Centerspace Reports Strong First Quarter 2021 Financial Results

Rhea-AI Summary

Centerspace (NYSE: CSR) reported Q1 2021 financial results, showing a net loss of $(0.49) per share, improved from $(0.69) in Q1 2020. Core FFO rose 5.6% to $0.95, with same-store revenues up 0.4% and expenses down 0.9%. The company acquired Union Pointe for $76.9 million and anticipates closing a $60 million asset sale this May. Centerspace's 2021 financial guidance was revised upward, projecting EPS between $0.10 and $0.50 and Core FFO of $3.48 to $3.72. Notably, it paid its 200th consecutive quarterly distribution.

Positive

• Core FFO increased 5.6% to $0.95 per diluted share.
• Same-store revenues grew by 0.4% year-over-year.
• Executed a significant acquisition of Union Pointe for $76.9 million.
• Updated 2021 guidance shows improved EPS and Core FFO outlook.

Negative

• Net loss of $(0.49) per diluted share for Q1 2021.
• Same-store occupancy decreased to 94.9% from 95.3% year-over-year.

MINNEAPOLIS, May 3, 2021 /PRNewswire/ -- Centerspace (NYSE: CSR) announced today its financial and operating results for the quarter ended March 31, 2021. The tables below show Net Income, Funds from Operations ("FFO")¹, and Core FFO¹, all on a per share basis, for the three months ended March 31, 2021; Same-Store Revenues, Expenses, and Net Operating Income ("NOI")¹ over comparable periods; and Same-Store Weighted-Average Occupancy for the three months ended March 31, 2021, December 31, 2020, and March 31, 2020.

		Three Months Ended March 31,
Per Share		2021				2020
Net Income - diluted		$	(0.49)			$	(0.69)
FFO - diluted		$	0.92			$	0.66
Core FFO - diluted		$	0.95			$	0.90

 

		Year-Over-Year Comparison			Sequential Comparison
Same-Store Results		Q1 2021 vs. Q1 2020			Q1 2021 vs. Q4 2020
Revenues		0.4	%		(0.2)	%
Expenses		(0.9)	%		5.5	%
NOI		1.4	%		(3.9)	%

 

		Three months ended
Same-Store Results		March 31, 2021			December 31, 2020			March 31, 2020
Weighted Average Occupancy		94.9	%		94.7	%		95.3	%

(1)	NOI, FFO, Core FFO, and same-store results are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to "Non-GAAP Financial Measures and Reconciliations" below.

 

Highlights

• In April 2021, Centerspace paid its 200th consecutive quarterly distribution since its initial dividend in 1971;
• Net Loss was $(0.49) per diluted share for the first quarter of 2021, compared to Net Loss of $(0.69) per diluted share for the same period of 2020;
• Core FFO increased 5.6% to $0.95 per diluted share for the three months ended March 31, 2021, compared to $0.90 for the three months ended March 31, 2020;
• Same-store revenues increased by 0.4% for the first quarter of 2021 compared to the first quarter of 2020;
• Same-store expenses decreased by 0.9% for the first quarter of 2021 as compared to the first quarter of 2020, contributing to NOI growth of 1.4%;
• In a press release issued April 19, 2021, the company announced a 122% increase to its mid-point earnings per share outlook and a 4.2% increase to mid-point Core FFO outlook for 2021;
• Continued to grow the portfolio in the core market of Denver through the acquisition of Union Pointe, a 256-home apartment community in Longmont, Colorado;
• Issued $50.0 million of 2.7% unsecured Series C Notes due June 6, 2030. In concert with the issuance, the company amended and expanded its Note Purchase Private Shelf Agreement to increase the aggregate amount under the agreement from $150.0 million to $225.0 million; and
• Continued to strengthen the balance sheet by issuing 164,279 common shares under the 2019 ATM program for net proceeds of $11.9 million.

Acquisitions and Dispositions

During the quarter, Centerspace acquired Union Pointe, a 256-home apartment community in Longmont, Colorado for an aggregate purchase price of $76.9 million.

Subsequent to the end of the quarter, Centerspace received $2.0 million of non-refundable deposits and expects to complete the sale of select assets in Rochester, Minnesota on May 24th. The sale consists of 589 apartment homes in six communities with an aggregate sale price of $60.0 million. The proceeds from this disposition are expected to be used to pay down the line of credit and increase liquidity.

Balance Sheet

At the end of the first quarter, Centerspace had $79.3 million of total liquidity on its balance sheet, consisting of $68.5 million available under the line of credit and cash and cash equivalents of $10.8 million.

Improved 2021 Financial Outlook

Centerspace's 2021 financial outlook with midpoints of $0.30 for Earnings per Share and $3.60 for Core FFO is consistent with its release issued April 19, 2021, and up from its February expectation of $0.14 and $3.455, respectively. For additional information, see S-14 of the supplemental. These ranges should be considered in their entirety. The revised outlook is:

	Previous Outlook for 2021		Updated Outlook for 2021
	Low	High	Low	High
Earnings per Share – diluted	$(0.18)	$0.45	$0.10	$0.50
Same-Store Revenue	(0.5)%	3.0%	0.0%	3.0%
Same-Store Expenses	4.0%	7.5%	3.0%	5.0%
Same-Store NOI	(3.5)%	(0.5)%	(1.5)%	1.5%
FFO per Share – diluted	$3.17	$3.52	$3.38	$3.62
Core FFO per Share – diluted	$3.29	$3.62	$3.48	$3.72

COVID-19 Developments

The COVID-19 pandemic, including the associated economic disruptions, has continued to impact business and operations since March 2020. The company continues to prioritize the health and well-being of its residents, team members, and the communities it serves.

A discussion of the ongoing and potential effects of the COVID-19 pandemic on financial condition, results of operations, and cash flows can be found in "Management's Discussion and Analysis of Financial Conditions and Results of Operations" presented in the company's Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 22, 2021. For a more detailed description of the risks and uncertainties affecting business, see the risk factors presented in Item 1A in the company's Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 22, 2021.

Upcoming Events

On May 18, 2021, at 9:00 a.m. CDT, Centerspace will be holding its 2021 Annual Meeting of Shareholders live via the Internet. Shareholders can participate in and/or vote at the Annual Meeting via live webcast over the Internet at www.virtualshareholdingmeeting.com/CSR2021. Shareholders must enter the 16-digit control number found in their proxy materials, either on the Notice of Internet Availability of Proxy Materials, the proxy card, or in the instructions that accompanied the proxy materials to enter the 2021 Annual Meeting. The company urges the shareholders to vote and submit proxies in advance of the Annual Meeting by one of the methods described in the proxy materials for the Annual Meeting. The Annual Meeting webcast will begin promptly at 9:00 a.m. CDT. On the day of the Annual Meeting, the company recommends that you log into its virtual meeting at least 15 minutes prior to the scheduled start time to ensure you can access the meeting.

Earnings Call

Live webcast and replay:  https://ir.centerspacehomes.com
Live Conference Call			Conference Call Replay
Tuesday, May 4, 2021, at 10:00 AM ET			Replay available until May 18, 2021
USA Toll Free Number	1-877-509-9785		USA Toll Free Number	1-877-344-7529
International Toll Free Number	1-412-902-4132		International Toll Free Number	1-412-317-0088
Canada Toll Free Number	1-855-669-9657		Canada Toll Free Number	1-855-669-9658
			Conference Number	10153254

Supplemental Information

Supplemental Operating and Financial Data for the quarter ended March 31, 2021 included herein ("Supplemental Information"), is available in the Investors section on Centerspace's website at www.centerspacehomes.com or by calling Investor Relations at 701-837-7104. 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.  

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 March 31, 2021, Centerspace owned 68 apartment communities consisting of 12,168 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for 2020 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. 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. 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, 2020, 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
Emily Miller
Phone: 701-837-7104
E-mail: IR@centerspacehomes.com

Marketing & Media
Kelly Weber
Phone: 701-837-7104
kweber@centerspacehomes.com

 

Common Share Data (NYSE: CSR)
		1st Quarter				4th Quarter				3rd Quarter				2nd Quarter				1st Quarter
		2021				2020				2020				2020				2020
High closing price		$	73.42			$	74.55			$	73.53			$	76.82			$	84.68
Low closing price		$	68.00			$	65.79			$	61.87			$	44.36			$	52.55
Average closing price		$	71.37			$	70.30			$	70.15			$	63.91			$	71.62
Closing price at end of quarter		$	68.00			$	70.64			$	65.17			$	70.49			$	55.00
Common share distributions – annualized		$	2.80			$	2.80			$	2.80			$	2.80			$	2.80
Closing dividend yield – annualized		4.1		%		4.0		%		4.3		%		4.0		%		5.1		%
Closing common shares outstanding (thousands)		13,220				13,027				12,976				12,827				12,164
Closing limited partnership units outstanding (thousands)		950				977				1,018				1,022				1,044
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)		$	963,560			$	989,243			$	911,989			$	976,216			$	726,440

 

 

CENTERSPACE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands)
		Three Months Ended
		3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
REVENUE		$	46,648			$	45,540			$	44,138			$	43,910			$	44,406
EXPENSES
Property operating expenses, excluding real estate taxes		13,449				12,668				13,129				12,360				13,468
Real estate taxes		5,792				5,256				5,402				5,410				5,465
Property management expense		1,767				1,460				1,442				1,345				1,554
Casualty loss		101				331				91				913				327
Depreciation/amortization		19,992				20,282				18,995				18,156				18,160
General and administrative expenses		3,906				3,733				3,077				3,202				3,428
TOTAL EXPENSES		$	45,007			$	43,730			$	42,136			$	41,386			$	42,402
Operating income		1,641				1,810				2,002				2,524				2,004
Interest expense		(7,231)				(6,903)				(6,771)				(6,940)				(6,911)
Loss on extinguishment of debt		—				(2)				(4)				(17)				—
Interest and other income (loss)		431				406				281				538				(2,777)
Income (loss) before gain (loss) on sale of real estate and other investments, and gain (loss) on litigation settlement		(5,159)				(4,689)				(4,492)				(3,895)				(7,684)
Gain (loss) on sale of real estate and other investments		—				17				25,676				(190)				—
Net income (loss)		$	(5,159)			$	(4,672)			$	21,184			$	(4,085)			$	(7,684)
Dividends to preferred unitholders		(160)				(160)				(160)				(160)				(160)
Net (income) loss attributable to noncontrolling interest – Operating Partnership		469				460				(1,387)				447				692
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities		(17)				(6)				(8)				(5)				145
Net income (loss) attributable to controlling interests		(4,867)				(4,378)				19,629				(3,803)				(7,007)
Dividends to preferred shareholders		(1,607)				(1,607)				(1,607)				(1,609)				(1,705)
Discount (premium) on redemption of preferred shares		—				—				(1)				25				273
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS		$	(6,474)			$	(5,985)			$	18,021			$	(5,387)			$	(8,439)
Per Share Data - Basic
Net earnings (loss) per common share – basic		$	(0.49)			$	(0.46)			$	1.40			$	(0.44)			$	(0.69)
Per Share Data - Diluted
Net earnings (loss) per common share – diluted		$	(0.49)			$	(0.46)			$	1.38			$	(0.44)			$	(0.69)

 

 

CENTERSPACE CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands)
		3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
ASSETS
Real estate investments
Property owned		$	1,883,407			$	1,812,557			$	1,805,390			$	1,694,033			$	1,687,436
Less accumulated depreciation		(408,014)				(399,249)				(380,392)				(383,917)				(366,307)
		1,475,393				1,413,308				1,424,998				1,310,116				1,321,129
Unimproved land		—				—				—				—				1,376
Mortgage loans receivable		30,107				24,661				17,986				10,961				16,775
Total real estate investments		1,505,500				1,437,969				1,442,984				1,321,077				1,339,280
Cash and cash equivalents		10,816				392				16,804				52,714				26,338
Restricted cash		1,610				6,918				2,199				2,535				2,344
Other assets		18,427				18,904				16,947				16,484				21,124
TOTAL ASSETS		$	1,536,353			$	1,464,183			$	1,478,934			$	1,392,810			$	1,389,086
LIABILITIES, MEZZANINE EQUITY, AND EQUITY
LIABILITIES
Accounts payable and accrued expenses		$	53,852			$	55,609			$	58,596			$	54,883			$	52,337
Revolving line of credit		181,544				152,871				135,000				63,000				83,000
Notes payable, net of loan costs		319,236				269,246				269,202				269,155				269,106
Mortgages payable, net of loan costs		293,709				297,074				313,065				323,705				328,367
TOTAL LIABILITIES		$	848,341			$	774,800			$	775,863			$	710,743			$	732,810
SERIES D PREFERRED UNITS		$	16,560			$	16,560			$	16,560			$	16,560			$	16,560
EQUITY
Series C Preferred Shares of Beneficial Interest		93,530				93,530				93,530				93,579				96,046
Common Shares of Beneficial Interest		980,453				968,263				968,436				958,292				912,653
Accumulated distributions in excess of net income		(443,409)				(427,681)				(412,577)				(421,515)				(407,150)
Accumulated other comprehensive income (loss)		(12,798)				(15,905)				(17,256)				(18,139)				(17,360)
Total shareholders' equity		$	617,776			$	618,207			$	632,133			$	612,217			$	584,189
Noncontrolling interests – Operating Partnership		53,007				53,930				53,669				52,558				54,777
Noncontrolling interests – consolidated real estate entities		669				686				709				732				750
Total equity		$	671,452			$	672,823			$	686,511			$	665,507			$	639,716
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY		$	1,536,353			$	1,464,183			$	1,478,934			$	1,392,810			$	1,389,086

 

CENTERSPACE
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (unaudited)

This release contains certain non-GAAP financial measures. The non-GAAP financial measures should not be considered a substitute for operating results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The definitions and calculations of these non-GAAP financial measures, as calculated by us, may not be comparable to non-GAAP financial measures reported by other REITs that do not define each of the non-GAAP financial measures exactly as Centerspace does.

The company provides certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or in service for substantially all of the periods being compared, and, in the case of newly-constructed properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, Centerspace determines the composition of its same-store pool for that year as well as adjusts the previous year, which allows us to evaluate full period-over-period operating comparisons for existing apartment communities and their contribution to net income. The company believes that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of its communities are performing year-over-year. Centerspace uses this measure to assess whether or not the company has been successful in increasing NOI, renewing the leases on existing residents, controlling operating costs, and making prudent capital improvements.

Reconciliation of Operating Income to Net Operating Income

Net operating income, or NOI, is a non-GAAP financial measure which the company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance.

	(in thousands, except percentages)
	Three Months Ended													Sequential							Year-Over-Year
	3/31/2021				12/31/2020				3/31/2020					$ Change				% Change			$ Change				% Change
Operating income	$	1,641			$	1,810			$	2,004				$	(169)			(9.3)	%		$	(363)			(18.1)	%
Adjustments:
Property management expenses	1,767				1,460				1,554					307				21.0	%		213				13.7	%
Casualty loss	101				331				327					(230)				(69.5)	%		(226)				(69.1)	%
Depreciation and amortization	19,992				20,282				18,160					(290)				(1.4)	%		1,832				10.1	%
General and administrative expenses	3,906				3,733				3,428					173				4.6	%		478				13.9	%
Net operating income	$	27,407			$	27,616			$	25,473				$	(209)			(0.8)	%		$	1,934			7.6	%
Revenue
Same-store	$	41,743			$	41,831			$	41,573				$	(88)			(0.2)	%		$	170			0.4	%
Non-same-store	4,240				3,104				272					1,136				36.6	%		3,968				1,458.8	%
Other properties	650				571				972					79				13.8	%		(322)				(33.1)	%
Dispositions	15				34				1,589					(19)				(55.9)	%		(1,574)				(99.1)	%
Total	46,648				45,540				44,406					1,108				2.4	%		2,242				5.0	%
Property operating expenses, including real estate taxes
Same-store	17,385				16,485				17,540					900				5.5	%		(155)				(0.9)	%
Non-same-store	1,496				1,156				120					340				29.4	%		1,376				1,146.7	%
Other properties	289				249				278					40				16.1	%		11				4.0	%
Dispositions	71				34				995					37				108.8	%		(924)				(92.9)	%
Total	19,241				17,924				18,933					1,317				7.3	%		308				1.6	%
Net operating income
Same-store	24,358				25,346				24,033					(988)				(3.9)	%		325				1.4	%
Non-same-store	2,744				1,948				152					796				40.9	%		2,592				1,705.3	%
Other properties	361				322				694					39				12.1	%		(333)				(48.0)	%
Dispositions	(56)				—				594					(56)				(100.0)	%		(650)				(109.4)	%
Total	$	27,407			$	27,616			$	25,473				$	(209)			(0.8)	%		$	1,934			7.6	%

 

Reconciliation of Same-Store Controllable Expenses to Total Property Operating Expenses, Including Real Estate Taxes

Same-store controllable expenses exclude real estate taxes and insurance, in order to provide a measure of expenses that are within management's control, and is used for the purposes of budgeting, business planning, and performance evaluation. This is a non-GAAP financial measure and should not be considered an alternative to total expenses or total property operating expenses.

	(in thousands, except percentages)
	Three Months Ended March 31,
	2021				2020				$ Change				% Change
Controllable expenses
On-site compensation(1)	$	4,553			$	4,697			$	(144)			(3.1)	%
Repairs and maintenance	2,283				2,386				(103)				(4.3)	%
Utilities	3,083				3,054				29				0.9	%
Administrative and marketing	901				908				(7)				(0.8)	%
Total	$	10,820			$	11,045			$	(225)			(2.0)	%
Non-controllable expenses
Real estate taxes	$	5,094			$	5,111			$	(17)			(0.3)	%
Insurance	1,471				1,384				87				6.3	%
Total	$	6,565			$	6,495			$	70			1.1	%
Property operating expenses, including real estate taxes - non-same-store	$	1,496			$	120			$	1,376			1,146.7	%
Property operating expenses, including real estate taxes - other properties	289				278				11				4.0	%
Property operating expenses, including real estate taxes - dispositions	71				995				(924)				(92.9)	%
Total property operating expenses, including real estate taxes	$	19,241			$	18,933			$	308			1.6	%

______________________________
(1)	On-site compensation for administration, leasing, and maintenance personnel.

 

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 investment trusts, is helpful to investors in understanding its operating performance, primarily because its calculation does not assume that the value of real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation.

Centerspace uses the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc. ("Nareit"). Nareit defines FFO as net income or loss calculated in accordance with GAAP, excluding:

• depreciation and amortization related to real estate;
• gains and losses from the sale of certain real estate assets; and
• impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.

The exclusion in Nareit's definition of FFO of impairment write-downs and gains and losses from the sale of real estate assets helps to identify the operating results of the long-term assets that form the base of the company's investments, and assists management and investors in comparing those operating results between periods.

Due to the limitations of the Nareit FFO definition, Centerspace has made certain interpretations in applying this definition. The company believes that all such interpretations not specifically identified in the Nareit definition are consistent with this definition. Nareit's FFO White Paper 2018 Restatement clarified that impairment write-downs of land related to a REIT''s main business are excluded from FFO and a REIT has the option to exclude impairment write-downs of assets that are incidental to its main business.

While FFO is widely used by Centerspace as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO in the same way. Accordingly, FFO presented here is not necessarily comparable to FFO presented by other real estate companies. FFO should not be considered as an alternative to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash flow needs, including the ability to service indebtedness or make distributions to shareholders.

Core Funds from Operations ("Core FFO") is FFO as adjusted for non-routine items or items not considered core to business operations. By further adjusting for items that are not considered part of core business operations, the company believes that Core FFO provides investors with additional information to compare core operating and financial performance between periods. Core FFO should not be considered as an alternative to net income, or any other GAAP measurement of performance, but rather should be considered an additional supplemental measure. Core FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund the company's cash needs, including its ability to service indebtedness or make distributions to shareholders. Core FFO is a non-GAAP and non-standardized financial measure that may be calculated differently by other REITs and should not be considered a substitute for operating results determined in accordance with GAAP.

		(in thousands, except per share amounts)
		Three Months Ended
		3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
Funds From Operations
Net income (loss) available to common shareholders		$	(6,474)			$	(5,985)			$	18,021			$	(5,387)			$	(8,439)
Adjustments:
Noncontrolling interests – Operating Partnership		(469)				(460)				1,387				(447)				(692)
Depreciation and amortization		19,992				20,282				18,995				18,156				18,160
Less depreciation – non real estate		(98)				(87)				(85)				(88)				(93)
Less depreciation – partially owned entities		(24)				(33)				(31)				(33)				(282)
(Gain) loss on sale of real estate		—				(17)				(25,676)				190				—
FFO applicable to common shares and Units		$	12,927			$	13,700			$	12,611			$	12,391			$	8,654
Adjustments to Core FFO:
Casualty loss (recovery)		—				204				545				—				—
Loss on extinguishment of debt		—				2				4				17				—
Rebranding costs		—				402				—				—				—
Technology implementation costs		413				—				—				—				—
(Gain) loss on marketable securities		—				—				—				(175)				3,553
(Discount) premium on redemption of preferred shares		—				—				1				(25)				(273)
Core FFO applicable to common shares and Units		$	13,340			$	14,308			$	13,161			$	12,208			$	11,934
Funds from operations applicable to common shares and Units		$	12,927			$	13,700			$	12,611			$	12,391			$	8,654
Dividends to preferred unitholders		160				160				160				160				160
Funds from operations applicable to common shares and Units - diluted		$	13,087			$	13,860			$	12,771			$	12,551			$	8,814
Core funds from operations applicable to common shares and Units		$	13,340			$	14,308			$	13,161			$	12,208			$	11,934
Dividends to preferred unitholders		160				160				160				160				160
Core funds from operations applicable to common shares and Units - diluted		$	13,500			$	14,468			$	13,321			$	12,368			$	12,094
Per Share Data
Earnings (loss) per share and Unit - diluted		$	(0.49)			$	(0.46)			$	1.38			$	(0.44)			$	(0.69)
FFO per share and Unit - diluted		$	0.92			$	0.97			$	0.90			$	0.93			$	0.66
Core FFO per share and Unit - diluted		$	0.95			$	1.02			$	0.94			$	0.91			$	0.90
Weighted average shares and Units - diluted		14,282				14,222				14,143				13,558				13,401

 

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 extinguishment of debt, and gain/loss from involuntary conversion. The company considers Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, the cost of debt, or non-operating gains and losses. Adjusted EBITDA is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP. 

		(in thousands)
		Three Months Ended
		3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
Adjusted EBITDA
Net income (loss) available to common shareholders		$	(4,867)			$	(4,378)			$	19,629			$	(3,803)			$	(7,007)
Adjustments:
Dividends to preferred unitholders		160				160				160				160				160
Noncontrolling interests – Operating Partnership		(469)				(460)				1,387				(447)				(692)
Income (loss) before noncontrolling interests – Operating Partnership		$	(5,176)			$	(4,678)			$	21,176			$	(4,090)			$	(7,539)
Adjustments:
Interest expense		7,216				6,888				6,756				6,926				6,764
Loss on extinguishment of debt		—				2				4				17				—
Depreciation/amortization related to real estate investments		19,969				20,250				18,964				18,123				17,878
Casualty loss (recovery)		—				204				545				—				—
Interest income		(407)				(328)				(256)				(331)				(597)
(Gain) loss on sale of real estate and other investments		—				(17)				(25,676)				190				—
Technology implementation costs		413				—				—				—				—
(Gain) loss on marketable securities		—				—				—				(175)				3,553
Adjusted EBITDA		$	22,015			$	22,321			$	21,513			$	20,660			$	20,059

 

 

CENTERSPACE DEBT ANALYSIS (in thousands)
Debt Maturity Schedule Annual Expirations
			Future Maturities of Debt
			Secured Fixed Debt				Unsecured Fixed Debt(1)				Unsecured Variable Debt				Total Debt				% of Total Debt			Weighted Average Interest Rate(2)
	2021 (remainder)		$	18,091			$	—			$	1,544			$	19,635			2.5	%		5.40	%
	2022		33,269				50,000				130,000				213,269				26.8	%		2.16	%
	2023		43,442				—				—				43,442				5.4	%		4.02	%
	2024		—				70,000				—				70,000				8.8	%		3.63	%
	2025		32,717				75,000				—				107,717				13.5	%		4.30	%
	Thereafter		167,482				175,000				—				342,482				43.0	%		3.58	%
Total debt			$	295,001			$	370,000			$	131,544			$	796,545			100.0	%		3.37	%

______________________________
(1)	Term loans have variable interest rates that are fixed with interest rate swaps and $50.0 million of the variable interest, line of credit is fixed with an interest rate swap.
(2)	Weighted average interest rate of debt that matures during the year, including the effect of interest rate swaps on the term loans and line of credit.

 

 

		3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
Debt Balances Outstanding
Secured fixed rate		$	295,001			$	298,445			$	314,511			$	325,230			$	329,988
Unsecured fixed rate line of credit(1)		50,000				50,000				50,000				50,000				50,000
Unsecured variable rate line of credit		131,544				102,871				85,000				13,000				33,000
Unsecured term loans		145,000				145,000				145,000				145,000				145,000
Unsecured senior notes		175,000				125,000				125,000				125,000				125,000
Debt total		$	796,545			$	721,316			$	719,511			$	658,230			$	682,988
Mortgage debt weighted average interest rate		3.92		%		3.93		%		3.99		%		4.01		%		4.01		%
Lines of credit rate (rate with swap)		2.18		%		2.35		%		3.35		%		2.97		%		3.18		%
Term loan rate (rate with swap)		4.11		%		4.18		%		4.18		%		4.12		%		4.13		%
Senior notes rate		3.47		%		3.78		%		3.78		%		3.78		%		3.78		%
Total debt		3.37		%		3.62		%		3.68		%		3.87		%		3.92		%

______________________________
(1)	A portion of the primary line of credit is fixed through an interest rate swap.

 

 

CENTERSPACE  CAPITAL ANALYSIS  (in thousands, except per share and unit amounts)
		Three Months Ended
		3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
Equity Capitalization
Common shares outstanding		13,220				13,027				12,976				12,827				12,164
Operating partnership units outstanding		950				977				1,018				1,022				1,044
Total common shares and units outstanding		14,170				14,004				13,994				13,849				13,208
Market price per common share (closing price at end of period)		$	68.00			$	70.64			$	65.17			$	70.49			$	55.00
Equity capitalization-common shares and units		$	963,560			$	989,243			$	911,989			$	976,216			$	726,440
Recorded book value of preferred shares		$	93,530			$	93,530			$	93,530			$	93,579			$	96,046
Total equity capitalization		$	1,057,090			$	1,082,773			$	1,005,519			$	1,069,795			$	822,486
Series D Preferred Units		$	16,560			$	16,560			$	16,560			$	16,560			$	16,560
Debt Capitalization
Total debt		$	796,545			$	721,317			$	719,511			$	658,230			$	682,988
Total capitalization		$	1,870,195			$	1,820,650			$	1,741,590			$	1,744,585			$	1,522,034
Total debt to total capitalization(1)		43.1		%		39.6		%		41.3		%		37.7		%		44.9		%

______________________________
(1)	Total debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet, market value of common shares and operating partnership units, and book value of Series C preferred shares and Series D preferred units outstanding at the end of the period.

 

 

		Three Months Ended
		3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
Debt service coverage ratio(1)		2.53		x		2.73		x		2.65		x		2.48		x		2.42		x
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization		2.14		x		2.28		x		2.21		x		2.05		x		1.97		x
Net debt/Adjusted EBITDA(2)		8.92		x		8.07		x		8.17		x		7.33		x		8.18		x
Net debt and preferred equity/Adjusted EBITDA(2)		10.17		x		9.31		x		9.45		x		8.66		x		9.59		x
Distribution Data
Common shares and Units outstanding at record date		14,171				14,004				13,994				13,849				13,208
Total common distribution declared		$	9,919			$	9,803			$	9,796			$	9,694			$	9,245
Common distribution per share and Unit		$	0.70			$	0.70			$	0.70			$	0.70			$	0.70
Payout ratio (Core FFO per diluted share and unit basis)(3)		73.7		%		68.6		%		74.5		%		76.9		%		77.8		%

______________________________
(1)	Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization. This term is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.
(2)	Net debt is the total debt balance less cash and cash equivalents and net tax deferred exchange proceeds (included within restricted cash). Adjusted EBITDA is annualized for periods less than one year. Net debt and adjusted EBITDA are non-GAAP financial measures and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.
(3)	Payout ratio (Core FFO per diluted share and unit basis) is the ratio of the current quarterly or annual distribution rate per common share and unit divided by quarterly or annual Core FFO per diluted share and unit. This term is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP.

 

 

CENTERSPACE SAME-STORE FIRST QUARTER COMPARISONS (in thousands, except property data amounts and percentages)
		Apartment Homes Included			Revenues											Expenses											NOI
Regions					Q1 2021				Q1 2020				% Change			Q1 2021				Q1 2020				% Change			Q1 2021				Q1 2020				% Change
Denver, CO		992			$	5,408			$	5,510			(1.9)	%		$	1,868			$	1,804			3.5	%		$	3,540			$	3,706			(4.5)	%
Minneapolis, MN		2,355			10,466				10,768				(2.8)	%		4,431				4,566				(3.0)	%		6,035				6,202				(2.7)	%
North Dakota		2,422			7,949				7,711				3.1	%		3,271				3,487				(6.2)	%		4,678				4,224				10.7	%
Omaha, NE		1,370			4,026				3,814				5.6	%		1,762				1,626				8.4	%		2,264				2,188				3.5	%
Rochester, MN		1,711			6,385				6,539				(2.4)	%		2,993				2,823				6.0	%		3,392				3,716				(8.7)	%
St. Cloud, MN		1,192			3,656				3,611				1.2	%		1,635				1,756				(6.9)	%		2,021				1,855				8.9	%
Other Markets		1,223			3,853				3,620				6.4	%		1,425				1,478				(3.6)	%		2,428				2,142				13.4	%
Same-Store Total		11,265			$	41,743			$	41,573			0.4	%		$	17,385			$	17,540			(0.9)	%		$	24,358			$	24,033			1.4	%

 

		% of NOI Contribution			Weighted Average Occupancy (1)									Average Monthly Rental Rate (2)											Average Monthly Revenue per Occupied Home (3)
Regions					Q1 2021			Q1 2020			Growth			Q1 2021				Q1 2020				% Change			Q1 2021				Q1 2020				% Change
Denver, CO		14.5	%		94.5	%		94.2	%		0.3	%		$	1,715			$	1,793			(4.4)	%		$	1,922			$	1,965			(2.2)	%
Minneapolis, MN		24.8	%		92.9	%		94.3	%		(1.4)	%		1,494				1,485				0.6	%		1,595				1,616				(1.3)	%
North Dakota		19.2	%		96.2	%		96.1	%		0.1	%		1,061				1,037				2.3	%		1,138				1,104				3.1	%
Omaha, NE		9.3	%		95.1	%		94.3	%		0.8	%		912				893				2.1	%		1,030				984				4.7	%
Rochester, MN		13.9	%		95.2	%		97.1	%		(1.9)	%		1,240				1,239				0.1	%		1,307				1,312				(0.4)	%
St. Cloud, MN		8.3	%		94.6	%		94.9	%		(0.3)	%		970				944				2.8	%		1,081				1,064				1.6	%
Other Markets		10.0	%		97.7	%		96.2	%		1.5	%		985				941				4.7	%		1,075				1,025				4.9	%
Same-Store Total		100.0	%		94.9	%		95.3	%		(0.4)	%		$	1,200			$	1,190			0.8	%		$	1,302			$	1,291			0.8	%

______________________________
(1)	Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rent. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account.  Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.
(2)	Average monthly rental rate is scheduled rent divided by the total number of apartment homes.
(3)	Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.

 

 

CENTERSPACE SAME-STORE SEQUENTIAL QUARTER COMPARISONS (in thousands, except property data amounts and percentages)
		Apartment Homes Included			Revenues											Expenses											NOI
Regions					Q1 2021				Q4 2020				% Change			Q1 2021				Q4 2020				% Change			Q1 2021				Q4 2020				% Change
Denver, CO		992			$	5,408			$	5,399			0.2	%		$	1,868			$	1,635			14.3	%		$	3,540			$	3,764			(6.0)	%
Minneapolis, MN		2,355			10,466				10,605				(1.3)	%		4,431				4,488				(1.3)	%		6,035				6,117				(1.3)	%
North Dakota		2,422			7,949				8,011				(0.8)	%		3,271				3,070				6.5	%		4,678				4,941				(5.3)	%
Omaha, NE		1,370			4,026				3,891				3.5	%		1,762				1,648				6.9	%		2,264				2,243				0.9	%
Rochester, MN		1,711			6,385				6,357				0.4	%		2,993				2,771				8.0	%		3,392				3,586				(5.4)	%
St. Cloud, MN		1,192			3,656				3,656				—			1,635				1,602				2.1	%		2,021				2,054				(1.6)	%
Other Markets		1,223			3,853				3,912				(1.5)	%		1,425				1,271				12.1	%		2,428				2,641				(8.1)	%
Same-Store Total		11,265			$	41,743			$	41,831			(0.2)	%		$	17,385			$	16,485			5.5	%		$	24,358			$	25,346			(3.9)	%

 

		% of NOI Contribution			Weighted Average Occupancy									Average Monthly Rental Rate											Average Monthly Revenue per Occupied Home
Regions					Q1 2021			Q4 2020			Growth			Q1 2021				Q4 2020				% Change			Q1 2021				Q4 2020				% Change
Denver, CO		14.5	%		94.5	%		94.3	%		0.2	%		$	1,715			$	1,727			(0.7)	%		$	1,922			$	1,924			(0.1)	%
Minneapolis, MN		24.8	%		92.9	%		93.2	%		(0.3)	%		1,494				1,502				(0.5)	%		1,595				1,611				(1.0)	%
North Dakota		19.2	%		96.2	%		95.8	%		0.4	%		1,061				1,061				—			1,138				1,151				(1.1)	%
Omaha, NE		9.3	%		95.1	%		93.8	%		1.3	%		912				912				—			1,030				1,010				2.0	%
Rochester, MN		13.9	%		95.2	%		95.0	%		0.2	%		1,240				1,242				(0.2)	%		1,307				1,304				0.2	%
St. Cloud, MN		8.3	%		94.6	%		94.6	%		—			970				971				(0.1)	%		1,081				1,080				0.1	%
Other Markets		10.0	%		97.7	%		98.1	%		(0.4)	%		985				980				0.5	%		1,075				1,087				(1.1)	%
Same-Store Total		100.0	%		94.9	%		94.7	%		0.2	%		$	1,200			$	1,203			(0.2)	%		$	1,302			$	1,307			(0.4)	%

 

 

CENTERSPACE PORTFOLIO SUMMARY(1)
		Three Months Ended
		3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
Number of Apartment Homes at Period End
Same-Store		11,265				10,567				10,567				11,257				11,257
Non-Same-Store		903				1,343				1,343				878				878
All Communities		12,168				11,910				11,910				12,135				12,135
Average Monthly Rental Rate(2)
Same-Store		$	1,200			$	1,177			$	1,178			$	1,142			$	1,135
Non-Same-Store		1,584				1,599				1,597				1,594				1,572
All Communities		$	1,229			$	1,225			$	1,210			$	1,175			$	1,163
Average Monthly Revenue per Occupied Apartment Home(3)
Same-Store		$	1,302			$	1,282			$	1,271			$	1,232			$	1,237
Non-Same-Store		1,705				1,708				1,729				1,681				1,658
All Communities		$	1,332			$	1,330			$	1,307			$	1,264			$	1,263
Weighted Average Occupancy(4)
Same-Store		94.9		%		95.0		%		94.4		%		94.6		%		95.4		%
Non-Same-Store		91.8		%		92.3		%		93.9		%		93.9		%		93.3		%
All Communities		94.6		%		94.6		%		94.3		%		94.5		%		95.2		%
Operating Expenses as a % of Scheduled Rent
Same-Store		42.9		%		41.2		%		43.4		%		41.5		%		45.0		%
Non-Same-Store		34.9		%		35.3		%		39.7		%		36.1		%		37.0		%
All Communities		42.1		%		40.3		%		43.0		%		41.0		%		44.3		%
Capital Expenditures
Total Capital Expenditures per Apartment Home – Same-Store		$	131			$	326			$	293			$	262			$	151

______________________________
(1)	Previously reported amounts are not revised for changes in the composition of the same-store properties pool.
(2)	Average monthly rental rate is scheduled rent divided by the total number of apartment homes. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.
(3)	Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.
(4)	Weighted average occupancy is the percentage resulting from dividing actual rental revenue by scheduled rent. The company believes that weighted average occupancy is a meaningful measure of occupancy because it considers the value of each vacant unit at its estimated market rate. Weighted average occupancy may not completely reflect short-term trends in physical occupancy and the calculation of weighted average occupancy may not be comparable to that disclosed by other REITs.

 

 

CENTERSPACE CAPITAL EXPENDITURES ($ in thousands, except per home amounts)
		Three Months Ended
		3/31/2021				3/31/2020
Total Same-Store Apartment Homes		11,263				11,263
Building - Exterior		$	495			$	192
Building - Interior		61				135
Mechanical, Electrical, & Plumbing		121				285
Furniture & Equipment		30				103
Landscaping & Grounds		73				97
Turnover		699				643
Capital Expenditures - Same-Store		$	1,479			$	1,455
Capital Expenditures per Apartment Home - Same-Store		$	131			$	129
Value Add		$	2,631			$	2,031
Total Capital Spend - Same-Store		$	4,110			$	3,486
Total Capital Spend per Apartment Home - Same-Store		$	365			$	310
All Properties - Weighted Average Apartment Homes		12,166				11,324
Capital Expenditures		$	1,555			$	1,810
Capital Expenditures per Apartment Home		$	128			$	160
Value Add		2,631				2,031
Acquisition Capital		558				1,478
Total Capital Spend		4,744				5,319
Total Capital Spend per Apartment Home		$	390			$	470
Value Add Capital Expenditures
Interior - Units
Same-Store		$	1,691			$	782
Non-Same-Store		$	—			$	—
Total Interior Units		$	1,691			$	782
Expected Year 1 Annual ROI		16.8		%		16.1		%
Common Areas and Exteriors
Same-Store		$	940			$	1,249
Non-Same-Store		$	—			$	—
Total Common Areas and Exteriors		$	940			$	1,249
Expected Year 1 Annual ROI		8.2		%		11.8		%
Total Value-Add Capital Expenditures
Same-Store		$	2,631			$	2,031
Non-Same-Store		$	—			$	—
Total Portfolio Value-Add		$	2,631			$	2,031
Expected Year 1 Annual ROI		13.8		%		13.5		%

 

 

CENTERSPACE 2021 Financial Outlook (in thousands, except per share amounts)
Centerspace revised its outlook for 2021 in the company's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 19, 2021.  The revised outlook for 2021 is shown in the table below.
	Three Months Ended				2021 Full-Year Outlook Range								2021 Revised Outlook Range
	March 31, 2021				Low				High				Low				High
	YTD Actual				Amount				Amount				Amount				Amount
Same-store growth
Revenue	$	41,743			(0.5)		%		3.0		%		—				3.0		%
Controllable expenses	$	10,820			5.0		%		8.5		%		3.5		%		4.5		%
Non-controllable expenses	$	6,565			2.5		%		6.0		%		2.5		%		6.0		%
Total Expenses	$	17,385			4.0		%		7.5		%		3.0		%		5.0		%
Same-store NOI	$	24,358			(3.5)		%		(0.5)		%		(1.5)		%		1.5		%
Components of NOI
Same-store NOI	$	24,358			$	94,200			$	97,600			$	96,500			$	99,200
Non-same-store NOI	$	2,744			$	7,900			$	8,200			$	11,400			$	11,600
Other Commercial NOI	$	361			$	1,700			$	1,800			$	1,700			$	1,800
Other Sold NOI	$	(56)			—				—				—				—
Total NOI	$	27,407			$	103,800			$	107,600			$	109,600			$	112,600
Accretion from investments and capital market activity, excluding impact from change in share count	$	—			1,300				990				(800)				(1,100)
Interest expense	$	(7,231)			(28,650)				(30,000)				(29,800)				(31,100)
Preferred dividends	$	(1,607)			(6,430)				(6,430)				(6,430)				(6,430)
Recurring income and expenses
Interest and other income	$	407			2,580				2,580				2,580				2,580
General and administrative and property management	$	(5,673)			(23,670)				(22,000)				(23,300)				(22,500)
Casualty losses	$	(101)			(1,750)				(1,250)				(1,750)				(1,250)
Non-real estate depreciation and amortization	$	(98)			(280)				(280)				(280)				(280)
Non-controlling interest	$	(17)			(65)				(70)				(65)				(70)
Total recurring income and expenses	$	(5,482)			(23,185)				$	(21,020)			(22,815)				$	(21,520)
FFO	$	13,087			$	46,835			$	51,140			$	49,755			$	52,450
Non-core income and expenses
Casualty loss	$	—			$	580			$	420			$	480			$	420
Technology implementation costs	413				1,190				990				1,090				990
Total non-core income and expenses	$	413			$	1,770			$	1,410			$	1,570			$	1,410
Core FFO	$	13,500			$	48,605			$	52,550			$	51,325			$	53,860
EPS - Diluted	$	(0.49)			$	(0.18)			$	0.45			$	0.10			$	0.50
FFO per diluted share	$	0.92			$	3.17			$	3.52			$	3.38			$	3.62
Core FFO per diluted share	$	0.95			$	3.29			$	3.62			$	3.48			$	3.72
Weighted average shares outstanding - diluted	14,282				14,773				14,515				14,731				14,472

 

Additional assumptions:

• Same-store capital expenditures of $912 per home to $1,012 per home
• Value-add expenditures of $15.0 million to $20.0 million
• Investments of $145.0 million to $170.0 million, which includes the January 2021 acquisition of Union Pointe in Longmont, Colorado
• Dispositions of $55.0 million to $75.0 million
• Proceeds of $50.0 million to $70.0 million from equity issuance

Reconciliation of Net Income (Loss) Available to Common Shareholders to FFO and Core FFO

The following table presents reconciliations of Net income (loss) available to common shareholders to FFO and Core FFO, which are non-GAAP financial measures described in greater detail under "Non-GAAP Financial Measures and Reconciliations." They should not be considered as alternatives to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO and Core FFO also do not represent cash generated from operating activities in accordance with GAAP, nor are they indicative of funds available to fund all cash needs, including the ability to service indebtedness or make distributions to shareholders. The outlook and projections provided below are based on current expectations and are forward-looking.

					Previous Outlook								Revised Outlook
	Three Months Ended				12 Months Ended								12 Months Ended
	March 31, 2021				December 31, 2021								December 31, 2021
	Actual				Low				High				Low				High
Net income (loss) available to common shareholders	$	(6,474)			$	(1,274)			$	8,031			$	2,929			$	8,692
Noncontrolling interests - Operating Partnership	(469)				(1,456)				(1,456)				(1,456)				(1,456)
Depreciation and amortization	19,992				71,424				71,424				72,391				72,323
Less depreciation - non real estate	(98)				(280)				(280)				(280)				(280)
Less depreciation - partially owned entities	(24)				(95)				(95)				(95)				(95)
(Gain) loss on sale of real estate	—				(22,124)				(27,124)				(24,374)				(27,374)
Dividends to preferred unitholders	$	160			$	640			$	640			$	640			$	640
FFO applicable to common shares and Units	$	13,087			$	46,835			$	51,140			$	49,755			$	52,450
Adjustments to Core FFO:
Casualty loss write off	—				580				420				480				420
Technology implementation costs	413				1,190				990				1,090				990
Core FFO applicable to common shares and Units	$	13,500			$	48,605			$	52,550			$	51,325			$	53,860
Earnings per share - diluted	$	(0.49)			$	(0.18)			$	0.45			$	0.10			$	0.50
FFO per share - diluted	$	0.92			$	3.17			$	3.52			$	3.38			$	3.62
Core FFO per share - diluted	$	0.95			$	3.29			$	3.62			$	3.48			$	3.72

 

Reconciliation of Operating Income to Net Operating Income

Net operating income, or NOI, is a non-GAAP financial measure which the company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance. 

					Previous Outlook								Revised Outlook
	Three Months Ended				12 Months Ended								12 Months Ended
	March 31, 2021				December 31, 2021								December 31, 2021
	Actual				Low				High				Low				High
Operating income	$	1,641			$	6,956			$	12,926			$	12,159			$	16,527
Adjustments:
General and administrative and property management expenses	5,673				23,670				22,000				23,300				22,500
Casualty loss	101				1,750				1,250				1,750				1,250
Depreciation and amortization	19,992				71,424				71,424				72,391				72,323
Net operating income	$	27,407			$	103,800			$	107,600			$	109,600			$	112,600

 

 

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SOURCE Centerspace

FAQ

What were Centerspace's Q1 2021 earnings results?

Centerspace reported a net loss of $(0.49) per diluted share for Q1 2021, compared to $(0.69) in Q1 2020.

How did Centerspace's Core FFO perform in Q1 2021?

Core FFO rose 5.6% to $0.95 per diluted share in Q1 2021.

What is the updated 2021 earnings guidance for Centerspace?

The updated guidance projects earnings per share between $0.10 and $0.50 and Core FFO of $3.48 to $3.72.

What recent acquisitions did Centerspace make?

Centerspace acquired Union Pointe, a 256-home apartment community in Longmont, Colorado, for $76.9 million.

What was the same-store revenue change for Centerspace in Q1 2021?

Same-store revenues increased by 0.4% in Q1 2021 compared to Q1 2020.