	225,815		$	213,280		$	204,190		$	189,915
Resort base rental income		102,372			89,925			74,371			54,661			11,551
Utility and other income		36,849			30,643			27,367			24,496			19,666

Property operating revenues		376,154			346,383			315,018			283,347			221,132

Property operating and maintenance		127,342			116,179			103,832			91,812			61,945
Real estate taxes		27,429			26,246			24,671			22,723			18,011
Property management		18,385			17,079			15,919			12,852			9,373

Property operating expenses (exclusive of depreciation shown separately below)		173,156			159,504			144,422			127,387			89,329

Income from property operations		202,998			186,879			170,596			155,960			131,803

Home Sales Operations:
Gross revenues from inventory home sales		33,333			61,247			66,014			47,404			36,472
Cost of inventory home sales		(30,713	)		(54,498	)		(57,471	)		(41,577	)		(31,615	)

Gross profit from inventory home sales		2,620			6,749			8,543			5,827			4,857
Brokered resale revenues, net		1,528			2,129			2,714			2,176			1,714
Home selling expenses		(7,555	)		(9,836	)		(8,838	)		(8,630	)		(7,287	)
Ancillary services revenues, net		2,436			3,027			2,227			2,280			135

(Loss) income from home sales operations & other		(971	)		2,069			4,646			1,653			(581	)

Other Income (Expenses):
Interest income		1,732			1,975			1,406			1,391			1,695
Income from other investments, net (2)		22,476			20,102			16,609			3,475			956
General and administrative		(15,591	)		(12,760	)		(13,624	)		(9,243	)		(8,060	)
Rent control initiatives		(2,657	)		(1,157	)		(1,081	)		(2,412	)		(2,352	)
Interest and related amortization (3)		(103,070	)		(103,161	)		(100,712	)		(91,154	)		(58,206	)
Loss on early debt retirement (4)		—			—			(20,630	)		—			—
Depreciation on corporate assets		(437	)		(410	)		(804	)		(1,657	)		(1,240	)
Depreciation on real estate assets and other costs		(63,554	)		(60,276	)		(55,608	)		(47,467	)		(35,924	)

Total other expenses, net		(161,101	)		(155,687	)		(174,444	)		(147,067	)		(103,131	)

Income before minority interests, equity in income of unconsolidated joint ventures, loss on extinguishment of debt, gain on sale of property and discontinued operations		40,926			33,261			798			10,546			28,091

(Income) loss allocated to Common OP Units		(5,322	)		(4,267	)		1,329			(565	)		(3,431	)
Income allocated to Perpetual Preferred OP Units (5)		(16,140	)		(16,138	)		(13,974	)		(11,284	)		(11,252	)
Equity in income of unconsolidated joint ventures		2,696			3,583			6,508			3,739			340


Income (loss) before gain on sale of properties and other, and discontinued operations		22,160			16,439			(5,339	)		2,436			13,748


Gain on sale of properties and other		—			—			—			2			—

Income (loss) from continuing operations		22,160			16,439			(5,339	)		2,438			13,748


Discontinued Operations:
Discontinued operations		289			520			1,927			2,750			4,607
Depreciation on discontinued operations		—			(84	)		(410	)		(1,427	)		(1,476	)
Gain (loss) on sale of discontinued properties and other		12,036			(192	)		2,279			636			10,826
Minority interests on discontinued operations		(2,383	)		(51	)		(790	)		(371	)		(2,573	)

Income from discontinued operations		9,942			193			3,006			1,588			11,384


Net income (loss) available for Common Shares	$	32,102		$	16,632		$	(2,333	)	$	4,026		$	25,132

Equity LifeStyle Properties, Inc.
Consolidated Historical Financial Information
(continued)
(Amounts in thousands, except for per share and property data)


	(1) As of December 31,
	2007		2006		2005			2004		2003
Earnings per Common Share — Basic:
Income (loss) from continuing operations	$	0.92	$	0.70	$	(0.23	)	$	0.11	$	0.62
Income from discontinued operations	$	0.41	$	0.01	$	0.13		$	0.07	$	0.52
Net income (loss) available for Common Shares	$	1.33	$	0.71	$	(0.10	)	$	0.18	$	1.14

Earnings per Common Share — Fully Diluted:
Income (loss) from continuing operations	$	0.90	$	0.68	$	(0.23	)	$	0.10	$	0.61
Income from discontinued operations	$	0.41	$	0.01	$	0.13		$	0.07	$	0.50
Net income (loss) available for Common Shares	$	1.31	$	0.69	$	(0.10	)	$	0.17	$	1.11

Distributions declared per Common Share outstanding (3)	$	0.60	$	0.30	$	0.10		$	0.05	$	9.485

Weighted average Common Shares outstanding — basic		24,089		23,444		23,081			22,849		22,077
Weighted average Common OP Units outstanding		5,870		6,165		6,285			6,067		5,342
Weighted average Common Shares outstanding — fully diluted		30,414		30,241		29,366			29,465		28,002

Balance Sheet Data:
Real estate, before accumulated depreciation (6)	$	2,396,115	$	2,337,460	$	2,152,567		$	2,035,790	$	1,309,705
Total assets		2,033,695		2,055,831		1,948,874			1,886,289		1,463,507
Total mortgages and loans (3)		1,659,392		1,717,212		1,638,281			1,653,051		1,076,183
Minority interests (5)		217,776		212,794		209,379			134,771		124,634
Stockholders’ equity (3)		70,941		47,118		32,516			31,844		(2,528	)

Other Data:
Funds from operations (7)	$	92,752	$	82,367	$	52,827		$	54,448	$	58,479

Total Properties (at end of period)		311		311		285			275		142
Total sites (at end of period)		112,779		112,956		106,337			102,178		53,429


(1)		See the Consolidated Financial Statements of the Company contained in this Form 10-K. Certain revenue amounts reported in previously issued statements of operations have been reclassified in the attached statements of operations due to the Company’s expansion of the related revenue activity.

Property operations and home sale operations are discussed in Item 7 contained in this Form 10-K.

(2)

Since November 2004, Income from other investments, net included rental income from the lease of membership Properties to Thousand Trails or its current owner, Privileged Access. See Note 2(i) in the Notes to Consolidated Financial Statements contained in this Form 10-K.

Equity LifeStyle Properties, Inc.
Consolidated Historical Financial Information
(continued)

(3)		On October 17, 2003, we closed 49 mortgage loans collateralized by 51 Properties (the “Recap”) providing total proceeds of approximately $501 million at a weighted average interest rate of 5.84% per annum and with a weighted average maturity at that time of approximately 9 years. Approximately $170 million of the proceeds were used to repay amounts outstanding on our lines of credit and term loan. Approximately $225 million was used to pay a special distribution of $8.00 per share on January 16, 2004. The remaining funds were used for investment purposes in 2004. The Recap resulted in increased interest and amortization expense and the special distribution resulted in decreased stockholders’ equity.

(4)		On December 2, 2005, we refinanced approximately $293 million of secured debt maturing in 2007 with an effective interest rate of 6.8% per annum. This refinanced debt was secured by two cross-collateralized loan pools consisting of 35 Properties. The transaction generated approximately $337 million in proceeds from loans secured by individual mortgages on 20 Properties. The blended interest rate on the refinancing was approximately 5.3% per annum, and the loans mature in 2015. Transaction costs resulting from early debt retirement were approximately $20.0 million.

(5)		During 2005, we issued $25 million of 8.0625% Series D and $50 million of 7.95% Series F Cumulative Redeemable Perpetual Preference Units to institutional investors. Proceeds were used to pay down amounts outstanding under the Company’s lines of credit (see Note 4 in the Notes to Consolidated Financial Statements contained in this Form 10-K).

(6)		We believe that the book value of the Properties, which reflects the historical costs of such real estate assets less accumulated depreciation, is less than the current market value of the Properties.

(7)		Refer to Item 7 contained in this Form 10-K for information regarding why we present funds from operations and for a reconciliation of this non-GAAP financial measure to net income.

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

The following discussion should be read in conjunction with “Selected Financial Data” and the historical Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-K.

2007 Accomplishments

	•		Raised annual dividend to $0.80 per share in 2008, up from $0.60 per share in 2007.

	•		Successfully amended our existing unsecured Lines of Credit to expand our borrowing capacity from $275 million to $370 million.

	•		Acquired five Properties containing over 1,400 sites, including our outside joint venture partners’ interest in two Properties.

	•		Second year in row since 2000 that our manufactured home Properties owned year over year finished the year with a higher number of occupied sites than the number we started the year.

	•		Launched a new benefit program, RvontheGo Club, for members. Members receive discounts on entertainment and purchases at retailers, in addition to exclusive member-only discounts and advanced invitations to resort events.

Overview and Outlook

Occupancy in our Properties as well as our ability to increase rental rates directly affects revenues. Our revenue streams are predominantly derived from customers renting our sites on a long-term basis.

We have approximately 64,900 annual sites, approximately 8,700 seasonal sites, which are leased to customers generally for three to six months, and approximately 8,800 transient sites, occupied by customers who lease sites on a short-term basis. We expect to service over 100,000 customers with these transient sites. However, we consider this revenue stream to be our most volatile. It is subject to weather conditions, gas prices, and other factors affecting the marginal RV customer’s vacation and travel preferences. Finally, we have approximately 24,100 membership sites for which we will receive annual ground rent in 2008 of approximately $25.5 million. This rent is classified in Income from other investments, net in the Consolidated Statements of Operations. (See also Privileged Access discussion below) We also have interests in Properties containing approximately 6,300 sites for which revenue is classified as Equity in income from unconsolidated joint ventures in the Consolidated Statements of Operations.


	Total Sites as of Dec. 31,
	(rounded to 000s)
	2007		2006
Community sites (1)		44,800		45,700
Resort sites (2):
Annual		20,100		18,900
Seasonal		8,700		8,000
Transient		8,800		8,800
Membership (3)		24,100		24,100
Joint Ventures (4)		6,300		7,500

		112,800		113,000


(1)		Includes 655 and 1,581 sites from discontinued operations as of December 31, 2007 and 2006, respectively.

(2)		Includes 100 sites from discontinued operations as of December 31, 2006, subsequently sold in January 2007.

(3)		All sites are currently leased to Privileged Access.

(4)		Joint Venture income is included in Equity in income of unconsolidated joint ventures.

Our home sales volumes and gross profits have been declining since 2005. We believe that the disruption in the site-built housing market may be contributing to the decline in our home sales operations as potential customers are not able to sell their existing site-built homes as well as increased price sensitivity for seasonal and second homebuyers. A number of factors have contributed to this disruption. In the last few years, many site-built home sales were for speculative or investment purposes. Innovative financing techniques, such as loan securitizations, provided increased credit access and resulted in overbuilding and excess site-built home supply. Bad lending practices, like no money down, diminshed underwriting, longer amortization periods and aggressive appraisals have contributed to loan defaults, repossessions and capital meltdowns. The disruption has not impacted our maufactured home occupancy, however, the anticipated continuation of the decline in our sales volumes may negatively impact occupancy in the future. In order to maintain and improve existing occupancy, ELS is focusing on new customer acquisition projects. During 2007, we have formed an occupancy task force (“OTF”) to review our portfolio for opportunities to increase occupancy. Programs being evaluated by the OTF include: purchasing homes for a rental program, renting existing inventory homes and providing additional financing options to home buyers.

Privileged Access

Privileged Access has been the owner of Thousand Trails (“TT”) since April 14, 2006. TT’s primary business consists of entering into agreements with individuals to use its properties (the “Agreements”) and has been engaged in such business for almost 40 years. The properties are primarily campgrounds with designated sites for the placement of recreational vehicles to service its membership base of over 100,000 families. The campgrounds are owned by the Company and leased to Privileged Access. Privileged Access is headquartered in Frisco, Texas, and has more than 2,000 employees and is owned 100 percent by Mr. Joe McAdams, the Company’s President effective January 1, 2008.

As of December 31, 2007, we are leasing approximately 24,100 sites at 81 resort Properties to Privileged Access or its subsidiaries so that Privileged Access may meet its obligations under the Agreements. For the years ended December 31, 2007 and 2006 we recognized approximately $20.5 million and $17.8 million, respectively, in rent from these leasing arrangements. The lease income is included in Income from other investments, net in the Company’s Consolidated Statement of Operations.

The Company has recently evaluated a possible purchase of Privileged Access and/or its subsidiaries. However, there continues to be lack of definitive guidance regarding the tax treatment of gross income from membership contracts for REIT gross income test purposes. As a result, the Company believes that the best strategic option available at this time was to bring Mr. McAdams to the Company and continue to work with Privileged Access on initiatives such as fractional sales, whole ownership and potentially combining certain overhead functions while maintaining the landlord — tenant relationship.

Effective January 1, 2008, the leases for these Properties were amended and restated and provide for the following significant terms: a) annual fixed rent of approximately $25.5 million, b) annual rent increases at the higher of CPI or a renegotiated amount based upon the fair market value of the Properties, c) expiration date of January 15, 2020, and d) two 5-year extension terms at the option of Privileged Access. The January 1, 2008 lease for 59 of the Properties known as the “TT Portfolio” also included provisions where the Company paid Privileged Access $1 million for entering into the amended lease. The $1 million payment will be amortized on a pro-rata basis over the remaining term of the lease as an offset to the annual lease payments. Additionally, the Company also agreed to reimburse Privileged Access up to $5 million for the cost of any improvements made to the TT Portfolio. The Company shall reimburse Privileged Access only if the improvement has been pre-approved, is a depreciable fixed asset and supporting documentation is provided. The assets purchased with the capital improvement fund will be the assets of the Company and will be amortized in accordance with the Company’s depreciation policies.

The Company has subordinated its lease payment for the TT Portfolio to a bank that has loaned Privileged Access $10 million. The Company guaranteed $2.5 million of that loan in September 2007 and that guarantee was extinguished in December 2007. Privileged Access is obligated to pay back $5 million of the loan in 2008, $2.5 million in 2009 and the final $2.5 million in 2010. The Company believes that the possibility that Privileged Access would not make its lease payment on the TT Portfolio as a result of the subordination is remote.

Since June 12, 2006, Privileged Access has leased 130 cottage sites at Tropical Palms, a resort Property located near Orlando, Florida from the Company. For the years ended December 31, 2007 and 2006 we earned approximately $1.5 million and $0.6 million, respectively, in rent from this leasing arrangement. The lease income is included in the Resort base rental income in the Company’s Consolidated Statement of Operations. The Tropical Palms lease currently provides for the following significant terms: a) annual fixed rent of approximately $1.4 million, paid quarterly, b) percentage rent of 50% of the tenants gross revenues in excess of the fixed rent, and c) expiration date of June 30, 2008. The Company expects to extend the Tropical Palms lease when it expires.

Refer to Note 12 — Transactions with Related Parties included in the Notes to Consolidated Financial Statements in this Form 10-K for a description of all agreements between the Company and Privileged Access.

Supplemental Property Disclosure

We provide the following disclosures with respect to certain assets:

	•		Monte Vista — Monte Vista is a lifestyle-oriented resort Property located in Mesa, Arizona containing approximately 56 acres of vacant land. We have obtained approval to develop 275 manufactured home and 240 resort sites on this land. In connection with evaluating the development of Monte Vista, we evaluated selling the land and subsequently decided to list 26 acres of the land for sale. With respect to the land not listed for sale, we intend to develop additional resort sites and may consider other alternative uses for the land or sale of the acreage.

	•		Bulow Plantation — Bulow Plantation is a 628-site mixed lifestyle-oriented resort and manufactured home Property located in Flagler Beach, Florida, which contains approximately 180 acres of adjacent vacant land. We have obtained approval from Flagler County for an additional manufactured home community development of approximately 700

sites on this land. In connection with evaluating the possible development and based on inquiries from single-family home developers, we evaluated a sale of the land. Subsequently, we listed the land for sale for a purchase price of $28 million. We anticipate that we will proceed with the development if we determine that any offers or the terms thereof are unacceptable. ELS recently obtained an amendment to the Board of Flagler County Commissioners resolution approving the planned unit development classification of the Property to clarify that resort cottages may be installed and set forth standards for the installation of resort cottages. This amendment may impact the plans for the future development.

•

Holiday Village, Florida — Holiday Village is a 128-site manufactured home community located in Vero Beach, Florida, on approximately 20 acres of land. As a result of the 2004 hurricanes, this Property is less than 50% occupied. The residents have been notified that the Property was listed for sale for a purchase price of $6 million.

Insurance

Approximately 70 Florida Properties suffered damage from the four hurricanes that struck the state during August and September 2004. As of February 19, 2008, the Company estimates its total claim to be $21.8 million, of which approximately $21.5 million of claims, including business interruption, have been submitted to its insurance companies for reimbursement. Through December 31, 2007, the Company has made total expenditures of approximately $17.4 million and expects to incur additional expenditures to complete the work necessary to restore the Properties to their pre-hurricanes condition. The Company has reserved approximately $2.0 million related to these expenditures ($0.7 million in 2005 and $1.3 million in 2004). Approximately $6.8 million of these expenditures have been capitalized per the Company’s capitalization policy through December 31, 2007.

The Company has received proceeds from insurance carriers of approximately $7.9 million through December 31, 2007. The proceeds were accounted for in accordance with the Statement of Financial Accounting Standards No.5, “Accounting for Contingencies” (“SFAS No. 5”). Approximately $0.6 million has been recognized as a gain on insurance recovery, which is net of approximately $0.2 million of legal fees and included in income from other investments, net, as of December 31, 2007. The receivable from insurance providers included in other assets of approximately $1.5 million as of December 31, 2006, was collected in full during 2007.

Property Acquisitions, Joint Ventures and Dispositions

The following chart lists the Properties or portfolios acquired, invested in, or sold since January 1, 2006:


Property	Transaction Date	Sites
*Total Sites as of January 1, 2006*			106,337

Property or Portfolio (# of Properties in parentheses):
Thousand Trails (2)	April 14, 2006		624
Mid-Atlantic Portfolio (7)	April 25, 2006		1,594
Tranquil Timbers (1)	June 13, 2006		270
Outdoor World Portfolio (15)	December 15, 2006		3,962
Pine Island RV Resort (1)	August 3, 2007		363
Santa Cruz Ranch RV (1)	September 26, 2007		106
Tuxbury Pond RV Resort (1)	October 11, 2007		305

Joint Ventures:
Morgan Portfolio (5)	Various, 2006		1,134

Expansion Site Development and other:
Sites added (reconfigured) in 2006			134
Sites added (reconfigured) in 2007			75

Dispositions:
Indian Wells (Joint Venture) (1)	April 18, 2006		(350	)
Forest Oaks (1)	April 25, 2006		(227	)
Windsong (1)	April 25, 2006		(268	)
Blazing Star (Joint Venture) (1)	June 29, 2006		(254	)
Lazy Lakes (1)	January 10, 2007		(100	)
Del Rey (1)	July 6, 2007		(407	)
Holiday Village-Iowa (1)	November 30, 2007		(519	)

Total Sites as of December 31, 2007			112,779

Since December 31, 2005, the gross investment in real estate increased from $2,153 million to $2,396 million as of December 31, 2007, due primarily to the aforementioned acquisitions and dispositions of Properties during the period.

Markets

The following table identifies our five largest markets by number of sites and provides information regarding our Properties (excludes membership campground Properties leased to Privileged Access and Properties owned through Joint Ventures).


								Percent of Total
Major	Number of				Percent of			Property Operating
Market	Properties		Total Sites		Total Sites			Revenues
Florida		81		35,182		42.7	%		43.8	%
Arizona		32		12,375		15.0	%		12.6	%
California		31		7,333		8.9	%		17.1	%
Texas		8		5,143		6.2	%		2.3	%
Colorado		10		3,452		4.2	%		4.9	%
Other		53		18,930		23.0	%		19.3	%

Total		215		82,415		100.0	%		100.0	%

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures. We believe that the following critical accounting policies, among others, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Long-Lived Assets

In accordance with the Statement of Financial Accounting Standards No. 141, “Business Combinations” (“SFAS No. 141”), we allocate the purchase price of Properties we acquire to net tangible and identified intangible assets acquired based on their fair values. In making estimates of fair values for purposes of allocating purchase price, we utilize a number of sources, including independent appraisals that may be available in connection with the acquisition or financing of the respective Property and other market data. We also consider information obtained about each Property as a result of our due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired.

We periodically evaluate our long-lived assets, including our investments in real estate, for impairment indicators. Our judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions and legal factors. Future events could occur which would cause us to conclude that impairment indicators exist and an impairment loss is warranted.

Real estate is recorded at cost less accumulated depreciation. Depreciation is computed on the straight-line basis over the estimated useful lives of the assets. We use a 30-year estimated life for buildings acquired and structural and land improvements, a ten-to-fifteen-year estimated life for building upgrades and a three-to-seven-year estimated life for furniture, fixtures and equipment. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred and significant renovations and improvements that improve the asset and extend the useful life of the asset are capitalized over their estimated useful life.

Allowance for Doubtful Accounts

Rental revenue from our tenants is our principal source of revenue and is recognized over the term of the respective lease or the length of a customer’s stay, the majority of which are for a term of not greater than one year. We monitor the collectibility of accounts receivable from our tenants on an ongoing basis. We will reserve for receivables when we believe the ultimate collection is less than probable and maintain an allowance for doubtful accounts. An allowance for doubtful accounts is recorded during each period and the associated bad debt expense is included in our property operating and maintenance expense in our Consolidated Statements of Operations. The allowance for doubtful accounts is netted against rents receivable on our consolidated balance sheets. Our provision for uncollectible rents receivable was approximately $1.2 million and $0.9 million as of December 31, 2007 and December 31, 2006, respectively.

We may also finance the sale of homes to our customers through loans (referred to as “Chattel Loans”). The valuation of an allowance for doubtful accounts for the Chattel Loans is calculated based on a comparison of the outstanding principal balance of each note compared to the N.A.D.A. (National Automobile Dealers Association) value and the current market value of the underlying manufactured home collateral. A bad debt expense is recorded in home selling expense in our Consolidated Statements of Operations. The allowance for doubtful accounts is netted against the notes receivables on our consolidated balance sheets. The allowance for these Chattel Loans as of December 31, 2007 and December 31, 2006 was $160,000 and $110,000, respectively.

Inventory

Inventory consists of new and used Site Set homes and is stated at the lower of cost or market after consideration of the N.A.D.A. Manufactured Housing Appraisal Guide and the current market value of each home included in the home inventory. Inventory sales revenues and resale revenues are recognized when the home sale is closed. Inventory is recorded net of an inventory reserve as of December 31, 2007 and December 31, 2006 of $0.8 million and $0.6 million, respectively. The expense for the inventory reserve is included in the cost of home sales in our Consolidated Statements of Operations.

Variable Interest Entities

In December 2003, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 46R, Consolidation of Variable Interest Entities (“FIN 46R”) — an interpretation of ARB 51. The objective of FIN 46R is to provide guidance on how to identify a variable interest entity (“VIE”) and determine when the assets, liabilities, non-controlling interests, and results of operations of a VIE need to be included in a company’s consolidated financial statements. A company that holds variable interests in an entity will need to consolidate such entity if the company absorbs a majority of the entity’s expected losses or receives a majority of the entity’s expected residual returns if they occur, or both (i.e., the primary beneficiary). The Company will apply FIN 46R to all types of entity ownership (general and limited partnerships and corporate interests).

The Company will re-evaluate and apply the provisions of FIN 46R to existing entities if certain events occur which warrant re-evaluation of such entities. In addition, the Company will apply the provisions of FIN 46R to all new entities in the future. The Company also consolidates entities in which it has a controlling direct or indirect voting interest. The equity method of accounting is applied to entities in which the Company does not have a controlling direct or indirect voting interest,

but can exercise influence over the entity with respect to its operations and major decisions. The cost method is applied when (i) the investment is minimal (typically less than 5%) and (ii) the Company’s investment is passive.

Effective January 1, 2008, the 100 percent owner of Privileged Access, Mr. Joe McAdams, became our President and we amended and restated the leases for the 81 Properties. Under generally accepted accounting principles, effective January 1, 2008, Mr. McAdams, Privileged Access and the Company are considered related parties. Due to the materiality of the leasing arrangement and the related party nature of the arrangement, the Company has analyzed whether the operations of Privileged Access should be consolidated with ours. We have determined under FIN 46 that it would not be appropriate to consolidate Privileged Access as we do not control Privileged Access and are not the primary beneficiary of Privileged Access. This conclusion required management to make complex judgments. As a result of the complex nature of the arrangements, on February 15, 2008, we submitted a letter to the Office of the Chief Accountant at the SEC describing the relationship and asking for the SEC’s concurrence with our conclusions that we should not consolidate the operations of Privileged Access. As of the date of filing this Form 10-K, we do not a response from the SEC.

Valuation of Financial Instruments

The valuation of financial instruments under Statement of Financial Accounting Standards No. 107, “Disclosures About Fair Value of Financial Instruments” (“SFAS No. 107”) and Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”) requires us to make estimates and judgments that affect the fair value of the instruments. Where possible, we base the fair values of our financial instruments on listed market prices and third party quotes. Where these are not available, we base our estimates on other factors relevant to the financial instrument.

Stock-Based Compensation

The Company adopted the fair-value-based method of accounting for share-based payments effective January 1, 2003 using the modified prospective method described in FASB Statement No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure”. The Company adopted Statement of Financial Accounting Standards No. 123(R) (“SFAS 123(R)”), “Share Based Payment” on July 1, 2005, which did not have a material impact on the Company’s results of operations or its financial position. The Company uses the Black-Scholes-Merton formula to estimate the value of stock options granted to employees, consultants and directors.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements with any unconsolidated investments or joint ventures that we believe have or are reasonably likely to have a material effect on our financial condition, results of operations, liquidity or capital resources.

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 160, “Non-controlling Interests in Consolidated Financial Statements” (“SFAS No. 160”), an amendment of Accounting Research Bulletin No. 51. The Statement seeks to improve uniformity and transparency in reporting of the net income attributable to non-controlling interests in the consolidated financial statements of the reporting entity. The statement requires, among other provisions, the disclosure, clear labeling and presentation of non-controlling interests in the Consolidated Balance Sheet and Consolidated Income Statement. SFAS No. 160 is effective January 1, 2009 with early adoption prohibited. The Company does not expect the adoption of SFAS No. 160 will have a material effect on the financial position of the Company.

In December 2007, the FASB issued Statement of Financial Accounting Standard No. 141R, “Business Combinations”, (“SFAS No. 141R”). SFAS No. 141R replaces FASB Statement No. 141 but retains the fundamental requirements in SFAS No. 141 that the acquisition method of accounting (also known as the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. SFAS No. 141R also establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquired entity; (b) improves the completeness of the information reported about a business combination by changing the requirements for recognizing assets acquired and liabilities assumed arising from contingencies; (c) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (d) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141R replaces, with limited exceptions as specified in the Statement, the cost allocation process in SFAS No. 141with a fair value based allocation process. SFAS No. 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning

on or after December 15, 2008. Early application is not permitted. The Company has not yet determined the impact, if any, that SFAS No. 141R will have on its consolidated financial statements.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”). SFAS No. 159 permits companies to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing companies with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. Companies are not allowed to adopt SFAS No. 159 on a retrospective basis unless they choose early adoption. The adoption of SFAS No. 159 is optional and the Company plans to evaluate the potential adoption in 2008.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. This statement is effective for the Company beginning January 1, 2008. The Company does not expect the adoption of SFAS No. 157 will have a material effect on its financial statements.

In June 2006, FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FAS 109, Accounting for Income Taxes” (“FIN 48”), to create a single model to address accounting for uncertainty in tax positions. FIN 48 clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. As required, the Company adopted FIN 48 as of January 1, 2007. The adoption of FIN 48 did not have any significant impact on the Company’s financial position and results of operations.

Results of Operations

Comparison of Year Ended December 31, 2007 to Year Ended December 31, 2006

The following table summarizes certain financial and statistical data for the Property Operations for all Properties owned throughout both periods (“Core Portfolio”) and the Total Portfolio for the years ended December 31, 2007 and 2006 (amounts in thousands).


	Core Portfolio									Total Portfolio
					Increase /									Increase /
	2007		2006		(Decrease)		% Change			2007		2006		(Decrease)		% Change
Community base rental income	$	232,917	$	222,766	$	10,151		4.6	%	$	236,933	$	225,815	$	11,118		4.9	%
Resort base rental income		88,654		83,876		4,778		5.7	%		102,372		89,925		12,447		13.8	%
Utility and other income		34,572		29,751		4,821		16.2	%		36,849		30,643		6,206		20.3	%

Property operating revenues		356,143		336,393		19,750		5.9	%		376,154		346,383		29,771		8.6	%

Property operating and maintenance		118,418		112,054		6,364		5.7	%		127,342		116,179		11,163		9.6	%
Real estate taxes		26,301		25,522		779		3.1	%		27,429		26,246		1,183		4.5	%
Property management		17,466		16,560		906		5.5	%		18,385		17,079		1,306		7.6	%

Property operating expenses		162,185		154,136		8,049		5.2	%		173,156		159,504		13,652		8.6	%


Income from property operations	$	193,958	$	182,257	$	11,701		6.4	%	$	202,998	$	186,879	$	16,119		8.6	%

Property Operating Revenues

The 5.9% increase in the Core Portfolio property operating revenues reflects (i) a 4.2% increase in rates for our community base rental income combined with a 0.4% increase in occupancy, (ii) a 5.7% increase in revenues for our core resort base income, and (iii) an increase in utility income and other fees primarily due to the pass-through of higher utility rates, as well as an increase in the properties passing through utility costs as a separate line item to customers. Total Portfolio operating revenues increased due to site rental rate increases and our 2006 and 2007 acquisitions (see Note 5 in the Notes to Consolidated Financial Statements contained in this Form 10-K).

Results of Operations (continued)

Property Operating Expenses

The 5.2% increase in property operating expenses for the Core Portfolio reflects a 5.7% increase in property operating and maintenance due primarily to increases in utilities, repair and maintenance, payroll and insurance expenses. The increase in real estate taxes is in the Core Portfolio is generally due to higher property assessments on certain Properties. Property management expense for the Core Portfolio reflects costs of managing the Properties and is estimated based on a percentage of Property operating revenues. Total Portfolio operating expenses increased due to our 2006 and 2007 acquisitions, as well as increases in utilities and legal expenses. Property management expense for the Total Portfolio increased primarily due to 2006 and 2007 acquisitions and payroll increases.

Home Sales Operations

The following table summarizes certain financial and statistical data for the Home Sales Operations for the years ended December 31, 2007 and 2006 (amounts in thousands, except sales volumes).


	2007			2006			Variance			% Change
Gross revenues from new home sales	$	31,116		$	58,799		$	(27,683	)		(47.1	%)
Cost of new home sales		(28,067	)		(52,394	)		24,327			46.4	%

Gross profit from new home sales		3,049			6,405			(3,356	)		(52.4	%)

Gross revenues from used home sales		2,217			2,448			(231	)		(9.4	%)
Cost of used home sales		(2,646	)		(2,104	)		(542	)		(25.8	%)

Gross (loss) profit from used home sales		(429	)		344			(773	)		(224.7	%)

Brokered resale revenues, net		1,528			2,129			(601	)		(28.2	%)
Home selling expenses		(7,555	)		(9,836	)		2,281			23.2	%
Ancillary services revenues, net		2,436			3,027			(591	)		(19.5	%)

(Loss) income from home sales operations and other	$	(971	)	$	2,069		$	(3,040	)		(146.9	%)

Home sales volumes:
New home sales (1)		440			783			(343	)		(43.8	%)
Used home sales (2)		296			370			(74	)		(20.0	%)
Brokered home resales		967			1,255			(288	)		(22.9	%)


(1)		Includes third party home sales of 45 and 79 for the years ended December 31, 2007 and 2006, respectively.

(2)		Includes third party home sales of nine and 13 for the years ended December 31, 2007 and 2006, respectively.

Income from home sales operations decreased as a result of lower new, used and brokered resale volumes and lower gross profits per home sold. The decrease in home selling expenses is primarily due to lower sales volumes and decreased advertising costs. The decrease in ancillary service revenue relates primarily to an increase in community activity expenses and store expenses.

Other Income and Expenses

The following table summarizes other income and expenses for the years ended December 31, 2007 and 2006 (amounts in thousands).


	2007			2006			Variance			% Change
Interest income	$	1,732		$	1,975		$	(243	)		(12.3	%)
Income from other investments, net		22,476			20,102			2,374			11.8	%
General and administrative		(15,591	)		(12,760	)		(2,831	)		(22.2	%)
Rent control initiatives		(2,657	)		(1,157	)		(1,500	)		(129.6	%)
Interest and related amortization		(103,070	)		(103,161	)		91			0.1	%
Depreciation on corporate assets		(437	)		(410	)		(27	)		(6.6	%)
Depreciation on real estate assets		(63,554	)		(60,276	)		(3,278	)		(5.4	%)

Total other expenses, net	$	(161,101	)	$	(155,687	)	$	(5,414	)		(3.5	%)

Results of Operations (continued)

Interest income decreased due to a $0.4 million decrease in interest income related to a loan to Privileged Access that was paid off, a decrease in lower home loan balances, offset by an increase in interest earned on an our tax-deferred exchange escrow accounts.

Income from other investments, net increased due to: a gain on insurance recovery of approximately $0.6 million, a one-time gain related to a defeasance transaction of approximately $1.1 million, the previously discussed increase in ground lease activity with Privileged Access, offset by one-time gains recognized in 2006 including a $1.0 million non-refundable deposit received upon termination of the contract for the sale of Del Rey and a $0.9 million gain on sale of our preferred partnership interest in College Heights, which was previously classified as other assets.

General and administrative expense increased primarily due to an increase in payroll costs due to increased salaries and bonuses and accrued expense related to the Long-Term Incentive Plan. Rent control initiatives increased primarily as a result of activity regarding the Contempo Marin and City of Santee trials (see Note 18 in the Notes to Consolidated Financial Statements contained in this Form 10-K).

Depreciation on real estate increased $3.3 million primarily relating to acquisitions.

Equity in Income of Unconsolidated Joint Ventures

For the year ended December 31, 2007, equity in income of unconsolidated joint ventures decreased $0.9 million primarily due to the distributions received from three joint ventures relating to debt financings by the joint ventures. These distributions exceeded the Company’s basis and were included in income from unconsolidated joint ventures. This was offset by the purchase of the remaining interest in Mezzanine Properties and the gain on sale of the property owned by Indian Wells joint venture in 2006.

Comparison of Year Ended December 31, 2006 to Year Ended December 31, 2005


	Core Portfolio									Total Portfolio
					Increase /		%							Increase /		%
	2006		2005		(Decrease)		Change			2006		2005		(Decrease)		Change
Community base rental income	$	222,767	$	213,280	$	9,487		4.4	%	$	225,815	$	213,280	$	12,535		5.9	%
Resort base rental income		74,063		71,015		3,048		4.3	%		89,925		74,371		15,554		20.9	%
Utility and other income		28,831		27,202		1,629		6.0	%		30,643		27,367		3,276		12.0	%

Property operating revenues		325,661		311,497		14,164		4.5	%		346,383		315,018		31,365		10.0	%

Property operating and maintenance		106,382		102,158		4,224		4.1	%		116,179		103,832		12,347		11.9	%
Real estate taxes		24,736		24,490		246		1.0	%		26,246		24,671		1,575		6.4	%
Property management		15,995		15,392		603		3.9	%		17,079		15,919		1,160		7.3	%

Property operating expenses		147,113		142,040		5,073		3.6	%		159,504		144,422		15,082		10.4	%

Income from property operations	$	178,548	$	169,457	$	9,091		5.4	%	$	186,879	$	170,596	$	16,283		9.5	%

Property Operating Revenues

The 4.5% increase in the Core Portfolio property operating revenues reflects (i) a 4.4% increase in rates for our community base rental income combined with a 0.1% increase in occupancy, (ii) a 4.3% increase in revenues for our core resort base income, and (iii) an increase in utility income and other fees primarily due to the pass-through of higher utility rates. Total Portfolio operating revenues increased due to site rental rate increases and our 2005 and 2006 acquisitions (see Note 5 in the Notes to Consolidated Financial Statements contained in this Form 10-K).

Results of Operations (continued)

Property Operating Expenses

The 3.6% increase in property operating expenses for the Core Portfolio reflects a 4.1% increase in property operating and maintenance due primarily to increases in utilities and repair and maintenance. Property management expense for the Core Portfolio reflects costs of managing the Properties and is estimated based on a percentage of Property operating revenues. Total Portfolio operating expenses increased due to our 2005 and 2006 acquisitions, as well as increases in utilities and repair and maintenance. Property management expense for the Total Portfolio increased primarily due to 2005 and 2006 acquisitions and payroll increases.

Home Sales Operations

The following table summarizes certain financial and statistical data for the Home Sales Operations for the years ended December 31, 2006 and 2005 (amounts in thousands, except sales volumes).


	2006			2005			Variance			% Change
Gross revenues from new home sales	$	58,799		$	62,664		$	(3,865	)		(6.2	%)
Cost of new home sales		(52,394	)		(53,899	)		1,505			2.8	%

Gross profit from new home sales		6,405			8,765			(2,360	)		(26.9	%)

Gross revenues from used home sales		2,448			3,350			(902	)		(26.9	%)
Cost of used home sales		(2,104	)		(3,572	)		1,468			41.1	%

Gross profit (loss) from used home sales		344			(222	)		566			255.0	%

Brokered resale revenues, net		2,129			2,714			(585	)		(21.6	%)
Home selling expenses		(9,836	)		(8,838	)		(998	)		(11.3	%)
Ancillary services revenues, net		3,027			2,227			800			35.9	%


Income from home sales operations and other	$	2,069		$	4,646		$	(2,577	)		(55.5	%)


Home sales volumes:
New home sales (1)		783			771			12			1.6	%
Used home sales (2)		370			271			99			36.5	%
Brokered home resales		1,255			1,526			(271	)		(17.8	%)


(1)		Includes third party home sales of 79 and 84 for the years ended December 31, 2006 and 2005, respectively.

(2)		Includes third party home sales of 13 and zero for the years ended December 31, 2006 and 2005, respectively.

New home sales gross profit reflects a decrease in the gross margin. Used home sales gross profit reflects higher gross margin per home and higher volumes. Brokered resale revenues reflect decreased resale volumes. The increase in home selling expenses relates primarily to advertising. The increase in ancillary service revenue relates primarily to our acquisitions.

Other Income and Expenses

The following table summarizes other income and expenses for the years ended December 31, 2006 and 2005 (amounts in thousands).


	2006			2005			Variance			% Change
Interest income	$	1,975		$	1,406		$	569			40.5	%
Income from other investments, net		20,102			16,609			3,493			21.0	%
General and administrative		(12,760	)		(13,624	)		864			6.3	%
Rent control initiatives		(1,157	)		(1,081	)		(76	)		(7.0	%)
Interest and related amortization		(103,161	)		(100,712	)		(2,449	)		(2.4	%)
Loss on early debt retirement		—			(20,630	)		20,630			100.0	%
Depreciation on corporate assets		(410	)		(804	)		394			49.0	%
Depreciation on real estate assets		(60,276	)		(55,608	)		(4,668	)		(8.4	%)

Total other expenses, net	$	(155,687	)	$	(174,444	)	$	18,757			10.8	%

Results of Operations (continued)

Interest income increased due to interest earned on our Privileged Access note as discussed above.

Income from other investments, net increased due to: the previously discussed increase in ground lease activity with Privileged Access, corporate expense savings of $0.9 million, one-time gains including a $1.0 million non-refundable deposit received upon termination of the contract for the sale of Del Rey and a $0.9 million gain on sale of our preferred partnership interest in College Heights, was previously classified as other assets. These increases were offset by a write-off of costs related to potential transactions no longer being considered of $0.9 million.

General and administrative expense decreased due to decreased legal costs and banking fees, partially offset by an increase in payroll. Interest and related amortization increased due to acquisitions offset by a decrease in our average interest rates due to refinancings in 2005.

Loss on early debt retirement decreased due to transaction costs on early debt retirement related to refinancings in 2005.

Depreciation on corporate assets decreased as a result of assets being fully depreciated. Depreciation on real estate increased $4.7 million primarily relating to acquisitions.

Equity in Income of Unconsolidated Joint Ventures

For the year ended December 31, 2006, equity in income of unconsolidated joint ventures decreased $2.9 million primarily due to the purchase of the remaining interest in the Mezzanine Properties in the first quarter of 2006 (see Liquidity and Capital Resources — Investing Activities), as well as distributions received in 2005 from three joint ventures relating to debt refinancings by the ventures. Two of these distributions exceeded the Company’s basis and therefore were included in income from unconsolidated joint ventures in 2005. These decreases are partially offset by the net gain on sale of the property owned by the Indian Wells joint venture.

Liquidity and Capital Resources

Liquidity

As of December 31, 2007, the Company had $5.8 million in cash and cash equivalents and $267 million available on its lines of credit. The Company expects to meet its short-term liquidity requirements, including its distributions, generally through its working capital, net cash provided by operating activities and availability under the existing lines of credit. The Company expects to meet certain long-term liquidity requirements such as scheduled debt maturities, property acquisitions and capital improvements by long-term collateralized and uncollateralized borrowings including borrowings under its existing lines of credit and the issuance of debt securities or additional equity securities in the Company, in addition to net cash provided by operating activities. The Company has approximately $200 million of scheduled debt maturities in 2008. The Company is currently evaluating refinancing options and expects to be able to satisfy the maturing debt with some combination of refinancing proceeds, net cash provided by operating activities and/or its available lines of credit. The table below summarizes cash flow activity for the years ended December 31, 2007, 2006 and 2005 (amounts in thousands).


	For the twelve months ended
	December 31,
	2007			2006			2005
Cash provided by operating activities	$	122,791		$	99,457		$	90,326
Cash used in investing activities		(25,604	)		(67,086	)		(66,246	)
Cash used in financing activities		(93,007	)		(31,376	)		(28,775	)


Net increase (decrease) in cash	$	4,180		$	995		$	(4,695	)

Operating Activities

Net cash provided by operating activities increased $23.3 million for the year ended December 31, 2007 from $99.5 million for the year ended December 31, 2006. As discussed in “Results of Operations” above, this increase reflects increases in property operating income and income from other investments, net, offset by an increase in depreciation expense, general and

Liquidity and Capital Resources (continued)

administrative expense and a decrease in home sales. Net cash provided by operating activities increased $9.1 million for the year ended December 31, 2006 from $90.3 million for the year ended December 31, 2005. This increase reflects increases in property operating income and income from other investments, net, offset by an increase in interest expense and a decrease in home sales as discussed in “Results of Operations” above.

Investing Activities

Net cash used in investing activities reflects the impact of the following investing activities:

Acquisitions

During the year ended December 31, 2007, we completed the following transactions:

	•		On January 29, 2007, the Company acquired the remaining 75% interest in a joint venture Property known as Mesa Verde, which is a 345-site resort Property on approximately 28 acres in Yuma, Arizona. The gross purchase price was approximately $5.9 million. We assumed a first mortgage loan of approximately $3.5 million with an interest rate of 4.94% per annum, maturing in 2008. The remainder of the acquisition price of approximately $1.8 million was funded with a withdrawal from the tax-deferred exchange account established as a result of the disposition of Lazy Lakes, discussed below.

	•		On June 27, 2007, the Company purchased the remaining 75% interest in a Diversified Investments joint venture Property known as Winter Garden, which is a 350-site resort Property on approximately 27 acres in Winter Garden, Florida. The gross purchase price was approximately $10.9 million, and we assumed a second mortgage loan of approximately $4.0 million with an interest rate of 4.3% per annum, maturing in September 2008. The remainder of the acquisition price, net of a credit for our existing 25% interest, was funded with proceeds from the Company’s lines of credit and a withdrawal of approximately $3.7 million from the tax-deferred exchange account established as a result of the disposition of Lazy Lakes discussed below.

	•		On August 3, 2007, the Company acquired a 363-site resort Property known as Pine Island, on approximately 31 acres, located near St. James City, Florida. The purchase price of approximately $6.5 million was funded with a withdrawal from the tax-deferred exchange account established as a result of the sale of Del Rey discussed below.

	•		On September 26, 2007, the Company acquired a 106-site resort Property known as Santa Cruz RV Ranch, on approximately 7 acres, located near Scotts Valley, California. The purchase price was approximately $5.5 million.

	•		On October 11, 2007, we acquired a 305-site resort property known as Tuxbury Resort, on approximately 193 acres in Amesbury, Massachusetts, including approximately 100 acres of potential expansion land. The purchase price was approximately $7.3 million and the seller provided financing of approximately $1.2 million that matures in January 2010. The cash portion of the purchase price was funded with a withdrawal from the tax-deferred exchange account established as a result of the sale of Del Rey discussed below.

Certain purchase price adjustments may be made within one year following the acquisitions.

2006 Acquisitions

During the year ended December 31, 2006, we acquired 40 Properties (see Note 5 in the Notes to Consolidated Financial Statements contained in this Form 10-K). The combined investment in real estate for these 40 Properties was approximately $162.6 million and was funded with the exchange of two all age properties, new financing of $47.1 million, debt assumed of $38.7 million, and borrowings from our lines of credit. We assumed rents received in advance of approximately $5.0 million, inventory of approximately $1.9 million, escrow deposits of $0.6 million, and other net payables of $0.4 million.

2005 Acquisitions

During the year ended December 31, 2005, we acquired seven Properties (see Note 5 in the Notes to Consolidated Financial Statements contained in this Form 10-K). The combined real estate investment in these Properties was approximately $89.9

Liquidity and Capital Resources (continued)

million and was funded with money drawn from our lines of credit and debt assumed of $53.5 million. We also assumed approximately $5.4 million in escrow deposits and $4.0 million of rents received in advance as a result of these acquisitions.

Dispositions

On January 10, 2007, we sold Lazy Lakes, a 100-site resort Property in the Florida Keys, for proceeds of approximately $7.7 million. The Company recognized a gain of approximately $4.6 million. In order to defer the taxable gain on the sale of Lazy Lakes, the sales proceeds, net of an eligible distribution of $2.4 million, were deposited in a tax-deferred exchange account. The funds in the exchange account were used in the Mesa Verde and Winter Garden acquisitions discussed above.

On July 6, 2007, we sold Del Rey, a 407 site manufactured home site Property in Albuquerque, New Mexico, for proceeds of approximately $13.0 million. The Company recognized a gain of approximately $6.9 million. These proceeds were deposited in a tax-deferred exchange account pending future like-kind exchange acquisitions. Funds were subsequently used for the acquisitions of Pine Island and Tuxbury Resort, discussed above.

On November 30, 2007, we sold Holiday Village, a 519-site all-age manufactured home Property in Sioux City, Iowa for $3.0 million. The sales price included approximately $0.4 million in proceeds from the sale of inventory homes to the buyer. The Company recognized a gain of sale of approximately $0.6 million. The proceeds from the sale were deposited in a tax-deferred exchange account pending future like-kind acquisitions, which is classified as escrow deposits and other in the balance sheet.

During the year ended December 31, 2006, we exchanged two Properties located in Indiana as part of the Mid-Atlantic Portfolio acquisition (see Note 5 in the Notes to Consolidated Financial Statements contained in this Form 10-K). We recorded a loss on sale for this transaction of $0.2 million.

During the year ended December 31, 2005, we sold one Property located in Cedar Rapids, Iowa for a selling price of $6.7 million. Net proceeds of $6.3 million were used to repay amounts outstanding on our lines of credit. A gain on sale of approximately $2.3 million was recorded during the fourth quarter of 2005.

We currently have two all-age Properties held for disposition and are in various stages of negotiations for sale. We plan to reinvest the sale proceeds or reduce outstanding lines of credit.

The operating results of all properties sold or held for disposition have been reflected in the discontinued operations of the Consolidated Statements of Operations contained in this Form 10-K.

Notes Receivable Activity

As of December 31, 2006, we had a note receivable from Privileged Access of approximately $12.3 million, which was repaid in full during 2007. The remaining notes receivable activity of $1.2 million in cash outflow reflects net lending from our Chattel Loans.

Investments in and distributions from unconsolidated joint ventures

During the year ended December 31, 2007, the Company invested approximately $2.7 million in developing one of the Bar Harbor joint venture Properties, which resulted in an increase of the Company’s ownership interest per the joint venture agreement. As of December 31, 2007, the Bar Harbor joint venture has been consolidated with the operations of the Company as the Company has determined that as of December 31, 2007 we are the primary beneficiary by applying the standards of FIN 46R. This consolidation has decreased the Company’s investment in joint venture approximately $11.1 million, with an offsetting increase in investment in real estate.

During the year ended December 31, 2007, the Company received approximately $5.2 million in distributions from our joint ventures. $5.1 million of these distributions were classified as return on capital and were included in operating activities. The remaining distributions of approximately $0.1 million were classified as a return of capital and were included in investing activities and were related to refinancings at three of our joint venture Properties. Approximately $2.5 million of the distributions received exceeded the Company’s basis in its joint venture and as such were recorded in income from unconsolidated joint ventures.

During the year ended December 31, 2006, the Company invested approximately $1.1 million in five joint ventures owning five Properties located in Florida, Massachusetts, Maine and two in Virginia. The Company also invested approximately $1.6

Liquidity and Capital Resources (continued)

million in developing one of the Bar Harbor joint venture Properties, which resulted in an increase of the Company’s ownership interest per the joint venture agreement.

During the year ended December 31, 2006, the Company received approximately $5.1 million in distributions from our joint ventures. $3.5 million of these distributions were classified as return on capital and were included in operating activities. The remaining distributions of approximately $1.6 million were classified as a return of capital and were included in investing activities and related to our sale of the Property owned by the Indian Wells joint venture and the sale of our interest in the Blazing Star joint venture.

During the year ended December 31, 2005, the Company invested approximately $7.0 million for a 50% preferred joint venture interest in three Properties located near Bar Harbor, Maine. The Company also invested approximately $0.6 million for a 40% interest in a Texas Property owned by a joint venture controlled by Diversified Investments, Inc (“Diversified”).

During the year ended December 31, 2005, the Company received approximately $11.3 million in distributions from our joint ventures. $5.8 million of these distributions were classified as return on capital and were included in operating activities. The remaining distributions of approximately $5.5 million were classified as a return of capital, were included in investing activities, and related to refinancings at three of our joint venture Properties.

In addition, the Company recorded approximately $2.7 million, $3.6 million and $6.5 million of net income from joint ventures, net of $1.4 million, $1.9 million and $2.0 million of depreciation, in the years ended December 31, 2007, 2006 and 2005, respectively.

Due to the Company’s inability to control the joint ventures, the Company accounts for its investment in the joint ventures using the equity method of accounting.

Proceeds from sale of investment

During the year ended December 31, 2006, the Company sold its preferred partnership interest in College Heights for approximately $9.0 million. At the time of the sale, College Heights owned a portfolio of 11 Properties with approximately 1,900 sites located in Michigan, Ohio and Florida. The proceeds received represent a per site value of approximately $22,000.

Capital improvements

Capital expenditures for improvements are identified by the Company as recurring capital expenditures (“Recurring CapEx”), site development costs and corporate costs. Recurring CapEx was approximately $16.0 million, $14.6 million and $15.9 million for the years ended December 31, 2007, 2006 and 2005, respectively. Included in Recurring CapEx for the years ended 2007, 2006 and 2005 is approximately $1.5 million, $2.0 million and $3.4 million of costs incurred to replace hurricane damaged assets. Site development costs were approximately $12.8 million, $17.3 million and $16.2 million for the years ended December 31, 2007, 2006 and 2005, respectively, and represent costs to develop expansion sites at certain of the Company’s Properties and costs for improvements to sites when a smaller used home is replaced with a larger new home. Reduction in site development costs is due to the decrease in new homes sales volume. Corporate costs such as computer hardware, office furniture and office improvements and expansion were $0.6 million, $0.3 million and $0.8 million for the years ended December 31, 2007, 2006 and 2005, respectively.

Financing Activities

Net cash used in financing activities reflects the impact of the following:

Mortgages and Credit Facilities

Financing, Refinancing and Early Debt Retirement

2007 Activity

During the year ended December 31, 2007, the Company completed the following transactions:

•

The Company repaid approximately $1.9 million of mortgage debt in connection with the sale of Lazy Lakes.

Liquidity and Capital Resources (continued)

•

In connection with the acquisition of Mesa Verde, during the first quarter of 2007, the Company assumed $3.5 million in mortgage debt bearing interest at 4.94% per annum and maturing in May 2008.

	•		In connection with the acquisition of Winter Garden, during the second quarter of 2007, the Company assumed $4.0 million in mortgage debt bearing interest at 4.3% per annum and maturing in September 2008.

	•		During the quarter ended September 30, 2007, the Company repaid the outstanding mortgage indebtedness on Ft. Myers Beach RV Resort of approximately $2.9 million.

	•		In September 2007, we amended our existing unsecured Lines of Credit (“LOC”) to expand our borrowing capacity from $275 million to $420 million. The lines of credit continue to accrue interest at LIBOR plus a maximum of 1.20% per annum, have a 0.15% facility fee, mature on June 30, 2010, and have a one-year extension option. Our current group of banks have committed up to $370 million on our $420 million borrowing capacity. We incurred commitment and arrangement fees of approximately $0.3 million to increase our borrowing capacity.

	•		During the quarter ended December 31, 2007, the Company paid off a $6.5 million mortgage that matured on Park City West RV Resort.

	•		The Company paid down $7.7 million of the mortgage debt on Tropical Palms RV Resort during the quarter ended December 31, 2007. The Tropical Palms RV Resort mortgage debt balance as of December 31, 2007 is approximately $12 million and matures in December 2008.

2006 Activity

During the year ended December 31, 2006, the Company completed the following transactions:

	•		Assumed $25.9 million in mortgage debt on four of the eleven Properties related to the acquisition of the Mezzanine Portfolio. During the second and third quarters of 2006, this mortgage debt was defeased. Net proceeds of approximately $10.4 million were used to pay down the lines of credit. The four mortgages bear interest at weighted average interest rates ranging from 5.69% to 6.143% per annum and mature in 2016. In addition, we financed $47.1 million of mortgage debt to acquire the remaining seven Properties in the Mezzanine Portfolio. The seven mortgages bear interest at weighted average rates ranging from 5.70% to 5.72% per annum, and mature in April 2016.

	•		Received $3.0 million and $2.9 million in mortgage debt proceeds as a result of meeting certain operational criteria at the Monte Vista Property and the Viewpoint Property, respectively. These proceeds were used to pay down the lines of credit.

	•		Renewed our unsecured debt. We replaced the term loan which had a remaining balance of $100 million maturing in 2007, and a $110 million line of credit maturing in August 2006 with a $225 million line of credit with a four-year maturity and one-year extension option. The new facility bears interest at the London Interbank Offered Rate (“LIBOR”) plus 1.20% per annum with a 0.15% facility fee per annum. The interest rate on the term loan was LIBOR plus 1.75% per annum and the $110 million line of credit had an interest rate of LIBOR plus 1.65% and had a 0.15% unused fee, both per annum. The interest rate on $75 million of the outstanding balance on the new line of credit is fixed at 6.38% per annum through mid-December 2007. We also renewed our $50 million line of credit which bears interest at LIBOR plus 1.20% per annum with a 0.20% facility fee per annum, and matures on June 29, 2010. The renewal increases our financial flexibility and lowers our credit spread.

	•		Acquired for $2.4 million land formerly subject to a ground lease previously classified as mortgage debt relating to the Golden Terrace South Property.

	•		Assumed $12.8 million in mortgage debt in connection with the acquisition of the remaining interests in four Diversified Properties. The four mortgages have a weighted average interest rate of approximately 5.5% per annum and a weighted average maturity of three years.

Liquidity and Capital Resources (continued)

2005 Activity

During the third quarter of 2005, the Company refinanced two mortgage loans for proceeds of $34 million at an interest rate of 4.95% per annum. Net proceeds were used to pay down approximately $20 million in other secured financing maturing in 2006.

On December 2, 2005, the Company refinanced approximately $293 million of secured debt maturing in 2007 with an effective interest rate of 6.8% per annum. This debt was secured by two cross-collateralized loan pools consisting of 35 Properties. The transaction generated approximately $337 million in proceeds from loans secured by individual mortgages on 20 Properties. The blended interest rate on the refinancing was approximately 5.3% per annum and the loans mature in 2015. Transaction costs were approximately $20.0 million ($0.67 per fully diluted share) and are classified as loss on early debt retirement on the Consolidated Statements of Operations. The remaining excess proceeds were used to repay outstanding amounts on our lines of credit. This transaction strengthened the Company’s balance sheet by extending the weighted average years to maturity by approximately two years.

During the third quarter of 2005, in connection with its acquisitions, the Company assumed mortgage debt of approximately $53.5 million at a weighted average interest rate of approximately 5.9% per annum.

Secured Debt

As of December 31, 2007, our secured long-term debt balance was approximately $1.6 billion, with a weighted average interest rate in 2007 of approximately 5.9% per annum. The debt bears interest at rates between 4.3% and 10.0% per annum and matures on various dates mainly ranging from 2008 to 2016. Included in our debt balance are three capital leases with an imputed interest rate of 13.1% per annum. We have approximately $200 million of long-term debt maturing in 2008 and approximately $80 million in 2009. The weighted average term to maturity for the long-term debt is approximately 5.5 years.

Unsecured Debt

We have two unsecured lines of credit with maximum borrowing capacity of $350 million and $20 million which bear interest at a per annum rate of LIBOR plus a maximum of 1.20% per annum, have a 0.15% facility fee, mature on June 30, 2010, and have a one-year extension option. Throughout the year ended December 31, 2007, we borrowed $126.2 million and paid down $154.5 million on our lines of credit. The weighted average interest rate in 2007 for our unsecured debt was approximately 6.8% per annum. The balance outstanding as of December 31, 2007 was $103 million. As of February 22, 2008, approximately $281.7 million is available to be drawn on these combined lines of credit.

Other Loans

During 2007, we borrowed $4.3 million to finance our insurance premium payments. As of December 31, 2007, this loan has been paid off.

During 2006, the Company borrowed $3.6 million to finance its insurance premium payments. As of December 31, 2006, $0.3 million remained outstanding. This loan was paid off in January 2007 and beared interest at 5.30% per annum.

Certain of the Company’s mortgages and credit agreements contain covenants and restrictions including restrictions as to the ratio of secured or unsecured debt versus encumbered or unencumbered assets, the ratio of fixed charges-to-earnings before interest, taxes, depreciation and amortization (“EBITDA”), limitations on certain holdings and other restrictions.

Contractual Obligations

As of December 31, 2007, we were subject to certain contractual payment obligations as described in the table below (dollars in thousands):


Contractual
Obligations	Total			2008(2)			2009			2010(3)			2011			2013			Thereafter
Long Term Borrowings (1)	$	1,656,924		$	212,134		$	85,807		$	336,232		$	65,081		$	18,076		$	939,594
Weighted average interest rates		6.13	%		5.72	%		7.00	%		7.12	%		7.07	%		5.93	%		5.75	%


(1)		Balance excludes net premiums and discounts of $2.5 million.

Liquidity and Capital Resources (continued)


(2)		The Company is currently evaluating refinancing options and expects to be able to satisfy the maturing debt with some combination of refinancing proceeds, net cash provided by operating activities and/or its available lines of credit.

(3)		Includes lines of credit repayments in 2010 of $103 million. We have an option to extend this maturity for one year to 2011.

Included in the above table are certain capital lease obligations totaling approximately $6.6 million. These agreements expire June 2009 and are paid semi-annually at an imputed interest rate of 13.1% per annum.

The Company does not include preferred OP Unit distributions, interest expense, insurance, property taxes and cancelable contracts in the contractual obligations table above.

The Company leases land under non-cancelable operating leases at certain of the Properties expiring in various years from 2022 to 2054, with terms which require twelve equal payments per year plus additional rents calculated as a percentage of gross revenues. For the years ended December 31, 2007, 2006 and 2005, ground lease rent was approximately $1.6 million. Minimum future rental payments under the ground leases are approximately $1.8 million for each of the next five years and approximately $20.8 million thereafter.

With respect to maturing debt, the Company has staggered the maturities of its long-term mortgage debt over an average of approximately 6 years, with no more than $600 million in principal maturities coming due in any single year. The Company believes that it will be able to refinance its maturing debt obligations on a secured or unsecured basis; however, to the extent the Company is unable to refinance its debt as it matures, it believes that it will be able to repay such maturing debt from asset sales and/or the proceeds from equity issuances. With respect to any refinancing of maturing debt, the Company’s future cash flow requirements could be impacted by significant changes in interest rates or other debt terms, including required amortization payments.

Equity Transactions

In order to qualify as a REIT for federal income tax purposes, the Company must distribute 90% or more of its taxable income (excluding capital gains) to its stockholders. The following regular quarterly distributions have been declared and paid to common stockholders and minority interests since January 1, 2005.

Distribution

Amount Per

For the Quarter

Stockholder

Share

Ending

Record Date

Payment Date

$0.0250

March 31, 2005

March 25, 2005

April 8, 2005

$0.0250

June 30, 2005

June 24, 2005

July 8, 2005

$0.0250

September 30, 2005

October 14, 2005

$0.0250

December 31, 2005

December 30, 2005

January 13, 2006

$0.0750

March 31, 2006

April 14, 2006

$0.0750

June 30, 2006

July 14, 2006

$0.0750

September 30, 2006

September 29, 2006

October 13, 2006

$0.0750

December 31, 2006

December 29, 2006

January 12, 2007

$0.1500

March 31, 2007

March 30, 2007

April 13, 2007

$0.1500

June 30, 2007

June 29, 2007

July 13, 2007

$0.1500

September 30, 2007

September 28, 2007

October 12, 2007

$0.1500

December 31, 2007

December 28, 2007

January 11, 2008

2007 Activity

On November 13, 2007, the Company announced that in 2008 the annual distribution per common share will be $0.80 per share up from $0.60 per share in 2007 and $0.30 per share in 2006. This decision recognizes the Company’s investment opportunities and the importance of its dividend to its stockholders.

On December 28, 2007, September 28, 2007, June 29, 2007 and March 30, 2007, the Operating Partnership paid distributions of 8.0625% per annum on the $150 million Series D 8% Units and 7.95% per annum on the $50 million of Series F 7.95% Units.

During the year ended December 31, 2007, we received approximately $3.7 million in proceeds from the issuance of shares of common stock through stock option exercises and the Company’s Employee Stock Purchase Plan (“ESPP”).

Liquidity and Capital Resources (continued)

2006 Activity

On December 29, 2006, September 29, 2006, June 30, 2006 and March 31, 2006, the Operating Partnership paid distributions of 8.0625% per annum on the $150 million of Series D 8% Units and 7.95% per annum on the $50 million of Series F 7.95% Units.

During the year ended December 31, 2006, we received approximately $3.8 million in proceeds from the issuance of shares of common stock through stock option exercises and the ESPP.

2005 Activity

On March 24, 2005, the Operating Partnership issued $25 million of 8.0625% Series D Cumulative Redeemable Perpetual Preference Units (the “Series D 8% Units”), to institutional investors. The Series D 8% Units are non-callable for five years. In addition, the Operating Partnership had an existing $125 million of 9.0% Series D Cumulative Redeemable Perpetual Preference Units (the “Series D 9% Units”) outstanding that were callable by the Company as of September 2004. In connection with the new issue, the Operating Partnership agreed to extend the non-call provision of the Series D 9% Units to be coterminous with the new issue, and the institutional investors holding the Series D 9% Units agreed to lower the rate on such units to 8.0625%. All of the units have no stated maturity or mandatory redemption. Net proceeds from the offering were used to pay down amounts outstanding under the Company’s lines of credit.

On June 30, 2005, the Operating Partnership issued $50 million of 7.95% Series F Cumulative Redeemable Perpetual Preference Units (the “Series F Units”), to institutional investors. The Series F Units are non-callable for five years and have no stated maturity or mandatory redemption. Net proceeds from the offering were used to pay down amounts outstanding under the Company’s lines of credit.

On March 24, 2005, the Operating Partnership paid distributions of 9.0% per annum on the $125 million of Series D 9% Units. For the seven days ended March 31, 2005 and the nine months thereafter, the Operating Partnership paid distributions of 8.0625% per annum on the $150 million of Series D 8% Units. For the six months ended December 31, 2005, the Operating Partnership paid distributions of 7.95% per annum on the $50 million of Series F Units. Distributions on the Units were paid quarterly on the last calendar day of each quarter.

During the year ended December 31, 2005, we received approximately $4.0 million in proceeds from the issuance of shares of common stock through stock option exercises and the ESPP.

Inflation

Substantially all of the leases at the Properties allow for monthly or annual rent increases which provide us with the opportunity to achieve increases, where justified by the market, as each lease matures. Such types of leases generally minimize the risks of inflation to the Company. In addition, our resort Properties are not generally subject to leases and rents are established for these sites on an annual basis.

Liquidity and Capital Resources (continued)

Funds From Operations

Funds from Operations (“FFO”) is a non-GAAP financial measure. We believe FFO, as defined by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), to be an appropriate measure of performance for an equity REIT. While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance.

FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from sales of Properties, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. We believe that FFO is helpful to investors as one of several measures of the performance of an equity REIT. We further believe that by excluding the effect of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. Investors should review FFO, along with GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. We compute FFO in accordance with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. FFO does not represent cash generated from operating activities in accordance with GAAP, nor does it represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flow from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.

The following table presents a calculation of FFO for the years ended December 31, 2007, 2006 and 2005 (amounts in thousands):


	2007			2006			2005
Computation of funds from operations:
Net income (loss) available for Common Shares	$	32,102		$	16,632		$	(2,333	)
Income (loss) allocated to Common OP Units		7,705			4,318			(539	)
Depreciation on real estate assets		63,554			60,276			55,608
Depreciation expense included in discontinued operations		—			84			410
Depreciation expense included in equity in income from joint ventures		1,427			1,909			1,960
Gain on sale of Properties		(12,036	)		(852	)		(2,279	)

Funds from operations available for Common Shares	$	92,752		$	82,367		$	52,827


Weighted average Common Shares outstanding — fully diluted		30,414			30,241			29,927

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss from adverse changes in market prices and interest rates. Our earnings, cash flows and fair values relevant to financial instruments are dependent on prevailing market interest rates. The primary market risk we face is long-term indebtedness, which bears interest at fixed and variable rates. The fair value of our long-term debt obligations is affected by changes in market interest rates. At December 31, 2007, approximately 93% or approximately $1.5 billion of our outstanding debt had fixed interest rates, which minimizes the market risk until the debt matures. For each increase in interest rates of 1% (or 100 basis points), the fair value of the total outstanding debt would decrease by approximately $82.7 million. For each decrease in interest rates of 1% (or 100 basis points), the fair value of the total outstanding debt would increase by approximately $87.4 million.

At December 31, 2007, approximately 7% or approximately $114.8 million of our outstanding debt was short-term and at variable rates. Earnings are affected by increases and decreases in market interest rates on this debt. For each increase/decrease in interest rates of 1% (or 100 basis points), our earnings would increase/decrease by approximately $1.1 million annually.

FORWARD-LOOKING STATEMENTS

This report includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:

	•		in the age-qualified properties, home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial markets volatility;

	•		in the all-age properties, results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufactured home financing, and competition from alternative housing options including site-built single-family housing;

	•		our ability to maintain rental rates and occupancy with respect to properties currently owned or pending acquisitions;

	•		our assumptions about rental and home sales markets;

	•		the completion of pending acquisitions and timing with respect thereto;

	•		ability to obtain financing or refinance existing debt;

	•		the effect of interest rates;

	•		whether we will consolidate Privileged Access and the effects on our financials if we do so; and

	•		other risks indicated from time to time in our filings with the Securities and Exchange Commission.

These forward-looking statements are based on management’s present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. The Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.

Item 8. Financial Statements and Supplementary Data

See Index to Consolidated Financial Statements on page F-1 of this Form 10-K.

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, maintains a system of disclosure controls and procedures, designed to provide reasonable assurance that information the Company is required to disclose in the reports that the Company files under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports.

The Company’s management with the participation of the Chief Executive Officer and the Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2007. Based on that evaluation as of the end of the period covered by this annual report, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure information relating to the Company that would potentially be subject to disclosure under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated there under.

Changes in Internal Control Over Financial Reporting

There were no material changes to the Company’s internal controls over financial reporting during the quarter ended December 31, 2007.

Report of Management on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on management’s assessment, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework.”

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2007 has been audited by the Company’s independent registered public accounting firm, as stated in their report on Page F-2 of the Consolidated Financial Statements.

Item 9B. Other Information

Pursuant to the authority granted in the Stock Option and Award Plan, in November 2007 the Compensation Committee approved the annual award of stock options to be granted to the Chairman of the Board, the Compensation Committee Chairperson and Lead Director, the Executive Committee Chairperson, and the Audit Committee Chairperson and Audit Committee Financial Expert on January 31, 2008 for their services rendered in 2007. On January 31, 2008, Mr. Samuel Zell was awarded options to purchase 100,000 shares of common stock for services rendered as Chairman of the Board; Mrs. Sheli Rosenberg was awarded options to purchase 25,000 shares of common stock, which she elected to receive as 5,000 shares of restricted common stock, for services rendered as Lead Director and Chairperson of the Compensation Committee; Mr. Howard Walker was awarded options to purchase 15,000 shares of common stock, for services rendered as Chairperson of the Executive Committee; and Mr. Philip Calian was awarded options to purchase 15,000 shares of common stock, which he elected to receive as 3,000 shares of restricted common stock, for services rendered as Audit Committee Financial Expert and Audit Committee Chairperson. One-third of the options to purchase common stock and the shares of restricted common stock covered by these awards vests on each of December 31, 2008, December 31, 2009 and December 31, 2010.

PART III

Item 10. Directors and Executive Officers of the Registrant

The information required by Item 10 will be contained in the 2008 Proxy Statement, and thus this Part has been omitted in accordance with General Instruction G(3) to Form 10-K.

Items 11, 12, 13 and 14.

Executive Compensation, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Certain Relationships and Related Transactions, and Director Independence, and Principal Accountant Fees and Services

The information required by Item 11, Item 12, Item 13 and Item 14 will be contained in the 2008 Proxy Statement, and thus this Part has been omitted in accordance with General Instruction G(3) to Form 10-K.

PART IV

Item 15. Exhibits and Financial Statements Schedules

1. Financial Statements

See Index to Financial Statements and Schedules on page F-1 of this Form 10-K.

2. Financial Statement Schedules

See Index to Financial Statements and Schedules on page F-1 of this Form 10-K.

3. Exhibits:


2(a)		Admission Agreement between Equity Financial and Management Co., Manufactured Home Communities, Inc. and MHC Operating Partnership

3.1(p)		Amended and Restated Articles of Incorporation of Equity Lifestyle Properties, Inc. effective May 15, 2007

3.4(r)		Second Amended and Restated Bylaws effective August 8, 2007

3.5(k)		Amended and Restated Articles Supplementary of Equity LifeStyle Properties, Inc. effective March 16, 2005

3.6(k)		Articles Supplementary of Equity LifeStyle Properties, Inc. effective June 23, 2005

4		Not applicable

9		Not applicable

10.3(b)		Agreement of Limited Partnership of MHC-De Anza Financing Limited Partnership

10.4(c)		Second Amended and Restated MHC Operating Limited Partnership Agreement of Limited Partnership, dated March 15, 1996

10.5(l)		Amendment to Second Amended and Restated Agreement of Limited Partnership for MHC Operating Limited Partnership, dated February 27, 2004

10.10(d)		Form of Manufactured Home Communities, Inc. 1997 Non-Qualified Employee Stock Purchase Plan

10.11(g)		Amended and Restated Manufactured Home Communities, Inc. 1992 Stock Option and Stock Award Plan effective March 23, 2001

10.12(f)		$110,000,000 Amended, Restated and Consolidated Promissory Note (DeAnza Mortgage) dated June 28, 2000

10.19(h)		Agreement of Plan of Merger (Thousand Trails), dated August 2, 2004

10.20(h)		Amendment No. 1 to Agreement of Plan of Merger (Thousand Trails), dated September 30, 2004

10.21(h)		Amendment No. 2 to Agreement of Plan of Merger (Thousand Trails), dated November 9, 2004

10.22(h)		Thousand Trails Lease Agreement, dated November 10, 2004

10.27(n)		Credit Agreement ($225 million Revolving Facility) dated June 29, 2006

10.28(n)		Second Amended and Restated Loan Agreement ($50 million Revolving Facility) dated July 14, 2006

10.29(m)		Amended and Restated Thousand Trails Lease Agreement dated April 14, 2006

10.30(m)		Option Agreement (Thousand Trails) dated April 14, 2006

10.31(m)		Amendment No. 3 to Agreement and Plan of Merger (Thousand Trails) dated April 14, 2006

10.33(o)		Amendment of Non-Qualified Employee Stock Purchase Plan dated May 3, 2006

10.34(o)		Form of Indemnification Agreement

10.35(q)		Equity LifeStyle Properties, Inc. Long-Term Cash Incentive Plan dated May 15, 2007

10.36(q)		Equity LifeStyle Properties, Inc. Long-Term Cash Incentive Plan — Form of 2007 Award Agreement dated May 15, 2007

10.37(s)		Credit Agreement ($400 million Revolving Facility) dated September 21, 2007

10.38(s)		Second Amendment and Restated Loan Agreement ($20 million Revolving Facility) dated September 21, 2007

10.39(t)		Second Amended and Restated Lease Agreement dated as of January 1, 2008 by and between Thousand Trails Operations Holding Company, L.P. and MHC TT Leasing Company, Inc.

10.40(t)		Amended and Restated Option Agreement dated as of January 1, 2008, is by and among Privileged Access, LP, a Delaware limited partnership, PATT Holding Company, LLC, a Delaware limited liability company, Outdoor World Resorts, LLC, a Delaware limited liability company, PA-Trails Plus, LLC, a Delaware limited liability company, and Mid-Atlantic Resorts, LLC, a Delaware and MHC T1000 Trust, a Maryland real estate investment trust.

10.41(t)		Employment Agreement dated as of January 1, 2008 by and between Joe McAdams and Equity LifeStyle Properties, Inc.

11		Not applicable

12(u)		Computation of Ratio of Earnings to Fixed Charges

13		Not applicable

14(o)		Equity LifeStyle Properties, Inc. Business Ethics and Conduct Policy, dated July 2006

16		Not applicable
18		Not applicable

21(u)		Subsidiaries of the registrant

22		Not applicable

23(u)		Consent of Independent Registered Public Accounting Firm

24.1(u)		Power of Attorney for Philip C. Calian dated February 19, 2008

24.2(u)		Power of Attorney for Howard Walker dated February 20, 2008

24.3(u)		Power of Attorney for Thomas E. Dobrowski dated February 19, 2008

24.4(u)		Power of Attorney for Gary Waterman dated February 22, 2008

24.5(u)		Power of Attorney for Donald S. Chisholm dated February 18, 2008

24.6(u)		Power of Attorney for Sheli Z. Rosenberg dated February 24, 2008

24.7(u)		Power of Attorney for Sam Zell dated February 18, 2008



31.1(u)		Certification of Chief Financial Officer Pursuant To Section 302 of the Sarbanes-Oxley Act Of 2002

31.2(u)		Certification of Chief Executive Officer Pursuant To Section 302 of the Sarbanes-Oxley Act Of 2002

32.1(u)		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

32.2(u)		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350

The following documents are incorporated herein by reference.



(a)		Included as an exhibit to the Company’s Form S-11 Registration Statement, File No. 33-55994

(b)		Included as an exhibit to the Company’s Report on Form 10-K dated December 31, 1994

(c)		Included as an exhibit to the Company’s Report on Form 10-Q for the quarter ended June 30, 1996

(d)		Included as Exhibit A to the Company’s definitive Proxy Statement dated March 28, 1997, relating to Annual Meeting of Stockholders held on May 13, 1997

(e)		Included as an exhibit to the Company’s Form S-3 Registration Statement, filed November 12, 1999 (SEC File No. 333-90813)

(f)		Included as an exhibit to the Company’s Report on Form 10-K dated December 31, 2000

(g)		Included as Appendix A to the Company’s Definitive Proxy Statement dated March 30, 2001

(h)		Included as an exhibit to the Company’s Report on Form 8-K dated November 16, 2004

(i)		Included as an exhibit to the Company’s Report on Form 8-K dated November 22, 2004

(j)		Included as an exhibit to the Company’s Report on Form 10-K dated December 31, 2004

(k)		Included as an exhibit to the Company’s Report on Form 10-Q dated June 30, 2005

(l)		Included as an exhibit to the Company’s Report on Form 10-K dated December 31, 2005

(m)		Included as an exhibit to the Company’s Report on Form 8-K dated April 14, 2006

(n)		Included as an exhibit to the Company’s Report on Form 10-Q dated June 30, 2006

(o)		Included as an exhibit to the Company’s Report on Form 10-K dated December 31, 2006

(p)		Included as an exhibit to the Company’s Report on Form 8-K dated May 18, 2007

(q)		Included as an exhibit to the Company’s Report on Form 8-K dated May 15, 2007

(r)		Included as an exhibit to the Company’s Report on Form 8-K dated August 8, 2007

(s)		Included as an exhibit to the Company’s Report on Form 8-K dated September 21, 2007

(t)		Included as an exhibit to the Company’s Report on Form 8-K dated January 4, 2008

(u)		Filed herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	EQUITY LIFESTYLE PROPERTIES, INC., a Maryland corporation
Date: February 28, 2008	By:	/s/ Thomas P. Heneghan
		Thomas P. Heneghan
		Chief Executive Officer (Principal Executive Officer)


Date: February 28, 2008	By:	/s/ Michael B. Berman
		Michael B. Berman
		Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Equity LifeStyle Properties, Inc. — Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


Name	Title	Date

/s/ Thomas P. Heneghan Thomas P. Heneghan	Chief Executive Officer and Director *Attorney-in-Fact	February 28, 2008

/s/ Michael B. Berman	Executive Vice President and Chief Financial Officer	February 28, 2008
Michael B. Berman	*Attorney-in-Fact

* Samuel Zell Samuel Zell	Chairman of the Board	February 28, 2008

*Howard Walker	Vice-Chairman of the Board	February 28, 2008
Howard Walker

*Philip C. Calian	Director	February 28, 2008
Philip C. Calian

*Donald S. Chisholm Donald S. Chisholm	Director	February 28, 2008

*Thomas E. Dobrowski Thomas E. Dobrowski	Director	February 28, 2008

* Sheli Z. Rosenberg Sheli Z. Rosenberg	Director	February 28, 2008

*Gary Waterman Gary Waterman	Director	February 28, 2008

INDEX TO FINANCIAL STATEMENTS

EQUITY LIFESTYLE PROPERTIES, INC.


		Page

Report of Independent Registered Public Accounting Firm		F-2
Report of Independent Registered Public Accounting Firm		F-3
Consolidated Balance Sheets as of December 31, 2007 and 2006		F-4
Consolidated Statements of Operations for the years ended December 31, 2007, 2006 and 2005		F-5 and F-6
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2007, 2006 and 2005		F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005		F-8 and F-9
Notes to Consolidated Financial Statements		F-10
Schedule II — Valuation and Qualifying Accounts		S-1
Schedule III — Real Estate and Accumulated Depreciation		S-2
Certain schedules have been omitted, as they are not applicable to the Company.

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Equity Lifestyle Properties, Inc.

We have audited Equity Lifestyle Properties, Inc’s (“Equity Lifestyle Properties” or the “Company”) internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Equity Lifestyle Properties’ management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

In our opinion, Equity Lifestyle Properties, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of December 31, 2007 and 2006, and the related consolidated statements of operations, shareholders’ equity, other comprehensive (loss) income and cash flows for each of the three years in the period ended December 31, 2007, and the financial statement schedules listed in the Index at Item 15, of Equity Lifestyle Properties, Inc., and our report dated February 25, 2008, expressed an unqualified opinion thereon.

ERNST & YOUNG LLP
Chicago, Illinois
February 25, 2008

F-2

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Equity Lifestyle Properties, Inc.

We have audited the accompanying consolidated balance sheets of Equity Lifestyle Properties, Inc. (“Equity Lifestyle Properties” or the “Company”), as of December 31, 2007 and 2006, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2007. Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Equity Lifestyle Properties at December 31, 2007 and 2006, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Equity Lifestyle Properties’ internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2008 expressed an unqualified opinion thereon.

ERNST & YOUNG LLP

Chicago, Illinois
February 25, 2008

F-3

Equity LifeStyle Properties, Inc.
Consolidated Balance Sheets
As of December 31, 2007 and 2006
(amounts in thousands, except for share data)


	December 31,			December 31,
	2007			2006

Assets
Investment in real estate:
Land	$	541,000		$	531,302
Land improvements		1,700,888			1,664,964
Buildings and other depreciable property		154,227			141,194

		2,396,115			2,337,460
Accumulated depreciation		(494,211	)		(435,809	)

Net investment in real estate		1,901,904			1,901,651
Cash and cash equivalents		5,785			1,605
Notes receivable, net		10,954			22,045
Investment in joint ventures		4,569			14,718
Rents receivable, net		1,156			1,294
Deferred financing costs, net		12,142			14,799
Inventory, net		63,526			70,091
Escrow deposits and other assets		33,659			29,628

Total Assets	$	2,033,695		$	2,055,831


Liabilities and Stockholders’ Equity
Liabilities:
Mortgage notes payable	$	1,556,392		$	1,586,012
Unsecured lines of credit		103,000			131,200
Accrued payroll and other operating expenses		34,617			30,936
Accrued interest payable		9,164			9,066
Rents received in advance and security deposits		37,274			36,454
Distributions payable		4,531			2,251

Total Liabilities		1,744,978			1,795,919

Commitments and contingencies

Minority interests — Common OP Units and other		17,776			12,794
Minority interests — Perpetual Preferred OP Units		200,000			200,000

Stockholders’ Equity:
Preferred stock, $.01 par value 10,000,000 shares authorized; none issued		—			—
Common stock, $.01 par value 100,000,000 and 50,000,000 shares authorized for 2007 and 2006, respectively; 24,348,517 and 23,928,652 shares issued and outstanding for 2007 and 2006, respectively		236			229
Paid-in capital		310,803			304,483
Distributions in excess of accumulated earnings		(240,098	)		(257,594	)

Total stockholders’ equity		70,941			47,118


Total Liabilities and Stockholders’ Equity	$	2,033,695		$	2,055,831

The accompanying notes are an integral part of the financial statements.

F-4

Equity LifeStyle Properties, Inc.
Consolidated Statements of Operations
For the Years Ended December 31, 2007, 2006 and 2005
(amounts in thousands, except per share data)


	2007			2006			2005

Property Operations:
Community base rental income	$	236,933		$	225,815		$	213,280
Resort base rental income		102,372			89,925			74,371
Utility and other income		36,849			30,643			27,367

Property operating revenues		376,154			346,383			315,018
Property operating and maintenance		127,342			116,179			103,832
Real estate taxes		27,429			26,246			24,671
Property management		18,385			17,079			15,919

Property operating expenses (exclusive of depreciation shown separately below)		173,156			159,504			144,422

Income from property operations		202,998			186,879			170,596

Home Sales Operations:
Gross revenues from inventory home sales		33,333			61,247			66,014
Cost of inventory home sales		(30,713	)		(54,498	)		(57,471	)

Gross profit from inventory home sales		2,620			6,749			8,543
Brokered resale revenues, net		1,528			2,129			2,714
Home selling expenses		(7,555	)		(9,836	)		(8,838	)
Ancillary services revenues, net		2,436			3,027			2,227

(Loss) income from home sales operations & other		(971	)		2,069			4,646

Other Income (Expenses):
Interest income		1,732			1,975			1,406
Income from other investments, net		22,476			20,102			16,609
General and administrative		(15,591	)		(12,760	)		(13,624	)
Rent control initiatives		(2,657	)		(1,157	)		(1,081	)
Interest and related amortization		(103,070	)		(103,161	)		(100,712	)
Loss on early debt retirement		—			—			(20,630	)
Depreciation on corporate assets		(437	)		(410	)		(804	)
Depreciation on real estate assets		(63,554	)		(60,276	)		(55,608	)

Total other expenses, net		(161,101	)		(155,687	)		(174,444	)

Income before minority interests, equity in income of unconsolidated joint ventures, and discontinued operations		40,926			33,261			798

(Income) loss allocated to Common OP Units		(5,322	)		(4,267	)		1,329
Income allocated to Perpetual Preferred OP Units		(16,140	)		(16,138	)		(13,974	)
Equity in income of unconsolidated joint ventures		2,696			3,583			6,508

Income (loss) before discontinued operations		22,160			16,439			(5,339	)


Discontinued Operations:
Discontinued operations		289			520			1,927
Depreciation on discontinued operations		—			(84	)		(410	)
Gain (loss) on sale of discontinued real estate		12,036			(192	)		2,279
Minority interests on discontinued operations		(2,383	)		(51	)		(790	)

Income from discontinued operations		9,942			193			3,006

Net income (loss) available for Common Shares	$	32,102		$	16,632		$	(2,333	)

The accompanying notes are an integral part of the financial statements

F-5

Equity LifeStyle Properties, Inc.
Consolidated Statements of Operations
For the Years Ended December 31, 2007, 2006 and 2005
(amounts in thousands, except per share data)


	2007		2006		2005

Earnings per Common Share — Basic:
Income (loss) from continuing operations	$	0.92	$	0.70	$	(0.23	)

Income from discontinued operations	$	0.41	$	0.01	$	0.13

Net income (loss) available for Common Shares	$	1.33	$	0.71	$	(0.10	)


Earnings per Common Share — Fully Diluted:
Income (loss) from continuing operations	$	0.90	$	0.68	$	(0.23	)

Income from discontinued operations	$	0.41	$	0.01	$	0.13

Net income (loss) available for Common Shares	$	1.31	$	0.69	$	(0.10	)


Distributions declared per Common Share outstanding	$	0.60	$	0.30	$	0.10


Tax status of Common Shares distributions deemed paid during the year:
Ordinary income	$	0.60	$	0.30	$	0.10

Long-term capital gain	$	—	$	—	$	—

Unrecaptured section 1250 gain	$	—	$	—	$	—


Weighted average Common Shares outstanding — basic		24,089		23,444		23,081

Weighted average Common Shares outstanding — fully diluted		30,414		30,241		29,366

The accompanying notes are an integral part of the financial statements

F-6

Equity LifeStyle Properties, Inc.
Consolidated Statements of Changes In Stockholders’ Equity
For The Years Ended December 31, 2007, 2006 and 2005
(amounts in thousands)


	2007		2006		2005
Preferred stock, $.01 par value	$	—	$	—	$	—


Common stock, $.01 par value
Balance, beginning of year	$	229	$	226	$	224
Issuance of common stock through exercise of options		7		3	$	2

Balance, end of year	$	236	$	229	$	226


Paid — in capital
Balance, beginning of year	$	304,483	$	299,444