CENTERSPACE Q1 FY2025 earnings call

• Multifamily fundamentals are strong with sustained demand driving net absorption. The Midwest and Mountain West regions benefit from lack of new supply. North Dakota and Omaha have positive results, and Minneapolis leasing spreads are ahead of the portfolio average. - Denver faces supply pressure but is optimistic about improving new lease rates as the year progresses. - Core FFO and same-store NOI growth were in line with expectations. - Balance sheet is fortified with a well-laddered debt maturity profile and robust liquidity of over $223 million.

The first quarter demonstrated strong performance in the multifamily segment. Weighted average occupancy for the same-store portfolio improved 120 basis points year-over-year to 96%, with April renewal retention around 57%. Blended leasing spreads were up 70 basis points in Q1, and new lease spreads moved from negative 1.1% in Q1 to positive 2.4% in April. Same-store NOI increased 2.1% year-over-year, and core FFO was $1.21 per diluted share. Revenues from same-store communities increased 3.5% compared to Q1 2024, driven by a 120 basis point occupancy increase to 95.8%. Expenses were up 5.8% year-over-year, primarily due to property taxes, but offset by controllable savings.

• Reaffirmed 2025 guidance, including core FFO midpoint of $4.98 per share and year-over-year same-store NOI growth of 2.25%. - Debt maturity profile remains well laddered with minimal maturities this year, weighted average debt cost 3.6%, and weighted average time to maturity 5.4 years. - Access to capital remains robust with over $223 million of total liquidity.

• Market volatility and capital markets volatility. - Disconnect between public and private market pricing. - Considerations of market exposures, leverage, share liquidity, and scale for investors.

Q: Brad Heffern asked about the strong Midwest apartment market and if they're being conservative.

A: Expected strong growth, right on plan, with strong numbers leading to lease losses and runway in Midwest markets.

Q: Brad Heffern asked about occupancy and weekend plans.

A: Projections around 95%, current at 96%, expect to come off, but will push rate if demand continues; Anne has family plans for the weekend.

Q: Ami Probandt asked about OpEx lumpiness.

A: Lumpiness in first and fourth quarters, increased non-controllable spend by $650k due to new assessments.

Q: Ami Probandt asked about retention down.

A: Q1 has least leases expiring, noise in Nebraska from value add, April retention jumped, second quarter expected strong.

Q: Jamie Feldman asked about Denver market.

A: April saw 200 basis point improvement in new lease spreads, peak supply end of second to third quarter, expect inflection in Q3.

Q: Jamie Feldman asked about North Dakota vs Denver capital recycling.

A: Midwest provides stability, North Dakota markets small with volatility, still think about capital recycling to stronger liquidity markets.

Q: Rob Stevenson asked about supply in markets.

A: Denver had 18k units delivered, Rochester has 4.5% supply, job growth in Rochester.

Q: Rob Stevenson asked about second quarter leasing update.

A: 25-30% of second quarter leases dealt with, 80% left.

Q: Rob Stevenson asked about Omaha occupancy decline.

A: Forced move-outs due to last value-add project.

Q: Alexander Goldfarb asked about agriculture impact.

A: Agriculture has secondary effect, North Dakota shifted to oil and gas.

Q: Alexander Goldfarb asked about retention rates vs peers.

A: Denver's lower retention offset by strong markets, full year retention expected at 51.5%.

Q: Mason Guell asked about new lease rates and acquisitions.

A: New lease rates playing out as expected, focus on Mountain West, potential acquisitions with embedded financing, mezz executions, OP unit transactions.