D/b/a Centerspace · NYSE:CSR
D/b/a Centerspace — Investors Real Estate Trust — BMO Real Estate Conference 2019
19 slides from D/b/a Centerspace's conference presentation, Sep 17, 2019
Slide 1: BMO Real Estate Conference Presentation September 2019
BMO REAL ESTATE CONFERENCE PRESENTATION September 2019
Slide 2: Safe Harbor Statement and Legal Disclosure
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 that may cause actual resu
Slide 3: Why IRET?
WHY IRET? Differentiated Increased exposure to target markets in Minneapolis Markets and Denver through disciplined capital recycling Internal Growth Enhanced operating platform opportunities to spur Opportunity organic growth with minimal capital requirement Increased Strong balance sheet with suff
Slide 4: Company Snapshot
COMPANY SNAPSHOT PORTFOLIO SUMMARY 2019 GUIDANCE . . Founded in 1970 Midpoint of Core FFO per share growth is 7.6% . Midpoint of same-store NOI growth is 3.5% . Apartment owner/operator with 13,975 homes in differentiated markets TOTAL MARKET . Publicly traded since 1997 CAPITALIZATION OF(2) . Net A
Slide 5: Portfolio Improvement Continues
PORTFOLIO IMPROVEMENT CONTINUES % of CORE MARKET FUNDAMENTALS Proforma Average Region 2019 NOI Homes Revenue(1) Minneapolis, MN 22.5% 2,259 $1,569 Rochester, MN 14.4% 1,711 $1,285 Job/Population Growth Denver, CO 9.6% 664 $2,008 Grand Forks, ND 8.4% 1,555 $967 Omaha, NE 7.8% 1,370 $966 Bismarck, ND
Slide 6: Operational and Margin-Enhancing Initiatives
OPERATIONAL AND MARGIN-ENHANCING INITIATIVES Focusing efforts to harvest organic growth from operational enhancements and margin-enhancing initiatives 60% KEY OPPORTUNITIES 59% 61% 58% 62% • Revenue Optimization 57% 63% Lease-Roll Management 5% increase • in SS 56% operating 64% • Value-Add Program
Slide 7: Driving Internal Growth
DRIVING INTERNAL GROWTH Our plan is producing consistent growth YoY Same-Store NOI Growth Trailing 3-Months 10.0% 8.7% 9.0% 8.0% 6.4% 7.0% 5.8% 6.0% 4.7% 4.6% 5.0% 4.0% 2.8% 2.6% 3.0% 2.0% 1.0% 0.0% 1/31/2019 4/30/2019 7/31/2019 10/31/2019 12/31/2019 3/31/2019 6/30/2019* IRET MF Average Peer Average
Slide 8: Growing Rental Revenue: Current Outlook
GROWING RENTAL REVENUE: CURRENT OUTLOOK Strong same-store performance has continued into this quarter. Non same-store is stabilized and performing Same-Store Lease Over Lease Pricing Same-Store Physical Occupancy (3,115 Leases) 98.0% 8.0% 6.0% 96.0% 4.1% 4.3% 4.0% 2.7% 2.4% 94.0% 2.0% 1.0% 0.0% 92.0
Slide 9: Peer Comparison
PEER COMPARISON We continue to view share repurchases as an attractive use of capital Second Quarter 2019 Peer Same-Store1 Avg. IRT NXRT AIV CPT MAA No. of SS Units 12,848 38,269 13,697 11,471 27,640 42,618 95,920 Revenue Growth 3.1% 4.0% 5.4% 4.0% 3.8% 3.4% 3.2% Expense Growth 3.8% 2.5% 3.1% 2.2% 1
Slide 10: Capital Structure Proforma September 30, 2019
CAPITAL STRUCTURE PROFORMA SEPTEMBER 30, 2019 A strong and flexible balance sheet allows us to execute our investment and operational strategies $ in thousands, except where noted $1.75B Total Capitalization % of Weighted Weighted Debt Summary Amount Total Avg. Rate Avg. Maturity Debt Summary $99M S
Slide 11: Value-Add Opportunity
VALUE-ADD OPPORTUNITY Highlights . We are moving forward to deliberately mine the opportunities in our portfolio. Currently, we have approved $33 million of value-add projects in 25% of the homes in our portfolio . Expected investment in 2019 is $5.7 million and is expected to be neutral to FFO in 2
Slide 12: Acquisition Case Study – SouthFork
ACQUISITION CASE STUDY – SOUTHFORK Opportunity . SouthFork Townhomes is a 272-unit community built in 1988 & 1990 and purchased by IRET from the original developers in February 2019 . The developers would have incurred a significant tax bill in a cash sale . IRET was able to work with the seller to
Slide 13: Markets Update
MARKETS UPDATE Minneapolis – St. Paul and Denver boast extremely tight job markets, characterized by a highly educated workforce % of Adult Population with Bachelor's Degree or Higher Unemployment Rate (1) Washington-Arlington-Alexandria, DC-VA-MD-WV 50.8% 3.6% San Francisco-Oakland-Hayward, CA 49.3
Slide 14: Minneapolis–St. Paul Is Strong
MINNEAPOLIS–ST. PAUL IS STRONG Economic Drivers 17 Fortune 500 Companies • The Minneapolis–St. Paul economy is supported by large Rank Company Rank Company corporations in diverse industries that generate stable job 6 United Health Group 212 Land O’ Lakes growth. Seventeen Fortune 500 companies and
Slide 15: Denver's Economy Is Thriving
DENVER’S ECONOMY IS THRIVING Economic Drivers 130 Total Nonfarm Payrolls (SA 2010-present) Indexed to Jan 2010 = 100 +28% • Denver’s advantageous location, livability, skilled workforce, and 125 attractiveness for doing business have prompted job creation throughout the metro area as employers reloc
Slide 16: Understanding Our Secondary Markets
UNDERSTANDING OUR SECONDARY MARKETS These five markets, plus Minneapolis-St. Paul and Denver are expected to make up 77% of proforma 2019 NOI Rochester, MN Omaha, NE Grand Forks, ND St. Cloud, MN Bismarck, ND Population 218,280 933,316 102,414 197,759 132,142 Median Household Income $71,985 $65,619
Slide 17: Best in Class Governance
BEST IN CLASS GOVERNANCE Executive Management Team Mark O. Decker, Jr. John A. Kirchmann Anne M. Olson PRESIDENT AND CEO EVP AND CFO EVP AND COO • Former investment banker with 18 years • Former Private Consultant • Former Partner – Dorsey & Whitney focused on small/mid cap REITs • Former VP of Oper
Slide 18: Investment Highlights
INVESTMENT HIGHLIGHTS Differentiated Market Exposure Internal Growth Opportunities Flexible Balance Sheet Value Add Opportunities Best in Class Governance www.iretapartments.com BMO Real Estate Conference Presentation 18
Slide 19: Investor Relations Contact
Investor Relations Contact: Jonathan Bishop ir@iret.com 952.401.4827
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