Investor Update
The Bay & The Landing · Elkhart Lake, WI
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101 Cedar Lane · Elkhart Lake, WI · Quarter II 2026
| Actual Quarterly Performance | Q4 2025 | Q1 2026 | Q2 2026 |
|---|---|---|---|
| Total Revenue | $550,236 | $639,075 | $603,254 |
| Operating Expenses | $458,016 | $463,253 | $478,045 |
| Net Operating Income | $92,220 | $175,822 | $125,209 |
| NOI Growth (QoQ) | -52.3% | +90.6% | -28.8% |
Average occupancy softened to 71.6% in June (47.97 of 67 units, on average) from 78.6% a year earlier, as IL move-outs outpaced new move-ins to preserve available condo sale inventory. Average revenue per occupied unit held at $4,230 in June.
Q2 NOI of $125,209 came in $50,524 below the $175,733 quarterly budget, driven by the occupancy softness for reasons noted herein. The operating margin held at 24.2% year-to-date.
No major capital projects were reported for Q2. Unit turnover normalized to 4.17% in June after spiking to 16.27% in April amid a cluster of move-outs; management continues to manage turnover costs in light of the strategic condo sale offering. The financing package includes a drawdown portion for strategic improvements that has not yet been utilized.
The CoVantage Credit Union loan transitioned to a 25-year amortizing schedule effective January 20, 2026. As mentioned in our Q1 update, distributions are on hold due to the pending condo sale process.
We have filed the condo plat and declaration with the Sheboygan County Register of Deeds and we anticipate the recording will be complete the week of July 27. The Condo Documents will be circulated to interested buyers immediately after recording. We have established a reserve fund and dues assessment schedule that includes: (1) an initial contribution to be made by The Company (to be funded through a loan draw), (2) a one-time contribution by each buyer, and (3) ongoing association dues.
As we discussed in past updates, the Village of Elkhart Lake has applied pressure to not open the occupancy of condos to persons under the age of 55. Given there is no deed restriction currently, and there is no definition of senior housing in the Village’s zoning code, our legal counsel has advised us with confidence that the sale of condos to the general public is a change in the form of ownership – not a change of use. As we have also stated in past updates, we believe the decision on whether to age restrict the condos belongs to the future condo association as we anticipate the resident base for these condos will largely be age 55+ on a “naturally occurring” basis. (Under federal Fair Housing law, an age restriction would still permit 20% of owners to be under age 55.) The specific question of age restriction will be decided by pending litigation that is likely to last throughout 2026.
With a strong buyer pipeline from within the current resident population and the general public, we are optimistic that condo sales will meet our proforma price and timing goals.
We have engaged Shorewest to represent our interests in discussions with the first round of resident and outside buyers. Shorewest has been engaged on a “listing by listing” basis.
