MINNEAPOLIS, Feb. 28, 2022
/PRNewswire/ -- Centerspace (NYSE: CSR) announced today its
financial and operating results for the year ended
December 31, 2021. The tables below show Net Income (Loss),
Funds from Operations ("FFO")1, and Core
FFO1, all on a per share basis, for the year ended
December 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
December 31, 2021, September 30,
2021, and December 31, 2020 and the twelve months ended
December 31, 2021 and 2020.
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
Per
Share
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Earnings (loss) per
share - diluted
|
|
$
(0.61)
|
|
$
(0.46)
|
|
$
(0.47)
|
|
$
(0.15)
|
FFO -
diluted
|
|
1.07
|
|
0.97
|
|
3.54
|
|
3.47
|
Core FFO -
diluted
|
|
1.08
|
|
1.02
|
|
3.99
|
|
3.78
|
|
|
Year-Over-Year
Comparison
|
|
Sequential
Comparison
|
|
YTD
Comparison
|
Same-Store
Results
|
|
4Q21 vs
4Q20
|
|
4Q21 vs.
3Q21
|
|
CY21 vs.
CY20
|
Revenues
|
|
9.2%
|
|
4.1%
|
|
4.8%
|
Expenses
|
|
10.9%
|
|
0.9%
|
|
4.8%
|
Net Operating Income
("NOI")
|
|
8.1%
|
|
6.4%
|
|
4.8%
|
|
|
Three months
ended
|
|
Twelve months
ended
|
Same-Store
Results
|
|
December 31,
2021
|
|
September 30,
2021
|
|
December 31,
2020
|
|
December 31,
2021
|
|
December 31,
2020
|
Weighted Average
Occupancy
|
|
93.4%
|
|
94.3%
|
|
94.8%
|
|
94.4%
|
|
94.7%
|
|
|
(1)
|
Net operating income,
Funds from Operations, 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-GAAP Financial Measures and
Reconciliations" in the Supplemental Financial and Operating Data
below.
|
Highlights for the Year Ended December 31, 2021
- Net Loss was $(0.47) per diluted
share for the year ended December 31,
2021, compared to Net Income of $(0.15) per diluted share for the year ended
December 31, 2020;
- Core FFO increased to $3.99 or
5.8% per diluted share compared to $3.78 for the year ended December 31, 2020;
- Same-store revenue increased 4.8% driven by 5.1% growth in
rental revenue and offset by a decrease of 0.3% in occupancy;
- Same-store operating expenses increased 4.8% year-over-year
with a increase of 3.7% in same-store controllable expenses, and a
increase of 6.7% in same-store non-controllable expenses;
- Same-store NOI growth of 4.8% for the year ended December 31, 2021;
- Same-store NOI growth of 6.4% from the third quarter of
2021;
- Continued to grow the portfolio through a strategic acquisition
of 14 communities in Minneapolis,
Minnesota and three communities in St. Cloud, Minnesota totaling 2,696 apartment
homes for an aggregate purchase price of $359.9 million. Acquired two new apartment
communities in Denver, Colorado
consisting of 432 homes for an aggregate purchase price of
$139.9 million;
- Sold five apartment communities consisting of 589 apartment
homes in Rochester, Minnesota for
an aggregate sale price of $60.0
million;
- Amended and expanded the Note Purchase Private Shelf Agreement
to increase the aggregate amount under the agreement from
$150.0 million to $225.0 million and issued $50.0 million of 2.7% unsecured Series C Notes
due June 6, 2030;
- Issued $125.0 million of
unsecured notes with a weighted average interest rate of 2.6% and
weighted average maturity of 10.5 years;
- Improved and extended $250.0
million revolving credit facility with an accordion feature
for up to $400.0 million which
matures in September 2025; and
- Continued to strengthen the balance sheet by issuing 1.8
million common shares at an average price of $86.13 per share for total consideration, net of
commissions and issuance costs, of approximately $156.4 million in the year ended December 31, 2021.
Subsequent Events
Subsequent to December 31, 2021,
Centerspace acquired a portfolio of three communities in the
Minneapolis, Minnesota region
totaling 267 apartment homes for an aggregate purchase price of
$68.1 million. The company also
acquired Noko Apartments in Minneapolis for an aggregate purchase price of
$46.4 million. The company previously
financed the construction and mezzanine loan.
On February 23, 2022 the company
paid $3.3 million to terminate a
$75.0 million interest rate swap and
a $70.0 million forward swap.
Dividend Distributions
Centerspace's Board of Trustees announced a regular quarterly
distribution of $0.73 per share/unit,
payable on April 11, 2022, to common
shareholders and unitholders of record at the close of business on
March 31, 2022, which represents a
$0.01 increase over the prior
distribution.
The Board of Trustees also declared a distribution of
$0.4140625 per share on the 6.625%
Series C Cumulative Redeemable Preferred Shares (NYSE: CSR PRC),
payable on March 31, 2022, to holders
of record at the close of business on March
15, 2022. Series C preferred share distributions are
cumulative and payable quarterly in arrears at an annual rate of
$1.65625 per share.
Balance Sheet
At December 31, 2021, Centerspace had $204.8 million of total liquidity on its balance
sheet, including $173.5 million
available on its lines of credit.
2022 Financial Overview
Centerspace is providing the following guidance for its 2022
performance.
2022 Calendar Year
Financial Outlook
|
|
|
|
Range for
2022
|
|
2021
Actual
|
|
Low
|
|
High
|
Earnings per Share -
diluted
|
$
(0.47)
|
|
$
(0.41)
|
|
$
(0.16)
|
FFO per Share -
diluted
|
$
3.54
|
|
$
4.25
|
|
$
4.50
|
Core FFO per Share -
diluted
|
$
3.99
|
|
$
4.33
|
|
$
4.57
|
Additional assumptions:
- Same-store capital expenditures of $925 per home to $975 per home
- Value-add expenditures of $21.0
million to $24.0 million
- Investments of $114.5 million due
to the January 2021 acquisitions of
four communities in Minneapolis,
Minnesota
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, please refer to
"2021 Financial Outlook" in the Supplemental Financial and
Operating Data below.
Earnings Call
Live webcast and
replay: https://www.ir.centerspacehomes.com
|
|
|
|
Live Conference
Call
|
|
Conference Call
Replay
|
Tuesday, March 1,
2022 at 10:00 AM ET
|
|
Replay available
until March 15, 2022
|
USA Toll Free
Number
|
1-844-200-6205
|
|
USA Toll Free
Number
|
1-866-813-9403
|
International Toll
Free Number
|
1-929-526-1599
|
|
International Toll
Free Number
|
44-204-525-0658
|
Canada Toll Free
Number
|
1-833-950-0062
|
|
Canada Toll Free
Number
|
1-226-828-7578
|
Conference
Number
|
130830
|
|
Conference
Number
|
848822
|
Supplemental Information
Supplemental Operating and Financial Data for the year ended
December 31, 2021, is available in the Investors section on
Centerspace's website at https://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 December 31, 2021, Centerspace owned 79 apartment
communities consisting of 14,441 homes located in Colorado, Minnesota, Montana, Nebraska, North
Dakota, and South Dakota.
Centerspace was named a Top Workplace for 2021 by the
Minneapolis Star Tribune. For more information, please visit
www.centerspacehomes.com.
Forward-Looking Statements
Certain statements in this press release are based on the
company's current expectations and assumptions, and are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. 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.
Forward-looking statements include the impact of a public health
crisis, including the COVID-19 pandemic, and the governmental and
third-party response to such a crisis, which may affect our key
personnel, our tenants, and the costs of operating our assets; the
impact of social distancing, shelter-in-place, travel restrictions,
remote work requirements, and similar governmental and private
measures taken to combat the spread of a public health crisis on
our operations and our tenants. 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 and uncertainties
are detailed from time to time in filings with the SEC, including
the "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Risk Factors" contained in the
company's Annual Report on Form 10-K, in quarterly reports on Form
10-Q, and in other reports the company files with the SEC from time
to time. 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
E-mail: kweber@centerspacehomes.com
Common Share Data
(NYSE: CSR)
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2021
|
|
September 30,
2021
|
|
June 30,
2021
|
|
March 31,
2021
|
|
December 31,
2020
|
High closing
price
|
|
$
111.26
|
|
$
105.42
|
|
$
79.71
|
|
$
73.42
|
|
$
74.55
|
Low closing
price
|
|
$
96.58
|
|
$
78.42
|
|
$
67.28
|
|
$
68.00
|
|
$
65.79
|
Average closing
price
|
|
$
103.29
|
|
$
94.10
|
|
$
71.99
|
|
$
71.37
|
|
$
70.30
|
Closing price at end
of quarter
|
|
$
110.90
|
|
$
94.50
|
|
$
78.90
|
|
$
68.00
|
|
$
70.64
|
Common share
distributions—annualized
|
|
$
2.88
|
|
$
2.88
|
|
$
2.80
|
|
$
2.80
|
|
$
2.80
|
Closing price
dividend yield - annualized
|
|
2.6%
|
|
3.1%
|
|
3.6%
|
|
4.1%
|
|
4.0%
|
Closing common shares
outstanding (thousands)
|
|
15,016
|
|
14,281
|
|
14,045
|
|
13,220
|
|
13,027
|
Closing limited
partnership units outstanding (thousands)
|
|
832
|
|
845
|
|
881
|
|
950
|
|
977
|
Closing Series E
preferred units, as converted (thousands)
|
|
2,186
|
|
2,186
|
|
—
|
|
—
|
|
—
|
Closing market value
of outstanding common shares, plus imputed closing market value of
outstanding limited partnership units (thousands)
|
|
$
1,999,971
|
|
$
1,635,984
|
|
$
1,177,661
|
|
$
963,560
|
|
$
989,243
|
CENTERSPACE
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
|
(in thousands,
except per share amounts)
|
|
|
|
Three Months Ended
|
|
|
Twelve months
ended
|
|
|
12/31/2021
|
|
9/30/2021
|
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
|
|
12/31/2021
|
|
12/31/2020
|
REVENUE
|
|
$
57,988
|
|
$
50,413
|
|
$
46,656
|
|
$
46,648
|
|
$
45,540
|
|
|
$
201,705
|
|
$
177,994
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses, excluding real estate taxes
|
|
16,852
|
|
14,434
|
|
13,018
|
|
13,449
|
|
12,668
|
|
|
57,753
|
|
51,625
|
Real estate
taxes
|
|
6,654
|
|
5,916
|
|
5,742
|
|
5,792
|
|
5,256
|
|
|
24,104
|
|
21,533
|
Property management
expenses
|
|
2,697
|
|
2,203
|
|
2,085
|
|
1,767
|
|
1,460
|
|
|
8,752
|
|
5,801
|
Casualty
loss
|
|
280
|
|
(10)
|
|
(27)
|
|
101
|
|
331
|
|
|
344
|
|
1,662
|
Depreciation/amortization
|
|
30,418
|
|
22,447
|
|
19,308
|
|
19,992
|
|
20,282
|
|
|
92,165
|
|
75,593
|
General and
administrative expenses
|
|
4,231
|
|
4,279
|
|
3,797
|
|
3,906
|
|
3,733
|
|
|
16,213
|
|
13,440
|
TOTAL
EXPENSES
|
|
$
61,132
|
|
$
49,269
|
|
$
43,923
|
|
$
45,007
|
|
$
43,730
|
|
|
$
199,331
|
|
$
169,654
|
Gain (loss) on sale of
real estate and other investments
|
|
678
|
|
—
|
|
26,840
|
|
—
|
|
17
|
|
|
27,518
|
|
25,503
|
Operating income
(loss)
|
|
(2,466)
|
|
1,144
|
|
29,573
|
|
1,641
|
|
1,827
|
|
|
29,892
|
|
33,843
|
Interest
expense
|
|
(7,456)
|
|
(7,302)
|
|
(7,089)
|
|
(7,231)
|
|
(6,903)
|
|
|
(29,078)
|
|
(27,525)
|
Interest and other
income (loss)
|
|
1,117
|
|
(5,082)
|
|
619
|
|
431
|
|
404
|
|
|
(2,915)
|
|
(1,575)
|
Net income
(loss)
|
|
$
(8,805)
|
|
$
(11,240)
|
|
$
23,103
|
|
$
(5,159)
|
|
$
(4,672)
|
|
|
$
(2,101)
|
|
$
4,743
|
Dividends to Series D
preferred unitholders
|
|
(160)
|
|
(160)
|
|
(160)
|
|
(160)
|
|
(160)
|
|
|
(640)
|
|
(640)
|
Net (income) loss
attributable to noncontrolling interest – Operating Partnership and
Series E preferred units
|
|
1,793
|
|
1,930
|
|
(1,386)
|
|
469
|
|
460
|
|
|
2,806
|
|
212
|
Net (income) loss
attributable to noncontrolling interests – consolidated real estate
entities
|
|
(36)
|
|
(22)
|
|
(19)
|
|
(17)
|
|
(6)
|
|
|
(94)
|
|
126
|
Net income (loss)
attributable to controlling interests
|
|
(7,208)
|
|
(9,492)
|
|
21,538
|
|
(4,867)
|
|
(4,378)
|
|
|
(29)
|
|
4,441
|
Dividends to
preferred shareholders
|
|
(1,607)
|
|
(1,607)
|
|
(1,607)
|
|
(1,607)
|
|
(1,607)
|
|
|
(6,428)
|
|
(6,528)
|
Discount (premium) on
redemption of preferred shares
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
297
|
NET INCOME (LOSS)
AVAILABLE TO COMMON SHAREHOLDERS
|
|
$
(8,815)
|
|
$
(11,099)
|
|
$
19,931
|
|
$
(6,474)
|
|
$
(5,985)
|
|
|
$
(6,457)
|
|
$
(1,790)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data -
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
per common share – basic
|
|
$
(0.61)
|
|
$
(0.79)
|
|
$
1.49
|
|
$
(0.49)
|
|
$
(0.46)
|
|
|
$
(0.47)
|
|
$
(0.15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data -
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
per common share – diluted
|
|
$
(0.61)
|
|
$
(0.81)
|
|
$
1.48
|
|
$
(0.49)
|
|
$
(0.46)
|
|
|
$
(0.47)
|
|
$
(0.15)
|
CENTERSPACE
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
(in
thousands)
|
|
|
|
12/31/2021
|
|
9/30/2021
|
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Real estate
investments
|
|
|
|
|
|
|
|
|
|
|
Property
owned
|
|
$
2,271,170
|
|
$
2,203,606
|
|
$
1,838,837
|
|
$
1,883,407
|
|
$
1,812,557
|
Less accumulated
depreciation
|
|
(443,592)
|
|
(426,926)
|
|
(407,400)
|
|
(408,014)
|
|
(399,249)
|
|
|
1,827,578
|
|
1,776,680
|
|
1,431,437
|
|
1,475,393
|
|
1,413,308
|
Mortgage loans
receivable
|
|
43,276
|
|
42,160
|
|
37,457
|
|
30,107
|
|
24,661
|
Total real estate
investments
|
|
1,870,854
|
|
1,818,840
|
|
1,468,894
|
|
1,505,500
|
|
1,437,969
|
Cash and cash
equivalents
|
|
31,267
|
|
20,816
|
|
5,194
|
|
10,816
|
|
392
|
Restricted
cash
|
|
7,358
|
|
2,376
|
|
8,444
|
|
1,610
|
|
6,918
|
Other
assets
|
|
30,582
|
|
34,919
|
|
17,218
|
|
18,427
|
|
18,904
|
TOTAL
ASSETS
|
|
$
1,940,061
|
|
$
1,876,951
|
|
$
1,499,750
|
|
$
1,536,353
|
|
$
1,464,183
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY, AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
62,403
|
|
$
58,092
|
|
$
52,413
|
|
$
53,852
|
|
$
55,609
|
Revolving line of
credit
|
|
76,000
|
|
57,000
|
|
87,000
|
|
181,544
|
|
152,871
|
Notes payable, net of
loan costs
|
|
299,344
|
|
299,454
|
|
319,286
|
|
319,236
|
|
269,246
|
Mortgages payable, net
of loan costs
|
|
480,703
|
|
489,140
|
|
287,143
|
|
293,709
|
|
297,074
|
TOTAL
LIABILITIES
|
|
$
918,450
|
|
$
903,686
|
|
$
745,842
|
|
$
848,341
|
|
$
774,800
|
|
|
|
|
|
|
|
|
|
|
|
SERIES D PREFERRED
UNITS
|
|
$
25,331
|
|
$
21,585
|
|
$
18,022
|
|
$
16,560
|
|
$
16,560
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
Series C Preferred
Shares of Beneficial Interest
|
|
93,530
|
|
93,530
|
|
93,530
|
|
93,530
|
|
93,530
|
Common Shares of
Beneficial Interest
|
|
1,157,255
|
|
1,092,130
|
|
1,033,940
|
|
980,453
|
|
968,263
|
Accumulated
distributions in excess of net income
|
|
(474,318)
|
|
(454,691)
|
|
(433,310)
|
|
(443,409)
|
|
(427,681)
|
Accumulated other
comprehensive income (loss)
|
|
(4,435)
|
|
(5,784)
|
|
(12,064)
|
|
(12,798)
|
|
(15,905)
|
Total shareholders'
equity
|
|
$
772,032
|
|
$
725,185
|
|
$
682,096
|
|
$
617,776
|
|
$
618,207
|
Noncontrolling
interests – Operating Partnership and Series E preferred
units
|
|
223,600
|
|
225,850
|
|
53,133
|
|
53,007
|
|
53,930
|
Noncontrolling
interests – consolidated real estate entities
|
|
648
|
|
645
|
|
657
|
|
669
|
|
686
|
TOTAL
EQUITY
|
|
$
996,280
|
|
$
951,680
|
|
$
735,886
|
|
$
671,452
|
|
$
672,823
|
TOTAL LIABILITIES,
MEZZANINE EQUITY, AND EQUITY
|
|
$
1,940,061
|
|
$
1,876,951
|
|
$
1,499,750
|
|
$
1,536,353
|
|
$
1,464,183
|
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
the company may not be comparable to non-GAAP 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 development properties, have achieved
a target level of physical occupancy of 90%. On the first day of
each calendar year, Centerspace determines the composition of the
same-store pool for that year and adjusts the previous year, to
evaluate full period-over-period operating comparisons for existing
apartment communities and their contribution to net operating
income. Measuring performance on a same-store basis allows
investors to evaluate how a fixed pool of communities are
performing year-over-year. Centerspace uses this measure to assess
success in increasing NOI, renewing leases on existing residents,
controlling operating costs, and making prudent capital
improvements.
Reconciliation of Operating Income (Loss) 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 and
amortization, financing costs, property management expenses,
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.
|
(dollars
in thousands)
|
|
Three Months
Ended
|
|
|
Sequential
|
|
Year-Over-Year
|
|
12/31/2021
|
|
9/30/2021
|
|
12/31/2020
|
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
(2,466)
|
|
$
1,144
|
|
$
1,827
|
|
|
$
(3,610)
|
|
(315.6)%
|
|
$
(4,293)
|
|
(235.0)%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property management
expenses
|
2,697
|
|
2,203
|
|
1,460
|
|
|
494
|
|
22.4%
|
|
1,237
|
|
84.7%
|
Casualty
loss
|
280
|
|
(10)
|
|
331
|
|
|
290
|
|
(2,900.0)%
|
|
(51)
|
|
(15.4)%
|
Depreciation and
amortization
|
30,418
|
|
22,447
|
|
20,282
|
|
|
7,971
|
|
35.5%
|
|
10,136
|
|
50.0%
|
General and
administrative expenses
|
4,231
|
|
4,279
|
|
3,733
|
|
|
(48)
|
|
(1.1)%
|
|
498
|
|
13.3%
|
Gain (loss) on sale of
real estate and other investments
|
$
(678)
|
|
—
|
|
$
(17)
|
|
|
$
(678)
|
|
100.0%
|
|
$
(661)
|
|
3,888.2%
|
Net operating
income
|
$
34,482
|
|
$
30,063
|
|
$
27,616
|
|
|
$
4,419
|
|
14.7%
|
|
$
6,866
|
|
24.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store
|
$
43,771
|
|
$
42,034
|
|
$
40,075
|
|
|
$
1,737
|
|
4.1%
|
|
$
3,696
|
|
9.2%
|
Non-same-store
|
13,407
|
|
7,214
|
|
3,105
|
|
|
6,193
|
|
85.8%
|
|
10,302
|
|
331.8%
|
Other
|
810
|
|
1,120
|
|
413
|
|
|
(310)
|
|
(27.7)%
|
|
397
|
|
96.1%
|
Dispositions
|
—
|
|
45
|
|
1,947
|
|
|
(45)
|
|
(100.0)%
|
|
(1,947)
|
|
(100.0)%
|
Total
|
57,988
|
|
50,413
|
|
45,540
|
|
|
7,575
|
|
15.0%
|
|
12,448
|
|
27.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses, including real estate taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store
|
17,275
|
|
17,126
|
|
15,573
|
|
|
149
|
|
0.9%
|
|
1,702
|
|
10.9%
|
Non-same-store
|
5,914
|
|
2,940
|
|
1,157
|
|
|
2,974
|
|
101.2%
|
|
4,757
|
|
411.1%
|
Other
|
312
|
|
317
|
|
249
|
|
|
(5)
|
|
(1.6)%
|
|
63
|
|
25.3%
|
Dispositions
|
5
|
|
(33)
|
|
945
|
|
|
38
|
|
(115.2)%
|
|
(940)
|
|
(99.5)%
|
Total
|
23,506
|
|
20,350
|
|
17,924
|
|
|
3,156
|
|
15.5%
|
|
5,582
|
|
31.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store
|
26,496
|
|
24,908
|
|
24,502
|
|
|
1,588
|
|
6.4%
|
|
1,994
|
|
8.1%
|
Non-same-store
|
7,493
|
|
4,274
|
|
1,948
|
|
|
3,219
|
|
75.3%
|
|
5,545
|
|
284.7%
|
Other
|
498
|
|
803
|
|
164
|
|
|
(305)
|
|
(38.0)%
|
|
334
|
|
203.7%
|
Dispositions
|
(5)
|
|
78
|
|
1,002
|
|
|
(83)
|
|
(106.4)%
|
|
(1,007)
|
|
(100.5)%
|
Total
|
$
34,482
|
|
$
30,063
|
|
$
27,616
|
|
|
$
4,419
|
|
14.7%
|
|
$
6,866
|
|
24.9%
|
|
(dollars in
thousands)
|
|
Twelve Months
Ended December 31,
|
|
2021
|
|
2020
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
29,892
|
|
$
33,843
|
|
$
(3,951)
|
|
(11.7)%
|
Adjustments:
|
|
|
|
|
|
|
|
Property management
expenses
|
8,752
|
|
5,801
|
|
2,951
|
|
50.9%
|
Casualty
loss
|
344
|
|
1,662
|
|
(1,318)
|
|
(79.3)%
|
Depreciation and
amortization
|
92,165
|
|
75,593
|
|
16,572
|
|
21.9%
|
General and
administrative expenses
|
16,213
|
|
13,440
|
|
2,773
|
|
20.6%
|
Gain (loss) on sale of
real estate and other investments
|
(27,518)
|
|
(25,503)
|
|
(2,015)
|
|
7.9%
|
Net operating
income
|
$
119,848
|
|
$
104,836
|
|
$
15,012
|
|
14.3%
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Same-store
|
$
166,326
|
|
$
158,702
|
|
$
7,624
|
|
4.8%
|
Non-same-store
|
29,298
|
|
5,424
|
|
23,874
|
|
440.2%
|
Other
|
2,831
|
|
2,147
|
|
684
|
|
31.9%
|
Dispositions
|
3,250
|
|
11,721
|
|
(8,471)
|
|
(72.3)%
|
Total
|
201,705
|
|
177,994
|
|
23,711
|
|
13.3%
|
|
|
|
|
|
|
|
|
Property operating
expenses, including real estate taxes
|
|
|
|
|
|
|
|
Same-store
|
67,306
|
|
64,204
|
|
3,102
|
|
4.8%
|
Non-same-store
|
11,790
|
|
2,152
|
|
9,638
|
|
447.9%
|
Other
|
1,120
|
|
1,008
|
|
112
|
|
11.1%
|
Dispositions
|
1,641
|
|
5,794
|
|
(4,153)
|
|
(71.7)%
|
Total
|
81,857
|
|
73,158
|
|
8,699
|
|
11.9%
|
|
|
|
|
|
|
|
|
Net operating
income
|
|
|
|
|
|
|
|
Same-store
|
99,020
|
|
94,498
|
|
4,522
|
|
4.8%
|
Non-same-store
|
17,508
|
|
3,272
|
|
14,236
|
|
435.1%
|
Other
|
1,711
|
|
1,139
|
|
572
|
|
50.2%
|
Dispositions
|
1,609
|
|
5,927
|
|
(4,318)
|
|
(72.9)%
|
Total
|
$
119,848
|
|
$
104,836
|
|
$
15,012
|
|
14.3%
|
Reconciliation of Same-Store Controllable Expenses to
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
and real estate taxes.
|
(dollars
in thousands)
|
|
Three Months Ended
December 31,
|
|
|
Twelve Months
Ended December 31,
|
|
2021
|
|
2020
|
|
$ Change
|
|
% Change
|
|
|
2021
|
|
2020
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Controllable
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On-site compensation
(1)
|
$
4,419
|
|
$
4,412
|
|
$
7
|
|
0.2%
|
|
|
$
17,602
|
|
$
17,319
|
|
$
283
|
|
1.6%
|
Repairs and
maintenance
|
2,725
|
|
2,037
|
|
688
|
|
33.8%
|
|
|
9,785
|
|
9,507
|
|
278
|
|
2.9%
|
Utilities
|
2,736
|
|
2,597
|
|
139
|
|
5.4%
|
|
|
10,975
|
|
10,286
|
|
689
|
|
6.7%
|
Administrative and
marketing
|
942
|
|
781
|
|
161
|
|
20.6%
|
|
|
3,643
|
|
3,376
|
|
267
|
|
7.9%
|
Total
|
$
10,822
|
|
$
9,827
|
|
$
995
|
|
10.1%
|
|
|
$
42,005
|
|
$
40,488
|
|
$
1,517
|
|
3.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controllable
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
taxes
|
$
4,839
|
|
$
4,513
|
|
$
326
|
|
7.2%
|
|
|
$
19,503
|
|
$
19,026
|
|
$
477
|
|
2.5%
|
Insurance
|
1,614
|
|
1,233
|
|
381
|
|
30.9%
|
|
|
5,798
|
|
4,690
|
|
1,108
|
|
23.6%
|
Total
|
$
6,453
|
|
$
5,746
|
|
$
707
|
|
12.3%
|
|
|
$
25,301
|
|
$
23,716
|
|
$
1,585
|
|
6.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses, including real estate taxes - non-same-store
|
$
5,914
|
|
$
1,157
|
|
$
4,757
|
|
411.1%
|
|
|
$
11,790
|
|
$
2,152
|
|
$
9,638
|
|
447.9%
|
Property operating
expenses, including real estate taxes - other
|
312
|
|
249
|
|
63
|
|
25.3%
|
|
|
1,120
|
|
1,008
|
|
112
|
|
11.1%
|
Property operating
expenses, including real estate taxes - dispositions
|
5
|
|
945
|
|
(940)
|
|
(99.5)%
|
|
|
1,641
|
|
5,794
|
|
(4,153)
|
|
(71.7)%
|
Total property
operating expenses, including real estate taxes
|
$
23,506
|
|
$
17,924
|
|
$
5,582
|
|
31.1%
|
|
|
$
81,857
|
|
$
73,158
|
|
$
8,699
|
|
11.9%
|
|
|
|
|
|
|
(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
measurement used as a supplemental measure for equity real estate
investment trusts, is helpful to investors in understanding
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 the definition. The
company believes that all such interpretations not specifically
provided for in the Nareit definition are consistent with the
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 the
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 needs, including the ability to service indebtedness
or make distributions to shareholders.
Core Funds from Operations ("Core FFO"), a non-GAAP measure, is
FFO 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 as 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 all cash needs, including the 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 that should not be considered a
substitute for operating results determined in accordance with
GAAP.
|
|
(in thousands,
except per share amounts)
|
|
|
Three Months Ended
|
|
|
Twelve Months
Ended
|
|
|
12/31/2021
|
|
9/30/2021
|
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
|
|
12/31/2021
|
|
12/31/2020
|
Net (loss) income
available to common shareholders
|
|
$
(8,815)
|
|
$
(11,099)
|
|
$
19,931
|
|
$
(6,474)
|
|
$
(5,985)
|
|
|
$
(6,457)
|
|
$
(1,790)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests - Operating Partnership and Series E preferred
units
|
|
(1,793)
|
|
(1,930)
|
|
1,386
|
|
(469)
|
|
(460)
|
|
|
(2,806)
|
|
(212)
|
Depreciation and
amortization
|
|
30,418
|
|
22,447
|
|
19,308
|
|
19,992
|
|
20,282
|
|
|
92,165
|
|
75,593
|
Less depreciation -
non real estate
|
|
(101)
|
|
(80)
|
|
(87)
|
|
(98)
|
|
(87)
|
|
|
(366)
|
|
(353)
|
Less depreciation -
partially owned entities
|
|
(21)
|
|
(24)
|
|
(24)
|
|
(24)
|
|
(33)
|
|
|
(93)
|
|
(379)
|
Gain on sale of real
estate
|
|
(678)
|
|
—
|
|
(26,840)
|
|
—
|
|
(17)
|
|
|
(27,518)
|
|
(25,503)
|
FFO applicable to
common shares and Units
|
|
$
19,010
|
|
$
9,314
|
|
$
13,674
|
|
$
12,927
|
|
$
13,700
|
|
|
$
54,925
|
|
$
47,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to Core
FFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casualty loss
(recovery)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
204
|
|
|
—
|
|
749
|
Loss on
extinguishment of debt
|
|
2
|
|
530
|
|
3
|
|
—
|
|
2
|
|
|
535
|
|
23
|
Rebranding
costs
|
|
—
|
|
—
|
|
—
|
|
—
|
|
402
|
|
|
—
|
|
402
|
Technology
implementation costs
|
|
535
|
|
625
|
|
447
|
|
413
|
|
—
|
|
|
2,020
|
|
—
|
(Gain) loss on
marketable securities
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
3,378
|
(Discount)
premium on redemption of preferred shares
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(297)
|
Commercial lease
termination proceeds
|
|
—
|
|
(450)
|
|
—
|
|
—
|
|
—
|
|
|
(450)
|
|
—
|
Acquisition
related costs
|
|
90
|
|
140
|
|
—
|
|
—
|
|
—
|
|
|
230
|
|
—
|
Interest rate
swap termination, amortization, and mark-to-market
|
|
(411)
|
|
5,353
|
|
—
|
|
—
|
|
—
|
|
|
4,942
|
|
—
|
Amortization of
assumed debt
|
|
(26)
|
|
(27)
|
|
—
|
|
—
|
|
—
|
|
|
(53)
|
|
—
|
Other
miscellaneous items
|
|
(61)
|
|
(3)
|
|
—
|
|
—
|
|
—
|
|
|
(64)
|
|
—
|
Core FFO applicable
to common shares and Units
|
|
$
19,139
|
|
$
15,482
|
|
$
14,124
|
|
$
13,340
|
|
$
14,308
|
|
|
$
62,085
|
|
$
51,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO applicable to
common shares and Units
|
|
$
19,010
|
|
$
9,314
|
|
$
13,674
|
|
$
12,927
|
|
$
13,700
|
|
|
$
54,925
|
|
$
47,356
|
Dividends to
preferred unitholders
|
|
160
|
|
160
|
|
160
|
|
160
|
|
160
|
|
|
640
|
|
537
|
FFO applicable to
common shares and Units - diluted
|
|
$
19,170
|
|
$
9,474
|
|
$
13,834
|
|
$
13,087
|
|
$
13,860
|
|
|
$
55,565
|
|
$
47,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO applicable
to common shares and Units
|
|
$
19,139
|
|
$
15,482
|
|
$
14,124
|
|
$
13,340
|
|
$
14,308
|
|
|
$
62,085
|
|
$
51,611
|
Dividends to
preferred unitholders
|
|
160
|
|
160
|
|
160
|
|
160
|
|
160
|
|
|
640
|
|
537
|
Core FFO
applicable to common shares and Units - diluted
|
|
$
19,299
|
|
$
15,642
|
|
$
14,284
|
|
$
13,500
|
|
$
14,468
|
|
|
$
62,725
|
|
$
52,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share and unit - diluted
|
|
$
(0.61)
|
|
$
(0.81)
|
|
$
1.48
|
|
$
(0.49)
|
|
$
(0.46)
|
|
|
$
(0.47)
|
|
$
(0.15)
|
FFO per share and unit
- diluted
|
|
$
1.07
|
|
$
0.60
|
|
$
0.95
|
|
$
0.92
|
|
$
0.97
|
|
|
$
3.54
|
|
$
3.47
|
Core FFO per share and
unit - diluted
|
|
$
1.08
|
|
$
0.98
|
|
$
0.98
|
|
$
0.95
|
|
$
1.02
|
|
|
$
3.99
|
|
$
3.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares and units - diluted
|
|
17,868
|
|
15,922
|
|
14,514
|
|
14,282
|
|
14,222
|
|
|
15,704
|
|
13,835
|
Reconciliation of Net Income (Loss) Available to Common
Shareholders to Adjusted EBITDA
Adjusted EBITDA is earnings before interest, taxes,
depreciation, amortization, gain or loss on sale of real estate and
other investments, impairment of real estate investments, gain or
loss on extinguishment of debt, gain on litigation settlement, and
gain/loss from involuntary conversion. Adjusted EBITDA is a
non-GAAP financial measure and should not be considered a
substitute for operating results determined in accordance with
GAAP. 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,
financing costs, or non-operating gains and losses.
|
|
(in thousands)
|
|
|
Three Months Ended
|
|
|
Twelve
Months Ended
|
|
|
12/31/2021
|
|
9/30/2021
|
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
|
|
12/31/2021
|
|
12/31/2020
|
Net income (loss)
attributable to controlling interests
|
|
$
(7,208)
|
|
$
(9,492)
|
|
$
21,538
|
|
$
(4,867)
|
|
$
(4,378)
|
|
|
$
(29)
|
|
$
4,441
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends to preferred
unitholders
|
|
160
|
|
160
|
|
160
|
|
160
|
|
160
|
|
|
640
|
|
640
|
Noncontrolling
interests – Operating Partnership and Series E preferred
units
|
|
(1,793)
|
|
(1,930)
|
|
1,386
|
|
(469)
|
|
(460)
|
|
|
(2,806)
|
|
(212)
|
Income (loss) before
noncontrolling interests – Operating Partnership
|
|
(8,841)
|
|
(11,262)
|
|
23,084
|
|
(5,176)
|
|
(4,678)
|
|
|
(2,195)
|
|
4,869
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
7,440
|
|
7,287
|
|
7,075
|
|
7,216
|
|
6,888
|
|
|
29,018
|
|
27,334
|
Loss on extinguishment
of debt
|
|
2
|
|
530
|
|
3
|
|
—
|
|
2
|
|
|
535
|
|
23
|
Depreciation/amortization related to real estate
investments
|
|
30,397
|
|
22,423
|
|
19,284
|
|
19,969
|
|
20,250
|
|
|
92,073
|
|
75,215
|
Casualty loss
(recovery)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
204
|
|
|
—
|
|
749
|
Interest
income
|
|
(644)
|
|
(769)
|
|
(583)
|
|
(407)
|
|
(328)
|
|
|
(2,403)
|
|
(1,512)
|
Gain (loss) on sale of
real estate and other investments
|
|
(678)
|
|
—
|
|
(26,840)
|
|
—
|
|
(17)
|
|
|
(27,518)
|
|
(25,503)
|
Technology
implementation costs
|
|
534
|
|
625
|
|
447
|
|
413
|
|
—
|
|
|
2,020
|
|
—
|
(Gain) loss on
marketable securities
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
3,378
|
Commercial lease
termination proceeds
|
|
—
|
|
(450)
|
|
—
|
|
—
|
|
—
|
|
|
(450)
|
|
—
|
Acquisition related
costs
|
|
90
|
|
140
|
|
—
|
|
—
|
|
—
|
|
|
230
|
|
—
|
Interest rate swap
termination and mark-to-market
|
|
(359)
|
|
5,361
|
|
—
|
|
—
|
|
—
|
|
|
5,002
|
|
—
|
Other miscellaneous
items
|
|
(61)
|
|
(3)
|
|
—
|
|
—
|
|
—
|
|
|
(64)
|
|
—
|
Adjusted
EBITDA
|
|
$
27,880
|
|
$
23,882
|
|
$
22,470
|
|
$
22,015
|
|
$
22,321
|
|
|
$
96,248
|
|
$
84,553
|
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)
|
2022
|
|
$
22,429
|
|
$
—
|
|
$
—
|
|
$
22,429
|
|
2.6%
|
|
3.92%
|
2023
|
|
42,596
|
|
—
|
|
—
|
|
42,596
|
|
5.0%
|
|
4.02%
|
2024
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
2025
|
|
32,112
|
|
75,000
|
|
1,000
|
|
108,112
|
|
12.6%
|
|
3.18%
|
2026
|
|
53,487
|
|
—
|
|
—
|
|
53,487
|
|
6.2%
|
|
3.74%
|
Thereafter
|
|
333,160
|
|
300,000
|
|
—
|
|
633,160
|
|
73.6%
|
|
3.15%
|
Total debt
|
|
$
483,784
|
|
$
375,000
|
|
$
1,000
|
|
$
859,784
|
|
100.0%
|
|
3.26%
|
|
|
|
|
|
|
(1)
|
The line of credit
was fixed through an interest rate swap with a $75.0 million
notional as of December 31, 2021. The interest rate swap was
terminated in February 2022.
|
(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.
|
|
|
12/31/2021
|
|
9/30/2021
|
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
Debt Balances
Outstanding
|
|
|
|
|
|
|
|
|
|
|
Secured fixed rate -
other mortgages
|
|
$
284,934
|
|
$
293,547
|
|
$
288,363
|
|
$
295,001
|
|
$
298,445
|
Secured fixed rate -
Fannie Mae credit facility
|
|
198,850
|
|
198,850
|
|
—
|
|
—
|
|
—
|
Unsecured fixed rate
line of credit(1)
|
|
75,000
|
|
57,000
|
|
50,000
|
|
50,000
|
|
50,000
|
Unsecured variable
rate line of credit
|
|
1,000
|
|
—
|
|
37,000
|
|
131,544
|
|
102,871
|
Unsecured term
loans
|
|
—
|
|
—
|
|
145,000
|
|
145,000
|
|
145,000
|
Unsecured senior
notes
|
|
300,000
|
|
300,000
|
|
175,000
|
|
175,000
|
|
125,000
|
Debt total
|
|
$
859,784
|
|
$
849,397
|
|
$
695,363
|
|
$
796,545
|
|
$
721,316
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Weighted
Average Interest Rates
|
|
|
|
|
|
|
|
|
|
|
Other mortgages
rate
|
|
3.81%
|
|
3.83%
|
|
3.90%
|
|
3.92%
|
|
3.93%
|
Fannie Mae Credit
Facility rate
|
|
2.78%
|
|
2.78%
|
|
—
|
|
—
|
|
—
|
Lines of credit rate
(rate with swap)
|
|
4.22%
|
|
2.79%
|
|
2.24%
|
|
2.18%
|
|
2.35%
|
Term loan rate (rate
with swap)
|
|
—
|
|
—
|
|
4.19%
|
|
4.11%
|
|
4.18%
|
Senior notes
rate
|
|
3.12%
|
|
3.12%
|
|
3.47%
|
|
3.47%
|
|
3.78%
|
Total debt
|
|
3.26%
|
|
3.23%
|
|
3.70%
|
|
3.37%
|
|
3.62%
|
|
|
|
|
|
|
(1)
|
The current rate on
our line of credit was LIBOR plus 150 basis points. The LIBOR
exposure on the line of credit as of December 31, 2021 was hedged
using an interest rate swap with a notional of $75.0 million and a
fixed rate of 2.81%. The interest rate swap was terminated in
February 2022.
|
Debt Maturity by
Quarter for the Next Two Years
|
|
Year
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
2022
|
|
$
—
|
|
$
—
|
|
$
22,429
|
|
$
—
|
|
$
22,429
|
2023
|
|
—
|
|
19,187
|
|
—
|
|
23,409
|
|
42,596
|
|
|
|
|
|
|
|
|
|
|
$
65,025
|
CENTERSPACE
|
CAPITAL
ANALYSIS
|
(in thousands,
except per share and unit amounts)
|
|
|
|
12/31/2021
|
|
9/30/2021
|
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
Equity
Capitalization
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
|
15,016
|
|
14,281
|
|
14,045
|
|
13,220
|
|
13,027
|
Operating partnership
units outstanding
|
|
832
|
|
845
|
|
881
|
|
950
|
|
977
|
Series E preferred
units (as converted)
|
|
2,186
|
|
2,186
|
|
—
|
|
—
|
|
—
|
Total common shares
and units outstanding
|
|
18,034
|
|
17,312
|
|
14,926
|
|
14,170
|
|
14,004
|
Market price per
common share (closing price at end of period)
|
|
$
110.90
|
|
$
94.50
|
|
$
78.90
|
|
$
68.00
|
|
$
70.64
|
Equity
capitalization-common shares and units
|
|
$
1,999,971
|
|
$
1,635,984
|
|
$
1,177,661
|
|
$
963,560
|
|
$
989,243
|
Recorded book value of
preferred shares
|
|
$
93,530
|
|
$
93,530
|
|
$
93,530
|
|
$
93,530
|
|
$
93,530
|
Total equity
capitalization
|
|
$
2,093,501
|
|
$
1,729,514
|
|
$
1,271,191
|
|
$
1,057,090
|
|
$
1,082,773
|
|
|
|
|
|
|
|
|
|
|
|
Series D preferred
units
|
|
$
25,331
|
|
$
21,585
|
|
$
18,022
|
|
$
16,560
|
|
16,560
|
|
|
|
|
|
|
|
|
|
|
|
Debt
capitalization
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
859,784
|
|
849,397
|
|
695,363
|
|
796,545
|
|
721,317
|
Total
capitalization
|
|
$
2,978,616
|
|
$
2,600,496
|
|
$
1,984,576
|
|
$
1,870,195
|
|
$
1,820,650
|
|
|
|
|
|
|
|
|
|
|
|
Total debt to total
capitalization(1)
|
|
28.9%
|
|
33.1%
|
|
35.0%
|
|
43.1%
|
|
39.6%
|
|
|
|
|
|
|
(1)
|
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
|
|
|
Twelve Months
Ended
|
|
|
12/31/2021
|
|
9/30/2021
|
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
|
|
12/31/2021
|
|
12/31/2020
|
Debt service coverage
ratio(1)
|
|
3.17
x
|
|
2.75
x
|
|
2.62
x
|
|
2.53
x
|
|
2.73
x
|
|
|
2.77 x
|
|
2.57 x
|
Adjusted
EBITDA/Interest expense plus preferred distributions and principal
amortization
|
|
2.68
x
|
|
2.32
x
|
|
2.21
x
|
|
2.14
x
|
|
2.28
x
|
|
|
2.34 x
|
|
2.13 x
|
Net debt/Adjusted
EBITDA(2)
|
|
7.43
x
|
|
8.67
x
|
|
7.68
x
|
|
8.92
x
|
|
8.07
x
|
|
|
8.61 x
|
|
8.53 x
|
Net debt and
preferred equity/Adjusted EBITDA(2)
|
|
8.50
x
|
|
9.88
x
|
|
8.92
x
|
|
10.17
x
|
|
9.31
x
|
|
|
9.84 x
|
|
9.83 x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares and
units outstanding at record date
|
|
15,848
|
|
15,126
|
|
14,926
|
|
14,171
|
|
14,004
|
|
|
15,848
|
|
14,004
|
Total common
distribution declared
|
|
$
11,411
|
|
$
10,890
|
|
$
10,448
|
|
$
9,919
|
|
$
9,803
|
|
|
$
42,669
|
|
$
38,538
|
Common distribution
per share and unit
|
|
$
0.72
|
|
$
0.72
|
|
$
0.70
|
|
$
0.70
|
|
$
0.70
|
|
|
$
2.84
|
|
$
2.80
|
Payout ratio (Core
FFO per diluted share and unit basis)(3)
|
|
66.7%
|
|
73.5%
|
|
71.4%
|
|
73.7%
|
|
68.6%
|
|
|
71.2%
|
|
74.1%
|
|
|
|
|
|
|
(1)
|
Debt service coverage
ratio is computed by dividing Adjusted EBITDA by interest expense
and principal amortization.
|
(2)
|
Net debt is the total
debt balance less cash and cash equivalents and net tax deferred
exchange proceeds (included within restricted cash). For the
quarterly period presented, adjusted EBITDA is annualized. Net debt
and adjusted EBITDA are non-GAAP 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 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 measure and should not be considered a substitute for
operating results determined in accordance with GAAP.
|
CENTERSPACE
|
SAME-STORE FOURTH
QUARTER COMPARISONS
|
(dollars in
thousands)
|
|
|
|
Homes
Included
|
|
Revenues
|
|
Expenses
|
|
NOI
|
Regions
|
|
|
Q42021
|
|
Q42020
|
|
%
Change
|
|
Q42021
|
|
Q42020
|
|
%
Change
|
|
Q42021
|
|
Q42020
|
|
%
Change
|
Denver, CO
|
|
992
|
|
$
5,817
|
|
$
5,400
|
|
7.7%
|
|
$
1,990
|
|
$
1,634
|
|
21.8%
|
|
$
3,827
|
|
$
3,766
|
|
1.6%
|
Minneapolis,
MN
|
|
2,355
|
|
11,709
|
|
10,604
|
|
10.4%
|
|
4,651
|
|
4,488
|
|
3.6%
|
|
7,058
|
|
6,116
|
|
15.4%
|
North
Dakota
|
|
2,421
|
|
8,155
|
|
8,011
|
|
1.8%
|
|
3,273
|
|
3,070
|
|
6.6%
|
|
4,882
|
|
4,941
|
|
(1.2)%
|
Omaha, NE
|
|
1,370
|
|
4,222
|
|
3,891
|
|
8.5%
|
|
1,888
|
|
1,648
|
|
14.6%
|
|
2,334
|
|
2,243
|
|
4.1%
|
Rochester,
MN
|
|
1,121
|
|
4,996
|
|
4,601
|
|
8.6%
|
|
2,174
|
|
1,860
|
|
16.9%
|
|
2,822
|
|
2,741
|
|
3.0%
|
St. Cloud,
MN
|
|
1,192
|
|
4,576
|
|
3,656
|
|
25.2%
|
|
1,820
|
|
1,602
|
|
13.6%
|
|
2,756
|
|
2,054
|
|
34.2%
|
Other Mountain
West(1)
|
|
1,221
|
|
4,296
|
|
3,912
|
|
9.8%
|
|
1,479
|
|
1,271
|
|
16.4%
|
|
2,817
|
|
2,641
|
|
6.7%
|
Same-Store
Total
|
|
10,672
|
|
$
43,771
|
|
$
40,075
|
|
9.2%
|
|
$
17,275
|
|
$
15,573
|
|
10.9%
|
|
$
26,496
|
|
$
24,502
|
|
8.1%
|
|
|
|
% of
NOI
|
|
Weighted Average
Occupancy (2)
|
|
Average
Monthly
Rental Rate
(3)
|
|
Average
Monthly
Revenue per
Occupied Home (4)
|
Regions
|
|
|
Q42021
|
|
Q42020
|
|
Growth
|
|
Q42021
|
|
Q42020
|
|
%
Change
|
|
Q42021
|
|
Q42020
|
|
%
Change
|
Denver, CO
|
|
14.5%
|
|
93.6%
|
|
94.3%
|
|
(0.7)%
|
|
$
1,855
|
|
$
1,727
|
|
7.4%
|
|
$
2,089
|
|
$
1,924
|
|
8.6%
|
Minneapolis,
MN
|
|
26.6%
|
|
92.8%
|
|
93.2%
|
|
(0.4)%
|
|
1,586
|
|
1,502
|
|
5.6%
|
|
1,786
|
|
1,611
|
|
10.9%
|
North
Dakota
|
|
18.4%
|
|
95.3%
|
|
95.8%
|
|
(0.5)%
|
|
1,107
|
|
1,062
|
|
4.2%
|
|
1,178
|
|
1,151
|
|
2.3%
|
Omaha, NE
|
|
8.8%
|
|
93.9%
|
|
93.8%
|
|
0.1%
|
|
996
|
|
912
|
|
9.2%
|
|
1,094
|
|
1,010
|
|
8.3%
|
Rochester,
MN
|
|
10.7%
|
|
91.7%
|
|
95.5%
|
|
(3.8)%
|
|
1,515
|
|
1,371
|
|
10.5%
|
|
1,620
|
|
1,429
|
|
13.4%
|
St. Cloud,
MN
|
|
10.4%
|
|
91.9%
|
|
94.6%
|
|
(2.7)%
|
|
1,106
|
|
971
|
|
13.9%
|
|
1,392
|
|
1,080
|
|
28.9%
|
Other Mountain
West(1)
|
|
10.6%
|
|
94.5%
|
|
98.1%
|
|
(3.6)%
|
|
1,133
|
|
981
|
|
15.5%
|
|
1,241
|
|
1,088
|
|
14.1%
|
Same-Store
Total
|
|
100.0%
|
|
93.4%
|
|
94.8%
|
|
(1.4)%
|
|
$
1,314
|
|
$
1,215
|
|
8.1%
|
|
$
1,463
|
|
$
1,321
|
|
10.6%
|
|
|
|
|
|
|
(1)
|
Includes apartment
communities in Billings, Montana and Rapid City, South
Dakota.
|
(2)
|
Weighted average
occupancy is defined as the percentage resulting from dividing
actual rental revenue by scheduled rent. Scheduled rent 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
rental rate is scheduled rent divided by the total number of
apartment homes.
|
(4)
|
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(1)
|
(dollars in
thousands)
|
|
|
|
Homes
Included
|
|
Revenues
|
|
Expenses
|
|
NOI
|
Regions
|
|
|
Q42021
|
|
Q32021
|
|
%
Change
|
|
Q42021
|
|
Q32021
|
|
%
Change
|
|
Q42021
|
|
Q32021
|
|
%
Change
|
Denver, CO
|
|
992
|
|
$
5,817
|
|
$
5,565
|
|
4.5%
|
|
$
1,990
|
|
$
1,899
|
|
4.8%
|
|
$
3,827
|
|
$
3,666
|
|
4.4%
|
Minneapolis,
MN
|
|
2,355
|
|
11,709
|
|
11,361
|
|
3.1%
|
|
4,651
|
|
4,548
|
|
2.3%
|
|
7,058
|
|
6,813
|
|
3.6%
|
North
Dakota
|
|
2,421
|
|
8,155
|
|
8,183
|
|
(0.3)%
|
|
3,273
|
|
3,378
|
|
(3.1)%
|
|
4,882
|
|
4,805
|
|
1.6%
|
Omaha, NE
|
|
1,370
|
|
4,222
|
|
4,166
|
|
1.3%
|
|
1,888
|
|
1,933
|
|
(2.3)%
|
|
2,334
|
|
2,233
|
|
4.5%
|
Rochester,
MN
|
|
1,121
|
|
4,996
|
|
4,874
|
|
2.5%
|
|
2,174
|
|
1,924
|
|
13.0%
|
|
2,822
|
|
2,950
|
|
(4.3)%
|
St. Cloud,
MN
|
|
1,192
|
|
4,576
|
|
3,683
|
|
24.2%
|
|
1,820
|
|
1,750
|
|
4.0%
|
|
2,756
|
|
1,933
|
|
42.6%
|
Other Mountain
West
|
|
1,221
|
|
4,296
|
|
4,202
|
|
2.2%
|
|
1,479
|
|
1,694
|
|
(12.7)%
|
|
2,817
|
|
2,508
|
|
12.3%
|
Same-Store
Total
|
|
10,672
|
|
$
43,771
|
|
$
42,034
|
|
4.1%
|
|
$
17,275
|
|
$
17,126
|
|
0.9%
|
|
$
26,496
|
|
$
24,908
|
|
6.4%
|
|
|
|
% of
NOI
|
|
Weighted Average
Occupancy
|
|
Average
Monthly
Rental
Rate
|
|
Average
Monthly
Revenue per
Occupied Home
|
Regions
|
|
|
Q42021
|
|
Q32021
|
|
Growth
|
|
Q42021
|
|
Q32021
|
|
%
Change
|
|
Q42021
|
|
Q32021
|
|
%
Change
|
Denver, CO
|
|
14.5%
|
|
93.6%
|
|
94.5%
|
|
(1.0)%
|
|
$
1,855
|
|
$
1,779
|
|
4.3%
|
|
$
2,089
|
|
$
1,978
|
|
5.6%
|
Minneapolis,
MN
|
|
26.6%
|
|
92.8%
|
|
94.6%
|
|
(1.9)%
|
|
1,586
|
|
1,558
|
|
1.8%
|
|
1,786
|
|
1,699
|
|
5.1%
|
North
Dakota
|
|
18.4%
|
|
95.3%
|
|
94.2%
|
|
1.2%
|
|
1,107
|
|
1,107
|
|
—
|
|
1,178
|
|
1,196
|
|
(1.5)%
|
Omaha, NE
|
|
8.8%
|
|
93.9%
|
|
94.6%
|
|
(0.7)%
|
|
996
|
|
962
|
|
3.5%
|
|
1,094
|
|
1,072
|
|
2.1%
|
Rochester,
MN
|
|
10.7%
|
|
91.7%
|
|
93.2%
|
|
(1.6)%
|
|
1,515
|
|
1,459
|
|
3.8%
|
|
1,620
|
|
1,552
|
|
4.4%
|
St. Cloud,
MN
|
|
10.4%
|
|
91.9%
|
|
91.5%
|
|
0.4%
|
|
1,106
|
|
1,063
|
|
4.0%
|
|
1,392
|
|
1,125
|
|
23.7%
|
Other Mountain
West
|
|
10.6%
|
|
94.5%
|
|
96.6%
|
|
(2.2)%
|
|
1,133
|
|
1,082
|
|
4.7%
|
|
1,241
|
|
1,187
|
|
4.5%
|
Same-Store
Total
|
|
100.0%
|
|
93.4%
|
|
94.3%
|
|
(1.0)%
|
|
$
1,314
|
|
$
1,280
|
|
2.7%
|
|
$
1,463
|
|
$
1,392
|
|
5.1%
|
|
(1)
|
Refer to footnotes on
page S-13.
|
CENTERSPACE
|
SAME-STORE
YEAR-TO-DATE COMPARISONS(1)
|
(dollars in
thousands)
|
|
|
|
Homes
Included
|
|
Revenues
|
|
Expenses
|
|
NOI
|
Regions
|
|
|
2021
|
|
2020
|
|
%
Change
|
|
2021
|
|
2020
|
|
%
Change
|
|
2021
|
|
2020
|
|
%
Change
|
Denver, CO
|
|
992
|
|
$
22,276
|
|
$
21,568
|
|
3.3%
|
|
$
7,592
|
|
$
6,968
|
|
9.0%
|
|
$
14,684
|
|
$
14,600
|
|
0.6%
|
Minneapolis,
MN
|
|
2,355
|
|
44,073
|
|
42,628
|
|
3.4%
|
|
18,279
|
|
17,613
|
|
3.8%
|
|
25,794
|
|
25,015
|
|
3.1%
|
North
Dakota
|
|
2,421
|
|
32,365
|
|
31,342
|
|
3.3%
|
|
13,121
|
|
12,861
|
|
2.0%
|
|
19,244
|
|
18,481
|
|
4.1%
|
Omaha, NE
|
|
1,370
|
|
16,451
|
|
15,427
|
|
6.6%
|
|
7,468
|
|
6,846
|
|
9.1%
|
|
8,983
|
|
8,581
|
|
4.7%
|
Rochester,
MN
|
|
1,121
|
|
19,223
|
|
18,512
|
|
3.8%
|
|
8,021
|
|
7,782
|
|
3.1%
|
|
11,202
|
|
10,730
|
|
4.4%
|
St. Cloud,
MN
|
|
1,192
|
|
15,548
|
|
14,362
|
|
8.3%
|
|
6,788
|
|
6,485
|
|
4.7%
|
|
8,760
|
|
7,877
|
|
11.2%
|
Other Mountain
West
|
|
1,221
|
|
16,390
|
|
14,863
|
|
10.3%
|
|
6,037
|
|
5,649
|
|
6.9%
|
|
10,353
|
|
9,214
|
|
12.4%
|
Same-Store
Total
|
|
10,672
|
|
$
166,326
|
|
$
158,702
|
|
4.8%
|
|
$
67,306
|
|
$
64,204
|
|
4.8%
|
|
$
99,020
|
|
$
94,498
|
|
4.8%
|
|
|
|
% of
NOI
|
|
Weighted Average
Occupancy
|
|
Average
Monthly
Rental
Rate
|
|
Average
Monthly
Revenue per
Occupied Home
|
Regions
|
|
|
2021
|
|
2020
|
|
Growth
|
|
2021
|
|
2020
|
|
%
Change
|
|
2021
|
|
2020
|
|
%
Change
|
Denver, CO
|
|
14.9%
|
|
94.2%
|
|
93.8%
|
|
0.4%
|
|
$
1,769
|
|
$
1,761
|
|
0.5%
|
|
$
1,987
|
|
$
1,932
|
|
2.8%
|
Minneapolis,
MN
|
|
26.0%
|
|
93.6%
|
|
93.6%
|
|
—%
|
|
1,537
|
|
1,497
|
|
2.7%
|
|
1,666
|
|
1,611
|
|
3.4%
|
North
Dakota
|
|
19.4%
|
|
95.4%
|
|
95.9%
|
|
(0.5)%
|
|
1,088
|
|
1,049
|
|
3.7%
|
|
1,168
|
|
1,125
|
|
3.7%
|
Omaha, NE
|
|
9.1%
|
|
94.7%
|
|
94.2%
|
|
0.5%
|
|
949
|
|
905
|
|
4.8%
|
|
1,056
|
|
996
|
|
6.1%
|
Rochester,
MN
|
|
11.3%
|
|
93.7%
|
|
95.5%
|
|
(1.8)%
|
|
1,439
|
|
1,378
|
|
4.2%
|
|
1,526
|
|
1,438
|
|
5.6%
|
St. Cloud,
MN
|
|
8.8%
|
|
92.6%
|
|
94.4%
|
|
(1.8)%
|
|
1,036
|
|
958
|
|
8.2%
|
|
1,174
|
|
1,064
|
|
10.0%
|
Other Mountain
West
|
|
10.5%
|
|
96.7%
|
|
96.5%
|
|
0.2%
|
|
1,054
|
|
962
|
|
9.5%
|
|
1,157
|
|
1,052
|
|
10.1%
|
Same-Store
Total
|
|
100.0%
|
|
94.4%
|
|
94.7%
|
|
(0.3)%
|
|
$
1,260
|
|
$
1,210
|
|
4.1%
|
|
$
1,376
|
|
$
1,308
|
|
5.1%
|
|
(1)
|
Refer to footnotes on
page S-13.
|
CENTERSPACE
|
PORTFOLIO SUMMARY
(1)
|
|
|
|
Three Months
Ended
|
|
|
12/31/2021
|
|
9/30/2021
|
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
Number of Apartment
Homes at Period End
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
10,672
|
|
10,676
|
|
10,676
|
|
11,265
|
|
10,567
|
Non-Same-Store
|
|
3,769
|
|
3,599
|
|
903
|
|
903
|
|
1,343
|
All
Communities
|
|
14,441
|
|
14,275
|
|
11,579
|
|
12,168
|
|
11,910
|
|
|
|
|
|
|
|
|
|
|
|
Average Monthly
Rental Rate(2)
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
$
1,314
|
|
$
1,279
|
|
$
1,233
|
|
$
1,200
|
|
$
1,177
|
Non-Same-Store
|
|
1,225
|
|
1,506
|
|
1,617
|
|
1,584
|
|
1,599
|
All
Communities
|
|
$
1,291
|
|
$
1,293
|
|
$
1,263
|
|
$
1,229
|
|
$
1,225
|
|
|
|
|
|
|
|
|
|
|
|
Average Monthly
Revenue per Occupied Apartment Home(3)
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
$
1,463
|
|
$
1,392
|
|
$
1,333
|
|
$
1,302
|
|
$
1,282
|
Non-Same-Store
|
|
1,306
|
|
1,606
|
|
1,739
|
|
1,705
|
|
1,708
|
All
Communities
|
|
$
1,423
|
|
$
1,397
|
|
$
1,365
|
|
$
1,332
|
|
$
1,330
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Occupancy(4)
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
93.4%
|
|
94.3%
|
|
94.9%
|
|
94.9%
|
|
95.0%
|
Non-Same-Store
|
|
94.7%
|
|
95.1%
|
|
94.2%
|
|
91.8%
|
|
92.3%
|
All
Communities
|
|
93.7%
|
|
94.4%
|
|
94.8%
|
|
94.6%
|
|
94.6%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses as
a % of Scheduled Rent
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
39.5%
|
|
41.8%
|
|
41.9%
|
|
42.9%
|
|
41.2%
|
Non-Same-Store
|
|
44.1%
|
|
39.9%
|
|
32.9%
|
|
34.9%
|
|
35.3%
|
All
Communities
|
|
40.6%
|
|
41.6%
|
|
41.0%
|
|
42.1%
|
|
40.3%
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
|
|
|
|
|
|
|
|
|
|
Total Capital
Expenditures per Apartment Home – Same-Store
|
|
$
369
|
|
$
255
|
|
$
159
|
|
$
131
|
|
$
326
|
|
|
|
|
|
|
(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 rent 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 apartment
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 apartment 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 calculation of
weighted average occupancy may not be comparable to that disclosed
by other real estate companies.
|
CENTERSPACE
|
CAPITAL
EXPENDITURES
|
(dollars in
thousands, except per home amounts)
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
12/31/2021
|
|
12/31/2020
|
|
|
12/31/2021
|
|
12/31/2020
|
Total Same-Store
Apartment Homes
|
|
10,672
|
|
10,672
|
|
|
10,672
|
|
10,672
|
|
|
|
|
|
|
|
|
|
|
Building -
Exterior
|
|
$
997
|
|
$
1,561
|
|
|
$
3,131
|
|
$
3,053
|
Building -
Interior
|
|
1,325
|
|
29
|
|
|
1,560
|
|
230
|
Mechanical,
Electrical, & Plumbing
|
|
274
|
|
427
|
|
|
826
|
|
1,900
|
Furniture &
Equipment
|
|
82
|
|
118
|
|
|
163
|
|
343
|
Landscaping &
Grounds
|
|
347
|
|
267
|
|
|
712
|
|
1,446
|
Turnover
|
|
909
|
|
388
|
|
|
3,281
|
|
2,940
|
Capital
Expenditures - Same-Store
|
|
$
3,934
|
|
$
2,790
|
|
|
$
9,673
|
|
$
9,912
|
Capital
Expenditures per Apartment Home - Same-Store
|
|
$
369
|
|
$
261
|
|
|
$
906
|
|
$
929
|
|
|
|
|
|
|
|
|
|
|
Value Add
|
|
$
4,356
|
|
$
3,483
|
|
|
$
18,366
|
|
$
13,762
|
Total Capital Spend
- Same-Store
|
|
$
8,290
|
|
$
6,273
|
|
|
$
28,039
|
|
$
23,674
|
Total Capital Spend
per Apartment Home - Same Store
|
|
$
777
|
|
$
588
|
|
|
$
2,627
|
|
$
2,218
|
|
|
|
|
|
|
|
|
|
|
All Properties -
Weighted Average Homes
|
|
14,326
|
|
11,322
|
|
|
12,489
|
|
10,982
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
|
$
4,337
|
|
$
2,822
|
|
|
$
10,278
|
|
$
9,954
|
Capital
Expenditures per Apartment Home
|
|
$
303
|
|
$
249
|
|
|
$
823
|
|
$
906
|
|
|
|
|
|
|
|
|
|
|
Value
Add
|
|
4,356
|
|
3,483
|
|
|
18,378
|
|
13,762
|
Acquisition
Capital
|
|
1,523
|
|
$
302
|
|
|
2,818
|
|
1,567
|
Total Capital
Spend
|
|
$
10,216
|
|
$
6,607
|
|
|
$
31,474
|
|
$
25,283
|
Total Capital
Spend per Apartment Home
|
|
$
713
|
|
$
584
|
|
|
$
2,520
|
|
$
2,302
|
|
|
|
|
|
|
|
|
|
|
Value Add Capital
Expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interior -
Units
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
$
1,941
|
|
$
1,171
|
|
|
$
11,340
|
|
$
5,752
|
Non-Same-Store
|
|
—
|
|
—
|
|
|
8
|
|
—
|
Total
Interior Units
|
|
$
1,941
|
|
$
1,171
|
|
|
$
11,348
|
|
$
5,752
|
|
|
|
|
|
|
|
|
|
|
Common Areas and
Exteriors
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
$
2,415
|
|
$
2,312
|
|
|
$
7,027
|
|
$
8,009
|
Non-Same-Store
|
|
—
|
|
—
|
|
|
3
|
|
—
|
Total Common
Areas and Exteriors
|
|
$
2,415
|
|
$
2,312
|
|
|
$
7,030
|
|
$
8,009
|
|
|
|
|
|
|
|
|
|
|
Total Value-Add Capital
Expenditures
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
$
4,356
|
|
$
3,483
|
|
|
$
18,367
|
|
$
13,761
|
Non-Same-Store
|
|
—
|
|
—
|
|
|
11
|
|
—
|
Total
Portfolio Value-Add
|
|
$
4,356
|
|
$
3,483
|
|
|
$
18,378
|
|
$
13,761
|
CENTERSPACE
|
2022 Financial
Outlook
|
(in thousands,
except per share amounts)
|
|
Centerspace is
providing guidance for 2022.
|
|
|
12 Months
Ended
|
|
2022 Full-Year
Guidance Range
|
|
December 31,
2021
|
|
Low
|
|
High
|
|
Actual
|
|
Amount
|
|
Amount
|
Same-store growth
(1)
|
|
|
|
|
|
Revenue
|
$
179,348
|
|
6.00%
|
|
8.00%
|
|
|
|
|
|
|
Controllable
expenses
|
$
44,693
|
|
3.75%
|
|
5.25%
|
Non-controllable
expenses
|
$
27,317
|
|
3.00%
|
|
4.50%
|
Total
Expenses
|
$
72,010
|
|
3.50%
|
|
5.00%
|
Same-store NOI
(1)
|
$
107,338
|
|
8.00%
|
|
10.00%
|
|
|
|
|
|
|
Components of
NOI
|
|
|
|
|
|
Same-store NOI
(1)
|
$
107,338
|
|
$
115,600
|
|
$
118,100
|
Non-same-store NOI
(1)
|
$
9,190
|
|
$
30,800
|
|
$
31,300
|
Other Commercial
NOI
|
$
1,475
|
|
$
1,300
|
|
$
1,400
|
Other Sold
NOI
|
$
1,845
|
|
—
|
|
—
|
|
|
|
|
|
|
Total NOI
|
$
119,848
|
|
$
147,700
|
|
$
150,800
|
|
|
|
|
|
|
Accretion from
investments and capital market activity, excluding impact from
change in share count
|
$
—
|
|
—
|
|
—
|
|
|
|
|
|
|
Interest
expense
|
$
(29,078)
|
|
(32,200)
|
|
(31,700)
|
Preferred
dividends
|
$
(6,428)
|
|
(6,400)
|
|
(6,400)
|
|
|
|
|
|
|
Recurring income
and expenses
|
|
|
|
|
|
Interest and other
income (loss)
|
$
(3,008)
|
|
660
|
|
700
|
General and
administrative and property management
|
$
(24,965)
|
|
(27,800)
|
|
(27,100)
|
Casualty
losses
|
$
(344)
|
|
(2,000)
|
|
(1,700)
|
Non-real estate
depreciation and amortization
|
$
(366)
|
|
(430)
|
|
(390)
|
Non-controlling
interest
|
$
(94)
|
|
(70)
|
|
(90)
|
Total recurring income
and expenses
|
$
(28,777)
|
|
(29,640)
|
|
(28,580)
|
|
|
|
|
|
|
FFO
|
$
55,565
|
|
$
79,460
|
|
$
84,120
|
FFO per diluted
share
|
$
3.54
|
|
$
4.25
|
|
$
4.50
|
|
|
|
|
|
|
Non-core income
and expenses
|
|
|
|
|
|
Casualty
loss
|
$
—
|
|
$
600
|
|
$
500
|
Technology
implementation costs
|
2,020
|
|
990
|
|
890
|
Interest rate swap
termination, amortization, and mark-to-market
|
4,942
|
|
—
|
|
—
|
Other miscellaneous
items
|
198
|
|
—
|
|
—
|
Total non-core income
and expenses
|
$
7,160
|
|
$
1,590
|
|
$
1,390
|
|
|
|
|
|
|
Core
FFO
|
$
62,725
|
|
$
81,050
|
|
$
85,510
|
Core FFO per
diluted share
|
$
3.99
|
|
$
4.33
|
|
$
4.57
|
|
|
|
|
|
|
EPS -
Diluted
|
$
(0.47)
|
|
$
(0.41)
|
|
$
(0.16)
|
Weighted average
shares outstanding - diluted
|
15,704
|
|
18,700
|
|
18,700
|
(1)
|
Amounts for the year
ended December 31, 2021 reflect the 2022 same-store
pool.
|
Additional assumptions:
- Same-store capital expenditures of $925 per home to $975 per home
- Value-add expenditures of $21.0
million to $24.0 million
- Investments of $114.5 million due
to the January 2022 acquisitions of
four communities in the Minneapolis,
Minnesota region
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.
|
|
|
Outlook
|
|
12 Months
Ended
|
|
|
12 Months
Ended
|
|
December 31,
2021
|
|
|
December 31,
2022
|
|
Amount
|
|
|
Low
|
|
High
|
Net income (loss)
available to common shareholders
|
$
(6,457)
|
|
|
$
282
|
|
$
4,922
|
Noncontrolling
interests - Operating Partnership and Series E preferred
units
|
(2,806)
|
|
|
(7,885)
|
|
(7,885)
|
Depreciation and
amortization
|
92,165
|
|
|
86,923
|
|
86,923
|
Less depreciation -
non real estate
|
(366)
|
|
|
(430)
|
|
(390)
|
Less depreciation -
partially owned entities
|
(93)
|
|
|
(70)
|
|
(90)
|
(Gain) loss on sale
of real estate
|
(27,518)
|
|
|
—
|
|
—
|
Dividends to
preferred unitholders
|
$
640
|
|
|
$
640
|
|
$
640
|
FFO applicable to
common shares and Units
|
$
55,565
|
|
|
$
79,460
|
|
$
84,120
|
|
|
|
|
|
|
|
Adjustments to Core
FFO:
|
|
|
|
|
|
|
Casualty loss write
off
|
—
|
|
|
600
|
|
500
|
Loss on extinguishment
of debt
|
535
|
|
|
—
|
|
—
|
Technology
implementation costs
|
2,020
|
|
|
990
|
|
890
|
Commercial lease
termination proceeds
|
(450)
|
|
|
—
|
|
—
|
Acquisition related
costs
|
230
|
|
|
—
|
|
—
|
Interest rate swap
termination, amortization, and mark-to-market
|
4,942
|
|
|
—
|
|
—
|
Other miscellaneous
items
|
(117)
|
|
|
—
|
|
—
|
Core FFO applicable
to common shares and Units
|
$
62,725
|
|
|
$
81,050
|
|
$
85,510
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
$
(0.47)
|
|
|
$
(0.41)
|
|
$
(0.16)
|
FFO per share -
diluted
|
$
3.54
|
|
|
$
4.25
|
|
$
4.50
|
Core FFO per share -
diluted
|
$
3.99
|
|
|
$
4.33
|
|
$
4.57
|
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.
|
|
|
Outlook
|
|
12 Months
Ended
|
|
12 Months
Ended
|
|
December 31,
2021
|
|
December 31,
2022
|
|
Actual
|
|
Low
|
|
High
|
Operating
income
|
$
29,892
|
|
$
30,977
|
|
$
35,077
|
Adjustments:
|
|
|
|
|
|
General and
administrative and property management expenses
|
24,965
|
|
27,800
|
|
27,100
|
Casualty
loss
|
344
|
|
2,000
|
|
1,700
|
Depreciation and
amortization
|
92,165
|
|
86,923
|
|
86,923
|
(Gain) loss on sale of
real estate and other assets
|
(27,518)
|
|
—
|
|
—
|
Net operating
income
|
$
119,848
|
|
$
147,700
|
|
$
150,800
|
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SOURCE Centerspace