D/b/a Centerspace · NYSE:CSR
D/b/a Centerspace — Investors Real Estate Trust — Q1 2021 Earnings Presentation
25 slides from D/b/a Centerspace's earnings presentation, Apr 19, 2021
Slide 1: Investor Presentation April 2021
Investor Presentation April 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: IRET is now Centerspace
centerspacehomes.com 3 Better Every Days IRET IS NOW CENTERSPACE A lot has changed since our business began, and our new name is a reflection of who we have become. The rebrand of the company reflects our mission to provide great homes for our residents, our teams, and our investors. It is about com
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 Multifamily Acquisitions and Dispositions Since 2017 % of NOI by Market – March 2021 vs 2017 Acquired ten new communities in our target markets for $810 million $293 million in dispositions including 29 communities as we reduce our exposure to older, lower margin propertie
Slide 6: Revised 2021 Financial Outlook
centerspacehomes.com 6 Range for 2021 Low High Earnings per Share - diluted $0.10 $0.50 Revenue 0.0% 3.0% Total Expenses 3.0% 5.0% NOI (1.5%) 1.5% FFO per Share – diluted $3.38 $3.62 Core FFO per Share – diluted $3.48 $3.72 REVISED 2021 FINANCIAL OUTLOOK U p d a t e d O u t l o o k B a s e d o n B e
Slide 7: Operations Update: Accelerating Rent Growth Into Leasing Season
centerspacehomes.com 7 OPERATIONS UPDATE A c c e l e r a t i n g R e n t G r o w t h I n t o L e a s i n g S e a s o n Same-Store Lease-over-Lease Rate Changes Same-Store Weighted Average OccupancyLeasing Activity Rent growth is accelerating earlier than anticipated (1) Q1 represented 14% of our
Slide 8: Unemployment: Lowest Unemployment Rate Among Peers
centerspacehomes.com 8 UNEMPLOYMENT 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 9 % 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 portfolio relative to
Slide 9: Strong Operating Platform: Margins Continue to Improve in Q1
centerspacehomes.com 9 68% 69% 70% 71% 72% 73% 74% 75% 76% 77% 78% 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 i n Q 1 Same-Store communities continue to see NOI and gross margin growth Buying Efficient Communities Communities acquired have a weighted average
Slide 10: Recent Acquisitions
centerspacehomes.com 10 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 11: Value-Add Opportunity: Enhancing Portfolio Through Renovation Projects
centerspacehomes.com 11 Property Region Homes to Renovate Renovated Date Complete Avg. Cost per Unit (1) Achieved Premium(2) Estimated ROI(3) Park Place Minneapolis, MN 500 267 In process $19,001 $254 16.9% Connelly on Eleven Minneapolis, MN 240 196 In process $10,129 $138 18.9% SouthFork Minneapoli
Slide 12: Value-Add Case Study: Connelly on Eleven
centerspacehomes.com 12 Homes to Renovate Renovated % Complete Cost Per Unit Achieved Premium(1) ROI 240 196 82% $10,129 $138 18.9% Spent to Date Achieved Premium ROI $3,420,491 $95 8.0% After BeforeOpportunity VALUE-ADD CASE STUDY C o n n e l l y o n E l e v e n , B u r n s v i l l e , M i n n e s
Slide 13: Capital Recycling: Improving Portfolio Metrics
centerspacehomes.com 13 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 14: Balance Sheet as of 3/31/2021
centerspacehomes.com 14 Common Equity 51% Secured Debt 16% Unsecured Debt 27% Series C Preferred 5% Series D Preferred 1% Debt Summary Amount % of Total Wtd Avg Int Rate Wtd Avg Maturity Total Secured Debt 295,001,243 37% 3.92% 5.03 Line of Credit 181,543,513 23% 2.18% 1.41 Term Loans 145,000,000 18
Slide 15: Minneapolis Market
centerspacehomes.com 15 MINNEAPOLIS MARKET C O M M U N I T I E S : 1 4 / H O M E S : 2 , 5 3 7 M A J O R E M P L O Y E R S Culturally vibrant and economically diverse metro driven by major employment in health and life sciences, food and water, consumer retail, financial services, and manufacturin
Slide 16: Denver Market
centerspacehomes.com 16 100% Asset Class Class A 44% 56% Location Urban Suburban DENVER MARKET C O M M U N I T I E S : 5 / H O M E S : 1 , 7 1 3 M A J O R E M P L O Y E R S Diverse economy and major hub of technology, energy, aviation and bioscience; 23 Fortune 1,000 companies have their headquart
Slide 17: Nashville Market
centerspacehomes.com 17 NASHVILLE MARKET N e w T a r g e t M a r k e t – A N a t i o n a l G r o w t h L e a d e r i n H o u s e h o l d I n c o m e , J o b s , a n d M i l l e n n i a l P o p u l a t i o n M A J O R E M P L O Y E R S True live-work-play community with a lively cultural scene boas
Slide 18: Focused Secondary Market Presence
centerspacehomes.com 18 FOCUSED SECONDARY MARKET PRESENCE T h e s e F o u r M a r k e t s , P l u s M i n n e a p o l i s - S t . P a u l a n d D e n v e r M a k e U p 8 0 % o f P r o - F o r m a N O I Rochester, MN Omaha, NE Grand Forks, ND St. Cloud, MN Population 216,035 941,924 101,991 196,598 M
Slide 19: Best-in-Class Governance
centerspacehomes.com 19 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 20: ESG Highlights
centerspacehomes.com 20 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 LED lighting upgrades at 25 communities Only ENERGY STAR rated appliances used for replacement Water Conservation Provide s
Slide 21: Investment Highlights: Best-In-Class Governance
centerspacehomes.com 21 INVESTMENT HIGHLIGHTS Best-In-Class Governance
Slide 22: Appendix
centerspacehomes.com 22 APPENDIX
Slide 23: Reconciliation to Non-GAAP Measures: FFO and Core FFO
centerspacehomes.com 23 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 24: Reconciliation to Non-GAAP Measures
centerspacehomes.com 24 RECONCILIATION TO NON-GAAP MEASURES
Slide 25: Reconciliation to Non-GAAP Measures: Adjusted EBITDA
centerspacehomes.com 25 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
Investors Real Estate Trust — Q1 2021 Earnings Presentation on 6ix