Flagship Communities Q3 2026 Earnings Call Transcript
Flagship Communities (TSX:MHC) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Flagship Communities reported strong financial performance in Q3 2026, with a 17.6% increase in revenue to $30.7 million and a 6.9% increase in same community revenue.
The company completed a strategic acquisition of a 125-lot manufactured housing community in Kentucky, aligned with its strategy of acquiring communities with occupancy upside.
Flagship announced a 5.9% increase in monthly distributions to unitholders, marking the sixth consecutive year of distribution growth.
The company launched an NCIB to repurchase up to 10% of its public float and emphasized a disciplined approach to capital allocation.
Management remains confident in the MHC industry’s resilience, citing affordable housing demand and maintaining a strong balance sheet with no substantial debt maturities until 2030.
Operational improvements, such as enhanced amenities and utility recapture, contributed to increased margins, with the NOI margin reaching 65.3%.
Future guidance indicates expectations of high single-digit same-store NOI growth, driven by rent and occupancy increases.
Acquisitions remain a focus, with a capacity for $100-$125 million in potential deals, though market activity is currently light due to high interest rates.
Full Transcript
OPERATOR
Hello, ladies and gentlemen. Thank you for standing by. Welcome to the Flagship Communities third quarter 2026 earnings call. At this time, all participants are in a listen-only mode. Following the presentation, we will hold a brief question-and-answer session for analysts and institutional investors. To ask a question during the session, please press Star 11 on your telephone. To withdraw your question, please press Star 11 again. I would like to remind everyone that this conference call is being recorded.
Today’s presenters are Curt Keeney, Flagship’s President and Chief Executive Officer; Nathan Smith, Chief Investment Officer; and Eddie Carlile, Chief Financial Officer. Please note that comments made on today’s call may contain forward-looking information and this information by its nature is subject to risks and uncertainties. Actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, please consult Flagship’s relevant filings on SEDAR+.
These documents are also available on the REIT’s website at flagshipcommunities.com. Flagship has also prepared a corresponding PowerPoint presentation which it encourages you to follow along with during this call. And now I’ll pass the call over to Curt Keeney. Curt.
Curt Keeney (President and Chief Executive Officer)
Thank you, operator. Good morning, everyone. Thank you for joining us today. Our strong performance in the first half of 2026 continued into the third quarter. We generated double-digit revenue and NOI growth and continue to see increases in same community revenue and same community NOI, which speaks to the strength of our core business and the stability of the MHC industry. Our same community revenue of $27.5 million increased 6.9% over the same period last year.
Same community NOI was $17.9 million, an increase of 7.2% over the same period last year. And our same community NOI margin was 65.1%, which was a 0.1% increase compared to the same period last year. In addition to our strong operating and financial performance, we completed the strategic acquisition of a 125-lot MHC in our home state of Kentucky, which is consistent with our strategy of acquiring established communities with occupancy upside potential. Nathan will speak more about this during his remarks. Our success year to date helped provide our Board with the confidence to approve a 5.9% increase in our monthly distribution to unitholders.
This is the sixth consecutive year we have raised distributions. We are very fortunate to be in a position where we have been able to increase distributions every year since our IPO, all the while keeping our AFFO payout ratio below 50% and maintaining a conservative balance sheet. As you can see from slide 6, we have one of the strongest distribution growth records among Canadian REITs. Our distributions have generated a 5.2% compound annual growth rate and since our IPO have increased by nearly 36%.
The continued growth of distributions each year is just one part of our disciplined approach to allocating capital. We also continue to pursue accretive acquisitions in our key markets which will grow AFFO per unit and support distribution growth. At the same time, we announced our intention to launch an NCIB which allows us to repurchase up to approximately 10% of our public float. One of the main reasons for our success is our deep experience in the industry. This past month Nathan and I marked our 31st year in the manufactured housing business, and the attributes that made the industry compelling back then continue to be true today. For over 20 years, the MHC sector has grown approximately 4% per year, outperforming all other real estate sectors. As you can see from slide 8 of this presentation, NOI growth remained positive during the housing crisis and the Great Recession and, even more recently, remained resilient during the pandemic.
In today’s environment, home sales for traditional housing in the condo market are down primarily due to rising prices, credit tightening, continued higher mortgage rates, and general economic uncertainty. For less than renting a three-bedroom apartment, residents can own a home in our portfolio and build long-term equity. That is why Flagship has remained a compelling alternative to traditional rental housing. With that, I will now turn it over to Nathan for his remarks. Nathan.
Nathan Smith (Chief Investment Officer)
Thanks, Curt. Good morning, everyone. Flagship started with one community and 152 lots over 31 years. A big reason for our success is our ability to retain residents in our communities and complete successful acquisitions. This past quarter we bought 125 home sites in our home state of Kentucky for approximately $2 million. The community is 54% occupied and is located in Frankfort, Kentucky, where affordable housing is in high demand. Frankfort is Kentucky’s capital and home to major employers and the largest number of public administration jobs in the state.
And similar to past acquisitions, we are planning to add new amenities to enhance the resident experience. Planned improvements include a new clubhouse and office, a basketball court, and a playground. By investing in new amenities, we believe residents are more likely to stay in our communities, and by continuing to improve infrastructure and community engagement initiatives, we are helping to support a positive experience and the long-term retention of our residents.
This acquisition is also an example of how we are able to grow and realize efficiencies in our markets. This MHC is near four Flagship-owned communities in Kentucky, which will allow us to manage these properties effectively. We continue to take a disciplined approach to acquisitions while focusing on strong organic growth and delivering value for our unitholders. With that, I will turn it over to Eddie to review our financial results in more detail. Eddie.
Eddie Carlile (Chief Financial Officer)
Thanks, Nathan. Good morning, everyone. During the third quarter we continued to generate solid financial results from our organic portfolio while maintaining a strong and stable balance sheet. Revenue for the quarter was $30.7 million, an increase of 17.6% over the same period last year due to acquisitions as well as lot rate increases across the portfolio. Same community revenue of $27.5 million for the third quarter grew by approximately 6.9% over the comparable period last year.
This increase was driven by higher monthly lot rents and ancillary revenues combined with a rise in same community occupancy. Net operating income and NOI margin were $20.0 million and 65.3%, compared to $17.0 million and 65.0% during the same period last year. Same community NOI margin for the third quarter was 65.1%, a 0.1% increase over last year. FFO adjusted and FFO adjusted per unit for the quarter were $9.9 million and $0.39, respectively, an 8.2% and 6.8% increase, respectively, compared to last year. AFFO adjusted and AFFO adjusted per unit for the quarter were $8.9 million and $0.35, a 6.3% and 5.1% increase, respectively, compared to last year.
Same community occupancy of 85.2% increased 1.8% from the end of last year, and rent collections for the quarter were 99.2%, demonstrating the strength and consistency of the MHC sector. As at September 30, our total lot occupancy was 84.6%, which also increased relative to the end of last year, and our average monthly lot rent was $516. We remain focused on maintaining a strong and conservative balance sheet with an emphasis on long-dated, fixed-rate debt. Our weighted average mortgage interest rate was 4.54% and our weighted average mortgage term to maturity was 7.6 years. We have no substantial debt maturities until 2030. We had total liquidity of approximately $30.9 million. The REIT currently has 18 unencumbered investment properties with a total fair value of approximately $106 million as at September 30, 2026.
With that, I’ll now turn it back over to Curt for some final remarks. Curt.
Curt Keeney (President and Chief Executive Officer)
Thanks, Eddie. As 2026 draws to a close, I’m proud of what our team has delivered. Through the first nine months, we grew same community revenue and NOI, added new communities in our core markets, and our Board approved our sixth consecutive annual distribution increase. Our priorities headed into next year are the same ones that got us to this point. We expect to continue investing in the resident experience while enhancing our operational efficiencies. And we will continue to prioritize returning capital to unitholders from a position of financial strength with a conservative balance sheet and no substantial debt maturities until 2030. We remain confident in the outlook for our business and the MHC industry, as housing prices, high monthly rental rates for multifamily competitors, and mortgage rate increases have the potential to lead more people toward manufactured housing because our homes remain affordable.
Thank you for your time today, and I will now open up the line for questions.
OPERATOR
Thank you. As a reminder, to ask a question, please press Star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 11 again. Our first question comes from the line of Mark Rothschild with Canaccord. Your line is now open.
Mark Rothschild (Analyst)
Thanks, and good morning, guys.
Curt Keeney (President and Chief Executive Officer)
Morning, Mark.
Mark Rothschild (Analyst)
Hey. So on the same-property NOI growth that picked up a little bit this quarter from what we see earlier in the year, it doesn’t appear to be really from occupancy. And the rental rate increases went through earlier in the year. So, assuming it’s more on ancillary revenue, can you talk a little bit about what maybe has picked up this quarter and if this is a trend we should see continue?
Curt Keeney (President and Chief Executive Officer)
Yeah. Do you want to jump in?
Eddie Carlile (Chief Financial Officer)
Sure. Yeah. Mark, the real driver there is, you know, the first two quarters this year—it was kind of well documented—we talked a lot about the issues we had due to the winter weather with utility recapture, kind of a lot of the maintenance, repairs and maintenance. In the third quarter that has kind of been solved. We’ve got now utility recapture back over 90% for the first time this year and margins now trending back up over 65%. So that’s the biggest piece of that.
Ancillary revenues have slightly increased, but yeah, I would expect, assuming we don’t have some extreme weather issues again in fourth quarter, I would expect that growth and kind of margin increase to be there in Q4 as well.
Mark Rothschild (Analyst)
Okay, great. Thanks. Maybe just one more for me on that front. At times you’ve commented on private equity coming in and out of the business. How do higher bond yields impact how you feel about that and how you see deal flow? Do you see them maybe just, like, dropping out because the numbers don’t work, or maybe deals just won’t be less attractive for you as well with the higher interest rates?
Curt Keeney (President and Chief Executive Officer)
Well, I guess, Mark, what I would say to that is we’re seeing very little private equity right now because of just exactly what you just said. We’ve actually done three acquisitions this year and hopefully we’ll have some more if we’re lucky. But what we’re really seeing out there is really the industry is not having a lot of acquisitions because of the interest rate. So private equity is having a difficult time. And obviously we’re looking for accretive deals.
And we’ve done three accretive deals this year, so we will continue to look for those. But we are seeing deal flow out there being very light amongst everybody else, really.
Mark Rothschild (Analyst)
Okay, great. Thank you so much.
OPERATOR
Thank you. Our next question comes from the line of Jonathan Kelcher with TD Cowen. Your line is now open.
Jonathan Kelcher (Analyst)
Thanks. Good morning.
Curt Keeney (President and Chief Executive Officer)
Good morning, John.
Jonathan Kelcher (Analyst)
I guess just sticking with the acquisitions, it sounds like it’s just a slow period right now. Would that mean for next year we can expect, like, similar-size acquisitions that you did this year? Like smaller, sort of $5 million-ish, plus or minus?
Curt Keeney (President and Chief Executive Officer)
Well, you know, this industry has always been built on singles and doubles. So, you know, I think you’ll always continue to see singles. You know, we look for mom-and-pops to exit and, you know, you have to take those when they come. And that’s where we’re at right now. You know, we’re getting—we’ve done three this year, you know, but we’re a lot of single business. You know, this is not an industry where you’re going to buy 25 properties. It’s just not going to happen.
So it’s built on singles and doubles and we’ll keep doing it that way. Yeah, we actually did. We actually posted our and notified our residents of the rent increase in 2027 already. So it’s public. It’s 5.6% on average globally and about $29. And so, yeah, so I think that’s—again, we always kind of have a normal range of 4% or 5%. This year it’s 5.6%. But we’re very thoughtful about trying to be self-regulated on the rent. So no, I think that it’s been out now for a couple of weeks.
On the occupancy front, again, we kind of guide 1% to 2%. I always think from a modeling perspective, 1% is the right way to model it because we will turn over units and high-grade the community’s inventory. But just as a reminder, 75% of our customers own their house free and clear. They’re not rentals. So you have to kind of deal with that as they turn over in the fullness of time. So as we turn those units over, that’s always a little headwind as we’re making the rest of our occupancy gains because, you know, you can’t let the 1972 Windsor stay in the community.
OPERATOR
Thank you. Our next question comes from the line of Himanshu Gupta with Scotiabank. Your line is now open.
Himanshu Gupta (Analyst)
Thank you and good morning. Just on the expectation of rent increase, I think you mentioned 5.6%, occupancy gains of 1% to 2%, and something which you have said over many years now. Does that mean that, I mean, the setup is still there for—again, rather there for high single-digit same-store NOI growth for next year?
Curt Keeney (President and Chief Executive Officer)
Yeah, I think—that’s exact—exactly where we’re at. I’m sorry, Eddie, you want to go ahead?
Eddie Carlile (Chief Financial Officer)
No, no, go ahead. I apologize.
Curt Keeney (President and Chief Executive Officer)
I think that’s exactly where we’re at. The beautiful thing about what Nathan accomplished for us in the last two years is he’s purchased the vacancy we need for the next two or three years. So literally we can drive our NOI and that’s what we’re doing. If we just show up, go to work, and be who we are, we don’t need to be anything extraordinary. We just need to kind of execute our strategy, and we should have high single-digit, low double-digit NOI growth.
Himanshu Gupta (Analyst)
Awesome. Thank you. And then on this rent increase of mid-5%, similar to last year as well, obviously. Is that you being self-imposed? Do you think there’s more capacity for the tenants to pay even higher rent growth here?
Curt Keeney (President and Chief Executive Officer)
Well, the answer is you have to be self-disciplined. If you remember, in our leases, the residents pay their utilities directly. They pay for everything from their electric to their water/sewer to their cable, and there’s inflation in all of those items. So when we look at that, we just want to be cognizant that the rent’s only one part of their housing expense because they do own their home most of the time. So you look at it and you go, okay, is there more capacity if you sit down with your Excel spreadsheet? The answer is yes, we’re $300 to $500 cheaper than a comparable housing product in multifamily typically. So that gives us runway, but that doesn’t mean we should push that faster. Again, 30%–40% of my residents are on fixed income—Social Security, disability, maybe a pension plan—and so we want to make sure that those folks remain healthy.
Yes, the answer is yes, there’s runway, but you should be self-disciplined.
Himanshu Gupta (Analyst)
Got it. Okay, and the last quick one here. Maybe CapEx for the next year. How should we think about CapEx budget for next year?
Curt Keeney (President and Chief Executive Officer)
We’re going to cash flow. That’s how we think about it. We look at it, and we look at our excess cash flow, which is $18 million or something like that. We will continue to deplete our rental fleet as we can. We will also have to high-grade our rental fleet a little bit as we can. But I think our CapEx right now is just growth projects, and we will use our capital—our net cash flow, $18 to $20 million. We use that for growth initiatives. But right now, I think we’re in real good shape on the CapEx for next year.
Himanshu Gupta (Analyst)
Got it. Very helpful. And I’ll turn it back. Thank you.
OPERATOR
Thank you. Our next question comes from the line of Brad Sturges with Raymond James. Your line is now open.
Brad Sturges (Analyst)
Hey, good morning. Just following along the lines of Himanshu there, just on the growth projects. Can you just give us an update on where you are from your lot expansion program and what could be delivered in terms of new lots over the next few quarters?
Curt Keeney (President and Chief Executive Officer)
Sure. Morning, Brent. We’ve got two or three entitled developments right now in our queue lined up. I would expect we probably only put 50 lots from that online next year. I’ve said this many times that we are—we are developers. We know how to do this. We think the best use of capital a lot of times is not developing, but buying vacancy that’s already developed, and that’s what we’ve been doing. So I think next year, 50 to 100, and I’d probably bet on 50.
Brad Sturges (Analyst)
Okay. And just if the acquisition opportunities were there, just what is the capacity on the balance sheet today in terms of total capacity for new acquisitions?
Curt Keeney (President and Chief Executive Officer)
Eddie, you want to jump in?
Eddie Carlile (Chief Financial Officer)
Sure. Yeah. I think, Brad, we could probably do between $100 and $125 million in acquisitions on balance sheet without having much of an issue. We do have, call it about $110 million of unencumbered assets right now on the balance sheet. Our debt to GBVS debt down this quarter to 38%. So certainly the capacity is there on the balance sheet to be able to do the acquisitions as they come along.
Brad Sturges (Analyst)
Okay. And at this point, you know, you’re talking about the market being pretty quiet. Do you have any indication on changes in pricing at all at this point?
Curt Keeney (President and Chief Executive Officer)
At this point we are seeing very little changes in pricing, but we’ve never seen wide swings in pricing in manufactured housing. So that’s what—you know, I mean, that question comes up all the time and I appreciate the question, but for nearly, soon to be, 32 years, I’ve never seen pricing change a whole lot. In MH business there are some pricing that you’ll get that’s higher, but it’s also a really heavy lift. So, you know, but most of it is how we’ve always—trades somewhere between 5 and 7 cap.
It has and will continue to do in a foreseeable future that I see. It’s just a supply and demand issue.
Brad Sturges (Analyst)
Makes sense. Appreciate it.
Curt Keeney (President and Chief Executive Officer)
I mean that’s in our markets, Brad. Like down in—if you get into Florida, I mean the cap rates continue to drop and drop. So, I mean, that’s a different—
Nathan Smith (Chief Investment Officer)
Get ready for a 3 cap.
Curt Keeney (President and Chief Executive Officer)
That’s a different market. Yeah, you could be sub-4 cap there with a straight face. But in our markets that’s not—that’s not true. Shouldn’t be.
Brad Sturges (Analyst)
Yeah. Okay, appreciate that. I’ll turn it back. Thank you.
OPERATOR
Thank you. Our next question comes from the line of Kyle Stanley with Desjardins. Your line is now open.
Kyle Stanley (Analyst)
Thanks. Morning, guys.
Curt Keeney (President and Chief Executive Officer)
Good morning, Kyle.
Kyle Stanley (Analyst)
On the utility recapture being back above 90 as you mentioned earlier, was any of that due to anything operationally that you did or is it really just fewer headwinds from weather? And I guess if we make an assumption that the weather is a bit more benign moving forward, you kind of preserve that margin where it was.
Curt Keeney (President and Chief Executive Officer)
Yeah. So, I mean, yeah, certainly was operational as far as getting those things back under control. You know, we have a pretty sophisticated real-time leak-detecting system. We have people that their job every day is to go out, find leaks in our communities, and get those fixed. So a significant amount of work was done. But as far as what caused us to go kind of sideways in the beginning, it certainly was the weather. And, you know, without—I’d like to say without any weather in the fourth quarter being too extreme, we should be able to maintain that 90-plus percent recapture.
Kyle Stanley (Analyst)
Okay, that’s fair. It looks like you reduced the rental fleet by about 70 homes versus the second quarter. So how are you approaching, you know, reducing the rental fleet with balancing occupancy and, you know, where could you see the rental fleet—assuming no acquisitions next year—where could you see that rental fleet maybe trending through the year?
Curt Keeney (President and Chief Executive Officer)
That’s a fair question. I appreciate that. Yeah, we’re very—you know, we’ve got a homeownership model and we’ve never guided that we will be out of the home rental business because every time we buy an acquisition, typically we get rental fleet with it. We really would like to guide it back down to 10% or less as a part of the overall portfolio of lots. So we’re a little over that right now. We’re 11.5%, pushing 12%, I think, and we’d like to guide it back down.
And it’s really simple on the rental units. We sell them to the people that would like to buy them that are in them now. Typically that’s kind of in the tax refund season, which is coming up in Q1 of next year and Q2. And we also are taking houses out and selling them that have age limits on them at this point, and just trying to reduce the rental fleet in general again. If I could get it sub-10% in the next year or two, that’d be nice.
Kyle Stanley (Analyst)
Okay. Yeah, next year or two is a good target. And then just last one, following the midterms, anything that you see positive or negative in terms of outcomes for your markets or portfolio more generally, or, you know, pretty much status quo? Just love your thoughts there.
Curt Keeney (President and Chief Executive Officer)
So, you know, interesting enough, the midterms actually were probably pretty good to us because we have, you know, split government now in the United States. And also what you’ll find is that most of the Democrats that were elected in the Senate were from red states. So I wouldn’t expect that you would see some wide swings in, you know, rent control or anything like that because, you know, they would like to be reelected one day. And if you come from a red state, I don’t think you would start with some things like that.
And also the House the same way, you know, after the gerrymandering in the United States, basically probably 40 or 50 of those seats that the Democrats won are basically in—that were Trump-plus states or Trump-plus districts, I should say. So I’m not anticipating it. I’m actually thinking the next two years there’ll be a lot of thoughts about how we create more affordable housing. But that is a tall order and it’s not a quick fix in the United States.
So I hope that gives you some color.
Kyle Stanley (Analyst)
Yep. No, it does for sure. Thank you very much. I will turn it back.
Curt Keeney (President and Chief Executive Officer)
I think this is an area of Mecca for us right now. Affordable housing is front and center, and this environment is very good for us. But go ahead. I’m sorry, operator.
OPERATOR
Thank you. Our next question comes from the line of Dean Wilkinson with CIBC. Your line is now open.
Dean Wilkinson (Analyst)
Thanks. Morning, guys. I actually have a follow-up along those lines. I think last month the President signed an executive order that had a few things in there, but it established a task force looking at MHCs. What do you guys think is going to come out of that, and if they do the right thing and talk to industry, what would you say to that task force?
Curt Keeney (President and Chief Executive Officer)
Well, I wouldn’t get too excited about this if I was you. Here’s the situation. The bill has a lot to do with the ability to take the homes and put them in urban markets, and that’s what it is really about. I think a manufacturer will do actually very well there, but I’m not so sure that it will have a whole lot to do with our side of the business.
Dean Wilkinson (Analyst)
So that’s more like buying it, putting it on a lot that I own, and not specifically going into the community—right, the infill and removing the chassis?
Curt Keeney (President and Chief Executive Officer)
There can be beneficial aspects. I just don’t think that it is something that is going to have a big effect on the community business.
Dean Wilkinson (Analyst)
I would probably argue that it’s beneficial to the community business because you’re going to want all of the amenities that come with what you have when you have a community, as opposed to just one of these kind of sitting out in the middle of nowhere.
Nathan Smith (Chief Investment Officer)
Well, I think you get a little bit confused there. It’s city infill. They want to be able to take and put homes in an urban setting in a lot where they may have had to tear a house down, and that’s not something we do. So the problem with it is they have to change the code to allow a house with a chassis in it, because a chassis is a HUD code home, and they have moved HUD code homes from the ability to place them in cities. So they’d have to even change that.
So removing the chassis allows them to place a home on a scattered lot in an urban area, which really doesn’t have a whole lot of effect to us. I mean, we don’t compete against that customer. Yeah, we don’t even compete with that customer. That would be a value add for the manufacturers, the three public manufacturers. But for us as a community operator, I see actually zero effect of that on us.
Dean Wilkinson (Analyst)
Okay, perfect. Thanks, Nathan.
Curt Keeney (President and Chief Executive Officer)
Just to lay one little bit on there too. This whole thing about removing the chassis and making a home cheaper is a false narrative, because if you think about it, what you’re doing is now you’re having to crane the house on and have some kind of foundation that’s more than a HUD code foundation because you’re removing the chassis. So, I mean, I actually think the house will get more expensive if you do that. And Flagship Communities, we will not be removing any chassis.
We will not allow those homes in our properties either, because we think that it could have some effect. I wouldn’t want to litigate having a removed chassis in an MH environment. Wheels off, chassis on. Wheels on, chassis off. That was exactly right, Dean. Appreciate the fact you understand that. We like that. Thank you. Thanks, guys.
OPERATOR
Thank you. As a reminder, to ask a question at this time, please press star 11 on your touchtone telephone. Our next question comes from the line of Matt Kornack with National Bank of Canada Capital Markets. Your line is now open.
Matt Kornack (Analyst)
Hey, guys, just wanted to quickly touch on the rent, the rental product, because presumably that’s higher rent and maybe growing at a slower pace in terms of year-over-year growth or rental growth. So is it kind of 2x the revenue impact versus the 12% of lots? Anyway, how we should ultimately think about that would be helpful.
Curt Keeney (President and Chief Executive Officer)
Eddie, you want to jump in on that?
Eddie Carlile (Chief Financial Officer)
Yeah, I think the question, if I’m understanding that, is do you get the additional revenue on the rental homes? And the answer to that is yes, we do rent increases on the homes as well. So in this year it’s going to be about 5% as well. So to the extent that you are renting the lot and the house, 10–11%, we would expect to see on renewal that to increase about 5% on the home as well. So yeah, that’s going to have a bit of an additional driver for revenue growth there.
Matt Kornack (Analyst)
Okay, that’s very helpful. And then maybe just on the margins, it looks like there’s some seasonality into Q4. I don’t know if that’s ultimately the case, but do you typically see a bit of a pickup into Q4, or is it fairly stable? And then that 65% you mentioned, should we expect that that’s a pretty good run rate for margins for 2027 as well?
Eddie Carlile (Chief Financial Officer)
Yeah. I mean, that 65% to me, as we think about it, is generally kind of my—I look at the high-water mark there. For us, we will have quarters when it’ll be a little better than that. But the seasonal impacts, you know, Q4 for us generally is when things get kind of quiet, so we’re not cutting as much grass. It’s really all dependent on the weather, though. If we were to have a significant weather event—which generally in our markets, Q4 is not real bad weather—but as long as we can keep the weather events out of Q4, that has a little bit of seasonality.
But to me that 65%, if we can maintain that for Q4 into next year, that would meet my expectations.
Matt Kornack (Analyst)
Okay, great. Thanks for that colour.
OPERATOR
Thank you. And I’m currently showing no further questions at this time. I’d now like to hand the call back over to Kurt Kinney for closing remarks.
Kurt Kinney (Investor Relations)
Thank you, operator, and thank you, everyone, for participating today. Please feel free to reach out to our investor relations team at ir@flagshipcommunities.com if you have any further questions. Have a great day.
OPERATOR
This concludes today’s conference. Thank you for your participation. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.