Employee and Training Information - As of December 31, 2024, the company had 404 employees, with an average tenure of 4.27 years[45][46] - Team members completed over 2,700 volunteer hours during the year ended December 31, 2024[47] - A total of approximately 24,700 training courses were completed by team members, along with 3,965 live training events in 2024[49] - As of December 31, 2024, 74.5% of team members self-identified as white, 7.7% as Hispanic and/or Latino, and 5.7% as Black or African American[51] Market and Economic Risks - The company faces competition from various housing alternatives, which could adversely affect rental and occupancy rates[55] - Economic conditions, including inflation and unemployment rates, significantly impact the company's financial performance[60][68] - The company is concentrated in the multifamily housing sector, making it vulnerable to downturns in this asset class[67] - The company intends to explore acquisitions or developments in new and existing geographic markets, which introduces various risks[65] - The company faces significant risks related to inflation, which has risen to levels not seen in decades, potentially increasing operating costs and limiting rent increases[70] - Catastrophic weather events and climate change pose risks to the company's properties, potentially leading to damages that exceed insurance coverage[71] - The company may be subject to rent stabilization regulations, which could limit its ability to raise rents and increase operating costs, impacting rental revenues[75] - Competition from various institutions in the real estate market may limit the company's ability to acquire attractive investment opportunities, adversely affecting profitability[77] Compliance and Regulatory Risks - Compliance with government regulations and potential liabilities under environmental laws could affect the company's costs and investment strategies[57] - Increased scrutiny from regulators regarding anti-competitive practices in the residential real estate industry could lead to legal challenges and increased compliance costs[76] - Changes in federal or state laws regarding climate change could increase capital expenditures without a corresponding increase in revenue, adversely impacting financial results[74] - Compliance with laws benefiting disabled persons may require unexpected expenditures, impacting investment strategies and overall returns[96] Cybersecurity and Information Security Risks - The company has experienced a ransomware attack previously, which did not materially impact operations, but future cyber-attacks remain a risk[86] - The costs associated with mitigating cybersecurity risks are expected to increase, including expenses for expert services and compliance with regulations[85] - The company faces significant information security risks, with potential breaches leading to legal claims, regulatory penalties, and damage to reputation, which could materially harm financial condition and cash flows[87] Financial and Debt Management Risks - The company anticipates needing to refinance a significant portion of its outstanding debt, totaling approximately $966.6 million as of December 31, 2024, which may not be possible on favorable terms[103] - Mortgage debt obligations expose the company to foreclosure risks, which could result in the loss of properties and adversely affect the overall portfolio value[104] - Conditions in capital and credit markets, including higher interest rates, may limit the company's access to financing and increase the cost of capital, adversely affecting business activities and earnings[106] - The company has incurred additional indebtedness that bears interest at variable rates, which could adversely affect cash flow and shareholder distributions if interest rates rise[107] - The company maintains cash and cash equivalents at insured financial institutions, but there is a concentration of credit risk due to balances exceeding FDIC insurance coverage of $250,000[109] - Interest rate hedging arrangements may lead to losses, particularly if the hedging instruments are not indexed to the same rates as the indebtedness[110] REIT Compliance and Tax Risks - The company must make distributions of at least 90% of its REIT taxable income, limiting its ability to retain cash for growth and increasing reliance on raising additional equity capital[114] - The Board of Trustees has the authority to reduce or suspend distributions on common shares, which could adversely affect shareholder returns[112] - The company’s qualification as a REIT is contingent on meeting specific income and asset tests, with potential tax liabilities if it fails to qualify[117] - If the operating partnership is treated as a corporation for tax purposes, it would significantly reduce cash available for distribution to shareholders[120] - Dividends paid by REITs may be taxed at higher rates than those of non-REIT corporations, potentially making REIT investments less attractive to investors[121] Environmental and Liability Risks - The company may incur substantial liabilities under environmental laws for hazardous substances, which could adversely affect property sales, rentals, and borrowing capabilities[88] - The company does not carry insurance for environmental liabilities, and any encountered liabilities could negatively impact operational results and financial condition[91] - The company has tax protection agreements in place on twenty-eight properties, which could trigger material obligations if sold in a taxable transaction[123] Development and Growth Risks - The company may face challenges in managing growth effectively, particularly through acquisitions of additional real estate properties[80] - The company may face risks related to properties under development, including delays in obtaining necessary permits, which could lead to increased costs or project abandonment[93] - The company has entered into joint ventures, which may involve risks that could conflict with its interests and affect financial performance[97] Market Conditions and Future Outlook - The COVID-19 pandemic has previously impacted the company's business, and future outbreaks of infectious diseases may disrupt operations and financial condition[100] - Financial disruptions in the multifamily property sector could jeopardize financing from Fannie Mae and Freddie Mac, impacting liquidity and credit availability for acquisitions[108] - The company’s exposure to market risk is primarily related to fluctuations in interest rates, which could significantly affect future revenue and cash flows[254] - Legislative changes, such as the Inflation Reduction Act of 2022, could adversely impact the company and its shareholders, particularly through its taxable REIT subsidiaries[130]

Core Insights - Centerspace reported a net loss of $1.27 per diluted share for the year ended December 31, 2024, compared to a net income of $2.32 per diluted share for the year ended December 31, 2023 [8] - Core Funds from Operations (Core FFO) increased to $4.88 per diluted share for 2024, a 2.1% increase from $4.78 in 2023 [8] - Same-store Net Operating Income (NOI) grew by 3.7% year-over-year, driven by a 3.3% increase in same-store revenues [8] Financial Performance - For the three months ended December 31, 2024, diluted net income (loss) per share was $(0.31), an improvement from $(0.65) in the same period of 2023 [2] - Funds from Operations (FFO) for the twelve months ended December 31, 2024, was $4.49 per diluted share, compared to $4.27 in 2023, reflecting a year-over-year increase [2] - Core FFO for the three months ended December 31, 2024, was $1.21 per diluted share, slightly down from $1.22 in the same period of 2023 [2] Operational Metrics - Same-store revenues increased by 3.1% in Q4 2024 compared to Q4 2023, while expenses rose by 4.6% [2] - The weighted average occupancy rate for the three months ended December 31, 2024, was 95.5%, up from 94.8% in the same period of 2023 [2] - Renewal lease rate growth was 3.2% for Q4 2024, consistent with the previous quarter, while new lease rate growth was negative at (3.3)% [2] Balance Sheet and Liquidity - As of December 31, 2024, Centerspace had total liquidity of $224.6 million, including $212.6 million available on lines of credit [5] - The company issued approximately 1.6 million common shares for net proceeds of $112.6 million, using the funds to redeem outstanding Series C preferred shares [8] Dividend Information - Centerspace's Board of Trustees announced a quarterly distribution of $0.77 per share/unit, payable on April 8, 2025, to shareholders of record as of March 28, 2025 [6] Future Outlook - Centerspace provided guidance for 2025, indicating expectations for continued growth in Core FFO and NOI [7]

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 71 apartment communities comprising 13,012 homes across several states including Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota [2]. Upcoming Financial Results - Centerspace will release its operating results for the quarter ended December 31, 2024, after market close on February 18, 2025 [1]. - A conference call to discuss these results will be held on February 19, 2025, at 10:00 a.m. Eastern Time [1]. Conference Call Details - Interested parties can access the live conference call via a webcast link provided [1]. - Operator assisted dial-in numbers are available for the United States and Canada, with specific local and toll-free options listed [2]. - A replay of the conference call will be available until February 26, 2025, with dedicated dial-in numbers for replay access [2]. Recognition - Centerspace was recognized as a top workplace for the fifth consecutive year in 2024 by the Minneapolis Star Tribune [2].

Core Viewpoint - Centerspace (NYSE: CSR) announced the tax treatment for calendar year 2024 distributions on its common and preferred shares, advising shareholders to consult personal tax advisors for specific tax implications [1]. Distribution Summary - Common Shares distributions for 2024 include: - $0.730 per share on 12/29/23, payable on 01/12/24, with $0.3044544 as ordinary taxable dividend [2] - $0.750 per share on 03/28/24, payable on 04/08/24, with $0.3127957 as ordinary taxable dividend [2] - $0.750 per share on 06/28/24, payable on 07/10/24, with $0.3127957 as ordinary taxable dividend [2] - $0.750 per share on 09/30/24, payable on 10/10/24, with $0.3127957 as ordinary taxable dividend [2] - Total for the year: $2.980 per share, with $1.2428415 as ordinary taxable dividend [2] - Series C Preferred Shares distributions for 2024 include: - $0.4140625 per share on 03/15/24, payable on 03/28/24, fully as ordinary taxable dividend [2] - $0.4140625 per share on 06/14/24, payable on 06/28/24, fully as ordinary taxable dividend [2] - $0.4140625 per share on 09/16/24, payable on 09/30/24, fully as ordinary taxable dividend [2] - Total for the year: $1.2421875, fully as ordinary taxable dividend [2] Company Overview - Centerspace is an owner and operator of apartment communities, focusing on integrity and service, founded in 1970 [4] - The company currently owns 71 apartment communities with a total of 13,012 homes across several states including Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota [4] - Centerspace was recognized as a top workplace for the fifth consecutive year in 2024 by the Minneapolis Star Tribune [4]

Core Thesis - Centerspace (CSR) is a Midwest-focused apartment REIT trading at a discount compared to peers, with a market cap of approximately $1 billion and lower AFFO multiples and NAV [1][22]. Group 1: Financial Performance and Growth Prospects - CSR's markets have experienced less new supply, allowing for continued growth in AFFO/share for 2024 and 2025, while the broader sector remains flat or slightly down [2]. - The stock is trading at less than 80% of NAV and has a 3-turn discount to the sector average AFFO multiple, indicating that its near-term prospects are not fully priced in [2][30]. - Expected AFFO per share is projected at $4.21 for 2025 and $4.42 for 2026, reflecting strong growth [12][14]. Group 2: Acquisition Strategy - CSR employs a clever acquisition strategy, recently acquiring the Lydian, a 129-unit apartment building in Denver for $54 million, financed through debt assumption and OP unit issuance [5][6]. - The acquisition was structured to be accretive from day one, with a low cap rate typical for newly built properties in growth markets [5][10]. - The OP unit issuance allowed CSR to issue equity above market price, providing tax benefits to the seller and enhancing the company's capital structure [7][8]. Group 3: Market Position and Valuation - CSR has historically traded at a discount to peers, currently at 14.9X AFFO compared to the sector median of 18.7X, indicating potential for valuation improvement [22][24]. - The company has made significant improvements in size and leverage, with a market cap of $1.06 billion and healthy EBITDA coverage of interest expenses [24][25]. - CSR's portfolio is now primarily in major markets like Minneapolis and Denver, reducing the historical discount associated with smaller, less recognized markets [28][29]. Group 4: Regional Market Dynamics - Midwestern apartments are less volatile compared to coastal or sunbelt markets, with CSR's markets currently outperforming peers in same-store NOI growth [11][14]. - Despite facing a rental rate surge in 2021-2022, CSR's markets are expected to show better growth rates in the near term, benefiting from lower vacancy rates and rising rental rates [14][19]. - The company has a lower rent-to-tenant income ratio of 23.1%, suggesting room for significant rent growth [20].

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, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Financial Data and Key Metrics Changes - The company reported core FFO of $1.18 per diluted share for Q3 2024, reflecting a 2.8% year-over-year increase in same-store NOI [17] - Same-store revenue increased by 3% compared to Q3 2023, driven by a 2.2% increase in revenue per occupied home and a 70 basis point year-over-year increase in weighted average occupancy, which stood at 95.3% for the quarter [17][18] - The midpoint of full-year core FFO guidance was raised by $0.01 to $4.86 per share, an increase of $0.06 versus initial guidance [9][19] Business Line Data and Key Metrics Changes - Same-store new lease trade-outs decreased by 1.2%, while renewal leases increased by 3.2%, resulting in a 1.5% blended lease increase for the quarter [6] - North Dakota communities led the portfolio with blended spreads of 5.4%, while Nebraska communities saw blended growth at 3.3% [8] - Minneapolis recognized a 1.2% blended rent increase, maintaining its position as a strong absorption market nationally [8] Market Data and Key Metrics Changes - The company noted that much of its portfolio experienced lower supply than national averages, benefiting its results during the quarter [7] - The Denver market, where the company expanded its presence, is seeing a decline in new deliveries, with current construction at about 4.8% of existing stock [63] Company Strategy and Development Direction - The company aims to be a premier provider of apartment homes and vibrant communities, focusing on consistent earnings growth for investors [11] - The acquisition of the Lydian in Denver is part of the strategy to leverage geographically proximate operating platforms and enhance portfolio scale [12][13] - The company is actively looking for growth opportunities in various markets while maintaining a balanced exposure to any single market [51] Management's Comments on Operating Environment and Future Outlook - Management commented on the softening of market rents, attributing it to supply and demand dynamics, with expectations for future rent growth being conservative [25][58] - Despite some increases in bad debt, management believes that overall tenant health remains stable, with rent-to-income levels at 23% [9][58] - The company anticipates that as markets move into the net absorption phase with tapering deliveries, it will create a favorable environment for future growth [15][59] Other Important Information - The company issued approximately 1.5 million shares under its ATM program, raising $105 million, which was used to redeem Series C preferred shares [11][21] - Bad debt for the third quarter was reported at 45 to 50 basis points, which is at the high end of the expected range [45] Q&A Session Summary Question: Is the market rent softening greater than the normal seasonal trend? - Management acknowledged that the softening is more than expected and attributed it to supply/demand dynamics [25] Question: What leads to the large drop in revenue growth guidance from Q3 to Q4? - Management explained that the drop is due to expectations of higher utility costs and fewer concessions in Q4 [26] Question: What are the preliminary October leasing stats? - Management indicated that it is early in the month, but new leases remain slightly negative while renewals are slightly positive [28] Question: What components are driving the lower new lease rates? - Management expects renewals to average in the mid-2s and new leases to average a negative mid-rate [32] Question: How long will it take to stabilize the Lydian acquisition? - Management estimates it will take about 12 to 18 months to fully implement operational best practices [34] Question: What is driving the higher retention rates? - Management noted that the drop in home-buying interest due to high costs is contributing to higher retention rates [38] Question: What is the expected growth for insurance renewal? - Management indicated that early indications were favorable, but recent weather events may impact the renewal [44] Question: What is the bad debt level for the quarter? - Bad debt was reported at 45 to 50 basis points, consistent with expectations [45] Question: How is the new lease growth distributed across markets? - Management noted strength in North Dakota and Nebraska, but declines in Denver and Minneapolis [47]

Financial Performance - Centerspace (CSR) reported quarterly funds from operations (FFO) of $1.18 per share, exceeding the Zacks Consensus Estimate of $1.17 per share, but down from $1.20 per share a year ago, representing an FFO surprise of 0.85% [1] - The company posted revenues of $65.03 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 2%, compared to $64.57 million in the same quarter last year [2] - Over the last four quarters, Centerspace has surpassed consensus FFO estimates four times but has not beaten consensus revenue estimates [2] Stock Performance and Outlook - Centerspace shares have increased approximately 20.9% since the beginning of the year, while the S&P 500 has gained 21.8% [3] - The future price movement of the stock will largely depend on management's commentary during the earnings call and the company's FFO outlook [4][6] - The current consensus FFO estimate for the upcoming quarter is $1.20 on revenues of $67 million, and for the current fiscal year, it is $4.83 on revenues of $262.9 million [7] Industry Context - The REIT and Equity Trust - Residential industry, to which Centerspace belongs, is currently ranked in the top 33% of over 250 Zacks industries, indicating a favorable outlook for the sector [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]

[Earnings Release](index=2&type=section&id=Earnings%20Release) [Financial & Operating Highlights](index=2&type=section&id=Financial%20%26%20Operating%20Highlights) Centerspace reported a Q3 2024 net loss of $0.40 per diluted share, Core FFO of $1.18, 2.8% same-store NOI growth, and raised its 2024 Core FFO guidance Q3 & YTD 2024 Key Financial Metrics (Per Diluted Share) | Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $(0.40) | $0.41 | $(0.96) | $2.96 | | FFO | $1.01 | $1.15 | $3.40 | $3.15 | | Core FFO | $1.18 | $1.20 | $3.68 | $3.56 | Q3 2024 Same-Store Performance vs. Prior Periods | Same-Store Metric | Q3 2024 vs Q3 2023 | Q3 2024 vs Q2 2024 | YTD 2024 vs YTD 2023 | | :--- | :--- | :--- | :--- | | Revenues | 3.0% | —% | 3.3% | | Expenses | 3.2% | 5.8% | 2.0% | | NOI | 2.8% | (3.7)% | 4.2% | - Weighted average occupancy for the same-store portfolio remained stable at **95.3%** in Q3 2024, up from 94.6% in Q3 2023[4](index=4&type=chunk) - The company raised the mid-point and narrowed the 2024 financial outlook for net loss and Core FFO per diluted share[5](index=5&type=chunk) - During Q3 2024, Centerspace issued approximately **1.5 million** common shares for **$105.1 million** and used the proceeds to redeem all outstanding Series C preferred shares for **$97.0 million**, which carried a 6.625% distribution rate[5](index=5&type=chunk) [Balance Sheet & Liquidity](index=3&type=section&id=Balance%20Sheet%20%26%20Liquidity) Centerspace maintained a solid liquidity position of $235.5 million at Q3 2024, comprising available lines of credit and cash equivalents - Total liquidity at the end of Q3 2024 stood at **$235.5 million**[7](index=7&type=chunk) Components of Liquidity (as of September 30, 2024) | Component | Amount (in millions) | | :--- | :--- | | Available under lines of credit | $221.0 | | Cash and cash equivalents | $14.5 | | **Total Liquidity** | **$235.5** | [Updated 2024 Financial Outlook](index=3&type=section&id=Updated%202024%20Financial%20Outlook) Centerspace updated its 2024 financial outlook, raising the Core FFO per share midpoint to $4.82-$4.90 and narrowing same-store NOI growth to 3.25%-3.75% Updated Full-Year 2024 Guidance | Metric | Previous Outlook | Updated Outlook | | :--- | :--- | :--- | | Net income per Share – diluted | $(1.21) - $(1.01) | $(1.21) - $(1.06) | | Same-Store Revenue Growth | 3.25% - 4.25% | 3.00% - 3.50% | | Same-Store Expense Growth | 3.50% - 4.75% | 2.50% - 3.25% | | Same-Store NOI Growth | 3.00% - 4.00% | 3.25% - 3.75% | | Core FFO per Share – diluted | $4.78 - $4.92 | $4.82 - $4.90 | - Additional assumptions for 2024 include same-store recurring capital expenditures of **$1,100 to $1,150 per home** and value-add expenditures of **$23.0 million to $25.0 million**[9](index=9&type=chunk) [Subsequent Events](index=3&type=section&id=Subsequent%20Events) Centerspace acquired The Lydian in Denver, CO, for $54.0 million on October 1, 2024, financed by assumed debt, operating partnership units, and cash - On October 1, 2024, Centerspace acquired The Lydian in Denver, CO, for **$54.0 million**[10](index=10&type=chunk) - The acquisition was funded by assuming mortgage debt, issuing common operating partnership units, and using cash[10](index=10&type=chunk) [Supplemental Financial and Operating Data](index=6&type=section&id=Supplemental%20Financial%20and%20Operating%20Data) [Common Share Data](index=7&type=section&id=Common%20Share%20Data) Centerspace's common stock closed Q3 2024 at $70.47 with a 4.3% dividend yield, and total shares outstanding increased to 19.4 million Q3 2024 Common Share Performance (as of Sep 30, 2024) | Metric | Value | | :--- | :--- | | High closing price | $75.50 | | Low closing price | $67.04 | | Closing price at end of quarter | $70.47 | | Closing dividend yield – annualized | 4.3% | | Total closing common shares & units (thousands) | 19,415 | [Key Financial Data](index=8&type=section&id=Key%20Financial%20Data) This section presents unaudited consolidated statements of operations and balance sheets, detailing YTD 2024 revenues, net loss, and total assets [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Centerspace reported Q3 2024 revenue of $65.0 million and a net loss of $6.2 million, with YTD 2024 revenue at $194.6 million and a net loss of $14.6 million Statement of Operations Highlights (in thousands) | Line Item | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $65,025 | $64,568 | $194,574 | $197,241 | | Total Expenses | $58,675 | $58,408 | $176,380 | $179,746 | | Gain (loss) on sale of real estate | $0 | $11,235 | $(577) | $71,327 | | Net Income (Loss) Available to Common Shareholders | $(6,166) | $6,167 | $(14,581) | $44,661 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of Q3 2024, Centerspace's total assets were $1.89 billion and total liabilities $982.3 million, with Series C Preferred Shares redeemed during the quarter Balance Sheet Highlights (in thousands) | Line Item | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total real estate investments, net | $1,834,080 | $1,889,443 | | Cash and cash equivalents | $14,453 | $8,630 | | **Total Assets** | **$1,887,405** | **$1,926,361** | | Total Liabilities | $982,266 | $978,776 | | Series C Preferred Shares | $0 | $93,530 | | **Total Equity** | **$888,579** | **$931,025** | [Non-GAAP Financial Measures and Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section reconciles key non-GAAP metrics like NOI, FFO, Core FFO, and Adjusted EBITDA, used to evaluate core operational performance [Net Operating Income (NOI)](index=11&type=section&id=Net%20Operating%20Income%20%28NOI%29) Q3 2024 total NOI increased 1.4% to $38.4 million, driven by a 2.8% rise in same-store NOI, which grew 4.2% year-to-date Same-Store NOI Performance | Period | Revenue Growth | Expense Growth | NOI Growth | | :--- | :--- | :--- | :--- | | Q3 2024 vs Q3 2023 | 3.0% | 3.2% | 2.8% | | YTD 2024 vs YTD 2023 | 3.3% | 2.0% | 4.2% | [Same-Store Controllable Expenses](index=13&type=section&id=Same-Store%20Controllable%20Expenses) Q3 2024 same-store property operating expenses increased 3.2% year-over-year, primarily due to a 7.6% rise in non-controllable expenses, while controllable expenses grew 0.8% Q3 2024 vs Q3 2023 Same-Store Expense Growth | Expense Category | % Change YoY | | :--- | :--- | | Controllable Expenses | 0.8% | | Non-controllable Expenses | 7.6% | | - Real estate taxes | 1.1% | | - Insurance | 26.5% | | **Total Same-Store Expenses** | **3.2%** | [Funds From Operations (FFO) and Core FFO](index=14&type=section&id=Funds%20From%20Operations%20%28FFO%29%20and%20Core%20FFO) Q3 2024 FFO per diluted share was $1.01 and Core FFO was $1.18, with year-to-date Core FFO increasing 3.4% to $3.68 FFO and Core FFO Reconciliation Highlights (Per Diluted Share) | Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $(0.40) | $0.41 | $(0.96) | $2.96 | | FFO | $1.01 | $1.15 | $3.40 | $3.15 | | Core FFO | $1.18 | $1.20 | $3.68 | $3.56 | [Adjusted EBITDA](index=15&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q3 2024 was $31.8 million, a slight increase from Q3 2023, with year-to-date Adjusted EBITDA at $97.2 million Adjusted EBITDA Performance (in thousands) | Period | Adjusted EBITDA | | :--- | :--- | | Q3 2024 | $31,757 | | Q3 2023 | $31,692 | | YTD 2024 | $97,178 | | YTD 2023 | $96,773 | [Debt and Capital Analysis](index=16&type=section&id=Debt%20and%20Capital%20Analysis) This section details Centerspace's debt structure and capital position, showing $921.3 million in total debt at 3.59% weighted average interest and stable credit metrics [Debt Analysis](index=16&type=section&id=Debt%20Analysis) As of Q3 2024, Centerspace had $921.3 million in total debt at a 3.59% weighted average interest rate, with a well-structured maturity profile extending beyond 2028 - Total debt outstanding as of Q3 2024 was **$921.3 million**, with a weighted average interest rate of **3.59%**[35](index=35&type=chunk)[36](index=36&type=chunk) - The company has a staggered debt maturity profile, with **63.8%** of its debt maturing in 2029 or later[35](index=35&type=chunk) [Capital Analysis](index=17&type=section&id=Capital%20Analysis) At Q3 2024, Centerspace's total market capitalization was $2.31 billion, with a moderate leverage profile and a Core FFO payout ratio of 63.6% Key Capital & Credit Metrics (as of Sep 30, 2024) | Metric | Value | | :--- | :--- | | Total Market Capitalization | $2.31 billion | | Total Debt to Total Market Capitalization | 40.0% | | Net Debt / Adjusted EBITDA | 7.17x | | Payout Ratio (Core FFO basis) | 63.6% | [Portfolio Analysis](index=18&type=section&id=Portfolio%20Analysis) This section details Centerspace's portfolio performance, highlighting 2.8% Q3 same-store NOI growth, 95.3% occupancy, and $42.6 million in year-to-date capital expenditures [Same-Store Comparisons](index=18&type=section&id=Same-Store%20Comparisons) Q3 2024 same-store NOI grew 2.8% year-over-year, led by North Dakota's 10.6% growth, though sequential NOI decreased 3.7% due to higher expenses Q3 2024 vs Q3 2023 Same-Store NOI Growth by Region | Region | % of NOI Contribution | NOI % Change YoY | | :--- | :--- | :--- | | Denver, CO | 23.0% | 0.2% | | Minneapolis, MN | 34.4% | 2.5% | | North Dakota | 12.6% | 10.6% | | Omaha, NE | 5.9% | 6.2% | | **Same-Store Total** | **100.0%** | **2.8%** | - Sequentially, same-store NOI decreased by **3.7%** from Q2 2024 to Q3 2024, as revenues were flat while expenses increased by **5.8%**[45](index=45&type=chunk) - For the first nine months of 2024, same-store NOI increased by **4.2%** compared to the same period in 2023[48](index=48&type=chunk) [Portfolio Summary](index=21&type=section&id=Portfolio%20Summary) As of Q3 2024, Centerspace's portfolio comprised 12,883 homes with 95.3% weighted average occupancy and an average monthly rental rate of $1,577 Portfolio Metrics (All Communities, as of Sep 30, 2024) | Metric | Value | | :--- | :--- | | Number of Apartment Homes | 12,883 | | Weighted Average Occupancy | 95.3% | | Average Monthly Rental Rate | $1,577 | | Average Monthly Revenue per Occupied Home | $1,750 | [Capital Expenditures](index=22&type=section&id=Capital%20Expenditures) Year-to-date Q3 2024 capital expenditures totaled $42.6 million, including $10.3 million in recurring and $20.6 million in value-add investments for the same-store portfolio Capital Expenditures - YTD 2024 (in thousands) | Category (Same-Store) | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | | Recurring Capital Expenditures | $10,316 | $8,684 | | Total Value Add | $20,608 | $15,478 | | **Total Same-Store Capital Spend** | **$30,924** | **$24,162** | - Year-to-date recurring capital expenditures for the same-store portfolio were **$820 per apartment home**, up from $690 in the prior year period[52](index=52&type=chunk) [2024 Financial Outlook](index=23&type=section&id=2024%20Financial%20Outlook) Centerspace updated its 2024 financial outlook, raising Core FFO per diluted share guidance to $4.82-$4.90 and same-store NOI growth to 3.25%-3.75% Updated 2024 Full-Year Guidance Ranges | Metric | Updated Low | Updated High | | :--- | :--- | :--- | | Same-Store Revenue Growth | 3.00% | 3.50% | | Same-Store Total Expense Growth | 2.50% | 3.25% | | Same-Store NOI Growth | 3.25% | 3.75% | | FFO per diluted share | $4.50 | $4.59 | | Core FFO per diluted share | $4.82 | $4.90 | - The updated outlook for Net Loss per share is now **$(1.21) to $(1.06)**[56](index=56&type=chunk) [Non-GAAP Financial Measures and Other Terms](index=25&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Other%20Terms) This section defines key non-GAAP financial measures and operational terms, explaining their calculation and utility for evaluating company performance - Defines key non-GAAP metrics including Adjusted EBITDA, FFO, Core FFO, and NOI, explaining their calculation and utility for investors[60](index=60&type=chunk)[66](index=66&type=chunk)[73](index=73&type=chunk) - Provides definitions for operational terms such as Average Monthly Rental Rate, Blended Lease Rate Growth, and Weighted Average Occupancy[61](index=61&type=chunk)[63](index=63&type=chunk)[84](index=84&type=chunk) - Explains the components of capital expenditures, distinguishing between Recurring Capital Expenditures and Value Add investments[78](index=78&type=chunk)[83](index=83&type=chunk)

MINNEAPOLIS, Oct. 28, 2024 /PRNewswire/ -- Centerspace (NYSE: CSR) announced today its financial and operating results for the three and nine months ended September 30, 2024. The tables below show Net Income (Loss), Funds from Operations ("FFO")1, and Core FFO1, all on a per diluted share basis, for the three and nine months ended September 30, 2024; Same-Store Revenues, Expenses, and Net Operating Income ("NOI")1 over comparable periods; along with SameStore Weighted-Average Occupancy and leasing rates for ...