D/b/a Centerspace · NYSE:CSR
D/b/a Centerspace — Centerspace — Investor Presentation (September 2023)
25 slides from D/b/a Centerspace's investor presentation, Sep 12, 2023
Slide 1: Investor Presentation September 2023
INVESTOR PRESENTATION September 2023 Civic Lofts – Denver, CO
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 Overview: Differentiated Multifamily Market Exposure
centerspacehomes.com 3 (1) See page 8 for breakdown Differentiated Multifamily Market Exposure 13,497 Apartments owned and operated NYSE: CSR $2.1 Billion(1) Total capitalizationKey Indices S&P SmallCap 600 MSCI US REIT Russell 2000 RISE is Centerspace’s commitment to Results, Innovation, Service, a
Slide 4: Results – 2023 Financial Outlook
centerspacehomes.com 4 Q2 YTD 2023 -------------------2023 Guidance Range-------------------- Actual Low Mid-Point High Revenues 9.5% 6.50% 7.25% 8.00% Expenses 6.6% 4.00% 4.62% 5.25% NOI 11.6% 8.50% 9.25% 10.00% Net Income $2.55 $2.84 $3.24 $3.64 FFO $2.01 $4.14 $4.25 $4.35 Core FFO $2.36 $4.55 $4.
Slide 5: Results – Portfolio Stability and Resiliency
centerspacehomes.com 5 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3TD 2023 Occupancy 95.2% 94.1% 94.5% 94.8% 95.1% 94.6% Expirations 28.7% 36.5% 15.5% 16.6% 30.3% 26.3% RESULTS – PORTFOLIO STABILITY AND RESILIENCY Centerspace has grown average rents even in volatile economic times 0.00% 2.00% 4.00% 6.
Slide 6: Results – Favorable Leasing Trends Continue
centerspacehomes.com 6 RESULTS - FAVORABLE LEASING TRENDS CONTINUE SAME STORE LEASING UPDATE Note: QTD leasing spreads are through August 31, 2023. 7.9% 1.6% 2.5% 5.2% 3.3% 8.9% 7.4% 5.7% 4.7% 5.1% 8.5% 4.1% 3.8% 4.9% 4.3% Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3TD 2023 New Renewal Blended
Slide 7: Results – NOI Composition and Rental Rate Growth
centerspacehomes.com 7 -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2023 vs 2022 Year-to-Date Rental Rate Growth New Lease Rents Renewal Rents Market % of Total NOI Minneapolis, MN 34.2% Denver, CO 22.9% North Dakota 14.4% Rochester, MN 9.3% Other Mountain West 8.6% Omaha, NE 5.3% St. Cloud, MN 5.3% T
Slide 8: Large Permanent Capital Base
centerspacehomes.com 8 Common Equity 53% Secured Debt 27% Unsecured Debt 15% Series C Preferred 4% Series D Preferred 1% *Share price $61.36 as of 6/30/2023 Large Permanent Capital Base ($2.1B Total Capitalization) $0.9B Total Debt $1.1B Common Equity $110M Preferred Equity % of Total Maturing 2.5%
Slide 9: Results – Stable Underlying Portfolio and Consistent Earnings
centerspacehomes.com 9 STABLE UNDERLYING PORFOLIO = CONSISTENT EARNINGSRESULTS – STABLE UNDE LYING PORTFOLIO AND CONSISTE T EARNINGS Differentiated and low supply exposure markets insulate portfolio and provide stability during periods of macroeconomic volatility 9.1% 1.6% 5.6% 11.0% 2019 2020 2021
Slide 10: Innovation – Portfolio Improvement Since 2017
centerspacehomes.com 10 ▪ Acquired 33 communities in our target markets for $1.4 billion through unique deal structuring which has provided a competitive advantage in transaction market ▪ $500 million of dispositions in non-core markets as we reduce our exposure to less efficient communities in lowe
Slide 11: Innovation – Advancing Portfolio Construction Through Dispositions
centerspacehomes.com 11 INNOVATION – ADVANCING PORTFOLIO CONSTRUCTION THOUGH DISPOSITIONS ▪ Average capitalization rate of the 2023 dispositions was 5.9%, while the implied capitalization rate for the portfolio is 7.2% based upon the common stock closing price at 6/30/2023 ($61.36 per share) ▪ Proce
Slide 12: Innovation – Competitive Advantage in Minneapolis
centerspacehomes.com 12 ▪ 29 CSR communities, 4,916 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 ▪ Diversifi
Slide 13: Innovation – Growth in Denver
centerspacehomes.com 13 ▪ 7 CSR communities, 2,104 homes, entered Denver 4Q 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, telecommunications and t
Slide 14: Market Data by Region
centerspacehomes.com 14 Region % of NOI (1) Population Market Homes Median Household Income Unemployment Rate 3-Month Avg Job Growth Median Single-Family Home Value Trailing 12- Month Deliveries (4) Market Vacancy (4) YoY Market Rent Growth (4) Homes Under Construction / % of Stock (4) Centerspace Y
Slide 15: Innovation – Portfolio Compares Favorably on Unemployment and Supply
centerspacehomes.com 15 ▪ 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 compani
Slide 16: Service – Enhancing Resident Experience and Optimizing Revenue
centerspacehomes.com 16 SERVICE – ENHANCING RESIDENT EXPERIENCE AND OPTIMIZING REVENUE 19% 81% Unit Renovations Total Units Renovated Nonrenovated Units 2020 2021 2022 1H 2023(3) Homes Completed 404 homes 686 homes 945 homes 375 homes Average Cost per Home(1) $11,003 $14,259 $18,549 $15,177 Average
Slide 17: Highlighting the Impact of Value Add
centerspacehomes.com 17 Highlighting the Impact of Value Add SERVICE – ENHANCING RESIDENT EXPERIENCE AND OPTIMIZING REVENUE Our portfolios in Omaha and Rochester recently completed substantial renovations. In Q2, both markets performed better than the portfolio average in: ▪ Same Store NOI ▪ Same St
Slide 18: Technology Platform for Residents and Operations
centerspacehomes.com 18 AI Leasing Assistant responds to email and text inquiries 24-hours a day Websites, resident and applicant portals, resident app, and robust CRM solution Full-service property management platform Mobile maintenance platform Electronic invoicing, vendor marketplace, and automat
Slide 19: Service – Enhancing Customer Experience Is a Core Goal
centerspacehomes.com 19 68.93 63.26 58 60 62 64 66 68 70 Centerspace ORA Score National Property Average ORA Score 2023 J Turner ORA Score (As of 7/1/2023) ORA TOP PERFORMERS Red 20 Apartments in Minneapolis, MN and Ironwood Apartments in New Hope, MN were named to the 2022 Elite 1% in the J Turner
Slide 20: Environmental Social Governance
centerspacehomes.com 20 ENVIRONMENTAL SOCIAL GOVERNANCE • Participated in the GRESB annual assessment to identify risks and opportunities and benchmark performance amongst real estate peers • Implemented an Environmental Management System (EMS) aligned with ISP 14001 to gather, track, and improve up
Slide 21: Engagement – Best-in-Class Governance
centerspacehomes.com 21 EXECUTIVE MANAGEMENT TEAM Anne Olson President and CEO Bhairav Patel EVP and 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 and Operations Support E
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 Centerspace believes that FFO, which is a non-GAAP financial measure used as a standard supplemental measure for eq
Slide 24: Reconciliation to Non-GAAP Measures
centerspacehomes.com 24 RECONCILIATION TO NON-GAAP MEASURES
Slide 25: Reconciliation to Adjusted EBITDA
centerspacehomes.com 25 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, gain or lo