Slide 1: Investor Presentation May 2022
INVESTOR PRESENTATION May 2022
Slide 2: Safe Harbor Statement and Legal Disclosure
centerspacehomes.com 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 differ materi
Slide 3: Company Snapshot
centerspacehomes.com 3 Differentiated Markets Internal Growth Opportunity Value-Add Opportunity Balance Sheet Flexibility Experienced Leadership (1) See page 14 for breakdown 0% 100% 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20
Slide 4: Better Every Day: Strong Foundation
centerspacehomes.com 4 BETTER EVERY DAYS STRONG FOUNDATION Same-store lease over lease growth was 6.9% in Q1 compared to 5.8% in Q4 2021 and 0.7% in Q1 2021 Same-store renewal lease growth accelerated to 9.6% in Q1 compared to 7.8% in Q4 2021 and 4.0% in Q1 2021 Total revenue growth was 7.8% i
Slide 5: Differentiated Portfolio
centerspacehomes.com 5 Region Homes Q1 Avg. Rev per Occ. Home(1) Denver, CO 1,888 $2,002 Minneapolis, MN (2) 5,293 $1,487 North Dakota 2,421 $1,185 Omaha, NE 1,370 $1,118 Rochester, MN 1,121 $1,601 St. Cloud, MN 1,524 $1,175 Other Mountain West(3) 1,221 $1,264 Total / Average 14,838 $1,428 (4) MULTI
Slide 6: Strong Fundamentals Throughout Midwest and Mountain West
centerspacehomes.com 6 STRONG FUNDAMENTALS THROUGHOUT MIDWEST AND MOUTAIN WEST Billings 2022 YTD lease trade-out: 14.8% Apr 2022 rent-to-income: 18.5% Bismarck 2022 YTD lease trade-out: 7.3% Apr 2022 rent-to-income: 15.5% Denver 2022 YTD lease trade-out: 10.3% Apr 2022 rent-to-income: 20.6% Grand Fo
Slide 7: Our Portfolio Compares Favorably on Unemployment and Supply
centerspacehomes.com 7 OUR PORTFOLIO COMPARES FAVORABLY ON UNEMPLOYMENT AND SUPPLY 2.7% 3.5% 3.5% 3.6% 3.6% 3.7% 3.7% 3.7% 3.8% 3.9% 3.9% 3.9% 4.0% 4.1% 4.5% 4.5% 4.8% March 2022 Weighted Average Unemployment Rate state unemployment rate weighted by unit count Centerspace portfolio has lower unemp
Slide 8: Positive Leasing Trends Continue: Same Store Leasing Update
centerspacehomes.com 8 Occupancy Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 April 2022 May 2022 94.7% 94.9% 94.3% 93.4% 93.9% 95.3% 94.8% 0.7% 10.0% 10.8% 5.8% 6.9% 11.5% 15.5% 4.0% 5.6% 7.2% 7.8% 9.6% 9.5% 7.9% 2.0% 7.5% 9.0% 6.5% 7.9% 10.8% 11.9% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Apr-22 May-22
Slide 9: Optimizing Rents from 2021 Portfolio Acquisition
centerspacehomes.com 9 OPTIMIZING RENTS FROM 2021 PORTFOLIO ACQUSITION -1.0% 4.9% 7.1% 10.1% -1.3% 6.6% 15.5% 13.3% Q4 2021 Q1 2022 Apr May Same Store New Lease Rate Growth SS MSP KMS 7.1% 4.9% 4.7% 6.8% 4.0% 9.2% 7.1% 8.1% Q4 2021 Q1 2022 Apr May Same Store Renewal Rate Growth SS MSP KMS 0.7% 4.9%
Slide 10: Strong Operating Platform
centerspacehomes.com 10 Strong Operating Platform RISE BY 5 Same-Store communities continue to see NOI margin growth BUYING EFFICIENT COMMUNITIES Communities acquired since 2018 have a weighted average margin of 56.7% SELLING INEFFICIENT COMMUNITIES Communities sold since 2018 have a weighted averag
Slide 11: RISE BY Enhances Customer Experience
centerspacehomes.com 11 RISE BY 5 ENHANCES CUSTOMER EXPERIENCE 3.35 3.41 3.52 3.56 3.58 3.25 3.3 3.35 3.4 3.45 3.5 3.55 3.6 3.65 01/01/2019 01/01/2020 01/01/2021 01/01/2022 05/31/2022 Lifetime Average Online Reputation Scores (Overal l Scale o f 5 .0) 64.78 62.62 60 61 62 63 64 65 66 Centerspace ORA
Slide 12: Value-Add Highlights
centerspacehomes.com 12 VALUE-ADD HIGHLIGHTS ACCELERATING VALUE-ADD OPPORTUNITY Value-add opportunities to drive maximum revenue across the portfolio include unit and common area renovations and adding amenities including clubhouses, fitness centers, dog park, outdoor kitchens, and package locker
Slide 13: 2022 Financial Outlook
centerspacehomes.com 13 2022 FINANCIAL OUTLOOK ------------Forecasted Range------------- Low Mid-Point High Revenue 7.00% 8.00% 9.00% Total Expenses 5.50% 6.50% 7.50% NOI 8.00% 9.00% 10.00% Earnings per Share $(0.37) $(0.24) $(0.11) FFO per Share $4.26 $4.39 $4.52 Core FFO per Share $4.33 $4.45 $4.5
Slide 14: Balance Sheet Positioned for Growth
centerspacehomes.com 14 $22,254 $42,305 $77,907 $53,125 $51,849 $116,000 $103,000 $85,000 $198,000 $25,000 $78,850 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Common Equity 64% Secured Debt 19% Unsecured Debt 13% Series C Preferred 3% Series D Preferred 1% Access to Unsecured De
Slide 15: Improvement in Portfolio
centerspacehomes.com 15 Improvement since 2017 driven by thoughtful capital allocation and creative deal structuring $782,950 $488,080 $92,667 Acquisition Structure (in thousands) Cash OP Unit Development IMPROVEMENT IN PORTFOLIO Unique deal structures have provided a competitive advantage in the tr
Slide 16: Recent Acquisitions
centerspacehomes.com 16 RECENT ACQUISITIONS • A 130-home community built in 2021 • Conveniently located adjacent to Lake Nokomis and features walkability and connectivity to retailers • Amenities include fitness center, resort-style pool and community rooms • Studio, one, two-bedroom homes feature q
Slide 17: Minneapolis Market
centerspacehomes.com 17 1% 99% NOI Subject to Rent Control (2) Rent Control Non Rent Control 32 CSR communities consisting of 5,293 homes 16th largest MSA in the nation #6 on U.S. News best places to live in the U.S. 24% projected population increase by 2035 442,000 jobs to be added to the
Slide 18: Minneapolis Market
centerspacehomes.com 18 0% 1% 2% 12 Mo Change 10 Yr Change 5 Yr Forecast Labor Force Growth 0% 5% 10% 15% 12 Mo Change 10 Yr Change 5 Year Forecast Income Growth 0% 1% 2% 3% 4% 5% 2019 2020 2021 2022 (proj) 2023 (proj) Inventory Growth 0% 1% 2% 12 Mo Change 10 Yr Change 5 Yr Forecast Population Grow
Slide 19: Denver Market
centerspacehomes.com 19 6 CSR communities consisting of 1,888 homes 19th largest MSA in the nation #2 on U.S. News best places to live in the U.S. 6th fast growing state between 2010 and 2020 804,100 jobs to be added to the region by 2050 23 Fortune 1,000 companies headquartered in Color
Slide 20: Denver Market
centerspacehomes.com 20Source: CoStar Multifamily Market Report 0% 1% 2% 12 Mo Change 10 Yr Change 5 Yr Forecast Population Growth 0% 1% 2% 12 Mo Change 10 Yr Change 5 Yr Forecast Labor Force Growth 0% 5% 10% 15% 12 Mo Change 10 Yr Change 5 Year Forecast Income Growth 0% 1% 2% 3% 4% 5% 2019 2020 202
Slide 21: Secondary Markets Have Strong Fundamentals
centerspacehomes.com 21 SECONDARY MARKETS HAVE STRONG FUNDAMENTALS 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 Construction(4) Minneapolis 34.1% 3,640,0
Slide 22: ESG Highlights
centerspacehomes.com 22 ESG HIGHLIGHTS ENVIRONMENTAL SOCIAL GOVERNANCE • Created ENERGY Star portfolios at each property in the portfolio • Utilize WasteX waste management across the portfolio • Participate in GRESB annual assessment to identify risks and opportunities and benchmark performance • Pr
Slide 23: Best-in-Class Governance
centerspacehomes.com 23 BEST-IN-CLASS GOVERNANCE EXECUTIVE MANAGEMENT TEAM Mark O. Decker, Jr. President and CEO Bhairav Patel EVP and CFO Anne Olson EVP and COO CSR rated ISS’s top score of 1 - indicating highest quality corporate governance practices and lowest governance risk Jeffrey P. Caira Sin
Slide 24: Investment Highlights
centerspacehomes.com 24 INVESTMENT HIGHLIGHTS Best-In-Class Governance Differentiated Market Exposure Internal Growth Opportunities Value-Add Opportunities Flexible Balance Sheet
Slide 25: Appendix
centerspacehomes.com 25 APPENDIX
Slide 26: Reconciliation to Non-GAAP Measures
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 Adjusted EBITDA
centerspacehomes.com 28 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 real estate investments, gain/loss on