Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, which sparked a long-lasting interest in markets and the economy [1] - Recently, the author has been combining long stock positions with covered calls and cash secured puts, indicating a strategic approach to investment [1] - The investment philosophy is fundamentally long-term, with a primary focus on REITs and financials, along with occasional insights on ETFs and other stocks influenced by macroeconomic trends [1]

Financial Data and Key Metrics Changes - As of March 20, 2025, there were 16,726,594 common shares outstanding, with 14,681,024 shares represented at the meeting, indicating approximately 87.8% of all shares entitled to vote were present [7] - Proposal one for the election of trustees received at least 93.5% support from shareholders, while proposal two received 96.1% approval, proposal three received 95.95%, and proposal four received 99.1% [10][11] Business Line Data and Key Metrics Changes - No specific data on business line performance was provided in the meeting records Market Data and Key Metrics Changes - No specific market data was discussed during the meeting Company Strategy and Development Direction and Industry Competition - The company is focused on creating long-term value for shareholders and appreciates their continued interest and investment [12] Management's Comments on Operating Environment and Future Outlook - Management expressed gratitude for the hard work and commitment of associates over the past year, emphasizing the mission of providing great homes for residents [5] Other Important Information - Jeff Kyra will be retiring from the Board after ten years of service, and his contributions were recognized by the Board [12] Q&A Session Summary - There were no questions submitted during the meeting [13]

Core Perspective - The housing market presents contrasting views between homeowners and real estate professionals, with homeowners seeing high property values while realtors report declining transaction volumes [1][2][4][6] Market Dynamics - Real estate professionals are currently pessimistic due to macroeconomic changes, including tariff uncertainties and fluctuating mortgage rates, leading to postponed property purchases and a significant drop in commercial real estate transaction activity [6][10][11] - The Dow Jones REIT index has shown a correlation with declining transaction volumes, reflecting the negative sentiment from real estate professionals [11][20] REITs and Valuation - The market's perception of REITs is skewed by the gloomy outlook of transaction-driven professionals, despite the underlying real estate values and net operating income (NOI) remaining stable or growing [15][20] - REITs, as property owners, focus on operating income and property value rather than transaction volume, which is a key distinction in understanding their performance [14][20] Financial Metrics - The median REIT is trading at 77.9% of its Net Asset Value (NAV), indicating a significant discount compared to the actual asset values [20][21] - Funds From Operations (FFO) have shown growth post-COVID, with a modest dip in 2020, but overall trends indicate a recovery and growth trajectory [19] Investment Opportunities - The current market presents an opportunity to invest in REITs at a discount, as property values remain high while REIT stocks are undervalued [22][23] - Specific examples include purchasing apartments at approximately 75% of NAV and farmland at about 65% of its asset value, highlighting the disconnect between stock prices and asset values [23][26]

Financial Data and Key Metrics Changes - Core FFO for Q1 was reported at $1.21 per diluted share, reflecting a 2.1% year-over-year increase in same store NOI [13] - Revenues from same store communities increased by 3.5% compared to the same quarter of 2024, with occupancy rising by 120 basis points to 95.8% [13][14] - Same store expenses increased by 5.8% year-over-year, primarily due to property taxes [14] Business Line Data and Key Metrics Changes - The average physical occupancy for the same store portfolio improved to 96%, with renewal retention around 57% [5] - Blended leasing spreads increased by 70 basis points in Q1, with new lease spreads improving from negative 1.1% to positive 2.4% in April [5][6] - North Dakota led the portfolio with blended leasing spreads of 5.3% year-to-date, while Minneapolis showed positive leasing spreads [7][8] Market Data and Key Metrics Changes - Apartment demand remains resilient, with only a 2.2% expected expansion of apartment stock in the markets, down from 3.8% the previous year [9] - Institutional quality assets in Colorado and Minneapolis are pricing at mid to high 4% and low 5% cap rates, respectively [10] - The company’s footprint in the Midwest and Mountain West regions continues to benefit from a lack of new supply [6][10] Company Strategy and Development Direction - The company is maintaining discipline in all areas within its control and is ready to take advantage of opportunities to advance its platform [8] - Focus remains on enhancing the differentiated Mountain West and Midwest geography, with a robust balance sheet and capital positioning [11] - The company is evaluating new investment opportunities while being mindful of market exposures and leverage [11] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed guidance for the full year, expecting to achieve a midpoint of $4.98 per share for core FFO and 2.25% year-over-year same store NOI growth [15][16] - The macroeconomic environment is expected to continue impacting results, but strong demand trends are anticipated to improve new lease rates as the year progresses [8][10] - Management expressed optimism about the demand in Denver, expecting an inflection point in rents towards the end of the year [39] Other Important Information - The company reported a total liquidity of over $223 million, including cash on hand and a line of credit [16] - Retention rates are expected to improve, with April showing a jump to about 58% [32][63] Q&A Session Summary Question: Midwest apartment market performance - Management acknowledged strong performance in the Midwest, particularly in North Dakota and Omaha, and confirmed that they expected strong growth [20] Question: Occupancy projections for 2025 - Management projected occupancy around 95% for the year, with current occupancy at 96% [23] Question: Operating expenses and lumpiness - Management indicated that lumpiness in operating expenses is expected primarily in the first and fourth quarters, with increased assessments in certain jurisdictions [30] Question: Denver market outlook - Management noted a 200 basis point improvement in new lease spreads in Denver from March to April, with expectations for an inflection point in rents by the end of the year [39] Question: Impact of agriculture on local economies - Management stated that while agriculture is significant, the primary economic drivers in their markets are healthcare and education [56] Question: Retention rates compared to peers - Management explained that lower retention rates in Denver were impacting overall figures, but strong retention was observed in other markets [62]

Financial Data and Key Metrics Changes - Core FFO for Q1 was reported at $1.21 per diluted share, reflecting a 2.1% year-over-year increase in same store NOI [13][14] - Revenues from same store communities increased by 3.5% compared to the same quarter of 2024, with occupancy rising by 120 basis points to 95.8% [13][14] - Same store expenses increased by 5.8% year-over-year, primarily due to property taxes [14] Business Line Data and Key Metrics Changes - The average physical occupancy for the same store portfolio improved to 96%, with April renewal retention at approximately 57% [5][6] - Blended leasing spreads increased by 70 basis points in Q1, with renewal increases steady at 2% to mid-3% levels [5][6] - New lease spreads improved from negative 1.1% in Q1 to positive 2.4% in April [6] Market Data and Key Metrics Changes - The multifamily market is experiencing strong demand, with a projected 2.2% expansion of apartment stock in the company's markets over the next twelve months, down from 3.8% the previous year [9] - In Minneapolis, leasing spreads are outperforming the portfolio average, while Denver is still facing supply pressure [7][10] - North Dakota leads the portfolio with blended leasing spreads of 5.3% year-to-date, indicating strong market performance [6][10] Company Strategy and Development Direction - The company is focused on maintaining discipline in all controllable areas and is prepared to capitalize on opportunities to advance its platform [7][11] - The capital allocation strategy emphasizes enhancing the differentiated Mountain West and Midwest geography [11] - The company aims to evaluate new investment opportunities while being mindful of market exposures and leverage [11] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed guidance for the full year, expecting to achieve a core FFO midpoint of $4.98 per share and same store NOI growth of 2.25% [15] - The company is optimistic about the demand trends in the Midwest and Mountain West regions, despite some challenges in Denver [7][10] - Management noted that the macroeconomic environment remains volatile but believes in the long-term durability of the multifamily asset class [10] Other Important Information - The company reported a robust liquidity position with over $223 million available between cash and credit lines [15] - The debt maturity profile is well-laddered with minimal maturities this year and a weighted average debt cost of 3.6% [15] Q&A Session Summary Question: Are operations ahead of plan given strong Midwest apartment market? - Management acknowledged strong performance in the Midwest, particularly in North Dakota and Omaha, and confirmed they are on plan [18][19] Question: Will occupancy decrease in peak season for rate increases? - Management projected occupancy around 95% for the year, with current occupancy at 96% [21][22] Question: How to expect growth in OpEx for the remainder of the year? - Management indicated some lumpiness in OpEx, particularly in real estate taxes, but expects smoother growth moving forward [25][29] Question: What is the outlook for the Denver market? - Management noted a 200 basis point improvement in new lease spreads in April and anticipates an inflection point in rents by the end of the year [35][38] Question: How does agriculture impact local economies in the markets? - Management stated that while agriculture is significant, healthcare and education are the primary economic drivers in their markets [54][56] Question: What are the expectations for new lease rates for the year? - Management expects new lease rates to improve and taper off into the fall, affirming their guidance [65][66]

分组1 - Centerspace reported quarterly funds from operations (FFO) of $1.21 per share, matching the Zacks Consensus Estimate, but down from $1.23 per share a year ago [1] - The company achieved revenues of $67.09 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 0.59% and up from $64.51 million year-over-year [2] - Centerspace has surpassed consensus FFO estimates three times in the last four quarters [1] 分组2 - The stock has underperformed, losing about 8.8% since the beginning of the year compared to the S&P 500's decline of 5.3% [3] - The current consensus FFO estimate for the upcoming quarter is $1.24 on revenues of $67.2 million, and for the current fiscal year, it is $4.93 on revenues of $269.7 million [7] - The Zacks Industry Rank for REIT and Equity Trust - Residential is in the bottom 42% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - Centerspace reported a net loss of $0.22 per diluted share for Q1 2025, an improvement from a net loss of $0.37 per diluted share in Q1 2024[4]. - Revenue for Q1 2025 increased by $2.6 million or 4.0% to $67.1 million compared to $64.5 million in Q1 2024[4]. - Same-store revenues rose by 3.5% year-over-year, contributing to a 2.1% increase in same-store Net Operating Income (NOI)[4]. - Core FFO per diluted share decreased by 1.6% to $1.21 in Q1 2025, down from $1.23 in Q1 2024, primarily due to increased property taxes[4]. - The weighted average occupancy rate improved to 95.8% in Q1 2025 from 94.6% in Q1 2024[4]. - The net loss attributable to common shareholders was $3,734 million, an improvement from a net loss of $5,079 million in the previous quarter[20]. - Operating income for Q1 2025 was $4,746,000, an increase of $1,888,000 or 66.1% sequentially and $671,000 or 16.5% year-over-year[29]. - Net operating income for Q1 2025 was $40,362,000, reflecting a $280,000 increase or 0.7% sequentially and a $925,000 increase or 2.3% year-over-year[29]. - The company reported a net loss per common share of $0.22, an improvement from $0.31 in the previous quarter[20]. Liquidity and Capital Structure - Centerspace has total liquidity of $223.2 million at the end of Q1 2025, consisting of $211.3 million available under lines of credit and $11.9 million in cash[5]. - Total debt as of March 31, 2025, was $955,453,000, slightly down from $966,623,000 at the end of the previous quarter[44]. - The debt service coverage ratio improved to 2.83x for the three months ended March 31, 2025, compared to 2.80x in the previous quarter[50]. - The total debt to total market capitalization ratio was 42.9% as of March 31, 2025, compared to 42.4% in the previous quarter[48]. - The average interest rate on total debt was 3.57% for the quarter ended March 31, 2025, slightly down from 3.58% in the previous quarter[44]. Revenue and Expense Trends - Total expenses decreased to $62,347 million from $63,551 million in the previous quarter, reflecting a reduction in property operating expenses[20]. - Total property operating expenses, including real estate taxes, rose to $26,731,000, an increase of $404,000 or 1.5% sequentially and $1,662,000 or 6.6% year-over-year[32]. - Same-store controllable expenses totaled $15,710,000, an increase of $316,000 or 2.1% year-over-year[32]. - Real estate taxes increased by $1,221,000 or 20.3% year-over-year, totaling $7,236,000 in Q1 2025[32]. - The overall expenses for same-store properties increased by 5.8% to $25,380,000 in Q1 2025 from $24,000,000 in Q1 2024[53]. Outlook and Guidance - The updated financial outlook for 2025 maintains the same-store revenue growth guidance at 1.50% to 3.50%[7]. - The company anticipates FFO per share to remain between $4.73 and $4.97 for 2025[7]. - The Core FFO per diluted share is projected to be between $4.86 and $5.10 for 2025, compared to $4.73 in the previous year[67]. - Non-controllable expenses for 2025 are expected to range from $9,670,000 to $9,670,000, reflecting an increase of 5.75% to 7.75%[67]. - The total NOI for Same-Store properties is projected to be $38,878,000, with a growth rate of 1.25% to 3.25%[67]. Operational Metrics - The average monthly rental rate increased by 1.7% to $1,586 in Q1 2025, up from $1,559 in Q1 2024[53]. - The average monthly revenue per occupied home rose by 2.2% to $1,775 in Q1 2025, compared to $1,737 in Q1 2024[53]. - The Average Monthly Rental Rate for Same-Store properties increased to $1,586, up from $1,573 in the previous quarter, representing a growth of 0.8%[60]. - The Weighted Average Occupancy for Same-Store properties improved to 95.8%, compared to 95.5% in the prior quarter[60]. - The number of Same-Store apartment homes was 12,595, showing a slight increase from 12,580 on December 31, 2024[60]. Market and Regional Performance - North Dakota reported a significant NOI increase of 12.2% year-over-year, reaching $4,513,000 in Q1 2025[53]. - Minneapolis, MN achieved a 3.4% revenue growth, totaling $22,482,000 in Q1 2025, compared to $21,736,000 in Q1 2024[53]. - Omaha, NE experienced a 5.1% revenue increase to $3,751,000 in Q1 2025, up from $3,568,000 in Q1 2024[53]. - The company reported a 4.5% increase in revenues for the Other Mountain West region, totaling $5,332,000 in Q1 2025[53]. Non-GAAP Measures and Definitions - The company emphasizes that FFO and Core FFO are non-GAAP measures that provide additional insights into operational performance, excluding certain non-routine items[82]. - Net Operating Income (NOI) is defined as total real estate revenues less property operating expenses, excluding various costs, and is considered an important measure of operating performance[91]. - Total debt to total market capitalization is a non-GAAP measure that assesses the proportion of total debt relative to the overall market capitalization, providing insight into financial leverage[103]. - Same-store controllable expenses exclude real estate taxes and insurance, providing a measure of expenses within management's control for budgeting and performance evaluation[100].

Core Insights - Centerspace reported a net loss of $0.22 per diluted share for Q1 2025, an improvement from a net loss of $0.37 per diluted share in Q1 2024 [2][5] - Funds from Operations (FFO) per diluted share increased slightly to $1.17 in Q1 2025 from $1.16 in Q1 2024, while Core FFO per diluted share decreased by 1.6% to $1.21 from $1.23 [2][5] - Same-store revenues rose by 3.5% year-over-year, contributing to a 2.1% increase in same-store Net Operating Income (NOI) [2][5] Financial Performance - Total revenue for Q1 2025 was $67.1 million, up by $2.6 million or 4.0% compared to $64.5 million in Q1 2024 [5] - Same-store expenses increased by 5.8% year-over-year, while same-store NOI saw a 2.1% increase [2][5] - The weighted average occupancy rate improved to 95.8% in Q1 2025 from 94.6% in Q1 2024 [2][5] Lease Metrics - New lease rate growth declined by 1.1% in Q1 2025, while renewal lease rate growth increased to 3.5% from 3.1% in Q4 2024 [2][5] - The retention rate dropped to 49.2% in Q1 2025 from 54.7% in Q4 2024 [2][5] Balance Sheet - As of the end of Q1 2025, Centerspace had total liquidity of $223.2 million, comprising $211.3 million available under lines of credit and $11.9 million in cash and cash equivalents [4] Updated Financial Outlook - Centerspace maintained its 2025 financial outlook, projecting same-store revenue growth between 1.50% and 3.50% and same-store NOI growth between 1.25% and 3.25% [7] - The updated outlook for FFO per diluted share remains between $4.73 and $4.97, and for Core FFO per diluted share between $4.86 and $5.10 [7]

Revenue and Income - For the three months ended March 31, 2025, revenue increased by $2.6 million or 4.0% to $67.1 million, compared to $64.5 million for the same period in 2024[116]. - Same-store revenues increased by 3.5% for the three months ended March 31, 2025, driving a 2.1% increase in same-store NOI compared to the same period of the prior year[116]. - Total revenue for the three months ended March 31, 2025, was $67.1 million, up 4.0% from $64.5 million in the same period of 2024[124]. - Revenue from same-store communities increased by 3.5%, or $2.2 million, for the three months ended March 31, 2025, compared to the same period in the prior year[127]. - Operating income increased by $671,000 or 16.5% to $4.746 million for the three months ended March 31, 2025, compared to $4.075 million for the same period in 2024[122]. - Net operating income (NOI) increased by $925,000 or 2.3% to $40.362 million for the three months ended March 31, 2025, compared to $39.437 million for the same period in 2024[122]. - Net operating income (NOI) for same-store communities increased by $781,000 to $38.9 million for the three months ended March 31, 2025[127]. - Funds from Operations (FFO) applicable to common shares increased to $23.2 million for the three months ended March 31, 2025, a 10.9% increase from $20.9 million in the prior year[143]. - Core FFO applicable to common shares and units rose to $23.979 million in Q1 2025, compared to $22.046 million in Q1 2024, marking an increase of about 8.8%[145]. Loss and Expenses - Net loss was $0.22 per diluted share for the three months ended March 31, 2025, compared to a net loss of $0.37 per diluted share for the same period in 2024[116]. - Net loss available to common shareholders was $3.7 million for the three months ended March 31, 2025, compared to a net loss of $5.5 million in the same period of 2024, representing a 32.3% improvement[137]. - General and administrative expenses increased by $374,000 to $5.0 million in Q1 2025, primarily due to higher share-based compensation and consulting fees[133]. - Casualty loss decreased to $532,000 in Q1 2025 from $820,000 in the same period of 2024, reflecting less claim activity[131]. - Property operating expenses for same-store communities increased by 5.8%, or $1.4 million, in the three months ended March 31, 2025[127]. - Interest expense rose by 4.6% to $9.6 million for the three months ended March 31, 2025, compared to $9.2 million in the same period of 2024[135]. Assets and Liquidity - Property owned at historical cost was $2.5 billion as of March 31, 2025[112]. - The company owned interests in 71 apartment communities consisting of 13,012 apartment homes as of March 31, 2025[112]. - As of March 31, 2025, total liquidity was approximately $223.2 million, slightly down from $224.6 million as of December 31, 2024[153]. - Cash and cash equivalents decreased to $11.9 million as of March 31, 2025, from $12.0 million as of December 31, 2024[165]. - The company had a multibank revolving line of credit with total commitments of $250 million, with $46 million outstanding as of March 31, 2025, leaving $204 million available for borrowing[154]. - The weighted average interest rate on mortgage debt was 4.02% as of March 31, 2025, with mortgage loan indebtedness totaling $418.5 million[160]. Distributions - The company has paid quarterly distributions continuously since its first distribution in 1971[113]. - Distributions declared for common shares were $0.77 per share in Q1 2025, compared to $0.75 per share in Q1 2024[148]. - The company paid distributions on common shares, Series E preferred units, and Units totaling $14.7 million[173]. Capital and Investments - The company funded capital improvements for apartment communities amounting to approximately $5.0 million[173]. - The company repaid $1.9 million of mortgage principal during the reporting period[173]. - The company had no acquisitions or dispositions during the three months ended March 31, 2025[147]. - The company amended its equity distribution agreement to increase the maximum aggregate offering price of common shares available for sale from $250 million to $500 million[161]. Market and Economic Conditions - The company is facing supply chain challenges and inflationary pressures, which are likely to increase operating expenses, particularly in energy, labor, and construction materials[169]. - Rising interest rates could negatively impact the company's borrowing costs for variable rate borrowings or refinancing activities[170]. - The company's exposure to market risk is primarily related to fluctuations in interest rates on fixed and variable rate debt obligations[175]. - Future revenue and cash flows are dependent on prevailing market prices and interest rates[174]. - The company does not enter into derivative instruments for trading or speculative purposes[175]. Accounting and Compliance - There have been no significant changes to critical accounting policies during the three months ended March 31, 2025[172]. - As of March 31, 2025, the company had no significant off-balance sheet arrangements[171].

Market Efficiency and Stock Price Movements - The market exhibits varying degrees of efficiency, particularly less efficient during erratic price movements, with recent intraday swings reaching up to 8 percentage points [1] - It is essential to differentiate between stocks that have declined for valid reasons and those that are merely affected by broader market movements [2] Categories of Stock Price Declines - Stock price declines can be categorized into two types: one where earnings decrease leading to a price drop, and another where multiples contract without a change in earnings [6] - The focus should be on investing in companies whose fundamentals remain intact despite a drop in multiples [2] Fundamental Impact on Stocks - Macro news tends to influence the entire market, often leading to mispricing, while individual stock news affects specific companies [3] - Companies like Apple (AAPL) are more susceptible to macroeconomic news, which can lead to a fundamental decline in earnings [4] Investment Opportunities in REITs - Centerspace (CSR), a midwestern apartment REIT, has seen a 13.7% decline in the last month, but its fundamentals remain strong due to decreasing apartment construction starts [5][11] - Broadstone Net Lease (BNL) has also experienced a 13% selloff, yet its long-term triple net lease structure ensures stable revenue growth [14][20] - Easterly Government Properties (DEA) faced a total drop of over 26% due to a dividend cut, but its earnings guidance remains unchanged, indicating a potential undervaluation [23][26] Market Reactions and Valuation - The market's reaction to dividend changes can lead to significant price drops that do not reflect the underlying fundamentals of the company [32] - The AFFO yield for DEA is now above 11%, suggesting it is undervalued compared to its reliable cash flows from long-term government leases [35] Conclusion on Investment Strategy - Market pricing inefficiencies create opportunities for investors to identify undervalued stocks that do not reflect their true fundamental value [36]