CENTERSPACE

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Investors Real Estate Trust : Investor Presentation - August 2021

08/10/2021 | 09:03am

Investor Presentation

August 2021

SAFE HARBOR STATEMENT AND LEGAL DISCLOSURE

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 materially from expected results. These statements may be identified by our use of words such as "expects," "plans," "estimates," "anticipates," "projects," "intends," "believes," and similar expressions that do not relate to historical matters. Such risks, uncertainties, and other factors include, but are not limited to, changes in general and local economic and real estate market conditions, rental conditions in our markets, fluctuations in interest rates, the effect of government regulations, the availability and cost of capital and other financing risks, risks associated with our value-add and redevelopment opportunities, the failure of our property acquisitions and disposition activities to achieve expected results, competition in our markets, our ability to attract and retain skilled personnel, our ability to maintain our tax status as a real estate investment trust (REIT), and those risks and uncertainties detailed from time to time in our 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 our Form 10- K for the period ended December 31, 2020. We assume no obligation to update or supplement forward- looking statements that become untrue due to subsequent events.

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IRET IS NOW CENTERSPACE

B u i l d i n g o n a S t r o n g F o u n d a t i o n

Strong Operating Results Driven by Consistent Occupancy and Accelerating Rent Growth

  • Same-storelease over lease growth remained strong at 12.7% in July, up from 10.0% in Q2 2021
  • Same-storerenewal lease growth accelerated to 6.5% in July up from 5.6% in Q2 2021
  • Same-storeoccupancy remains strong at 94.1% in July, compared to 94.9% in Q2 2021

Acquisition and Disposition Activity Continues

  • Announcement of 2,696 home acquisition in Minneapolis and St. Cloud, with a target close in the third quarter for a purchase price of $323.8 million financed with issuance of convertible preferred units and assumption of in-place debt
  • Recent disposition of 596 homes in Rochester, Minnesota for a sale price of $60.0M
  • January 2021 acquisition of Union Pointe for an aggregate purchase price of $76.9M enhanced scale in Denver to 1,713 homes in 5 communities

Operating Initiatives Progress to Enhance Customer Experience and Margin Enhancement

  • Technology implementation underway to further operating efficiencies across the portfolio
  • Value add opportunities include unit and common area renovations as well as adding amenities such as clubhouses, fitness centers, dog parks, package locker solutions, etc.
  • Since April 2018, same-store gross margin has increased from 68.1% to 74.9%

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Better Every Days

A lot has changed since our business began, and our new name is a reflection of who we have become.

The rebrand of the company reflects our mission to provide great homes for our residents, our teams, and our investors. It is about coming together for the benefit of everyone - something in which each and every member of our team believes.

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COMPANY SNAPSHOT

F o c u s e d o n G r o w t h i n M u l t i f a m i l y

PORTFOLIO SUMMARY

  • Founded in 1970, celebrating 50 Years
  • Apartment owner/operator with 11,579 homes
  • Publicly traded since 1997
  • Portfolio transformation from diversified to focused multifamily from 2017-2019
  • Total capitalization of $1.9 billion(1)
  • Added to the S&P SmallCap 600 Index in 2020

Multifamily and Other % of Gross Real Estate Assets

Multifamily

Other

100%

50%

0%

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

  1. See page 16 for breakdown

Differentiated

Markets

Internal Growth

Opportunity

Value-Add

Opportunity

Balance Sheet

Flexibility

Experienced

Leadership

Strong Midwest markets led by

Minneapolis and Denver

Nashville a new target market

Enhanced operating platform

Deep value-add pipeline

Strong balance sheet with sufficient

liquidity to capitalize on future

opportunities

High caliber management and board

executing a sound strategic plan

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PORTFOLIO OVERVIEW

D i f f e r e n t i a t e d P o r t f o l i o - S t r o n g M i d w e s t M a r k e t s

Region

Homes

Avg. Rev per Occ.

Home(1)

Denver, CO

1,713

$1,846

Minneapolis, MN

2,537

$1,600

North Dakota

2,422

$1,144

Omaha, NE

1,370

$1,029

Rochester, MN

1,122

$1,462

St. Cloud, MN

1,192

$1,089

Other Mountain West(2)

1,223

$1,099

Total / Average

11,579

$1,356

Multifamily Acquisitions and Dispositions Since 2017

  • Acquired 10 new communities in our target markets for $810 million
  • $353 million in dispositions including 35 communities as we reduce our exposure to older, lower margin properties with less growth
    1. Average monthly revenue per occupied home is defined as total rental revenues divided by the financial occupancy of apartment homes for the period
    2. Includes Rapid City, SD and Billings, MT

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Percent of NOI by State

6%

Minot

Grand Forks

Target Markets

Billings

Bismarck

42%

18% St. Cloud

Rapid City

Minneapolis

3%

Rochester

8%

Omaha

Denver

23%

Nashville

New Target

Market

% of NOI by Market - June 2021 vs 2017

40%

30%

20%

10%

0%

Minneapolis

Denver

Rochester

St. Cloud

Omaha

ND Market

Other

Mountain

West

2021

2017

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IRET - Investors Real Estate Trust published this content on 09 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 August 2021 13:03:04 UTC.

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