In This Article:
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Earnings per Share (Core FFO): $1.18 for the third quarter.
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Same Store Revenue Growth: Increased by 3% compared to the same period in 2023.
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Occupancy Rate: Increased to 95.3%, a 70 basis point improvement year-over-year.
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Blended Lease Increases: 1.5% for the quarter.
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Resident Retention: Over 58% for the quarter.
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Core FFO Guidance: Raised midpoint to $4.86 per share for the full year.
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Same Store Expense Growth: Increased by 3.2% year-over-year.
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Interest Expense: Expected to range between $37.3 million to $37.6 million for the year.
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Shares Issued: Approximately 1.5 million shares issued, raising $105 million.
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Debt Assumed: $35 million at a 3.72% interest rate for the Lydian acquisition.
Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Centerspace (NYSE:CSR) reported earnings of $1.18 per share of core FFO for the third quarter, driven by stable revenue growth and expense control initiatives.
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Same store revenue increased by 3% over the same period in 2023, with occupancy rising to 95.3%, a 70 basis point improvement over last year.
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The company expanded its presence in the Denver market with the acquisition of the Lydian, which is expected to generate an NOI yield in the mid to high 5% range.
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Centerspace (NYSE:CSR) raised the midpoint of its full-year core FFO guidance by a penny to $4.86 per share, reflecting positive NOI growth.
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The company successfully issued approximately 1.5 million shares, raising $105 million to redeem its series C preferred shares, simplifying its capital structure and improving cash flow.
Negative Points
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Market rent softened more than expected, impacting revenue growth projections for the remainder of the year.
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Same store expenses increased by 3.2% year-over-year, driven by higher non-controllable expenses such as insurance premiums.
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The company anticipates increased interest expenses due to debt assumed in conjunction with the Lydian acquisition.
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Revenue growth guidance implies a substantial drop from Q3 to Q4, attributed to market rent softening and seasonal trends.
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Bad debt levels are trending towards the high end of expectations, with no significant improvement anticipated in the near term.
Q & A Highlights
Q: You mentioned market rent softening more than expected. Is that also a greater softening than the normal seasonal trend? A: Bhairav Patel, CFO: It is more than we expected and more than the seasonal expectation, just slightly more. We attribute it mostly to the supply-demand dynamics, which were against our expectations. Our expectations for the year were just a little bit higher.