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, 2006

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

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, or a non- accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ            Accelerated filer o            Non-accelerated filer o

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 $939.9 million as of June 30, 2006 based upon the closing price of $43.83 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 26, 2007, 24,065,473 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 15, 2007.

 

 

Equity LifeStyle Properties, Inc.

TABLE OF CONTENTS

		Page
PART I.
Item 1. Business			3
Item 1A. Risk Factors			8
Item 1B. Unresolved Staff Comments			12
Item 2. Properties			12
Item 3. Legal Proceedings			20
Item 4. Submission of Matters to a Vote of Security Holders			23
PART II.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			24
Item 6. Selected Financial Data			25
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			28
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			47
Forward-Looking Statements			48
Item 8. Financial Statements and Supplementary Data			49
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			49
Item 9A. Controls and Procedures			49
Item 9B. Other Information			49
PART III.
Item 10. Directors and Executive Officers of the Registrant			50
Item 11. Executive Compensation			50
Item 12. Security Ownership of Certain Beneficial Owners and Management			50
Item 13. Certain Relationships and Related Transactions			50
Item 14. Principal Accountant Fees and Services			50
PART IV.
Item 15. Exhibits and Financial Statement Schedules			51
Amendment of Non-Qualified Employee Stock Purchase Plan
Form of Indemnification Agreement
Computation of Ratio of Earnings to Fixed Charges
Business Ethics and Conduct Policy
Subsidiaries of the Registrant
Consent of Independent Registered Public Accounting Firm
Power of Attorney for Philip C. Calian
Power of Attorney for Howard Walker
Power of Attorney for Thomas E. Dobrowski
Power of Attorney for Gary Waterman
Power of Attorney for Donald S. Chisholm
Power of Attorney for Sheli Z. Rosenberg
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 906
Certification of CEO Pursuant to Section 906

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”. 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, 2006, we owned or had an ownership interest in a portfolio of 311 Properties located throughout the United States and Canada containing 112,956 residential sites. These Properties are located in 30 states and British Columbia (with the number of Properties in each state or province shown parenthetically) – Florida (87), California (47), 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), Ohio (2), Tennessee (2), Utah (2), Alabama (1), Iowa (1), Kentucky (1), Montana (1), New Hampshire (1), New Mexico (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 1,400 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 95 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 (see Note 4 of the Notes to Consolidated Financial Statements contained in this Form 10-K). 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 69 Properties with over 27,000 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 28 Properties, and we redeployed capital to markets we believe have greater long-term potential. In that same time period we acquired 189 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. As a result, during 1999 and 2000 we implemented a stock repurchase program, and 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 77 of our Properties have expansion potential, with approximately 6,000 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 27 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. 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 12 U.S. vehicle-owning households owns an RV. The 80 million people born from 1945 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 2006 National Association of Realtors (“NAR”) reports, sales of second homes in 2005 accounted for four out of ten residential transactions, or 3.34 million second-home sales in 2005. There were approximately 6.8 million vacation homes in 2005. The typical vacation-home buyer is 59 years old and earned $120,600 in 2005. Approximately 67% of vacation home-owners prefer to be near an ocean, river or lake; 39% close to recreational or sporting activities; 38% close to vacation or resort areas; and 31% close to mountains or other natural attractions. 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.

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);

•

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.

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 liability, fire, extended coverage and business interruption insurance on all of our Properties. We believe the policy specifications and insured limits of these policies are adequate and appropriate. There are, however, 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 insured 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.

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, 2006. 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 52% as of December 31, 2006. 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 shareholders 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, 2006, Mr. Zell and certain affiliated holders beneficially owned approximately 14.4% of our outstanding common stock (in each case including common stock issuable upon the exercise of stock options and the exchange of Units). 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.

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 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.

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, 2006, we owned or had an ownership interest in 311 Properties located in 30 states and British Columbia, including 87 Properties located in Florida and 47 Properties located in California. 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. 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. 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.

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, 2006, we owned or had an ownership interest in a portfolio of 311 Properties located throughout the United States and British Columbia containing 112,956 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 2.5% and 2.2%, respectively, of our total property operating revenues for the year ended December 31, 2006.

     The following table sets forth certain information relating to the Properties we owned as of December 31, 2006, categorized by our major markets (excluding membership campground Properties leased to Privileged Access and Properties owned through joint ventures).

     

																												Total
																								Total				Number of
																								Number of				Annual Sites				Annual Site				Annual Site								Annual				Annual
												Acres				Developable				Expansion				Sites as of				as of				Occupancy as				Occupancy as								Rent as of				Rent as of
Property		Address		City		State		ZIP		MH/RV		(c)				Acres (d)				Sites (e)				12/31/06				12/31/06				of 12/31/06				of 12/31/05								12/31/06				12/31/05
		Florida
East Coast:
Sunshine Key		38801 Overseas Hwy		Big Pine Key		FL		33043		RV			54												409				—				—				—								—				—
Carriage Cove		Five Carriage Cove Way		Daytona Beach		FL		32119		MH			59												418				418				93.5	%			92.1	%						$	5,138			$	4,949
Coquina Crossing		4536 Coquina Crossing Dr.		Elkton		FL		32033		MH			316				65				196				556				556				86.7	%			85.2	%			(b	)		$	4,931			$	4,629
Bulow Plantation		3165 Old Kings Road South		Flagler Beach		FL		32136		MH			323				180				722				276				276				98.9	%			98.9	%			(b	)		$	4,673			$	4,330
Bulow RV		3345 Old Kings Road South		Flagler Beach		FL		32136		RV			—	(f)			—				—				352				128				100.0	%			100.0	%						$	4,496			$	3,681
Carefree Cove		3273 N.W. 37th St		Ft. Lauderdale		FL		33309		MH			20												163				163				90.2	%			92.0	%						$	5,772			$	5,693
Park City West		10550 W. State Road 84		Ft. Lauderdale		FL		33324		MH			60												363				363				89.5	%			94.8	%						$	5,155			$	4,706
Sunshine Holiday		2802 W. Oakland Park Blvd.		Ft. Lauderdale		FL		33311		MH			32												269				269				90.0	%			90.0	%						$	5,343			$	5,078
Sunshine Holiday RV		2802 W. Oakland Park Blvd.		Ft. Lauderdale		FL		33311		RV			—	(f)											131				35				100.0	%			100.0	%						$	5,143			$	4,964
Maralago Cay		6280 S. Ash Lane		Lantana		FL		33462		MH			102				5								602				602				92.9	%			93.9	%						$	5,973			$	5,747
Coral Cay		2801 NW 62nd Avenue		Margate		FL		33063		MH			121												817				817				82.7	%			88.9	%						$	5,854			$	5,750
Lakewood Village		3171 Hanson Avenue		Melbourne		FL		32901		MH			68												349				349				87.7	%			87.4	%						$	5,292			$	4,997
Holiday Village		1335 Fleming Ave Box 228		Ormond Beach		FL		32174		MH			43												301				301				87.0	%			85.7	%						$	4,446			$	4,308
Sunshine Holiday		1701 North US Hwy 1		Ormond Beach		FL		32174		RV			69												349				132				100.0	%			100.0	%						$	3,744			$	3,500
The Meadows		2555 PGA Boulevard		Palm Beach Gardens		FL		33410		MH			55												379				379				85.2	%			84.7	%			(b	)		$	5,615			$	5,090
Breezy Hill RV		800 NE 48th Street		Pompano Beach		FL		33064		RV			52												762				381				100.0	%			100.0	%						$	5,230			$	4,937
Highland Wood RV		900 NE 48th Street		Pompano Beach		FL		33064		RV			15												148				3				100.0	%			100.0	%						$	5,820			$	4,258
Lighthouse Pointe		155 Spring Drive		Port Orange		FL		32129		MH			64												433				433				86.8	%			87.1	%			(b	)		$	4,446			$	4,286
Pickwick		4500 S. Clyde Morris Blvd		Port Orange		FL		32119		MH			84				4								432				432				99.1	%			99.3	%						$	4,606			$	4,420
Indian Oaks		780 Barnes Boulevard		Rockledge		FL		32955		MH			38												208				208				100.0	%			100.0	%						$	3,827			$	3,615
Lazy Lakes		311 Johnson Road		Sugar Loaf		FL		33042		RV			13												100				—				—				100.0	%							—			$	6,342
Countryside		8775 20th Street		Vero Beach		FL		32966		MH			125												643				643				89.6	%			90.1	%			(b	)		$	4,929			$	4,579
Heritage Plantation		1101 Ranch Road		Vero Beach		FL		32966		MH			64												435				435				84.6	%			86.9	%						$	4,901			$	4,743
Holiday Village		1000 S.W. 27th Avenue		Vero Beach		FL		32968		MH			20												128				128				39.8	%			43.8	%						$	4,190			$	4,073
Sunshine Travel		9455 108th Avenue		Vero Beach		FL		32967		RV			30				6				48				300				213				100.0	%			100.0	%						$	3,787			$	3,715
Central:
Clerbook		20005 U.S. Highway 27		Clermont		FL		34711		RV			288												1,255				474				100.0	%			—				(a	)		$	3,194				—
Lake Magic		9600 Hwy 192 West		Clermont		FL		34714		RV			69												471				143				100.0	%			100.0	%						$	3,411			$	3,141
Southern Palms		One Avocado Lane		Eustis		FL		32726		RV			120												950				403				100.0	%			100.0	%						$	3,269			$	2,754
Grand Island		13310 Sea Breeze Lane		Grand Island		FL		32735		MH			35												359				359				59.1	%			58.5	%			(b	)		$	4,378			$	4,114
Sherwood Forest		5302 W. Irlo Bronson Hwy		Kissimmee		FL		34746		MH			124												754				754				94.2	%			93.8	%			(b	)		$	5,004			$	4,645
Sherwood Forest RV		5300 W. Irlo Bronson Hwy		Kissimmee		FL		34746		RV			107				43				149				513				147				100.0	%			100.0	%						$	4,403			$	4,353
Tropical Palms		2650 Holiday Trail		Kissimmee		FL		34746		RV			59												541				37				100.0	%			—							$	4,096				—
Coachwood		2610 Dogwood Place		Leesburg		FL		34748		MH			29												202				202				92.6	%			94.6	%						$	3,460			$	3,207
Mid-Florida Lakes		199 Forest Dr.		Leesburg		FL		34788		MH			290												1,225				1,225				82.5	%			82.4	%			(b	)		$	4,996			$	4,759
Southernaire		1700 Sanford Road		Mt. Dora		FL		32757		MH			14												108				108				86.1	%			88.0	%						$	3,945			$	3,608
Oak Bend		10620 S.W. 27th Ave.		Ocala		FL		34476		MH			62												262				262				89.3	%			87.8	%			(b	)		$	4,023			$	3,878
Villas at Spanish Oaks		3150 N.E. 36th Avenue		Ocala		FL		34479		MH			69												459				459				87.6	%			87.1	%						$	4,327			$	4,230

     

																												Total
																								Total				Number of
																								Number of				Annual Sites				Annual Site				Annual Site								Annual				Annual
												Acres				Developable				Expansion				Sites as of				as of				Occupancy as				Occupancy as								Rent as of				Rent as of
Property		Address		City		State		ZIP		MH/RV		(c)				Acres (d)				Sites (e)				12/31/06				12/31/06				of 12/31/06				of 12/31/05								12/31/06				12/31/05
Gulf Coast (Tampa/Naples):
Toby’s RV		3550 N.E. Hwy 70		Arcadia		FL		34266		RV			44												379				263				100.0	%			100.0	%						$	2,026			$	1,910
Manatee		800 Kay Road NE		Bradenton		FL		34212		RV			42												415				249				100.0	%			100.0	%						$	4,092			$	3,805
Windmill Manor		5320 53rd Ave. East		Bradenton		FL		34203		MH			49												292				292				93.8	%			94.2	%						$	5,034			$	4,812
Glen Ellen		2882 Gulf to Bay Blvd		Clearwater		FL		33759		MH			12												106				106				95.3	%			86.8	%						$	4,239			$	4,154
Hillcrest		2346 Druid Road East		Clearwater		FL		33764		MH			25												278				278				87.8	%			78.1	%						$	4,838			$	4,773
Holiday Ranch		4300 East Bay Drive		Clearwater		FL		33764		MH			12												150				150				91.3	%			87.3	%						$	4,800			$	4,701
Silk Oak		28488 US Highway 19 N		Clearwater		FL		33761		MH			19												181				181				91.7	%			78.5	%						$	5,124			$	4,711
Crystal Isles		11419 W. Ft. Island Drive		Crystal River		FL		34429		RV			32												260				21				100.0	%			100.0	%						$	3,502			$	3,020
Lake Haven		1415 Main Street		Dunedin		FL		34698		MH			48												379				379				89.2	%			83.6	%						$	5,756			$	5,546
Fort Myers Beach Resort		16299 San Carlos Blvd.		Fort Myers		FL		33908		RV			31												306				100				100.0	%			100.0	%						$	5,054			$	4,911
Gulf Air Resort		17279 San Carlos Blvd. SW		Fort Myers		FL		33931		RV			25												246				167				100.0	%			100.0	%						$	4,283			$	4,112
Barrington Hills		9412 New York Avenue		Hudson		FL		34667		RV			28												392				263				100.0	%			100.0	%						$	2,464			$	2,378
Down Yonder		7001 N. 142nd Avenue		Largo		FL		33771		MH			50												361				361				99.2	%			96.7	%						$	5,515			$	5,350
East Bay Oaks		601 Starkey Road		Largo		FL		33771		MH			40												328				328				97.9	%			95.7	%						$	5,247			$	5,101
Eldorado Village		2505 East Bay Drive		Largo		FL		33771		MH			25												227				227				98.2	%			96.0	%						$	5,208			$	5,046
Shangri La		249 Jasper Street N.W.		Largo		FL		33770		MH			14												160				160				96.9	%			90.6	%						$	4,809			$	4,512
Vacation Village		6900 Ulmerton Road		Largo		FL		33771		RV			29												293				201				100.0	%			100.0	%						$	3,760			$	3,660
Pasco		21632 State Road 54		Lutz		FL		33549		RV			27												255				174				100.0	%			100.0	%						$	3,182			$	3,077
Buccaneer		2210 N. Tamiami Trail N.E.		N. Ft. Myers		FL		33903		MH			223				65				162				971				971				98.2	%			97.8	%						$	5,269			$	4,767
Island Vista		3000 N. Tamiami Trail		N. Ft. Myers		FL		33903		MH			121												616				616				88.0	%			—				(a	)		$	3,809				—
Lake Fairways		19371 Tamiami Trail		N. Ft. Myers		FL		33903		MH			259												896				896				99.7	%			99.9	%						$	5,295			$	5,004
Pine Lakes		10200 Pine Lakes Blvd.		N. Ft. Myers		FL		33903		MH			314												584				584				100.0	%			99.8	%						$	6,282			$	6,079
Pioneer Village		7974 Samville Rd.		N. Ft. Myers		FL		33917		RV			90												733				438				100.0	%			100.0	%						$	3,521			$	3,326
The Heritage		3000 Heritage Lakes Blvd.		N. Ft. Myers		FL		33917		MH			214				22				132				455				455				98.0	%			98.0	%			(b	)		$	4,734			$	4,457
Windmill Village		16131 N. Cleveland Ave.		N. Ft. Myers		FL		33903		MH			69												491				491				92.9	%			93.7	%						$	4,294			$	4,226
Country Place		2601 Country Place Blvd.		New Port Richey		FL		34655		MH			82												515				515				100.0	%			100.0	%						$	3,672			$	3,513
Hacienda Village		7107 Gibraltar Ave		New Port Richey		FL		34653		MH			66												505				505				97.4	%			97.4	%						$	4,319			$	4,272
Harbor View		6617 Louisiana Ave		New Port Richey		FL		34653		MH			69												471				471				98.5	%			98.9	%						$	3,462			$	2,885
Bay Lake Estates		1200 East Colonia Lane		Nokomis		FL		34275		MH			34												228				228				95.6	%			95.2	%						$	5,692			$	5,456
Royal Coachman		1070 Laurel Road East		Nokomis		FL		34275		RV			111				6				30				546				416				100.0	%			100.0	%						$	5,531			$	5,126
Silver Dollar		12515 Silver Dollar Drive		Odessa		FL		33556		RV			412												385				382				100.0	%			100.0	%						$	3,953			$	3,613
Terra Ceia		9303 Bayshore Road		Palmetto		FL		34221		RV			18												203				137				100.0	%			100.0	%						$	2,951			$	2,849
Lakes at Countrywood		745 Arbor Estates Way		Plant City		FL		33565		MH			122												424				424				91.3	%			91.3	%			(b	)		$	3,596			$	3,439
Meadows at Countrywood		745 Arbor Estates Way		Plant City		FL		33565		MH			140				23				143				799				799				94.6	%			93.5	%			(b	)		$	4,261			$	4,007
Oaks at Countrywood		745 Arbor Estates Way		Plant City		FL		33565		MH			44								—				168				168				75.0	%			74.4	%			(b	)		$	3,710			$	3,462
Harbor Lakes		3737 El Jobean Road #294		Port Charlotte		FL		33953		RV			80												528				279				100.0	%			100.0	%						$	3,905			$	3,713
Gulf View		10205 Burnt Store Road		Punta Gorda		FL		33950		RV			78												206				43				100.0	%			100.0	%						$	3,872			$	3,749
Tropical Palms		17100 Tamiami Trail		Punta Gorda		FL		33955		MH			50												297				297				85.9	%			—				(a	)		$	3,053				—
Winds of St. Armands No		4000 N. Tuttle Ave.		Sarasota		FL		34234		MH			74												471				471				95.1	%			96.2	%						$	5,121			$	4,892
Winds of St. Armands So		3000 N. Tuttle Ave.		Sarasota		FL		34234		MH			61												306				306				99.0	%			99.7	%						$	5,090			$	4,885
Topics		13063 County Line Road		Spring Hill		FL		34609		RV			35												230				210				100.0	%			100.0	%						$	2,576			$	2,458
Bay Indies		950 Ridgewood Ave		Venice		FL		34285		MH			210												1,309				1,309				96.2	%			97.6	%						$	6,054			$	5,736
Ramblers Rest		1300 North River Rd.		Venice		FL		34293		RV			117												647				492				100.0	%			—				(a	)		$	4,008				—
Sixth Avenue		39345 6th Avenue		Zephyrhills		FL		33542		MH			14												134				134				91.0	%			91.8	%						$	2,271			$	2,135
Total Florida Market													6,752				419				1,582				34,548				28,174				93.8	%			93.4	%						$	4,444			$	4,276

     

																												Total
																								Total				Number of
																								Number of				Annual Sites				Annual Site				Annual Site								Annual				Annual
												Acres				Developable				Expansion				Sites as of				as of				Occupancy as				Occupancy as								Rent as of				Rent as of
Property		Address		City		State		ZIP		MH/RV		(c)				Acres (d)				Sites (e)				12/31/06				12/31/06				of 12/31/06				of 12/31/05								12/31/06				12/31/05
		California
Northern California:
Monte del Lago		13100 Monte del Lago		Castroville		CA		95012		MH			54												310				310				96.1	%			96.5	%			(b	)		$	10,892			$	9,155
Colony Park		3939 Central Avenue		Ceres		CA		95307		MH			20												186				186				90.9	%			89.8	%						$	6,494			$	5,974
Four Seasons		3138 West Dakota		Fresno		CA		93722		MH			40												242				242				89.7	%			89.3	%						$	3,967			$	3,680
Tahoe Valley		1175 Melba Drive		Lake Tahoe		CA		96150		RV			86				20				200				413				—				—				—								—				—
Sea Oaks		1675 Los Osos Valley Rd., #221		Los Osos		CA		93402		MH			18												125				125				99.2	%			100.0	%						$	5,793			$	5,563
Coralwood		331 Coralwood		Modesto		CA		95356		MH			22												194				194				95.9	%			99.0	%						$	7,596			$	6,694
Concord Cascade		245 Aria Drive		Pacheco		CA		94553		MH			31												283				283				99.3	%			98.6	%						$	7,258			$	7,089
San Francisco RV		700 Palmetto Ave		Pacifica		CA		94044		RV			12												182				—				—				—								—				—
Quail Meadows		5901 Newbrook Drive		Riverbank		CA		95367		MH			20												146				146				100.0	%			98.6	%						$	7,706			$	6,546
California Hawaiian		3637 Snell Avenue		San Jose		CA		95136		MH			50												418				418				92.8	%			95.2	%						$	9,120			$	8,920
Sunshadow		1350 Panoche Avenue		San Jose		CA		95122		MH			30												121				121				95.9	%			96.7	%						$	8,903			$	8,656
Village of the Four Seasons		200 Ford Road		San Jose		CA		95138		MH			30												271				271				90.4	%			92.6	%						$	8,414			$	8,212
Westwinds (4 Properties)		500 Nicholson Lane		San Jose		CA		95134		MH			88												723				723				89.2	%			90.0	%						$	9,945			$	9,555
Laguna Lake		1801 Perfumo Canyon Road		San Luis Obispo		CA		93405		MH			100												290				290				99.7	%			99.7	%						$	5,219			$	4,887
Contempo Marin		400 Yosemite Road		San Rafael		CA		94903		MH			63												396				396				98.5	%			98.5	%						$	8,082			$	7,958
DeAnza Santa Cruz		2395 Delaware Avenue		Santa Cruz		CA		95060		MH			30												198				198				95.5	%			96.0	%						$	9,004			$	8,263
Royal Oaks		415 Akers Drive N.		Visalia		CA		93291		MH			20												149				149				88.6	%			87.9	%						$	4,456			$	3,919
Southern California:
Date Palm Country Club		36-200 Date Palm Drive		Cathedral City		CA		92234		MH			232				3				24				538				538				97.8	%			96.8	%						$	9,932			$	9,396
Date Palm RV		36-100 Date Palm Drive		Cathedral City		CA		92234		RV			—	(f)			—				—				140				—				—				—								—				—
Rancho Mesa		450 East Bradley Ave.		El Cajon		CA		92021		MH			20				5								158				158				81.0	%			86.1	%						$	10,529			$	9,936
Rancho Valley		12970 Hwy 8 Business		El Cajon		CA		92021		MH			19												140				140				97.1	%			100.0	%						$	10,843			$	10,552
Royal Holiday		4400 W Florida Ave		Hemet		CA		92545		MH			22												179				179				58.1	%			58.7	%						$	4,503			$	4,070
Pacific Dunes Ranch		1205 Silver Spur Place		Oceana		CA		93445		RV			48												215				3				100.0	%			100.0	%						$	5,355			$	1,800
Las Palmas		1025 S. Riverside Ave.		Rialto		CA		92376		MH			18												136				136				100.0	%			100.0	%						$	4,796			$	4,583
Parque La Quinta		350 S. Willow Ave. #120		Rialto		CA		92376		MH			19												166				166				100.0	%			100.0	%						$	4,922			$	4,646
Meadowbrook		8301 Mission Gorge Rd.		Santee		CA		92071		MH			43												338				338				97.9	%			98.2	%						$	8,918			$	8,691
Lamplighter		10767 Jamacha Blvd.		Spring Valley		CA		91978		MH			32				2								270				270				98.1	%			98.9	%						$	11,104			$	10,940
Santiago Estates		13691 Gavina Ave. #632		Sylmar		CA		91342		MH			113				25								300				300				100.0	%			99.3	%						$	9,601			$	9,013
Total California Market													1,280				55				224				7,227				6,280				94.1	%			94.7	%						$	7,734			$	7,148
		Arizona
Countryside RV		2701 S. Idaho Rd		Apache Junction		AZ		85219		RV			53												560				258				100.0	%			100.0	%						$	2,748			$	2,676
Golden Sun RV		999 W Broadway Ave		Apache Junction		AZ		85220		RV			33												329				191				100.0	%			100.0	%						$	2,711			$	2,699
Casita Verde RV		2200 N. Trekell Rd.		Casa Grande		AZ		85222		RV			14												192				97				100.0	%			—				(a	)		$	2,086				—
Fiesta Grande RV		1511 East Florence Blvd.		Casa Grande		AZ		85222		RV			77												767				425				100.0	%			—				(a	)		$	2,451				—
Foothills West RV		10167 N. Encore Dr.		Casa Grande		AZ		85222		RV			16												188				121				100.0	%			—				(a	)		$	1,998				—
Casa del Sol East II		10960 N. 67th Avenue		Glendale		AZ		85304		MH			29												239				239				80.3	%			79.9	%						$	6,697			$	6,299
Casa del Sol East III		10960 N. 67th Avenue		Glendale		AZ		85304		MH			28												236				236				84.3	%			78.4	%						$	6,696			$	6,565
Palm Shadows		7300 N. 51st. Avenue		Glendale		AZ		85301		MH			33												294				294				80.3	%			79.3	%						$	5,293			$	4,991
Hacienda de Valencia		201 S. Greenfield Rd.		Mesa		AZ		85206		MH			51												365				365				90.4	%			81.9	%						$	5,497			$	5,205
Monte Vista		8865 E. Baseline Road		Mesa		AZ		85209		RV			142				56				515				832				771				100.0	%			100.0	%						$	5,296			$	4,957
The Highlands at Brentwood		120 North Val Vista Drive		Mesa		AZ		85213		MH			45												273				273				97.8	%			92.3	%						$	6,559			$	6,291