Slide 1: Investor Presentation
INVESTOR PRESENTATION March 2024 Lake Vista – Fort Collins, CO
Slide 2: Safe Harbor Statement & Legal Disclosure
SAFE HARBOR STATEMENT & LEGAL DISCLOSURE Certain statements in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual result
Slide 3: Mission & Vision
MISSION & VISION 71 France – Edina, MN OUR MISSION OUR VISION To provide a great home— To be the premier provider for our residents, of apartment homes in vibrant our team members, communities by focusing on and our investors. integrity and serving others. centerspacehomes.com 3
Slide 4: Company Overview
COMPANY OVERVIEW Differentiated R ESULTS Multifamily Market Exposure NYSE: CSR I NNOVATION S ERVICE 12,883(1) E NGAGEMENT Apartments owned and operated $2.1 Billion(2) RISE is Centerspace’s commitment Total capitalization Key Indices to Results, Innovation, Service, and S&P SmallCap 600 Engagement.
Slide 5: Cash Flow Growth Focus
CASH FLOW GROWTH FOCUS TO EXECUTE THIS, WE FOCUS ON: Exceptional customer experience Diverse talent to enable a culture of engagement Enhancing efficiencies by scaling the business CENTERSPACE Managing the balance sheet to maximize financial flexibility Investing in high-quality and efficient rental
Slide 6: Results – 2024 Financial Outlook
RESULTS – 2024 FINANCIAL OUTLOOK 2023 -------------------2024 Guidance Range-------------------- Actual Low Mid-Point High Same-Store Growth Revenues 7.2% 3.0% 4.0% 5.0% Expenses 4.6% 5.5% 6.3% 7.0% NOI 9.0% 1.5% 2.5% 3.5% Per Share Net Income $2.32 ($1.31) ($1.15) ($0.99) FFO $4.27 $4.54 $4.67 $4.8
Slide 7: Results – Favorable Growth Profile
RESULTS – FAVORABLE GROWTH PROFILE Core FFO/sh Growth, Guidance Midpoint SS NOI Growth, Guidance Midpoint 1.0% 3.0% 0.4% at Midpoint 2.5% at Midpoint 0.5% 2.5% 0.0% 2.0% -0.5% -1.0% 1.5% -1.5% 1.0% -2.0% 0.5% -2.5% -3.0% 0.0% CSR SMID Cap Apt Non-coastal/Sunbelt All Multifamily CSR SMID Cap Apt Non-
Slide 8: Results – Renewal Leasing Spreads Continue to Hold
RESULTS – RENEWAL LEASING SPREADS CONTINUE TO HOLD SAME STORE LEASING UPDATE New Renewal Blended 5.7% 4.9% 4.8% 4.8% 4.7% 3.7% 3.7% 3.7% 3.3% 2.2% 2.1% 1.0% 0.4% -0.7% -3.0% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 QTD Oxbo – St. Paul, MN Note: Data represents 2023 Same Store pool. QTD leasing spread
Slide 9: Results – Portfolio Stability & Resiliency
RESULTS – PORTFOLIO STABILITY & RESILIENCY Centerspace has grown average rents even in volatile economic times SAME STORE LEASING $1,550 14.00% 12.00% $1,500 10.00% $1,450 8.00% 6.00% $1,400 4.00% $1,350 2.00% 0.00% $1,300 -2.00% $1,250 -4.00% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023
Slide 10: Results – NOI Composition & Rental Rate Growth
RESULTS – NOI COMPOSITION & RENTAL RATE GROWTH Market % of Total NOI Minneapolis, MN 33.8% 2023 vs 2022 Year-To-Date RentalRental 2023 vs 2022 Year-to-Date RateRate Growth Growth Denver, CO 22.7% Blended 3.0% 2.2% 6.9% 7.5% 3.3% 3.0% 1.8% 3.6% Rent North Dakota 11.3% Rochester, MN 9.4% 12.0% Other M
Slide 11: Results – Balance Sheet Positioned for Growth
RESULTS – BALANCE SHEET POSITIONED FOR GROWTH Quarterly Net Debt / Annualized Trailing EBITDA(1) Diversified Permanent Capital Base 4-Quarter Moving Average Most Recent Quarter $2.1B Total Capitalization 9.0x 8.5x 8.0x Secured 7.5x Debt 28% 7.0x $920M Total Debt 6.5x 6.0x Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 12: Results – Attractive Valuation vs Both Private and Public Markets
RESULTS – ATTRACTIVE VALUATION VS BOTH PRIVATE AND PUBLIC MARKETS NAV Per Share(1) Implied Value per Home(1) (2) $79.00 300,000 Trading at ~15% discount to 250,000 consensus NAV per share(1) (2) 200,000 150,000 $74.00 $74.50 100,000 ~$162,000 implied value per 50,000 home at current share price(2) 0
Slide 13: Innovation – Portfolio Improvement Since 2017
INNOVATION – PORTFOLIO IMPROVEMENT SINCE 2017 Improvement since 2017 driven by disciplined capital While similar in total number of homes, investment and disposition activity allocation and creative deal structuring has resulted in a more efficient and higher quality portfolio Acquisition Structure
Slide 14: Innovation – Recent Capital Recycling Accretive to Portfolio Quality
INNOVATION – RECENT CAPITAL RECYCLING ACCRETIVE TO PORTFOLIO QUALITY AND FINANCIAL PERFORMANCE OCTOBER 2023 ACQUISITION LAKE VISTA APARTMENT HOMES, FORT COLLINS, CO Communities 1 Homes 303 Avg. Monthly Rent/Home $1,866 Homes/Community 303 SEPTEMBER 2023 & FEBRUARY 2024 DISPOSITIONS Avg Age (Years) 1
Slide 15: Innovation – Approach to Investments & Dispositions
INNOVATION – APPROACH TO INVESTMENTS & DISPOSITIONS DEMOGRAPHIC AND ECONOMIC MULTIFAMILY FUNDAMENTALS OTHER CONSIDERATIONS CONSIDERATIONS CONSIDERATIONS Population Trends Rents Focused in-market relationships Population Characteristics Occupancy Business and regulatory environment Labor Force Health
Slide 16: Innovation – Geographic Differentiation
INNOVATION – GEOGRAPHIC DIFFERENTIATION PUBLIC MULTIFAMILY REIT MARKET OVERVIEW GEOGRAPHIC FOCUS (% OF UNITS) 24% 76% 43% 7% 18% 30% 3% 54% 5% 19% 19% 4% 86% 7% 100% 27% 34% 21% 17% 5% 14% 71% 11% 8% 31% 21% 24% 15% 5% 21% 74% 5% 95% 25% 75% 24% 76% 6% 91% 3% Mountain West Midwest West Southeast & T
Slide 17: Innovation – Competitive Advantage in Minneapolis
INNOVATION – COMPETITIVE ADVANTAGE IN MINNEAPOLIS MARKET HIGHLIGHTS CSR HIGHLIGHTS CSR Portfolio NOI % 34% ▪ 27 CSR communities, 4,711 homes, scaled Location by NOI Asset Class by NOI portfolio with opportunities in operating CSR Minneapolis $1,531 10% partnership unit transactions, mezzanine Portfo
Slide 18: Innovation – Growth in Denver
INNOVATION – GROWTH IN DENVER MARKET HIGHLIGHTS CSR HIGHLIGHTS CSR Portfolio NOI % 23% Location by NOI Asset Class by NOI ▪ 7 CSR communities, 2,104 homes, entered CSR Denver Portfolio Denver Q4 2017 and achieved critical mass Average Rent $1,985 ▪ 19th largest MSA, 3.0M population 41% CSR 2023 Aver
Slide 19: Innovation – Providing Differentiated Exposure
INNOVATION INNOVATION––PROVIDING PROVIDINGDIFFERENTIATED DIFFERENTIATEDEXPOSURE EXPOSURE Portfolio hallmarks include low unemployment rates, affordability of rents, resident financial strength, and diversified economies 3-Month YoY Median Avg Median Trailing 12- Market Homes Under CSR YTD % of Marke
Slide 20: Innovation – Portfolio Compares Favorably on Unemployment & Supply
INNOVATION – PORTFOLIO COMPARES FAVORABLY ON UNEMPLOYMENT & SUPPLY Creditworthiness of residents produces strong rent collection Measured supply pipeline in Centerspace portfolio markets rates; low unemployment in Centerspace portfolio markets can allows the ability to drive rent growth and retain o
Slide 21: Innovation – Historical Value-Add Growth
INNOVATION – HISTORICAL VALUE-ADD GROWTH Centerspace’s past and current projects have generated a 15.1% return on investment, resulting in over $154 million of incremental value creation(1) 2018-2023 Value Add Spend $35,000,000 140 Spend increased from $2.7mm in 2018 to $29.4mm in 2023, with $26.0mm
Slide 22: Service – Technology & Operating Platform Initiatives
SERVICE – TECHNOLOGY & OPERATING PLATFORM INITIATIVES BEGINNING MIDDLE END * Beginning the journey Training in new methods Starting to see initial results Accelerating Approaching steady state Cycle continues for and developing Standard knowledge and evaluating how we each new product Operating Proc
Slide 23: Service – Enhancing Customer Experience Is a Core Goal
SERVICE – ENHANCING CUSTOMER EXPERIENCE IS A CORE GOAL 2024 J Turner ORA Score (As of 3/1/2024) LIFETIME AVERAGE REPUTATION SCORES* (As o f 3/1/2 0 2 4) 3.95 3.85 3.85 3.81 National Property Average ORA Score 61.57 3.75 3.61 3.65 3.51 3.55 3.49 Centerspace ORA Score 69.76 3.45 3.38 3.35 3.25 54 56 5
Slide 24: Engagement – ESG Highlights
ENGAGEMENT – ESG HIGHLIGHTS ENVIRONMENTAL SOCIAL GOVERNANCE • Established formal ESG targets and • Donated $75,710 to national, regional, and • Maintain a Supermajority Independent published them for the first time in the diversity-promoting charities in 2023 Board with 87.5% of board members 2022 a
Slide 25: Engagement – Best-in-Class Governance / Executive Management Team
ENGAGEMENT – BEST-IN-CLASS GOVERNANCE EXECUTIVE ISS rated top score of 1 - indicating highest quality MANAGEMENT corporate governance practices and lowest TEAM governance risk Anne Olson Bhairav Patel President & CEO EVP & CFO SENIOR LEADERSHIP TEAM Brad Abel Grant Campbell Jean Denn Julie Ellis Jul
Slide 26: Key Takeaways
KEY TAKEAWAYS VALUE GEOGRAPHIC PROVEN DIFFERENTIATION EXECUTION centerspacehomes.com 26
Slide 27: Appendix
APPENDIX centerspacehomes.com 27
Slide 28: Reconciliation to Non-GAAP Measures
RECONCILIATION TO NON-GAAP MEASURES Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds From Operations and Core Funds From Operations Centerspace believes that FFO, which is a non-GAAP financial measure used as a standard supplemental measure for equity real estate investm
Slide 29: Reconciliation to Non-GAAP Measures
RECONCILIATION RECONCILIATIONTOTO RECONCILIATION TONON-GAAP NON-GAAP NON-GAAP MEASURES MEASURES MEASURES Updated Three Months Ended (in thousands) Year Ended (in thousands) 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 12/31/2023 12/31/2022 Funds From Operations Net (loss) income available to
Slide 30: Reconciliation to Non-GAAP Measures – Adjusted EBITDA
RECONCILIATIONTOTONON-GAAP RECONCILIATION NON-GAAPMEASURES MEASURES Three Months Ended (in thousands) Year Ended (in thousands) 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 12/31/2023 12/31/2022 Adjusted EBITDA Net income (loss) attributable to controlling $ (8,156) $ 7,774 $ (1,863) $ 43,571
Slide 31: Reconciliation to Non-GAAP Measures – NOI Outlook
RECONCILIATIONTOTONON-GAAP RECONCILIATION NON-GAAPMEASURES MEASURES Reconciliations of Operating Income to Net Operating Income Outlook Year Ended Year Ended Net operating income, or NOI, is a non-GAAP financial 12/31/2023 12/31/2024 measure which the Company defines as total real estate Actual Low