D/b/a Centerspace · NYSE:CSR
D/b/a Centerspace — Centerspace — Investor Presentation (November 2021)
28 slides from D/b/a Centerspace's investor presentation, Nov 9, 2021
Slide 1: Investor Presentation November 2021
Investor Presentation November 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 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 held steady at 10.8% in Q3 compared to 10.0% in Q2 2021 and 0.7% in Q1 2021 Same-store renewal lease growth accelerated to 7.2% in Q3 compared to 5.6% in
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 Q3 Avg. Rev per Occ. Home(1) Denver, CO 1,713 $2,110 Minneapolis, MN (3) 4,901 $1,593 North Dakota 2,422 $1,305 Omaha, NE 1,370 $1,174 Rochester, MN 1,122 $1,680 St. Cloud, MN (3) 1,524 $1,194 Other Mountain West(2) 1,223 $1,267 Total / Average 14,275 $1,503 (3) M
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: Leasing Trends Remain Strong
centerspacehomes.com 7 -2.6% 0.0% -1.2% -4.2% 7.0% 10.8% 10.0% 0.7% October Q3 Q2 Q1 Same Store New Lease Rate Growth 2020 2021 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 2.9% 0.6% 3.2% 3.3% 7.4% 7.2% 5.6% 4.0% October Q3 Q2 Q1 Same Store Renewal Rate Growth 2020 2021 0.5% 0
Slide 8: Minneapolis/St. Cloud 2,696 Home Acquisition
centerspacehomes.com 8 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 9: Acquisition Financing and Preferred Unit Terms
centerspacehomes.com 9 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 a
Slide 10: Minneapolis/St. Cloud Acquisition Communities
centerspacehomes.com 10 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 11: Minneapolis Acquisition Community Map and Details
centerspacehomes.com 11 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 12: St. Cloud Map and Acquisition Performance
centerspacehomes.com 12 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 Acquisiton Total 332 A Park Meadows 408 Park Meadows Dr Waite Park 1982 360 B West Stonehill 690 Prosper
Slide 13: Minneapolis and St. Cloud Market Overview
centerspacehomes.com 13 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 14: Strong Operating Platform: Margins Continue to Improve
centerspacehomes.com 14 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 15: Value-Add Renovation Program
centerspacehomes.com 15 Property Region Homes to Renovate Renovated Date Complete Avg. Cost per Unit (1) Achieved Premium(2) Estimated ROI(3) Park Place Minneapolis, MN 500 337 In process $17,497 $252 18.20% Connelly on Eleven Minneapolis, MN 240 208 In process $10,332 $139 18.70% SouthFork Minneapo
Slide 16: Balance Sheet September 30, 2021
centerspacehomes.com 16 $29,822 $42,875 $89,316 $53,845 $52,447 $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 Common Equity 58% Secured Debt 18% Unsecured Debt 13% Series C Preferred 3% Series D Preferred 1%Series E Preferred 7% De
Slide 17: Capital Recycling: Improving Portfolio Metrics
centerspacehomes.com 17 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 18: Recent Acquisitions
centerspacehomes.com 18 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 19: Midwest Has Strong Fundamentals: Lowest Unemployment Among Peers
centerspacehomes.com 19 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 20: Midwest Has Strong Fundamentals: Lowest Under Construction
centerspacehomes.com 20 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 21: Operations Review: Secondary Markets See Low Supply
centerspacehomes.com 21 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 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 Bhairav Patel is joining the
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