D/b/a Centerspace · NYSE:CSR
D/b/a Centerspace — Centerspace — Investor Presentation (September 2021)
28 slides from D/b/a Centerspace's investor presentation, Sep 30, 2021
Slide 1: Investor Presentation September 2021
Investor Presentation September 2021
Slide 2: Safe Harbor Statement and Legal Disclosure
centerspacehomes.com 2 SAFE HARBOR STATEMENT AND 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 tha
Slide 3: Strong Operating Results; Acquisition and Disposition Activity Continues
centerspacehomes.com 3 Strong Operating Results Driven by Consistent Occupancy and Accelerating Rent Growth Same-store lease over lease growth held steady at 9.6% in August compared to 12.7% in July and 10.0% in Q2 2021 Same-store renewal lease growth accelerated to 7.6% in August compared to 6.
Slide 4: Company Snapshot: Focused on Growth in Multifamily
centerspacehomes.com 4 Differentiated Markets Strong Midwest markets led by Minneapolis and Denver Nashville a new target market Internal Growth Opportunity Enhanced operating platform Value-Add Opportunity Deep value-add pipeline Balance Sheet Flexibility Strong balance sheet with sufficient liquid
Slide 5: Portfolio Overview: Differentiated Portfolio - Strong Midwest Markets
centerspacehomes.com 5 Region Homes Avg. Rev per Occ. Home(1) Denver, CO 1,713 $1,862 Minneapolis, MN (3) 4,901 $1,411 North Dakota 2,422 $1,156 Omaha, NE 1,370 $1,050 Rochester, MN 1,122 $1,497 St. Cloud, MN (3) 1,524 $1,066 Other Mountain West(2) 1,223 $1,119 Total / Average 14,275 $1,333 (3) Mult
Slide 6: Revised 2021 Financial Outlook
centerspacehomes.com 6 Range for 2021 2020 Actual Low High Mid-Point Earnings per Share $(0.15) $0.10 $0.50 $0.30 Revenue $167,807 0.0% 3.0% 1.5% Total Expenses $67,892 3.0% 5.0% 4.0% NOI $97,915 (1.5%) 1.5% 0.0% FFO per Share $3.47 $3.38 $3.62 $3.50 Core FFO per Share $3.78 $3.48 $3.72 $3.60 Range
Slide 7: Operations Update: Rent Growth Remains through Leasing Season
centerspacehomes.com 7 OPERATIONS UPDATE R e n t G r o w t h R e m a i n s t h r o u g h L e a s i n g S e a s o n 0.9% 0.7% 3.2% 3.3% 7.6% 6.5% 5.6% 4.0% August July Q2 Q1 Same Store Renewal Rate Growth 2020 2021 0.6% 0.7% 1.3% -1.4% 8.3% 8.0% 7.5% 2.0% August July Q2 Q1 Same Store Blended Rental R
Slide 8: Operations Review: Markets Overview - Regional Statistics
centerspacehomes.com 8 OPERATIONS REVIEW M a r k e t s O v e r v i e w - R e g i o n a l S t a t i s t i c s Region % of NOI(1) Population Market Units(2) Median HH Income Unemployment Rate(3) 3-Month Avg Job Growth(3) Median Home Value T12 Deliveries(4) Market Vacancy(5) Market Rent Growth(5) Under
Slide 9: KMS 2,696 Home Acquisition: Portfolio Acquisition Overview
centerspacehomes.com 9 Description Enterprise Highlights Community Highlights KMS communities well located within their submarkets with proximity to jobs, retail and amenities Rent level attainable to large pool of renters Majority of communities in portfolio are low density with attractive ga
Slide 10: KMS Acquisition Financing and Preferred Unit Terms
centerspacehomes.com 10 Preferred Units Current Property Debt Acq Cap Other Existing KMS property debt has been assumed and refinanced $198,850,000 refinanced under a Fannie Mae credit facility with a weighted average interest rate of 2.78% and maturities at 10.07 years $20M loan assumed with an
Slide 11: KMS Acquisition Communities
centerspacehomes.com 11 Property Market Homes Palisades Minneapolis 330 River Pointe Minneapolis 301 Woodland Pointe Minneapolis 288 Burgundy/Hillsboro Court Minneapolis 251 Windsor Gates Minneapolis 200 Woodhaven Minneapolis 178 New Hope Garden/New Hope Village Minneapolis 151 Wingate Minneapolis 1
Slide 12: KMS Minneapolis Communities
centerspacehomes.com 12 Name Address City Built Units 1 Palisades 560 W Sandhurst Dr Roseville 1970 330 2 River Pointe 7855 E River Rd Fridley 1971 301 3 Woodland Pointe 6850 Ashwood Rd Woodbury 1974 288 4 Windsor Gates 7821 Zane Ave N Brooklyn Park 1970 200 5 Woodhaven 6045 Lyndale Ave S Minneapoli
Slide 13: KMS St. Cloud Adds to Strong Performing Team and Portfolio
centerspacehomes.com 13 Name Address City Built Units 1 Legacy 248 3rd St S Waite Park 1983 119 2 Pointe West 3225 Maine Prairie Rd Saint Cloud 1975 93 3 Gatewood 813 7th St S Waite Park 1987 120 KMS Total 332 A Park Meadows 408 Park Meadows Dr Waite Park 1982 360 B West Stonehill 690 Prosper Dr Wai
Slide 14: Minneapolis and St. Cloud Market Commentary
centerspacehomes.com 14 Minneapolis Minneapolis MSA boasts a diversified economy being home to 17 Fortune 500 companies including UnitedHealth Group, Target and Best Buy The Twin Cities was well-positioned heading into the pandemic with a tight vacancy rate, strong demand, and solid rent growth
Slide 15: Strong Operating Platform: Margins Continue to Improve
centerspacehomes.com 15 Strong Operating Platform RISE BY 5 M a r g i n s C o n t i n u e t o I m p r o v e Same-Store communities continue to see NOI margin growth Buying Efficient Communities Communities acquired have a weighted average margin of 57.2% Selling Inefficient Communities Communities s
Slide 16: Value-Add Renovation Program
centerspacehomes.com 16 Property Region Homes to Renovate Renovated Date Complete Avg. Cost per Unit (1) Achieved Premium(2) Estimated ROI(3) Park Place Minneapolis, MN 500 300 In process $18,105 $253 17.60% Connelly on Eleven Minneapolis, MN 240 204 In process $10,284 $138 18.70% SouthFork Minneapo
Slide 17: Balance Sheet: Pro Forma June 30, 2021
centerspacehomes.com 17 Debt Summary Amount % of Total Wtd Avg Int Rate Wtd Avg Maturity Total Secured Debt 507,212,919 59% 3.48% 7.01 Total Unsecured Debt 354,000,000 41% 3.16% 8.39 Private Placement 300,000,000 35% 3.12% 9.13 Line of Credit 54,000,000 6% 3.39% 4.25 Total Debt 861,212,919 100% 3.35
Slide 18: Capital Recycling: Improving Portfolio Metrics
centerspacehomes.com 18 Multifamily portfolio quality has improved since 2017 We focus our energy and capital on improving 3 long-term metrics CAPITAL RECYCLING I m p r o v i n g P o r t f o l i o M e t r i c s Portfolio Quality Distributable Cash Growth NAV per Share Our capital recycling program h
Slide 19: Recent Acquisitions
centerspacehomes.com 19 RECENT ACQUISITIONS F o c u s o n E x p a n d i n g o u r P o r t f o l i o i n T a r g e t M a r k e t s o f M i n n e a p o l i s a n d D e n v e r • A 256-home community built in 2019 • Conveniently located Longmont with close proximity to Boulder • Amenities include fitne
Slide 20: Midwest Has Strong Fundamentals: Lowest Unemployment Among Peers
centerspacehomes.com 20 MIDWEST HAS STRONG FUNDAMENTALS C e n t e r s p a c e L o w e s t U n e m p l o y m e n t R a t e A m o n g P e e r s a n d 2 3 % B e l o w t h e U S A v e r a g e Centerspace portfolio has lower unemployment among peers and the national average Low unemployment in our po
Slide 21: Midwest Has Strong Fundamentals: Lowest Under Construction
centerspacehomes.com 21 MIDWEST HAS STRONG FUNDAMENTALS C e n t e r s p a c e M a i n t a i n s L o w e s t U n d e r C o n s t r u c t i o n P o r t f o l i o A m o n g P e e r s Centerspace’s markets have the lowest percentage of construction among multifamily peers Low supply in CSR portfolio
Slide 22: Best-in-Class Governance
centerspacehomes.com 22 BEST-IN-CLASS GOVERNANCE H i g h C a l i b e r L e a d e r s h i p F o c u s e d o n H i g h Q u a l i t y G o v e r n a n c e Executive Management Team Mark O. Decker, Jr. PRESIDENT AND CEO John A. Kirchmann EVP AND CFO Anne M. Olson EVP AND COO CSR rated ISS’s top score of
Slide 23: ESG Highlights
centerspacehomes.com 23 ESG HIGHLIGHTS S t r o n g F o c u s o n E n v i r o n m e n t a l , S o c i a l a n d C o r p o r a t e G o v e r n a n c e Energy Efficiency Completed installation of 3,323 LED light bulbs Only ENERGY STAR rated appliances used for replacement Water Conservation Provide sha
Slide 24: Investment Highlights
centerspacehomes.com 24 INVESTMENT HIGHLIGHTS Best-In-Class Governance
Slide 25: Appendix
centerspacehomes.com 25 APPENDIX
Slide 26: Reconciliation to Non-GAAP Measures: FFO and Core FFO
centerspacehomes.com 26 RECONCILIATION TO NON-GAAP MEASURES Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds From Operations and Core Funds From Operations We use the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”).
Slide 27: Reconciliation to Non-GAAP Measures
centerspacehomes.com 27 RECONCILIATION TO NON-GAAP MEASURES
Slide 28: Reconciliation to Non-GAAP Measures: Adjusted EBITDA
centerspacehomes.com 28 RECONCILIATION TO NON-GAAP MEASURES Reconciliation of Net Income (Loss) Available to Common Shareholders to Adjusted EBITDA Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain/loss on sale of real estate and other investments, impairment of re