Centerspace (NYSE:CSR) Q4 2023 Earnings Conference Call February 21, 2024 10:00 AM ET Company Participants Josh Klaetsch – Investor Relations Anne Olson - President, Chief Executive Officer, Secretary & Executive Trustee Bhairav Patel – Executive Vice President & Chief Financial Officer Grant P. Campbell - Senior Vice President, Investments Conference Call Participants Brad Heffern - RBC Capital Markets Connor Mitchell - Piper Sandler John Kim - BMO Capital Markets Robert Stevenson - Janney Barry Oxford - C ...

Centerspace (CSR) came out with quarterly funds from operations (FFO) of $1.22 per share, beating the Zacks Consensus Estimate of $1.11 per share. This compares to FFO of $1.17 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 9.91%. A quarter ago, it was expected that this real estate investment trust would post FFO of $1.13 per share when it actually produced FFO of $1.20, delivering a surprise of 6.19%.Over the last four quarters, ...

MINNEAPOLIS, Feb. 20, 2024 /PRNewswire/ -- Centerspace (NYSE: CSR) announced today its financial and operating results for the year ended December 31, 2023. The tables below show Net Income (Loss), Funds from Operations ("FFO")1, and Core FFO1, all on a per diluted share basis, for the year ended December 31, 2023; Same-Store Revenues, Expenses, and Net Operating Income ("NOI")1 over comparable periods; and Same-Store Weighted Average Occupancy for the three months ended December 31, 2023, September 30, 202 ...

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MINNEAPOLIS, Jan. 25, 2024 /PRNewswire/ -- Centerspace (NYSE: CSR) announced today the appointment of Ola Oyinsan Hixon to its Board of Trustees on January 23, 2024. "We are very excited to welcome Ola as a Trustee," said Centerspace President and CEO Anne Olson. "Her extensive portfolio and asset management experience within the real estate space will allow her to provide valuable insight as we scale and position our Company in the coming years." Ms. Hixon is an executive director at PGIM Real Estate and p ...

MINNEAPOLIS, Jan. 24, 2024 /PRNewswire/ -- Centerspace (NYSE: CSR) announced today the tax treatment (Form 1099-DIV) for calendar year 2023 distributions on its common and preferred shares of beneficial interest. Shareholders are encouraged to consult with their personal tax advisors as to the specific tax treatment of their Centerspace distributions. Security Description     Record Date     Payable Date     Cash Distribution Per Share   Box 1a Ordinary Taxable Dividend Box 1b Qualified Dividend (1) ...

Financial Data and Key Metrics Changes - The company reported a year-to-date increase in core FFO of 6.8% year-over-year [6] - Same store revenue achieved a 5.7% year-over-year increase, slightly ahead of expectations [7] - Core FFO was reported at $1.20 per diluted share, driven by a 5.4% year-over-year increase in same store NOI [19] Business Line Data and Key Metrics Changes - The company executed one-third of its lease expirations in the third quarter, achieving a 3.9% blended lease trade out [7] - New lease trade outs showed a 2.3% increase, while renewals increased by 4.9% [7] - Cost control measures have benefited repairs and maintenance costs, offsetting increased on-site compensation [9] Market Data and Key Metrics Changes - Market rent is declining as leasing slows into the fourth quarter, with October showing a blended 0.8% leasing trade out [8] - The company noted that certain markets, particularly Denver and Minneapolis, are experiencing elevated supply pressures [38] Company Strategy and Development Direction - The company is focusing on value-add capital in smart home and smart community categories, targeting implementation in about 50% of total communities by the end of 2024 [10] - The company aims to improve portfolio quality and market exposure through capital recycling, with recent dispositions and acquisitions enhancing its geographic footprint [11][18] Management's Comments on Operating Environment and Future Outlook - Management expects supply to moderate in 2024, with a focus on maintaining occupancy levels [25][39] - The company anticipates no relief on insurance costs and expects overall expenses to moderate to 3% to 4% growth [57] - Management expressed optimism about holding revenue and growing NOI next year [47] Other Important Information - The company ended the quarter with no balance on its line of credit and a weighted average interest rate of 3.46% [20] - The acquisition of Lake Vista apartment homes was completed for $94.5 million, with an attractive interest rate on the assumed mortgage [18] Q&A Session Summary Question: What are the new lease numbers in October? - Management indicated that the new lease numbers are relatively normal for October, but they are feeling some pressure on lease rates [24][25] Question: What is the expected occupancy level for Q4? - The company expects occupancy to be in the mid-94% range, factoring in guidance [41] Question: How is the company managing staffing and retention? - The company is focused on retention through professional development and training opportunities to combat staffing challenges in the industry [60][61] Question: What are the expectations for new supply in the market? - Management noted that while some markets are experiencing elevated supply, they feel insulated due to their portfolio's characteristics [38][39] Question: What is the current state of bad debt? - Bad debt is reported at about 30 to 40 basis points, consistent with pre-COVID trends, and management has not seen significant fraud [52][71]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-35624 | --- | |--------------------------------------| | | | 45-0311232 | | (I.R.S. Employer Identification No.) | | | | 58702-1988 | | (Zip code) | (Registrant's telephone number, including area code) Indicate by check mark whether t ...

Financial Data and Key Metrics Changes - Revenue growth was strong, achieving 7% to 10% increases across same-store portfolios compared to the same quarter last year [7] - Core FFO grew by 10.8% year-over-year, with a year-to-date increase of 10% [11] - NOI increased by 12.1% year-over-year and 7.2% sequentially [16] - Same-store revenues increased by 8.5% year-over-year, while same-store expenses grew by 3.3% [16] - Core FFO guidance raised to $4.65 per diluted share, an increase of $0.23 from the previous midpoint [19] Business Line Data and Key Metrics Changes - Same-store new lease trade-outs achieved a 5.2% increase, while same-store renewals saw a 7% increase [7] - Blended rent increase was 4.9% for the quarter, with July showing 4.6% for new lease trade-outs and 4.1% for renewals [8] Market Data and Key Metrics Changes - The company experienced consistent strength in leasing across its markets, with a focus on the Mountain West region for future acquisitions [15][30] - The transaction market remains slow for institutional quality products, but there is significant demand for well-located and stable products [15] Company Strategy and Development Direction - The company is focusing on a deep value-add pipeline and plans to invest approximately $100 million in new acquisitions [14][21] - There is a strategic shift towards expanding the Mountain West portfolio, particularly targeting Denver [30] - The company aims to maintain flexibility in its balance sheet while advancing portfolio composition initiatives [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance and the ability to raise guidance for the remainder of the year [11][22] - There is an expectation of normal seasonality in leasing and revenue trends, with continued discipline on expenses [14] - Management noted that while insurance costs are expected to remain steady in the short term, a significant increase is anticipated next year [32] Other Important Information - The company recorded a loss on litigation settlement of $2.9 million during the second quarter [17] - Total liquidity stands at over $245 million, with leverage at an all-time low of 6.5x [18] Q&A Session Summary Question: What are the things that were boosting the second quarter results that you don't expect to be as recurring? - Management acknowledged that while some trends are expected to continue, they built in room for potential changes in turn costs and utilities due to heavy expirations [25][26] Question: Is there a reduction in renewals in July typical on a seasonal basis? - Management clarified that lower renewals reflect lease rates from the end of the first quarter and expect a slight uptick as they head into fall [27] Question: Are you looking at any new markets for acquisitions? - Management confirmed a focus on expanding the Mountain West portfolio, particularly in Denver and surrounding areas [30] Question: What are the expectations for insurance costs over the next couple of quarters? - Management indicated that insurance costs are expected to remain steady in the short term, with a significant increase anticipated next year [32] Question: What is driving the large increase in guidance now? - Management attributed the increase to strong operating results and the successful transition in executive leadership, which provided certainty in G&A costs [36][38] Question: What markets are showing the strongest and least strongest blended growth? - Strongest growth is seen in Omaha and St. Cloud, driven by value-add spend over the last 18 months [69]

There were no non-financial assets or liabilities measured at fair value on a nonrecurring basis at June 30, 2023 and December 31, 2022. The fair value of unsecured senior notes and mortgages payable are estimated based on the discounted cash flows of the loans using market research and management estimates of comparable interest rates, excluding any prepayment penalties (Level 3). NOTE 8 • ACQUISITIONS AND DISPOSITIONS Centerspace did not acquire new real estate during the three months ended June 30, 2023 ...