Slide 1: Investor Presentation June 2024
INVESTOR PRESENTATION June 2024 Lake Vista – Fort Collins, CO
Slide 2: Safe Harbor Statement & Legal Disclosure
SAFE HARBOR STATEMENT & 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 result
Slide 3: Mission & Vision
MISSION & VISION 71 France – Edina, MN OUR MISSION OUR VISION To provide a great home— To be the premier provider for our residents, of apartment homes in vibrant our team members, communities by focusing on and our investors. integrity and serving others. centerspacehomes.com 3
Slide 4: Company Overview
COMPANY OVERVIEW Differentiated R ESULTS Multifamily Market Exposure NYSE: CSR I NNOVATION S ERVICE 12,883(1) E NGAGEMENT Apartments owned and operated $2.1 Billion(2) RISE is Centerspace’s commitment Total capitalization Key Indices to Results, Innovation, Service, and S&P SmallCap 600 Engagement.
Slide 5: Cash Flow Growth Focus
CASH FLOW GROWTH FOCUS TO EXECUTE THIS, WE FOCUS ON: Exceptional customer experience Diverse talent to enable a culture of engagement Enhancing efficiencies by scaling the business CENTERSPACE Managing the balance sheet to maximize financial flexibility Investing in high-quality and efficient rental
Slide 6: Results – 2024 Financial Outlook
RESULTS – 2024 FINANCIAL OUTLOOK 2023 -------------------2024 Guidance Range-------------------- Actual Low Mid-Point High Same-Store Growth Revenues 7.2% 3.0% 3.8% 4.5% Expenses 4.6% 4.0% 4.8% 5.5% NOI 9.0% 2.5% 3.3% 4.0% Per Share Net Income $2.32 ($1.34) ($1.22) ($1.10) FFO $4.27 $4.57 $4.67 $4.7
Slide 7: Results – Favorable Growth Profile
RESULTS – FAVORABLE GROWTH PROFILE Core FFO/sh Growth, Guidance Midpoint SS NOI Growth, Guidance Midpoint 1.5% 3.5% 3.3% at Midpoint 1.0% at Midpoint 1.0% 3.0% 0.5% 2.5% 0.0% -0.5% 2.0% -1.0% 1.5% -1.5% 1.0% -2.0% 0.5% -2.5% -3.0% 0.0% CSR SMID Cap Apt Non-coastal/Sunbelt All Multifamily CSR SMID Ca
Slide 8: Results – Leasing Spreads Accelerating Into Leasing Season
RESULTS – LEASING SPREADS ACCELERATING INTO LEASING SEASON SAME STORE LEASING UPDATE New Renewal Blended 4.7% 4.7% 4.7% 4.7% 3.9% 3.6% 3.6% 3.6% 3.4% 3.2% 2.0% 1.5% 0.3% 0.0% -3.2% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 QTD Oxbo – St. Paul, MN Note: Data represents 2024 Same Store pool. QTD leasing
Slide 9: Results – Portfolio Stability & Resiliency
RESULTS – PORTFOLIO STABILITY & RESILIENCY Centerspace has grown average rents even in volatile economic times SAME STORE LEASING $1,550 14.00% 12.00% $1,500 10.00% 8.00% $1,450 6.00% 4.00% $1,400 2.00% 0.00% $1,350 -2.00% $1,300 -4.00% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024
Slide 10: Results – NOI Composition & Rental Rate Growth
RESULTS – NOI COMPOSITION & RENTAL RATE GROWTH Market % of Total NOI Minneapolis, MN 35.0% 2024 vs 2023 Year-To-Date RentalRental 2023 vs 2022 Year-to-Date RateRate Growth Growth Denver, CO 22.6% Blended 1.1% 1.9% 6.0% 4.6% 2.4% 1.4% 2.2% 2.5% Rent North Dakota 10.4% Rochester, MN 9.8% 8.0% Other Mo
Slide 11: Results – Balance Sheet Positioned for Growth
RESULTS – BALANCE SHEET POSITIONED FOR GROWTH Quarterly Net Debt / Annualized Trailing EBITDA(1) Diversified Permanent Capital Base $2.1B Total Capitalization 4-Quarter Moving Average Most Recent Quarter 9.0x 8.5x Secured 8.0x Debt 7.5x $929M 29% 7.0x Total Debt 6.5x 6.0x $110M Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 12: Innovation – Portfolio Improvement Since 2017
INNOVATION – PORTFOLIO IMPROVEMENT SINCE 2017 Improvement since 2017 driven by disciplined capital While similar in total number of homes, investment and disposition activity allocation and creative deal structuring has resulted in a more efficient and higher quality portfolio Acquisition Structure
Slide 13: Innovation – Recent Capital Recycling Accretive to Portfolio Quality
INNOVATION – RECENT CAPITAL RECYCLING ACCRETIVE TO PORTFOLIO QUALITY AND FINANCIAL PERFORMANCE OCTOBER 2023 ACQUISITION LAKE VISTA APARTMENT HOMES, FORT COLLINS, CO Communities 1 Homes 303 Avg. Monthly Rent/Home $1,866 Homes/Community 303 SEPTEMBER 2023 & FEBRUARY 2024 DISPOSITIONS Avg Age (Years) 1
Slide 14: Innovation – Approach to Investments & Dispositions
INNOVATION – APPROACH TO INVESTMENTS & DISPOSITIONS DEMOGRAPHIC AND ECONOMIC MULTIFAMILY FUNDAMENTALS OTHER CONSIDERATIONS CONSIDERATIONS CONSIDERATIONS Population Trends Rents Focused in-market relationships Population Characteristics Occupancy Business and regulatory environment Labor Force Health
Slide 15: Innovation – Geographic Differentiation
INNOVATION – GEOGRAPHIC DIFFERENTIATION PUBLIC MULTIFAMILY REIT MARKET OVERVIEW GEOGRAPHIC FOCUS (% OF UNITS) 24% 76% 43% 7% 18% 30% 4% 53% 5% 18% 19% 4% 86% 7% 100% 27% 34% 21% 17% 5% 14% 71% 11% 8% 30% 21% 25% 15% 4% 21% 74% 5% 95% 25% 75% 24% 76% 6% 92% 3% Mountain West Midwest West Southeast & T
Slide 16: Innovation – Competitive Advantage in Minneapolis
INNOVATION – COMPETITIVE ADVANTAGE IN MINNEAPOLIS MARKET HIGHLIGHTS CSR HIGHLIGHTS CSR Portfolio NOI % 35.0% ▪ 27 CSR communities, 4,711 homes, scaled Location by % of NOI Asset Class by % of NOI portfolio with opportunities in operating CSR Minneapolis Portfolio partnership unit transactions, mezza
Slide 17: Innovation – Growth in Denver
INNOVATION – GROWTH IN DENVER MARKET HIGHLIGHTS CSR HIGHLIGHTS CSR Portfolio NOI % 22.6% Location by % of NOI Asset Class by % of NOI ▪ 7 CSR communities, 2,104 homes, entered CSR Denver Portfolio Denver Q4 2017 and achieved critical mass Average Rent $1,976 ▪ 19th largest MSA, 3.0M population 39% C
Slide 18: Innovation – Providing Differentiated Exposure
INNOVATION INNOVATION––PROVIDING PROVIDINGDIFFERENTIATED DIFFERENTIATEDEXPOSURE EXPOSURE Portfolio hallmarks include low unemployment rates, affordability of rents, resident financial strength, and diversified economies Forecasted Next CSR YTD Median Median Trailing 12-Month 12-Month Net Homes Under
Slide 19: Rental Affordability vs Homeownership & Income Growth
INNOVATION – RENTAL AFFORDABILITY VS HOMEOWNERSHIP & INCOME GROWTH Rent Vs. Own Affordability Gap in CSR Markets Income Growth Has Outpaced Rent Growth in CSR Markets Median Household Income Growth Minus Market Rent Growth: 2017 Q1 to 2024 Q1 $3,500 14% $3,000 12% 12% 11% 11% Monthly Payment $2,500
Slide 20: Demographics vs Housing Deliveries Are Attractive
INNOVATION – DEMOGRAPHICS VS HOUSING DELIVERIES ARE ATTRACTIVE US Housing is Structurally Undersupplied US Housing Starts (SAAR) Suggest New Supply to Decrease Formations/Completions (000s) Cumulative Housing Shortfall (000s) 2,500 6,000 1,900 2,000 5,000 1,800 1,500 4,000 1,700 Starts (000s) 1,000
Slide 21: Portfolio Compares Favorably on Unemployment & Supply
INNOVATION – PORTFOLIO COMPARES FAVORABLY ON UNEMPLOYMENT & SUPPLY Creditworthiness of residents produces strong rent collection Measured supply pipeline in Centerspace portfolio markets rates; low unemployment in Centerspace portfolio markets can allows the ability to drive rent growth and retain o
Slide 22: Innovation – Historical Value-Add Growth
INNOVATION – HISTORICAL VALUE-ADD GROWTH Centerspace’s past and current projects have generated a 15.3% return on investment, resulting in over $179 million of incremental value creation(1) 2018-2024 Value Add Spend $35,000,000 160 Spend increased from $2.7mm in 2018 to $29.4mm in 2023, with $26.0mm
Slide 23: Service – Enhancing Customer Experience Is a Core Goal
SERVICE – ENHANCING CUSTOMER EXPERIENCE IS A CORE GOAL 2024 J Turner ORA Score (As of 5/1/2024) LIFETIME AVERAGE REPUTATION SCORES* (As o f 5/1/2 0 2 4) 3.95 3.88 3.85 3.81 National Property Average ORA Score 61.77 3.75 3.61 3.65 3.51 3.55 3.49 Centerspace ORA Score 70.72 3.45 3.38 3.35 3.25 54 56 5
Slide 24: Engagement – ESG Highlights
ENGAGEMENT – ESG HIGHLIGHTS ENVIRONMENTAL SOCIAL GOVERNANCE • Established formal ESG targets and • Donated $75,710 to national, regional, and • Maintain a Supermajority Independent published them for the first time in the diversity-promoting charities in 2023 Board with 86% of board members 2022 ann
Slide 25: Engagement – Best-in-Class Governance / Executive Management Team
ENGAGEMENT – BEST-IN-CLASS GOVERNANCE EXECUTIVE ISS rated top score of 1 - indicating highest quality MANAGEMENT corporate governance practices and lowest TEAM governance risk Anne Olson Bhairav Patel President & CEO EVP & CFO SENIOR LEADERSHIP TEAM Brad Abel Grant Campbell Jean Denn Julie Ellis Jul
Slide 26: Key Takeaways
KEY TAKEAWAYS VALUE GEOGRAPHIC PROVEN DIFFERENTIATION EXECUTION centerspacehomes.com 26
Slide 27: Appendix
APPENDIX centerspacehomes.com 27
Slide 28: Reconciliation to Non-GAAP Measures
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 measure for equity real estate investm
Slide 29: Reconciliation to Non-GAAP Measures
RECONCILIATION RECONCILIATIONTOTO RECONCILIATION TONON-GAAP NON-GAAP NON-GAAP MEASURES MEASURES MEASURES Updated Three Months Ended (in thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Funds From Operations Net (loss) income available to common shareholders $ (5,512) $ (9,764) $ 6,167 $
Slide 30: Reconciliation to Non-GAAP Measures
RECONCILIATIONTOTONON-GAAP RECONCILIATION NON-GAAPMEASURES MEASURES Three Months Ended (in thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Reconciliation of Net Income (Loss) Adjusted EBITDA Available to Common Shareholders to Net income (loss) attributable to controlling interests $ (
Slide 31: Reconciliation to Non-GAAP Measures
RECONCILIATIONTOTONON-GAAP RECONCILIATION NON-GAAPMEASURES MEASURES Outlook Reconciliations of Operating Income Three Months Ended Year Ended to Net Operating Income 3/31/2024 12/31/2024 Net operating income, or NOI, is a non-GAAP financial Actual Low High measure which the Company defines as total