• our ability to maintain historical rental rates and occupancy with respect to Properties currently owned or that we may acquire;

• our assumptions about rental and home sales markets;

• 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, credit and capital 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;

• the completion of future acquisitions, if any, and timing with respect thereto and the effective integration and successful realization of cost savings;

• ability to obtain financing or refinance existing debt on favorable terms or at all;

• the effect of interest rates;

• the dilutive effects of issuing additional common stock;

• the effect of accounting for the sale of agreements to customers representing a right-to-use the Properties previously leased by Privileged Access under the Codification Topic "Revenue Recognition" (prior authoritative guidance: Staff Accounting Bulletin No. 104, Revenue Recognition in Consolidated Financial Statements, Corrected); 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.

The following chart lists the Properties acquired, invested in, or sold since January 1, 2008.

Property                                                          Transaction Date           Sites
Total Sites as of January 1, 2008                                                            112,779

Property or Portfolio (# of Properties in parentheses):
Grandy Creek (1)                                                  January 14, 2008               179
Lake George Schroon Valley Resort (1)                             January 23, 2008               151

Expansion Site Development and other:
Sites added (reconfigured) in 2008                                                                71
Sites added (reconfigured) in 2009                                                                (2 )

Dispositions:
Morgan Portfolio JV (5)                                           2008                        (1,134 )
Round Top JV (1)                                                  February 13, 2009             (319 )
Pine Haven JV (1)                                                 February 13, 2009             (625 )
Caledonia (1)                                                     April 17, 2009                (247 )
Casa Village (1)                                                  July 20, 2009                 (490 )


Total Sites as of September 30, 2009                                                         110,363

Since December 31, 2007, the gross investment in real estate has increased from $2,396 million to $2,529 million as of September 30, 2009.

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. Revenues are subject to seasonal fluctuations and as such quarterly interim results may not be indicative of full fiscal year results.
We have approximately 65,100 annual sites, approximately 8,900 seasonal sites, which are leased to customers generally for three to six months, and approximately 8,900 transient sites, occupied by customers who lease sites on a short-term basis. The revenue from seasonal and transient sites is generally higher during the first and third quarters. We expect to service over 100,000 customers at our transient sites and 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 24,300 membership sites designated as right-to-use sites which are utilized to service the approximately 113,000 customers who own right-to-use contracts. We also have interests in Properties containing approximately 3,100 sites for which revenue is classified as Equity in income from unconsolidated joint ventures in the Consolidated Statements of Operations.

                                   Total Sites as of     Total Sites as of
                                     September 30,         December 31,
                                         2009                  2008
                                   (rounded to 000s)     (rounded to 000s)
            Community sites (1)              44,400                44,800
            Resort sites:
            Annual                           20,700                20,100
            Seasonal                          8,900                 8,800
            Transient                         8,900                 8,800
            Right-to-use                     24,300                24,300
            Joint Ventures (2)                3,100                 5,200

                                            110,300               112,000

(1) Total includes 165 sites from discontinued operations.

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

A significant portion of our rental agreements on community sites are directly or indirectly tied to published CPI statistics that are issued during June through September each year. During June to September 2008, CPI was increasing at an annualized rate in excess of 5%. Due to the disruption we saw in the housing markets, we mitigated some of our 2009 rental increases despite these higher CPI figures. We currently expect our 2010 community base rental income to increase 1.5 to 2.0 percent as compared to 2009. We have already notified approximately 60 percent of our community site customers with rent increases reflecting this revenue growth.
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. We believe that our potential customers are also having difficulty obtaining financing on resort homes, resort cottages and RV purchases. The continued decline in homes sales activity in 2008 resulted in our decision to significantly reduce our new home sales operation during the last couple months of 2008 and until such time as new home sales markets improve. We believe that renting our vacant new homes may represent an attractive source of occupancy and potentially convert to a new homebuyer in the future and are focusing on smaller, more energy efficient and more affordable homes in our manufactured home Properties. We also believe that some customers that are capable of purchasing are opting instead to rent due to the current economic environment.
We have also adjusted our business model with the introduction of low-cost internet and alternate distribution channels that focus on the installed base of almost eight million RV owners. RV manufacturers and dealers experienced the second year of declining volumes in 2008 with current monthly activity reflecting precipitous declines over the prior year. Availability of financing for both floor plan inventory and retail customers has been severely constrained and there is little hope for improvement in the near future. Although industry experts are predicting shipments of approximately 180,000 RV units in 2009, down from the estimated 237,000 in 2008, shipments for the

twelve months ended September 2009 were less than 150,000. As with the decline experienced by the manufactured home industry, the remaining participants' survival depends on their ability to react to the new environment. Privileged Access
Privileged Access owned Thousand Trails ("TT") from April 14, 2006 until August 13, 2008. Prior to the purchase, Privileged Access had a 12-year lease with the Company that terminated upon closing. The Company assumed TT's operations in connection with the PA Transaction. TT's primary business consists of selling right-to-use contracts that entitle the purchasers to use certain properties (the "Agreements"), a business that TT has been engaged in for almost 40 years. Our 82 Properties utilized to service the Agreements generally contain designated sites for the placement of recreational vehicles which service the customer base of over 100,000 families.
Several different Agreements are currently offered to new customers. These front-line Agreements are generally distinguishable from each other by the number of Properties a customer can access. The Agreements generally grant the customer the contractual right-to-use designated space within the Properties on a continuous basis for up to 14 days. The Agreements are generally for three years and require nonrefundable upfront payments as well as annual payments. The Company has reduced the number of traditional front line sales locations to three from almost 20 in 2008 eliminating significant sales related overhead. The Company has recently introduced one-year memberships that require smaller upfront and/or annual payments that can be purchased through the internet and other alternate distribution channels. Similar to our efforts at our Core resort Properties we have also been focusing on adding annual customers to the TT Properties.
Existing customers may be offered an upgrade Agreement from time-to-time. The upgrade Agreement is currently distinguishable from the new Agreement by
(1) increased length of consecutive stay by 50 percent (i.e. up to 21 days);
(2) ability to make earlier advance reservations and (3) access to additional properties. Each upgrade requires an additional nonrefundable upfront payment. The Company may finance the upfront nonrefundable payment under any Agreement. The PA Transaction also included the purchase of the operations of Resort Parks International ("RPI") and Thousand Trails Management Services, Inc. ("TTMSI"). Since 1983, RPI has provided a member-only RV reciprocal camping program in North America. The RPI network offers access to 200 private RV resorts, 450 public RV campgrounds, cabins and hundreds of condominiums world wide. TTMSI manages approximately 200 public campgrounds for the U.S. Forest Service. Refer to Note 12 - Transactions with Related Parties included in the Notes to Consolidated Financial Statements in this Form 10-Q 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:
• Tropical Palms - Beginning on July 15, 2008, Tropical Palms, a 541-site Property located in Kissimmee, Florida, was leased to a new operator for 12 years. The lease provides for an initial fixed annual lease payment of $1.6 million, which escalates at the greater of CPI or three percent. Percentage rent payments are provided for beginning in 2010, subject to gross revenue floors. The Company will match the lessee's capital investment in new rental units at the Property up to a maximum of $1.5 million. The lessee will pay the Company additional rent equal to eight percent per year on the Company's capital investment. The lease income recognized during the quarter and nine months ended September 30, 2009 was approximately $0.5 million and $1.4 million, respectively, and is included in income from other investments, net. During the quarter and nine months ended September 30, 2009, the Company spent approximately zero and $0.6 million, respectively, to match the lessee's investment in new rental units at the Property.

Government Stimulus
In response to recent market disruptions, legislators and financial regulators implemented a number of mechanisms designed to add stability to the financial markets, including the provision of direct and indirect assistance to distressed financial institutions, assistance by the banking authorities in arranging acquisitions of weakened banks and broker-dealers, implementation of programs by the Federal Reserve to provide liquidity to the commercial paper markets and temporary prohibitions on short sales of certain financial institution securities. Numerous actions have been taken by the Federal Reserve, Congress, U.S. Treasury, the SEC and others to address the current liquidity and credit crisis that has followed the sub-prime crisis that commenced in 2007. These measures include, but are not limited to various legislative and regulatory efforts, homeowner relief that encourages loan restructuring and modification; the establishment of significant liquidity and credit facilities for financial institutions and investment banks; the lowering of the federal funds rate, including two 50 basis point decreases in October of 2008; emergency action against short selling practices; a temporary guaranty program for money market funds; the establishment of a commercial paper funding facility to provide back-stop liquidity to commercial paper issuers; and coordinated international efforts to address illiquidity and other weaknesses in the banking sector. It is not clear at this time what impact these liquidity and funding initiatives of the Federal Reserve and other agencies that have been previously announced, and any additional programs that may be initiated in the future will have on the financial markets, including the extreme levels of volatility and limited credit availability currently being experienced, or on the U.S. banking and financial industries and the broader U.S. and global economies.
Further, the overall effects of the legislative and regulatory efforts on the financial markets is uncertain, and they may not have the intended stabilization effects. Should these legislative or regulatory initiatives fail to stabilize and add liquidity to the financial markets, our business, financial condition, results of operations and prospects could be materially and adversely affected. Even if legislative or regulatory initiatives or other efforts successfully stabilize and add liquidity to the financial markets, we may need to modify our strategies, businesses or operations, and we may incur increased capital requirements and constraints or additional costs in order to satisfy new regulatory requirements or to compete in a changed business environment. It is uncertain what effects recently enacted or future legislation or regulatory initiatives will have on us. Given the volatile nature of the current market disruption and the uncertainties underlying efforts to mitigate or reverse the disruption, we may not timely anticipate or manage existing, new or additional risks, contingencies or developments, including regulatory developments and trends in new products and services, in the current or future environment. Our failure to do so could materially and adversely affect our business, financial condition, results of operations and prospects. Critical Accounting Policies and Estimates Refer to the 2008 Form 10-K for a discussion of our critical accounting policies, which includes impairment of real estate assets and investments, investments in unconsolidated joint ventures, and accounting for stock compensation. During the nine months ended September 30, 2009, there were no changes to these policies.
The FASB finalized the Codification of GAAP effective for periods ending on or after September 15, 2009. References to GAAP issued by the FASB are to the Codification. The Codification does not change how the Company accounts for its transactions or the nature of the related disclosures made.

Results of Operations
The results of operations for the one Property currently designated as held for disposition as of September 30, 2009 pursuant to FASB ASC 360-10-35 and the one Property sold during 2009 have been classified as income from discontinued operations. See Note 4 in the Notes to the Consolidated Financial Statements for summarized information for these Properties.
Comparison of the Quarter Ended September 30, 2009 to the Quarter Ended September 30, 2008
The following table summarizes certain financial and statistical data for the Property Operations for all Properties owned and operated for the same period in both years ("Core Portfolio") and the Total Portfolio for the quarters ended September 30, 2009 and 2008 (amounts in thousands). The Core Portfolio may change from time-to-time depending on acquisitions, dispositions and significant transactions or unique situations. The Core Portfolio in this Form 10-Q includes all Properties acquired prior to December 31, 2007 and which have been owned and operated by the Company continuously since January 1, 2008.

                                          Core Portfolio                                               Total Portfolio
                                                    Increase /          %                                         Increase /          %
                        2009           2008         (Decrease)       Change          2009           2008          (Decrease)       Change

Community base
rental income         $  63,389      $ 61,554      $      1,835          3.0 %     $  63,389      $  61,554      $      1,835          3.0 %
Resort base rental
income                   26,976        26,653               323          1.2 %        34,561         29,343             5,218         17.8 %
Right-to-use
annual payments               -             -                 -            -          12,796          6,746             6,050         89.7 %
Right-to-use
contracts current
period, gross                 -             -                 -            -           5,080          5,003                77          1.5 %
Right-to-use
contracts,
deferred, net of
prior period
amortization                  -             -                 -            -          (4,327 )       (4,940 )             613         12.4 %
Utility and other
income                   10,096         9,649               447          4.6 %        12,331         10,572             1,759         16.6 %

Property operating
revenues                100,461        97,856             2,605          2.7 %       123,830        108,278            15,552         14.4 %

Property operating
and
Maintenance              34,297        34,760              (463 )       (1.3 %)       50,409         42,148             8,261         19.6 %
Real estate taxes         7,006         7,348              (342 )       (4.7 %)        7,955          7,794               161          2.1 %
Sales and
marketing, gross              -             -                 -            -           3,422          3,098               324         10.5 %
Sales and
marketing,
deferred                      -             -                 -            -          (1,410 )       (1,598 )             188         11.8 %
commissions, net
Property
management                5,366         5,259               107          2.0 %         8,725          6,446             2,279         35.4 %

Property operating
expenses                 46,669        47,367              (698 )       (1.5 %)       69,101         57,888            11,213         19.4 %

Income from
property
operations            $  53,792      $ 50,489      $      3,303          6.5 %     $  54,729      $  50,390      $      4,339          8.6 %

Property Operating Revenues
The 2.7% increase in the Core Portfolio property operating revenues reflects:
(i) a 3.3% increase in rates in our community base rental income offset by a 0.3% decrease in occupancy (ii) a 1.2% increase in revenues for our resort base income comprised of an increase in annual revenue offset by decreases in seasonal and transient resort revenue and (iii) an increase in utility income due to increased pass-throughs at certain Properties. The Total Portfolio property operating revenues increase of 14.4% is primarily due to the consolidation of the Properties formerly leased to Privileged Access beginning August 14, 2008 as a result of the PA Transaction. The right-to-use annual payments represent the annual payments earned on right-to-use contracts acquired in the PA Transaction or sold since the PA Transaction on August 14, 2008. The right-to-use contracts current period, gross represents all right-to-use contract sales during the quarters. The right-to-use contracts, deferred represents the deferral of current period sales into future periods, offset by the amortization of revenue deferred in prior periods.

Property Operating Expenses
The 1.5% decrease in property operating expenses in the Core Portfolio primarily reflects a 1.3% decrease in property operating and maintenance expenses and a 4.7% decrease in real estate taxes. Our Total Portfolio property operating and maintenance expenses increased due to the consolidation of the Properties formerly leased to Privileged Access beginning August 14, 2008 as a result of the PA Transaction. Total Portfolio sales and marketing expense are all related to the costs incurred for the sale of right-to-use contracts. Total Portfolio property management expenses primarily increased due to the PA Transaction. Sales and marketing, deferred commissions, net represents commissions on right-to-use contract sales deferred until future periods to match the deferral of the right-to-use contract sales, offset by the amortization of prior period commission. Home Sales Operations
The following table summarizes certain financial and statistical data for the Home Sales Operations for the quarters ended September 30, 2009 and 2008 (dollars in thousands).

                                            2009         2008       Variance       % Change

Gross revenues from new home sales         $   948     $  4,207     $  (3,259 )        (77.5 %)
Cost of new home sales                        (983 )     (4,457 )       3,474           77.9 %

Gross (loss) profit from new home sales        (35 )       (250 )         215           86.0 %

Gross revenues from used home sales          1,179        1,053           126           12.0 %
Cost of used home sales                       (859 )       (908 )          49            5.4 %

Gross profit (loss) from used home sales       320          145           175          120.7 %

Brokered resale revenues, net                  171          237           (66 )        (27.8 %)
Home selling expenses                         (278 )     (1,482 )       1,204           81.2 %
Ancillary services revenues, net             1,341          607           734          120.9 %


Income (loss) from home sales operations   $ 1,519     $   (743 )   $   2,262          304.4 %


Home sales volumes
New home sales (1)                              38           87           (49 )        (56.3 %)
Used home sales (2)                            263          134           129           96.3 %
Brokered home resales                          140          178           (38 )        (21.3 %)

(1) Includes third party home sales of 13 and 18 for the quarters ending September 30, 2009 and 2008, respectively.

(2) Includes third party home sales of three and zero for the quarters ending September 30, 2009 and 2008, respectively.

Income from home sales operations increased as a result of increased new and used home gross profits, an 81.2% decrease in home selling expenses and a 120.9% increase in ancillary services, net. Home selling expenses for 2009 were down as compared to 2008, as a result of decreased advertising costs. Ancillary services revenues, net increased primarily due to the inclusion of the ancillary activities on the Properties leased to Privileged Access prior to August 14, 2008.

Rental Operations
   The following table summarizes certain financial and statistical data for
manufactured home Rental Operations for the quarters ended September 30, 2009
and 2008 (dollars in thousands). Except as otherwise noted, the amounts below
are included in Ancillary services revenue, net in the Home Sales Operations
table in previous section.
. . .