CSR
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 28, 2024
CENTERSPACE
(Exact name of Registrant as specified in its charter)
North Dakota
001-35624
45-0311232
(State or Other Jurisdiction
(Commission File Number)
(I.R.S. Employer Identification No.)
of Incorporation or Organization)
3100 10th Street SW, Post Office Box 1988, Minot, ND 58702-1988
(Address of principal executive offices) (Zip code)
(701) 837-4738
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed from last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Shares of Beneficial Interest, no par value
CSR
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
Centerspace (the "Company") issued an earnings release on October 28, 2024, announcing certain financial and operational results for the three and nine months ended September 30, 2024. A copy of the press release is furnished as Exhibit 99.1 and incorporated herein by reference.
The information in this Item 2.02 and the earnings release furnished as Exhibit 99.1 under Item 9.01, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01 Financial Statements and Exhibits
Exhibit
Number Description
99.1 Earnings Release and Supplemental Operating and Financial Data, dated October 28, 2024.
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL Document.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Centerspace
By
/s/ Anne Olson
Anne Olson
Date: October 28, 2024
President and Chief Executive Officer
Exhibit 99.1
Earnings Release
Centerspace Reports Third Quarter 2024 Financial Results and Raises Mid-Point for 2024 Core
FFO per Share Guidance
MINNEAPOLIS, MN, October 28, 2024 - Centerspace (NYSE: CSR) announced today its financial and operating results for the three and nine months ended September 30, 2024. The tables below show Net Income (Loss), Funds from Operations ("FFO")1, and Core FFO1, all on a per diluted share basis, for the three and nine months ended September 30, 2024; Same-Store Revenues, Expenses, and Net Operating Income ("NOI")1 over comparable periods; along with Same-StoreWeighted-Average Occupancy and leasing rates for each of the three and applicable nine months ended September 30, 2024, June 30, 2024, and September 30, 2023.
Three Months Ended September 30,
Nine Months Ended September 30,
Per Common Share
2024
2023
2024
2023
Net income (loss) - diluted
$
(0.40)
$
0.41
$
(0.96)
$
2.96
FFO - diluted(1)
$
1.01
$
1.15
$
3.40
$
3.15
Core FFO - diluted(1)
$
1.18
$
1.20
$
3.68
$
3.56
Year-Over-Year
Sequential
YTD Comparison
Same-Store Results(2)
Comparison
Comparison
Q3 2024 vs. Q3 2023
Q3 2024 vs. Q2 2024
2024 vs. 2023
Revenues
3.0%
-%
3.3%
Expenses
3.2%
5.8%
2.0%
NOI(1)
2.8%
(3.7)%
4.2%
Three months ended
Nine months ended
Same-Store Results(2)
September 30,
June 30, 2024
September 30,
September 30,
September 30,
2024
2023
2024
2023
Weighted Average Occupancy
95.3%
95.3%
94.6%
95.1%
94.9%
New Lease Rate Growth
(1.2)%
3.6%
2.0%
0.8%
3.1%
Renewal Lease Rate Growth
3.2%
3.6%
4.7%
3.3%
4.9%
Blended Lease Rate Growth (3)
1.5%
3.6%
3.6%
2.2%
4.0%
Highlights for the Third Quarter and Year-to-Date
1
Balance Sheet
At the end of the third quarter, Centerspace had $235.5 million of total liquidity on its balance sheet, consisting of $221.0 million available under the lines of credit and cash and cash equivalents of $14.5 million.
Updated 2024 Financial Outlook
Centerspace updated its 2024 financial outlook. For additional information, see S-17 of the Supplemental Financial and Operating Data for the quarter ended September 30, 2024 included at the end of this release. These ranges should be considered in their entirety. The table below reflects the updated outlook.
Previous Outlook for 2024
Updated Outlook for 2024
Low
High
Low
High
Net income per Share - diluted
$(1.21)
$(1.01)
$(1.21)
$(1.06)
Same-Store Revenue
3.25%
4.25%
3.00%
3.50%
Same-Store Expenses
3.50%
4.75%
2.50%
3.25%
Same-Store NOI
3.00%
4.00%
3.25%
3.75%
FFO per Share - diluted
$4.61
$4.76
$4.50
$4.59
Core FFO per Share - diluted
$4.78
$4.92
$4.82
$4.90
Additional assumptions:
Note: FFO and Core FFO are non-GAAP financial measures. For more information on their usage and presentation and a reconciliation to the most comparable GAAP measure, please refer to "2024 Financial Outlook" in the Supplemental Financial and Operating Data within.
Subsequent Events
On October 1, 2024, Centerspace closed on the acquisition of The Lydian in Denver, CO, for total consideration of $54.0 million. The acquisition was financed through the assumption of mortgage debt, issuance of common operating partnership units, and cash.
Upcoming Events
Centerspace is scheduled to participate in Nareit's REITworld conference in Las Vegas, NV, November 18-21.
Earnings Call
Live webcast and replay: https://ir.centerspacehomes.com
Live Conference Call
Conference Call Replay
Tuesday, October 29, 2024, at 10:00 AM ET
Replay available until November 12, 2024
USA Toll Free
1-833-470-1428
USA Toll Free
1-866-813-9403
International
1-404-975-4839
International
1-929-458-6194
Canada Toll Free
1-833-950-0062
Access Code
050510
Access Code
581939
Supplemental Information
Supplemental Operating and Financial Data for the quarter ended September 30, 2024 included herein ("Supplemental Information"), is available in the Investors section on Centerspace's website at www.centerspacehomes.com or by calling Investor Relations at 952-401-6600.Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined and reconciled in the Supplemental Financial and Operating Data, which accompanies this earnings release.
2
About Centerspace
Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of September 30, 2024, Centerspace owned interests in 70 apartment communities consisting of 12,883 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a top workplace for the fifth consecutive year in 2024 by the Minneapolis Star Tribune. For more information, please visit www.centerspacehomes.com.
Forward-Looking Statements
Certain statements in this press release and the accompanying Supplemental Operating and Financial Data are based on the company's current expectations and assumptions, and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Forward-looking statements are typically identified by the use of terms such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will," "assumes," "may," "projects," "outlook," "future," and variations of such words and similar expressions. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial conditions, or plans expressed or implied by the forward-looking statements. Although the company believes the expectations reflected in its forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be achieved. Any statements contained herein that are not statements of historical fact should be deemed forward-looking statements. As a result, reliance should not be placed on these forward-looking statements, as these statements are subject to known and unknown risks, uncertainties, and other factors beyond the company's control and could differ materially from actual results and performance. Such risks, uncertainties, and other factors that might cause such differences include, but are not limited to those risks and uncertainties detailed from time to time in Centerspace's filings with the Securities and Exchange Commission, including the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" contained in its Annual Report on Form 10-K for the year ended December 31, 2023, in its subsequent quarterly reports on Form 10-Q, and in other public reports. The company assumes no obligation to update or supplement forward-looking statements that become untrue due to subsequent events.
Contact Information
Investor Relations
Josh Klaetsch
Phone: 952-401-6600
Email: IR@centerspacehomes.com
Marketing & Media
Kelly Weber
Phone: 952-401-6600
Email: kweber@centerspacehomes.com
3
Supplemental Financial and Operating Data
Table of Contents
September 30, 2024
Page
Common Share Data
S-1
Key Financial Data
Condensed Consolidated Statements of Operations
S-2
Condensed Consolidated Balance Sheets
S-3
Non-GAAP Financial Measures and Reconciliations
Net Operating Income
S-5
Same-Store Controllable Expenses
S-7
Funds From Operations and Core Funds From Operations
S-8
Adjusted EBITDA
S-9
Debt and Capital Analysis
Debt Analysis
S-10
Capital Analysis
S-11
Portfolio Analysis
Same-Store Comparisons
S-12
Portfolio Summary
S-15
Capital Expenditures
S-16
2024 Financial Outlook
S-17
Non-GAAP Financial Measures and Other Terms
S-19
Common Share Data (NYSE: CSR)
Three Months Ended
September 30,
June 30, 2024
March 31, 2024
December 31,
September 30,
2024
2023
2023
High closing price
$
75.50
$
70.93
$
58.00
$
59.33
$
66.57
Low closing price
$
67.04
$
55.48
$
52.65
$
47.82
$
59.39
Average closing price
$
71.91
$
65.88
$
55.68
$
54.61
$
62.52
Closing price at end of quarter
$
70.47
$
67.63
$
57.14
$
58.20
$
60.26
Common share distributions - annualized
$
3.00
$
3.00
$
3.00
$
2.92
$
2.92
Closing dividend yield - annualized
4.3 %
4.4 %
5.3 %
5.0 %
4.8 %
Closing common shares outstanding (thousands)
16,568
15,057
14,912
14,963
15,052
Closing limited partnership units outstanding (thousands)
809
828
844
861
864
Closing Series E preferred units outstanding, as converted
2,038
2,053
2,062
2,078
2,087
(thousands)
Total closing common shares, limited partnership units,
and Series E preferred units, as converted, outstanding
19,415
17,938
17,818
17,902
18,003
(thousands)
Closing market value of outstanding common shares, plus
imputed closing market value of outstanding limited
partnership units and Series E preferred units, as
$
1,368,175
$
1,213,147
$
1,018,121
$
1,041,896
$
1,084,861
converted (thousands)
S-1
CENTERSPACE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands)
Three Months Ended
Nine Months Ended
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
REVENUE
$
65,025
$
65,043
$
64,506
$
64,068
$
64,568
$
194,574
$
197,241
EXPENSES
Property operating expenses, excluding
19,628
18,108
18,764
18,237
19,602
56,500
58,816
real estate taxes
Real estate taxes
7,031
7,081
6,305
6,861
7,143
20,417
21,898
Property management expense
2,242
2,222
2,330
2,341
2,197
6,794
7,012
Casualty (gain) loss
(412)
510
820
853
937
918
1,242
Depreciation and amortization
26,084
25,714
27,012
26,617
24,697
78,810
75,061
Impairment of real estate investments
-
-
-
5,218
-
-
-
General and administrative expenses
4,102
4,216
4,623
4,363
3,832
12,941
15,717
TOTAL EXPENSES
$
58,675
$
57,851
$
59,854
$
64,490
$
58,408
$
176,380
$
179,746
Gain (loss) on sale of real estate and
-
-
(577)
(83)
11,235
(577)
71,327
other investments
Loss on litigation settlement
-
-
-
(1,000)
-
-
(2,864)
Operating income (loss)
6,350
7,192
4,075
(1,505)
17,395
17,617
85,958
Interest expense
(8,946)
(9,332)
(9,207)
(8,913)
(8,556)
(27,485)
(27,516)
Interest and other income
645
477
340
533
330
1,462
674
Net income (loss)
$
(1,951)
$
(1,663)
$
(4,792)
$
(9,885)
$
9,169
$
(8,406)
$
59,116
Dividends to Series D preferred unitholders
(160)
(160)
(160)
(160)
(160)
(480)
(480)
Net (income) loss attributable to
noncontrolling interest - Operating
1,095
561
1,079
1,917
(1,204)
2,735
(9,058)
Partnership and Series E preferred units
Net income attributable to noncontrolling
(32)
(34)
(32)
(29)
(31)
(98)
(96)
interests - consolidated real estate entities
Net income (loss) attributable to controlling
(1,048)
(1,296)
(3,905)
(8,157)
7,774
(6,249)
49,482
interests
Dividends to preferred shareholders
(1,607)
(1,607)
(1,607)
(1,607)
(1,607)
(4,821)
(4,821)
Redemption of preferred shares
(3,511)
-
-
-
-
(3,511)
-
NET INCOME (LOSS) AVAILABLE
$
(6,166)
$
(2,903)
$
(5,512)
$
(9,764)
$
6,167
$
(14,581)
$
44,661
TO COMMON SHAREHOLDERS
Per Share Data - Basic
Net income (loss) per common share -
$
(0.40)
$
(0.19)
$
(0.37)
$
(0.65)
$
0.41
$
(0.96)
$
2.98
basic
Per Share Data - Diluted
Net income (loss) per common share -
$
(0.40)
$
(0.19)
$
(0.37)
$
(0.65)
$
0.41
$
(0.96)
$
2.96
diluted
S-2
Disclaimer
Centerspace published this content on October 28, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 28, 2024 at 20:52:36.233.