D/b/a Centerspace · NYSE:CSR
D/b/a Centerspace — Centerspace — Investor Presentation (March 2022)
29 slides from D/b/a Centerspace's investor presentation, Mar 30, 2022
Slide 1: Investor Presentation March 2022
Investor Presentation March 2022
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 Driven by Consistent Occupancy and Accelerating Rent Growth
centerspacehomes.com 3 Strong Operating Results Driven by Consistent Occupancy and Accelerating Rent Growth Same-store lease over lease growth was 5.8% in Q4 compared to 10.8% in Q3 2021 and (3.6)% in Q4 2020 Same-store renewal lease growth accelerated to 7.8% in Q4 compared to 7.2% in Q3 2021 a
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 Q4 Avg. Rev per Occ. Home(1) Denver, CO 1,888 $1,959 Minneapolis, MN (2) 5,292 $1,504 North Dakota 2,421 $1,178 Omaha, NE 1,370 $1,094 Rochester, MN 1,121 $1,620 St. Cloud, MN 1,525 $1,297 Other Mountain West(3) 1,221 $1,241 Total / Average 14,840 $1,437 (4) Multi
Slide 6: 2022 Financial Outlook
centerspacehomes.com 6 Range for 2022 2021 Actual Low High Mid-Point Earnings per Share $(0.47) $(0.41) $(0.16) $(0.29) Revenue $166,326 6.00% 8.00% 7.00% Total Expenses $67,306 3.50% 5.00% 4.25% NOI $99,020 8.00% 10.00% 9.00% FFO per Share $3.54 $4.25 $4.50 $4.38 Core FFO per Share $3.99 $4.33 $4.5
Slide 7: Operations Update: Leasing Trends Remain Strong into Leasing Season
centerspacehomes.com 7 OPERATIONS UPDATE L e a s i n g T r e n d s R e m a i n S t r o n g i n t o L e a s i n g S e a s o n 6.8% 6.6% 5.8% 10.8% 10.0% 0.7% 9.1% 9.6% 7.8% 7.2% 5.6% 4.0% 7.7% 7.5% 6.4% 9.0% 7.5% 2.0% February 2022 January 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 New Renewal Blended Occu
Slide 8: MSP and KMS: September Acquisition of 2,364 Homes in Minneapolis
centerspacehomes.com 8 MSP and KMS T h e S e p t e m b e r 2 0 2 1 A c q u i s i t i o n o f 2 , 3 6 4 H o m e s i n M i n n e a p o l i s B r o u g h t O p p o r t u n i t y t o R e a l i z e S t r o n g M a r k e t R e n t G r o w t h 5.3% 0.1% 0.4% -1.0% 2.3% 3.8% 8.2% -2.8% -1.1% 0.9% 5.0% 7.9%
Slide 9: Minneapolis/St. Cloud 2,696 Home Acquisition
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: Acquisition financing and preferred unit terms
centerspacehomes.com 10 Preferred Units at Par Current Property Debt Acq Cap Other Paydown Line Assumed Loan Preferred Units at Par Current Property Debt Acq Cap Other Existing property debt has been assumed and refinanced $198,850,000 refinanced under a Fannie Mae credit facility with a weighted
Slide 11: Minneapolis/St. Cloud 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: Minneapolis acquisition property list
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: Portfolio Acquisition Adds to Strong Performing Team and Portfolio: St. Cloud Map
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 Acquisition Total 332 A Park Meadows 408 Park Meadows Dr Waite Park 1982 360 B West Stonehill 690 Prospe
Slide 14: Minneapolis and St. Cloud market overview
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 since 2018 have a weighted average margin of 57.2% Selling Inefficient Communities Co
Slide 16: Value-Add Opportunity: Enhancing Portfolio Through Renovation Projects
centerspacehomes.com 16 Highlights VALUE-ADD OPPORTUNITY E n h a n c i n g P o r t f o l i o T h r o u g h R e n o v a t i o n P r o j e c t s 12 communities are in the value-add process Value-add opportunities across the portfolio feature unit renovations, common areas, and adding amenities inc
Slide 17: Balance Sheet December 31, 2021
centerspacehomes.com 17 $22,429 $42,596 $108,112 $53,487 $52,149 $110,000 $95,000 $85,000 $169,900 $25,000 $78,850 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Debt Summary Amount % of Total Wtd Avg Int Rate Wtd Avg Maturity Total Secured Debt 481,523,436 56% 3.38% 6.84 Total Uns
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: Focus on Expanding Portfolio in Minneapolis and Denver
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 130-home community built in 2021 • Conveniently located adjacent to Lake Nokomis and features walkability and connectivity
Slide 20: Midwest Has Strong Fundamentals: Lowest Unemployment Rate 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 1 % 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 Portfolio
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: Operations Review: Secondary Markets See Low Supply
centerspacehomes.com 22 OPERATIONS REVIEW S e c o n d a r y M a r k e t s S e e L o w S u p p l y 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 Constructi
Slide 23: Best-in-Class Governance: High Caliber Leadership
centerspacehomes.com 23 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 Bhairav Patel EVP AND CFO Anne Olson EVP AND COO Jeffrey P. Caira Since 2015 Michael
Slide 24: ESG Highlights
centerspacehomes.com 24 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 4,372 LED light bulbs Only ENERGY STAR rated appliances used for replacement Water Conservation Provide sha
Slide 25: Investment Highlights: Best-in-Class Governance
centerspacehomes.com 25 INVESTMENT HIGHLIGHTS Best-In-Class Governance
Slide 26: Appendix
centerspacehomes.com 26 APPENDIX
Slide 27: Reconciliation to Non-GAAP Measures: FFO and Core FFO
centerspacehomes.com 27 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 28: Reconciliation to Non-GAAP Measures
centerspacehomes.com 28 RECONCILIATION TO NON-GAAP MEASURES
Slide 29: Reconciliation to Non-GAAP Measures: Adjusted EBITDA
centerspacehomes.com 29 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