Centerspace(US:CSR)2025-11-03 21:34Financial Performance - For the three months ended September 30, 2025, revenue increased by $6.4 million or 9.8% to $71.4 million, compared to $65.0 million for the same period in 2024[146] - Same-store revenues increased by 2.4% for the three months ended September 30, 2025, driving a 4.5% increase in same-store net operating income (NOI) compared to the same period of the prior year[146] - Net income was $3.19 per diluted share for the three months ended September 30, 2025, compared to a net loss of $0.40 per diluted share for the same period in 2024[146] - Total revenue for the three months ended September 30, 2025, was $71.4 million, a 9.8% increase from $65.0 million in the same period of 2024[160] - Net income for the three months ended September 30, 2025, was $65.4 million, a significant increase from a net loss of $1.9 million in the same period of 2024[160] - Net income available to common shareholders was $53.8 million for the three months ended September 30, 2025, compared to a net loss of $6.2 million in the same period of the prior year[184] - FFO applicable to common shares for the three months ended September 30, 2025, increased to $23.3 million, representing an increase of 24.7% compared to the prior year[190] - Funds from Operations (FFO) applicable to common shares and units for the nine months ended September 30, 2025, increased to $71.1 million, up from $61.7 million in the same period of 2024, reflecting a growth of approximately 15.4%[193] Property Operations - As of September 30, 2025, the company owned interests in 68 apartment communities consisting of 12,941 apartment homes, with property valued at $2.5 billion[142] - Same-store NOI is considered an important measure of operating performance, providing insights into the company's ability to manage existing properties effectively[148] - Revenue from same-store communities increased by 2.4%, or $1.4 million, for the three months ended September 30, 2025, compared to the same period in the prior year[160] - Net operating income (NOI) for same-store communities increased by $1.5 million to $35.5 million for the three months ended September 30, 2025[161] - Weighted average occupancy for same-store properties improved to 95.8% for the three months ended September 30, 2025, up from 95.6% in the same period of 2024[158] - Revenue from non-same-store communities increased by $4.6 million for the three months ended September 30, 2025, compared to the same period in the prior year[162] - NOI from other properties increased by $295,000 for the three months ended September 30, 2025, compared to the same period in the prior year[165] - The company added three new apartment communities, contributing to the revenue growth in non-same-store properties[162] Acquisitions and Dispositions - The company acquired Railway Flats in Loveland, Colorado, consisting of 420 homes for an aggregate purchase price of $132.2 million, including the assumption of $76.5 million in mortgage debt[146] - The company sold five apartment communities in St. Cloud, Minnesota for an aggregate sale price of $124.0 million[146] - The company acquired $281.2 million of new real estate and disposed of five apartment communities for $124.0 million during the nine months ended September 30, 2025[195] - The company acquired two apartment communities for $206.2 million in cash, including transaction costs[223] Expenses and Costs - Total property operating expenses increased by 6.4% to $28.4 million for the three months ended September 30, 2025, compared to $26.7 million in the same period of 2024[160] - General and administrative expenses increased by 21.8% to $5.0 million for the three months ended September 30, 2025, compared to $4.1 million in the same period of 2024[160] - Property management expenses increased by 11.0% to $2.5 million in the three months ended September 30, 2025, compared to $2.2 million in the same period of the prior year[169] - General and administrative expenses increased by $895,000 to $5.0 million in the three months ended September 30, 2025, compared to $4.1 million in the same period of the prior year[176] - Interest expense increased by 45.2% to $13.0 million in the three months ended September 30, 2025, compared to $8.9 million in the same period of the prior year[180] - Depreciation and amortization increased by 11.4% to $29.1 million in the three months ended September 30, 2025, compared to $26.1 million in the same period of the prior year[173] Shareholder Returns and Distributions - The company has paid quarterly distributions continuously since its first distribution in 1971, emphasizing its commitment to shareholder returns[143] - Distributions declared per common share and unit were $0.77 for Q3 2025, up from $0.75 in Q3 2024, and $2.31 for the nine months ended September 30, 2025, compared to $2.25 in the same period of 2024[196] - The company had a share repurchase program authorizing the repurchase of up to $100.0 million of outstanding common shares, valid for one year starting July 31, 2025[211] - The company repurchased approximately 63,000 common shares for $3.5 million during the three months ended September 30, 2025[212] Liquidity and Debt - Total liquidity as of September 30, 2025, was approximately $200.4 million, down from $224.6 million as of December 31, 2024[201] - The company had a multibank revolving line of credit with total commitments of $400.0 million as of September 30, 2025, with $222.5 million outstanding[202] - Mortgage loan indebtedness was $455.9 million on 13 apartment communities as of September 30, 2025, compared to $420.4 million on 15 communities at December 31, 2024[207] - The weighted average interest rate on mortgage debt decreased to 3.87% as of September 30, 2025, from 4.02% at December 31, 2024[207] Risks and Challenges - The company faces various risks, including inflation, economic conditions, and reliance on a single asset class, which could impact future performance[140] - Rising interest rates could negatively impact the company's borrowing costs for variable rate borrowings or refinancing activities[220] - The company continues to monitor supply chain challenges that may lead to increased operating expenses and delays in construction materials[219] Other Financial Metrics - Non-GAAP Core Funds from Operations (Core FFO) per diluted share increased to $1.19 for the three months ended September 30, 2025, compared to $1.18 for the same period in 2024[147] - Core FFO applicable to common shares and units for the nine months ended September 30, 2025, was $72.6 million, an increase from $66.8 million in the same period of 2024, indicating a growth of approximately 8.5%[193] - Gain on sale of real estate and other investments was $79.5 million for the three months ended September 30, 2025, compared to no gain or loss in the same period of the prior year[178] - Impairment of real estate investments was $8.7 million in the three months ended September 30, 2025[175] - During the nine months ended September 30, 2025, the company generated cash flows from operations amounting to $85.7 million[217] - As of September 30, 2025, the company had cash and cash equivalents of $12.9 million and restricted cash of $52.9 million[215] - The Series E preferred units had an aggregate liquidation preference of $157.2 million as of September 30, 2025[213] - For the three months ended September 30, 2024, the company sold 1,477,000 common shares for a net consideration of $105.1 million, resulting in an average net price per share of $71.12[209] - The company has an equity distribution agreement under its ATM Program with an aggregate offering price of $500.0 million, with $262.9 million remaining available as of September 30, 2025[208]