Centerspace : CSR 1Q24 Supplemental

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): April 29, 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)

[phone]

(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:

• Written communications pursuant to Rule 425 under the Securities Act
• Soliciting material pursuant to Rule 14a-12 under the Exchange Act
• Pre-commencementcommunications pursuant to Rule 14d-2(b) under the Exchange Act
• Pre-commencementcommunications pursuant to Rule 13e-4(c) under the Exchange Act Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

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
Series C Cumulative Redeemable Preferred Shares	CSR -PRC	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 April 29, 2024, announcing certain financial and operational results for the three months ended March 31, 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 item 9.01, including the press release furnished as Exhibit 99.1, 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

1. Exhibits

Exhibit

Number Description

99.1 Earnings Release and Supplemental Operating and Financial Data, dated April 29, 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: April 29, 2024	President and Chief Executive Officer

Exhibit 99.1

Earnings Release

Centerspace Reports First Quarter 2024 Financial Results and Raises Mid-Point for 2024 Core FFO

per Share Guidance

MINNEAPOLIS, MN, April 29, 2024 - Centerspace (NYSE: CSR) announced today its financial and operating results for the three months ended March 31, 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 months ended March 31, 2024; Same-Store Revenues, Expenses, and Net Operating Income ("NOI")1 over comparable periods; and Same-StoreWeighted-Average Occupancy for each of the three months ended March 31, 2024, December 31, 2023, and March 31, 2023.

		Three Months Ended March 31,
Per Common Share		2024		2023
Net income (loss) - diluted	$	(0.37)	$	2.76
FFO - diluted(1)	$	1.16	$	0.89
Core FFO - diluted(1)	$	1.23	$	1.07

	Year-Over-Year	Sequential
Same-Store Results(2)	Comparison	Comparison
Q1 2024 vs. Q1 2023	Q1 2024 vs. Q4 2023
Revenues	3.5%	0.5%
Expenses	(2.2)%	(0.1)%
NOI(1)	7.5%	0.9%

		Three months ended
Same-Store Results(2)	March 31, 2024	December 31, 2023	March 31, 2023
Weighted Average Occupancy	94.6%	94.8%	94.9%

1. NOI, FFO, and Core FFO 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-GAAPFinancial Measures and Reconciliations" and "Non-GAAP Financial Measures and Other Terms" in Supplemental and Financial Operating Data within.
2. Same-storeresults are updated for disposition activity. Refer to "Non-GAAP Financial Measures and Reconciliations" in Supplemental and Financial Operating Data within.

Highlights

• During the three months ended March 31, 2024, Centerspace successfully executed the sale of two non-core apartment communities in Minnesota for an aggregate sales price of $19.0 million;
• Net loss decreased to $0.37 per diluted share for the first quarter of 2024, compared to Net income of $2.76 per diluted share for the same period of the prior year;
• Core FFO per diluted share increased 15.0% to $1.23 for the three months ended March 31, 2024, compared to $1.07 for the three months ended March 31, 2023;
• Same-storerevenues increased by 3.5% for the first quarter of 2024 compared to the first quarter of 2023, driving a 7.5% increase in same-store NOI compared to the same period of the prior year;
• Centerspace repurchased 87,722 common shares for total consideration of $4.7 million and an average price of $53.62 per share; and
• Centerspace narrowed the 2024 financial outlook ranges for net income per diluted share and FFO per diluted share and raised the mid-point for Core FFO per diluted share. Refer to page S-15 in the Supplemental and Financial Operating Data within for additional detail.

1

Balance Sheet

At the end of the first quarter, Centerspace had $228.3 million of total liquidity on its balance sheet, consisting of $215.6 million available under the lines of credit and cash and cash equivalents of $12.7 million.

Revised 2024 Financial Outlook

Centerspace revised its 2024 financial outlook. For additional information, see S-15 of the Supplemental Financial and Operating Data for the quarter ended March 31, 2024 included at the end of this release. These ranges should be considered in their entirety. The table below reflects the revised outlook.

	Previous Outlook for 2024			Updated Outlook for 2024
	Low		High			Low		High
Net income per Share - diluted	$	(1.31)	$	(0.99)	$	(1.34)	$	(1.10)
Same-Store Revenue		3.00 %		5.00 %		3.00 %		4.50 %
Same-Store Expenses		5.50 %		7.00 %		4.00 %		5.50 %
Same-Store NOI		1.50 %		3.50 %		2.50 %		4.00 %
FFO per Share - diluted	$	4.54	$	4.80	$	4.57	$	4.76
Core FFO per Share - diluted	$	4.68	$	4.92	$	4.74	$	4.92

Additional assumptions:

• Same-storerecurring capital expenditures of $1,075 per home to $1,150 per home
• Value-addexpenditures of $25.0 million to $27.0 million
• Proceeds from dispositions of $19.0 million

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.

Upcoming Events

Centerspace is scheduled to participate in the following conferences:

• BTIG 4th Annual Housing Ecosystem Conference which will be held in New York, NY, May 6-7, 2024;
• BMO 2024 Real Estate conference which will be held in New York, NY, May 8, 2024; and
• National Association of Real Estate Investment Trusts ("Nareit") REITweek: 2024 Investor Conference which will be held in New York, NY, June 4-5, 2024.

Earnings Call

Live webcast and replay: https://ir.centerspacehomes.com

Live Conference Call		Conference Call Replay
Tuesday, April 30, 2024, at 10:00 AM ET	Replay available until May 14, 2024
USA Toll Free	1-833-470-1428	USA Toll Free	1-866-813-9403
International	1-929-526-1599	International	1-929-458-6194
Canada Toll Free	1-833-950-0062	Canada	1-226-828-7578
Access Code	748370	Access Code	274742

Supplemental Information

Supplemental Operating and Financial Data for the quarter ended March 31, 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 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.

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 March 31, 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. In 2022, Centerspace was named the National Apartment Association's Leading Organization in Diversity, Equity, and Inclusion. 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: [phone]

Email: [e-mail]

Marketing & Media

Kelly Weber

Phone: [phone]

Email: [e-mail]

3

Supplemental Financial and Operating Data

Table of Contents

March 31, 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-6
Funds From Operations and Core Funds From Operations	S-7
Adjusted EBITDA	S-8
Debt and Capital Analysis
Debt Analysis	S-9
Capital Analysis	S-10
Portfolio Analysis
Same-Store Comparisons	S-11
Portfolio Summary	S-13
Capital Expenditures	S-14
2024 Financial Outlook	S-15
Non-GAAP Financial Measures and Other Terms	S-17

Common Share Data (NYSE: CSR)

					Three Months Ended
	March 31, 2024			December 31,		September 30,		June 30, 2023		March 31, 2023
			2023			2023
High closing price	$	58.00	$	59.33	$	66.57			$	64.18	$	71.07
Low closing price	$	52.65	$	47.82	$	59.39			$	53.98	$	51.39
Average closing price	$	55.68	$	54.61	$	62.52			$	58.61	$	61.68
Closing price at end of quarter	$	57.14	$	58.20	$	60.26			$	61.36	$	54.63
Common share distributions - annualized	$	3.00	$	2.92	$	2.92			$	2.92	$	2.92
Closing dividend yield - annualized		5.3 %			5.0 %			4.8 %				4.8 %			5.3 %
Closing common shares outstanding (thousands)		14,912			14,963			15,052				14,949			15,032
Closing limited partnership units outstanding (thousands)		844			861			864				961			967
Closing Series E preferred units outstanding, as converted		2,062			2,078			2,087				2,094			2,103
(thousands)
Total closing common shares, limited partnership units,
and Series E preferred units, as converted, outstanding		17,818			17,902			18,003				18,004			18,102
(thousands)
Closing market value of outstanding common shares, plus
imputed closing market value of outstanding limited
partnership units and Series E preferred units, as	$	1,018,121	$	1,041,896	$	1,084,861			$	1,104,725	$	988,912
converted (thousands)

S-1

CENTERSPACE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands)

				Three Months Ended
		3/31/2024		12/31/2023		9/30/2023		6/30/2023		3/31/2023
REVENUE	$	64,506	$	64,068	$	64,568	$	64,776	$	67,897
EXPENSES
Property operating expenses, excluding real estate taxes		18,764		18,237		19,602		17,872		21,342
Real estate taxes		6,305		6,861		7,143		7,174		7,581
Property management expense		2,330		2,341		2,197		2,247		2,568
Casualty loss		820		853		937		53		252
Depreciation and amortization		27,012		26,617		24,697		24,371		25,993
Impairment of real estate investments		-		5,218		-		-		-
General and administrative expenses		4,623		4,363		3,832		4,162		7,723
TOTAL EXPENSES	$	59,854	$	64,490	$	58,408	$	55,879	$	65,459
Gain (loss) on sale of real estate and other investments		(577)		(83)		11,235		(67)		60,159
Loss on litigation settlement		-		(1,000)		-		(2,864)		-
Operating income (loss)		4,075		(1,505)		17,395		5,966		62,597
Interest expense		(9,207)		(8,913)		(8,556)		(8,641)		(10,319)
Interest and other income		340		533		330		295		49
Net income (loss)	$	(4,792)	$	(9,885)	$	9,169	$	(2,380)	$	52,327
Dividends to Series D preferred unitholders		(160)		(160)		(160)		(160)		(160)
Net (income) loss attributable to noncontrolling interest - Operating Partnership and		1,079		1,917		(1,204)		712		(8,566)
Series E preferred units
Net income attributable to noncontrolling interests - consolidated real estate entities		(32)		(29)		(31)		(35)		(30)
Net income (loss) attributable to controlling interests		(3,905)		(8,157)		7,774		(1,863)		43,571
Dividends to preferred shareholders		(1,607)		(1,607)		(1,607)		(1,607)		(1,607)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	(5,512)	$	(9,764)	$	6,167	$	(3,470)	$	41,964
Per Share Data - Basic
Net income (loss) per common share - basic	$	(0.37)	$	(0.65)	$	0.41	$	(0.23)	$	2.79
Per Share Data - Diluted
Net income (loss) per common share - diluted	$	(0.37)	$	(0.65)	$	0.41	$	(0.23)	$	2.76

S-2