Core Insights - Centerspace published its 2024 ESG Report and inaugural TCFD report, emphasizing its commitment to sustainable practices in the multifamily industry [1][3] - The company met four out of five ESG goals two years ahead of schedule and improved its GRESB score from 63 to 70 [2] Group 1: ESG Commitment - Centerspace's 2024 ESG report aligns with GRI's 2024 Universal Standards and the United Nations Sustainable Development Goals [2] - The company established an ESG Committee in 2019 to lead sustainability initiatives [1] Group 2: Climate Risk Management - The inaugural TCFD report serves as a foundation for managing climate risk and aligns with industry-standard reporting frameworks [3] - Centerspace is focused on continuous improvement in disclosure and climate risk mitigation [3] Group 3: Operational Practices - The company is committed to responsible business practices, including resource stewardship, waste reduction, and energy and water conservation [4] - Centerspace operates 73 apartment communities with a total of 13,773 homes across several states [4]

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The importance of patience in dividend stocks is highlighted, as a 10% drip on a higher-yielding stock is more significant for income investors compared to the same drop on the S&P 500 [2] - The article emphasizes a defensive investment approach with a medium- to long-term horizon [2]

Financial Data and Key Metrics Changes - CenterSpace reported a core FFO of $1.28 per diluted share for Q2 2025, driven by a 2.9% year-on-year increase in same-store NOI [16] - Same-store revenues increased by 2.7% year-on-year, with a 60 basis point increase in occupancy and a 2.1% increase in average monthly revenue per occupied home [16] - Same-store expenses rose by 2.4% year-on-year, with controllable expenses up 3.2% and non-controllable expenses up 1.2% [16] Business Line Data and Key Metrics Changes - The same-store portfolio experienced a 2.7% year-on-year revenue increase, contributing to a 2.9% growth in NOI [4] - Leasing spreads in Minneapolis increased by 2.7%, with new leases up 2.5% and renewals up 2.8% [7] - In Denver, leasing spreads remained challenged due to record supply, although there are expectations for improvement in the future [7] Market Data and Key Metrics Changes - The occupancy rate reached 96.1% in the quarter, supported by high retention of 60.2% [5] - The rent-to-income ratio for residents was reported at 22.5%, with same-store bad debt at approximately 40 basis points for the quarter [7] - Salt Lake City showed strong momentum with the second highest level of effective rent change among institutional markets [11] Company Strategy and Development Direction - The company is focused on capital recycling to improve portfolio metrics and increase exposure to institutional markets [5] - Recent acquisitions in Colorado and Utah, along with dispositions in Minnesota, are part of the strategy to enhance growth profiles [5] - The company aims to maintain best-in-class operations while driving shareholder results through continued earnings growth [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational platform's readiness for market repositioning efforts, with strong absorption rates in many markets [5] - The anticipated drop in supply in Denver, combined with expected job growth, is expected to turn current headwinds into tailwinds [7] - Management remains optimistic about the future despite macro volatility affecting stock prices [8] Other Important Information - An impairment charge of $14.5 million was booked due to the shorter holding period for properties being marketed for sale [17] - The company expanded its line of credit capacity by $150 million to facilitate recent acquisitions [19] Q&A Session Summary Question: Can you talk about any guardrails around dilution to offset organic growth? - Management indicated they are monitoring the balance sheet closely and aim to continue growing earnings year over year while managing temporary upticks in leverage [22][23] Question: Do you have any July leasing stats? - Management noted that trends from June continued, with Denver showing signs of improvement, although overall leasing remains healthy [24][25] Question: How have your expectations for top-line growth changed? - Expectations for Denver have been adjusted downward, but strong performance in tertiary markets has offset this [30] Question: Can you discuss the types of buyers for the assets being sold? - There is strong buyer interest with multiple offers from both local and national capital sources [32][33] Question: What is the long-term plan for leverage? - Management aims to reduce leverage below seven times over time, ideally targeting the low fives [36][37] Question: What are the cap rates on recent acquisitions? - Recent acquisitions had cap rates in the high fours, with specific rates of 4.8% for Railway and 4.65% for Sugar Mountain [42] Question: How is the company thinking about timing of capital allocation? - Management is not racing against a clock but is focused on taking advantage of opportunities as they arise [81][82]

Financial Performance - Centerspace (CSR) reported quarterly funds from operations (FFO) of $1.28 per share, exceeding the Zacks Consensus Estimate of $1.26 per share, and showing a slight increase from $1.27 per share a year ago [1] - The company achieved revenues of $68.55 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.48%, compared to $65.04 million in the same quarter last year [2] - Over the last four quarters, Centerspace has exceeded consensus FFO estimates three times and has topped consensus revenue estimates three times as well [2] Stock Performance - Centerspace shares have declined approximately 18.1% since the beginning of the year, while the S&P 500 has gained 6.1% [3] - The current consensus FFO estimate for the upcoming quarter is $1.23 on revenues of $67.8 million, and for the current fiscal year, it is $4.95 on revenues of $270.65 million [7] Industry Outlook - The REIT and Equity Trust - Residential industry, to which Centerspace belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in estimate revisions, which can impact Centerspace's stock performance [5]

Exhibit 99.1 | | | Year-Over-Year Comparison | Sequential Comparison | | --- | --- | --- | --- | | (2) Same-Store Results | | Q2 2025 vs. Q2 2024 | Q2 2025 vs. Q1 2025 | | Revenues | | 2.7% | 1.1% | | Expenses | | 2.4% | (1.3)% | | Net Operating Income ("NOI") | (1) | 2.9% | 2.6% | | | Three months ended | | | Six months ended | | | --- | --- | --- | --- | --- | --- | | | March 31, | | | | | | (2) Same-Store Results | June 30, 2025 | 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | | Weighted Average ...

Part I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported a $16.8 million net loss in Q2 2025, driven by a $14.5 million impairment charge, despite 5.4% revenue growth and total assets reaching $2.01 billion [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $2.01 billion by June 30, 2025, primarily due to assets held for sale, while total liabilities rose to $1.17 billion, leading to a decrease in total equity Condensed Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$2,013,239** | **$1,913,707** | | Total real estate investments | $1,809,608 | $1,854,761 | | Assets held for sale, net | $137,366 | $— | | **Total Liabilities** | **$1,168,347** | **$1,014,704** | | Revolving lines of credit | $216,030 | $47,359 | | Mortgages payable, net | $595,668 | $608,506 | | **Total Equity** | **$833,582** | **$882,443** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q2 2025 revenue grew 5.4% to $68.5 million, but a $16.8 million net loss was recorded, primarily due to a $14.5 million impairment charge and higher interest expense Q2 and H1 2025 vs 2024 Performance (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$68,549** | **$65,043** | **$135,642** | **$129,549** | | Total Expenses | $75,345 | $57,851 | $137,692 | $117,705 | | Impairment of real estate | $14,543 | $— | $14,543 | $— | | Interest Expense | $(10,724) | $(9,332) | $(20,359) | $(18,539) | | **Net Loss** | **$(16,785)** | **$(1,663)** | **$(20,966)** | **$(6,455)** | | **Net Loss per Share** | **$(0.87)** | **$(0.19)** | **$(1.09)** | **$(0.56)** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $50.7 million for H1 2025, while investing activities used $164.5 million, largely for real estate acquisitions, offset by $118.8 million from financing activities Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $50,694 | $47,264 | | Net cash used by investing activities | $(164,468) | $(28,416) | | Net cash provided by (used by) financing activities | $118,838 | $(12,705) | | **Net increase in cash** | **$5,064** | **$6,143** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's REIT operations, including a $149.0 million acquisition, a $14.5 million impairment on assets held for sale, and total debt reaching $1.11 billion - As of June 30, 2025, Centerspace is a REIT focused on owning and managing 72 apartment communities comprising 13,353 apartment homes[25](index=25&type=chunk) - During Q2 2025, the company acquired the 341-home Sugarmont property in Salt Lake City, UT, for **$149.0 million**[101](index=101&type=chunk)[102](index=102&type=chunk) - A loss of **$14.5 million** was recorded for the impairment of five apartment communities, which were written down to fair value upon being classified as held for sale[54](index=54&type=chunk) - Subsequent to the quarter's end, on July 29, 2025, the company acquired Railway Flats, a 420-home community in Loveland, CO, for **$132.2 million**, including the assumption of **$76.5 million** in mortgage debt[131](index=131&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a 5.4% revenue increase in Q2 2025, but a net loss of $0.87 per share due to a $14.5 million impairment, while Core FFO per share slightly increased to $1.28 [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q2 2025 revenue grew 5.4% to $68.5 million, with same-store NOI up 2.9%, but the net loss widened to $16.8 million due to a $14.5 million impairment and higher interest expense Same-Store Performance Analysis (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Same-Store Revenue | $58,073k | $56,534k | 2.7% | | Same-Store Property Operating Expenses | $21,880k | $21,363k | 2.4% | | **Same-Store NOI** | **$36,193k** | **$35,171k** | **2.9%** | | Same-Store Weighted Average Occupancy | 96.1% | 95.5% | 0.6% | - The company recorded a **$14.5 million** impairment on five apartment communities that were reclassified to assets held for sale, which was the primary driver of the quarterly net loss[166](index=166&type=chunk) - Interest expense increased by **14.9%** in Q2 2025, primarily due to a higher outstanding balance on lines of credit used to fund a recent acquisition[170](index=170&type=chunk) [Funds from Operations and Core Funds from Operations](index=33&type=section&id=Funds%20from%20Operations%20and%20Core%20Funds%20from%20Operations) Q2 2025 FFO increased 10.8% to $24.5 million, with Core FFO per diluted share slightly rising to $1.28, reflecting improved NOI and the absence of prior-year preferred dividends FFO and Core FFO Reconciliation (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net loss available to common shareholders | $(14,515) | $(2,903) | | FFO applicable to common shares and Units | $24,537 | $22,143 | | Core FFO applicable to common shares and Units | $25,297 | $22,801 | | **FFO per share and Unit - diluted** | **$1.24** | **$1.23** | | **Core FFO per share and Unit - diluted** | **$1.28** | **$1.27** | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, total liquidity was $206.3 million, supported by an expanded $400.0 million Unsecured Credit Facility, with major capital uses including a $150.1 million property acquisition - Total liquidity was approximately **$206.3 million** as of June 30, 2025, including **$194.0 million** available on lines of credit and **$12.4 million** in cash[191](index=191&type=chunk) - In May 2025, the company expanded its Unsecured Credit Facility borrowing capacity from **$250.0 million** to **$400.0 million**[192](index=192&type=chunk) - The company's share repurchase program, which authorized up to **$50.0 million** in repurchases, expired on March 10, 2025. No shares were repurchased in the first six months of 2025[201](index=201&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on variable-rate debt, with no material changes reported for the quarter - The company's main market risk is from interest rate changes affecting its variable rate debt. No material changes were reported for the quarter[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[217](index=217&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[218](index=218&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material pending legal proceedings beyond routine litigation incidental to its business - The company is not a party to any material pending legal proceedings[220](index=220&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported in the current period - No material changes to previously disclosed risk factors were reported[221](index=221&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued unregistered common shares and redeemed 52,500 Series D preferred units, while its $50.0 million share repurchase program expired - The company's **$50.0 million** share repurchase program expired on March 10, 2025[224](index=224&type=chunk) Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Number of Shares and Units Purchased | Average Price Paid per Share and Unit | | :--- | :--- | :--- | | April 1 - 30, 2025 | 30 | $64.01 | | May 1 - 31, 2025 | — | — | | June 1 - 30, 2025 | 52,500 | $100.00 | | **Total** | **52,530** | **$99.98** | [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No trustees or executive officers adopted or terminated Rule 10b5-1 trading plans during Q2 2025 - No company trustees or executive officers adopted or terminated a Rule 10b5-1 trading plan during the quarter[225](index=225&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section indexes all exhibits filed with the Form 10-Q, including corporate governance documents, incentive plans, and CEO/CFO certifications - The report includes standard exhibits such as CEO/CFO certifications under Sections 302 and 906, and financial data formatted in iXBRL[228](index=228&type=chunk)

Core Insights - Centerspace reported a net loss of $0.87 per diluted share for Q2 2025, compared to a net loss of $0.19 per diluted share in Q2 2024 [7] - Funds from Operations (FFO) per diluted share for Q2 2025 was $1.24, a decrease from $1.28 in Q2 2024 [2][7] - Core FFO per diluted share increased by 0.8% to $1.28 for Q2 2025, compared to $1.27 for the same period in 2024 [7] Financial Performance - Revenue for Q2 2025 increased by $3.5 million or 5.4% to $68.5 million, compared to $65.0 million for Q2 2024 [7] - Same-store revenues increased by 2.7% for Q2 2025 compared to Q2 2024, contributing to a 2.9% increase in same-store Net Operating Income (NOI) [7] - Same-store expenses rose by 2.4% year-over-year, while sequentially they decreased by 1.3% [2] Operational Metrics - Weighted average occupancy for Q2 2025 was 96.1%, up from 95.5% in Q2 2024 [2] - New lease rate growth was 2.1% for Q2 2025, while renewal lease rate growth was 2.6% [2] - The retention rate improved to 60.2% in Q2 2025 from 49.2% in Q2 2024 [2] Balance Sheet and Liquidity - As of the end of Q2 2025, Centerspace had total liquidity of $206.3 million, including $194.0 million available under lines of credit and $12.4 million in cash [5] - The company updated its 2025 financial outlook, projecting a net loss per share of $(0.71) to $(0.45) and FFO per share of $4.70 to $4.83 [9] Recent Developments - Centerspace acquired Sugarmont, its first apartment community in Salt Lake City, for $149.0 million [7] - On July 29, 2025, the company closed on the acquisition of Railway Flats, a 420-home apartment community in Loveland, CO, for $132.2 million [10]

Company Overview - Centerspace (NYSE: CSR) is an owner and operator of apartment communities, focusing on providing quality homes with an emphasis on integrity and service [2]. - Founded in 1970, the company currently owns 72 apartment communities comprising 13,353 homes across several states including Colorado, Minnesota, Montana, Nebraska, North Dakota, South Dakota, and Utah [2]. Upcoming Financial Results - Centerspace will release its operating results for the quarter ended June 30, 2025, after market close on August 4, 2025 [1]. - A conference call to discuss these results is scheduled for August 5, 2025, at 10:00 a.m. Eastern Time [1]. Recognition - Centerspace was recognized as a top workplace for the sixth consecutive year in 2025 by the Minneapolis Star Tribune [2].

Market Overview - The fiber cement market is valued at USD 14.437 billion in 2025 and is projected to grow at a CAGR of 4.28%, reaching USD 17.807 billion by 2030, driven by rising construction activities and demand for eco-friendly products [1][7]. Market Trends - The global construction sector's expansion significantly boosts the fiber cement market, with rapid urbanization and industrialization in developing countries being major growth drivers [2]. - Challenges include high manufacturing costs and the need for skilled labor for advanced technologies [2]. Regional Insights - The Asia Pacific region is expected to experience the fastest growth due to urbanization, infrastructure investments, and awareness of fiber cement benefits, supported by government initiatives like India's 'Housing for All by 2024' program [3]. Key Players - Major players in the fiber cement market include James Hardie Industries, Etex Group, Nichiha Corporation, CSR Limited, Gyproc, Everest Industries Limited, Swisspearl Group, Shera, and Ramco Industries [4]. Report Coverage - The report includes historical data (2022-2024) and forecasts (2025-2030), covering growth opportunities, challenges, supply chain outlook, regulatory framework, and competitive positioning [6][9]. - It also provides insights on market size, forecasts, trends by product type, installation types, and end-use sectors [6].

Company Overview - Centerspace owns and operates 13,353 apartments[12] - The company's total capitalization is $2.3 billion[14] - Centerspace's current trading price is at an 18% discount to consensus NAV[15] Operational Performance - Q2 2025 blended same-store leasing spreads are 2.5%[19] - Denver same-store new leasing spreads for May 2025 are 1.6%[21] - Centerspace's ORA score as of May 1, 2025, is 72.17[27] Transaction Activity - 2025 acquisitions include 2 communities with 761 homes, average monthly rent of $2,012 per home, and NOI margin of 67.4%[37] - 2025 dispositions include 12 communities with 1,511 homes, average monthly rent of $1,383 per home, and NOI margin of 52.9%[39] - The Salt Lake City acquisition closed on May 30, 2025, for $149 million, adding a 341-home community[43] Portfolio Composition - Pro forma for 2025 transactions, Minneapolis accounts for 30% of portfolio NOI, Colorado 26%, and Salt Lake City 4%[45] - The company closed a $150 million line of credit expansion on May 29, 2025[45] Market Fundamentals - Denver portfolio includes 7 communities with 1,977 homes, average rent of $1,976, and 94.7% occupancy[79] - Minneapolis portfolio includes 20 communities with 4,032 homes, average rent of $1,579, and 95.5% occupancy[88]