Slide 1: Investor Presentation September 2024
INVESTOR PRESENTATION September 2024 Lyra Apartments – Denver, CO
Slide 2: Safe Harbor Statement & Legal Disclosure
c ent e rs pa c ehome s.c om 2 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 results to diffe
Slide 3: Mission & Vision
OUR MISSION To provide a great home— for our residents, our team members, and our investors. OUR VISION To be the premier provider of apartment homes in vibrant communities by focusing on integrity and serving others. 71 France – Edina, MN MISSION & VISION 3c ent e rs pa c ehome s.c om
Slide 4: Company Overview
c ent e rs pa c ehome s.c om 4 1. As of June 30, 2024 2. See page 11 for breakdown Differentiated Multifamily Market Exposure 12,883(1) Apartments owned and operated NYSE: CSR $2.3 Billion(2) Total capitalizationKey Indices S&P SmallCap 600 MSCI US REIT Russell 2000 RISE is Centerspace’s commitment
Slide 5: Cash Flow Growth Focus
TO EXECUTE THIS, WE FOCUS ON: CENTERSPACE is guided by the north star of increasing distributable cash flow Exceptional customer experience Diverse talent to enable a culture of engagement Enhancing efficiencies by scaling the business Managing the balance sheet to maximize financial flexibility Inv
Slide 6: Results – 2024 Financial Outlook
c ent e rs pa c ehome s.c om 6 2023 -------------------2024 Guidance Range-------------------- Actual Low Mid-Point High Revenues 7.2% 3.25% 3.75% 4.25% Expenses 4.6% 3.50% 4.13% 4.75% NOI 9.0% 3.00% 3.50% 4.00% Net Income (Loss) $2.32 ($1.21) ($1.11) ($1.01) FFO $4.27 $4.61 $4.69 $4.76 Core FFO $4.
Slide 7: Results – Favorable Growth Profile
c ent e rs pa c ehome s.c om RESULTS – FAVORABLE GROWTH PROFILE 7Note: Data is based on midpoint of guidance ranges provided by noted peers with Q2 2024 earnings. SMID Cap Apt group includes ELME, IRT, and NXRT. Non-coastal/Sunbelt group includes CPT, ELME, IRT, MAA, and NXRT. All multifamily group
Slide 8: Results – Renewals Holding Strong; Leasing Spreads Returning to Normal
c ent e rs pa c ehome s.c om 8 Note: Data represents 2024 Same Store pool. QTD leasing spreads are through September 6, 2024 RESULTS – RENEWALS HOLDING STRONG; LEASING SPREADS RETURNING TO NORMAL SEASONAL PATTERNS Oxbo – St. Paul, MN 1.9% -3.4% -0.1% 3.4% -0.3% 4.7% 3.6% 3.3% 3.5% 3.4% 3.6% 0.2% 1.4
Slide 9: Results – Leasing Spreads Returning to Normal Seasonal Patterns
c ent e rs pa c ehome s.c om 9 -4.00% -2.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% $1,380 $1,400 $1,420 $1,440 $1,460 $1,480 $1,500 $1,520 $1,540 $1,560 $1,580 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 QTD SAME STORE LEASING Avg Rent Occupied New % Change Renewal % Chang
Slide 10: Results – NOI Composition & Rental Rate Growth
c ent e rs pa c ehome s.c om 10 -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 2023 vs 2022 Year-to-Date Rental Rate Growth New Lease Rents Renewal Rents Market % of Total NOI Minneapolis, MN 33.9% Denver, CO 22.5% North Dakota 11.6% Rochester, MN 9.7% Other Mountain West 8.4% St. Cloud, MN 5.5% Omaha, NE 5.1% Fort
Slide 11: Results – Balance Sheet Positioned for Growth
c ent e rs pa c ehome s.c om 11 Note: Capitalization figures are as of 6/30/2024, adjusted pro forma for cumulative ATM issuance as of 9/3/2024, anticipated Series C Preferred Share redemption, and the extension of the line of credit. 1. Net debt is the total outstanding debt balance less cash and c
Slide 12: Innovation – Portfolio Improvement Since 2017
c ent e rs pa c ehome s.c om 12 ▪ Acquired 34 communities for $1.5 billion through unique deal structuring which has provided a competitive advantage in transaction market ▪ Sold 66 communities for $599 million as we have reduced our exposure to less efficient communities in lower- growth markets 20
Slide 13: Innovation – Approach to Investments & Dispositions
c ent e rs pa c ehome s.c om DEMOGRAPHIC AND ECONOMIC CONSIDERATIONS MULTIFAMILY FUNDAMENTALS CONSIDERATIONS OTHER CONSIDERATIONS Population Trends Population Characteristics Labor Force Health Employment Economic Composition Rents Occupancy Market Size and Liquidity Supply and Demand General Housin
Slide 14: Innovation – Geographic Differentiation
c ent e rs pa c ehome s.c om 14Regency Park – St Cloud, MN GEOGRAPHIC FOCUS (% OF UNITS) Source: S&P Capital IQ Note: As of 8/16/24. Rounding may result in each row not adding to 100% INNOVATION – GEOGRAPHIC DIFFERENTIATION PUBLIC MULTIFAMILY REIT MARKET OVERVIEW 24% 4% 5% 4% 76% 21% 6% 43% 53% 4% 1
Slide 15: Minneapolis Market Highlights
c ent e rs pa c ehome s.c om 15 ▪ 27 CSR communities, 4,711 homes, scaled portfolio with opportunities in operating partnership unit transactions, mezzanine financing and development participation, and capital recycling ▪ 16th largest MSA, 3.7M population ▪ 15 Fortune 500 companies headquartered in
Slide 16: Innovation – Growth in Denver
c ent e rs pa c ehome s.c om 16 ▪ 7 CSR communities, 2,104 homes, entered Denver Q4 2017 and achieved critical mass ▪ 19th largest MSA, 3.0M population ▪ 21 Fortune 1,000 companies headquartered in Colorado ▪ Diversified economy with large presence of aviation/aerospace, healthcare, telecommunicatio
Slide 17: Market Data by Region
c ent e rs pa c ehome s.c om 17 Region % of NOI (1) Population Market Homes Median Household Income Unemployment Rate 3-Month Avg Job Growth Median Single-Family Home Value Market Vacancy YoY Market Rent Growth Trailing 12-Month Net Deliveries | % of Stock Forecasted Next 12-Month Net Deliveries | %
Slide 18: Rental Affordability vs Homeownership & Income Growth
c ent e rs pa c ehome s.c om INNOVATION – RENTAL AFFORDABILITY VS HOMEOWNERSHIP & INCOME GROWTH PROVEN EXECUTION 18 ▪ Homeownership affordability has grown increasingly difficult, as borrowing costs have increased while home prices remain near peak values ▪ Home ownership (PITI) in CSR markets now c
Slide 19: Demographics vs Housing Deliveries Are Attractive
c ent e rs pa c ehome s.c om GEOGRAPHIC DIFFERENTIATION INNOVATION – DEMOGRAPHICS VS HOUSING DELIVERIES ARE ATTRACTIVE PROVEN EXECUTION 19 ▪ New household formations exceed supply deliveries by over 5MM since 2011 ▪ Population demographics indicate continued strong demand of individuals in their pri
Slide 20: Portfolio Compares Favorably on Unemployment & Supply
c ent e rs pa c ehome s.c om 20 ▪ Low unemployment in our portfolio relative to all housing sectors- apartment, manufactured housing, and single-family rentals, is leading to strong collection rates ▪ Centerspace’s portfolio has the lowest weighted average unemployment rate among public multifamily
Slide 21: Value-Add Spend and Returns
c ent e rs pa c ehome s.c om 0 20 40 60 80 100 120 140 160 $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 2018 2019 2020 2021 2022 2023 2024 YTD 2018-2024 Value Add Spend Actual Spend Achieved Premium U/W Cumulative Premium 1. Includes unit renovations, common
Slide 22: Service – Enhancing Customer Experience
c ent e rs pa c ehome s.c om 22 71.49 61.94 54 56 58 60 62 64 66 68 70 72 Centerspace ORA Score National Property Average ORA Score 2024 J Turner ORA Score (As of 8/1/2024) ORA TOP PERFORMER Red 20 Apartments in Minneapolis, MN was named to the 2023 Elite 1% in the J Turner Research 2023 ORA Power R
Slide 23: Environmental, Social, Governance
c ent e rs pa c ehome s.c om 23 ENVIRONMENTAL SOCIAL GOVERNANCE • Published fifth annual ESG report, prepared in alignment with GRI 2024 Universal Standards & Topic Standards • Achieved 81% energy usage data coverage, surpassing 2027 goal of 75% • Submitted our second annual GRESB submission and inc
Slide 24: Engagement – Best-in-Class Governance
c ent e rs pa c ehome s.c om 24 EXECUTIVE MANAGEMENT TEAM Anne Olson President & CEO Bhairav Patel EVP & CFO ISS rated top score of 1 - indicating highest quality corporate governance practices and lowest governance risk SENIOR LEADERSHIP TEAM Susan Picotte SVP, Asset Management & Operations Support
Slide 25: Value Key Takeaways
c ent e rs pa c ehome s.c om GEOGRAPHIC DIFFERENTIATION VALUE KEY TAKEAWAYS PROVEN EXECUTION 25
Slide 26: Appendix
c ent e rs pa c ehome s.c om 26 APPENDIX
Slide 27: Reconciliation to Non-GAAP Measures – FFO
c ent e rs pa c ehome s.c om 27 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 measur
Slide 28: Reconciliation to Non-GAAP Measures
c ent e rs pa c ehome s.c om 28 RECONCILIATION TO NON-GAAP MEASURES UpdatedRECONCILIATION TO NON-GAAP MEASURESRECONCILIATION TO NON-GAAP MEASURES 1. Consists of $37,000 in associated trial costs related to the litigation matter for the three months ended March 31, 2024. Consists of a $3.9 million lo
Slide 29: Reconciliation to Adjusted EBITDA
c ent e rs pa c ehome s.c om 29 Reconciliation of Net Income (Loss) Available to Common Shareholders to Adjusted EBITDA Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain or loss on sale of real estate and other investments, impairment of real estate investments, ga
Slide 30: Reconciliation of Operating Income to NOI
c ent e rs pa c ehome s.c om 30 Reconciliations of Operating Income to Net Operating Income Net operating income, or NOI, is a non-GAAP financial measure which the Company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes that N