Centerspace (CSR) Q3 2024 earnings summary

Executive summary

• Q3 2024 core FFO was $1.18 per share, with stable revenue growth and expense control; core FFO for the nine months ended September 30, 2024, rose 3.4% year-over-year to $3.68 per share.

• Revenue for Q3 2024 increased 0.7% year-over-year to $65.0 million, driven by higher same-store and non-same-store revenues, partially offset by property dispositions.

• Net loss available to common shareholders was $6.2 million, or $(0.40) per diluted share, versus net income of $6.2 million, or $0.41 per diluted share, in Q3 2023.

• Expanded Denver presence with The Lydian acquisition for $54.0 million, funded by assumed mortgage debt, OP units at a premium, and cash.

• Raised $105 million via ATM share issuance, used to redeem all Series C preferred shares for $97.0 million and improve the balance sheet.

Financial highlights

• Q3 2024 revenue: $65.0 million (+0.7% year-over-year); nine months: $194.6 million (-1.4% year-over-year).

• Core FFO per diluted share: $1.18 for Q3 2024 (vs. $1.20 in Q3 2023); $3.68 for nine months (vs. $3.56 prior year).

• Same-store revenue increased 3% year-over-year; same-store NOI up 2.8% in Q3 2024.

• Weighted average occupancy for same-store properties: 95.3% in Q3 2024 (up from 94.6% in Q3 2023).

• Distributions declared: $0.75 per common share for Q3 2024; $2.25 for nine months; annualized dividend per share was $3.00.

Outlook and guidance

• 2024 Core FFO per diluted share guidance raised to $4.82–$4.90, with same-store revenue growth expected at 3.0%–3.5% and NOI growth at 3.25%–3.75%.

• Expense growth guidance lowered to 2.5%-3.25% for the year.

• Recurring capital expenditures per home projected at $1,100–$1,150; value-add expenditures at $23–$25 million.

• No additional acquisitions, dispositions, issuances, or borrowings factored into guidance post-Lydian.

• Management is monitoring inflation, supply chain pressures, and capital market volatility for potential impacts.