Centerspace Reports First Quarter 2025 Financial & Operating Results and Reaffirms 2025 Core FFO per Share Guidance

Rhea-AI Summary

Centerspace (NYSE: CSR) reported its Q1 2025 financial results with mixed performance. Revenue increased by 4.0% to $67.1 million compared to Q1 2024, with same-store revenues up 3.5%. The company posted a net loss of $0.22 per diluted share, an improvement from the $0.37 loss in Q1 2024. Core FFO decreased slightly to $1.21 per diluted share, down 1.6% year-over-year, primarily due to increased property taxes. Same-store NOI grew 2.1%, while weighted average occupancy improved to 95.8%. The company maintained strong liquidity of $223.2 million and reaffirmed its 2025 guidance, projecting Core FFO per share of $4.86-$5.10. The outlook includes same-store revenue growth of 1.50-3.50% and NOI growth of 1.25-3.25%.

Positive

• Revenue increased 4.0% YoY to $67.1 million
• Same-store revenues grew 3.5% YoY
• Net loss improved from $0.37 to $0.22 per diluted share YoY
• Weighted average occupancy improved to 95.8% from 94.6% YoY
• Strong liquidity position of $223.2 million

Negative

• Core FFO decreased 1.6% to $1.21 per diluted share YoY
• Property expenses increased 5.8% YoY
• New lease rate growth was negative at -1.1%
• Resident retention rate declined to 49.2% from 53.4% YoY

Insights

Real Estate Investment Analyst

Centerspace delivers mixed Q1 2025 results with 3.5% same-store revenue growth and slight Core FFO decline, while maintaining full-year guidance.

Centerspace's Q1 2025 results paint a picture of stable performance with some mixed signals. The company reported $67.1 million in revenue, representing a 4.0% increase year-over-year, while same-store revenues grew by 3.5%. This translated into same-store NOI growth of 2.1%, demonstrating operational resilience despite expense pressure.

The headline figure shows Core FFO declined by 1.6% to $1.21 per diluted share compared to $1.23 in Q1 2024. However, this decline has a specific explanation - the company experienced a $0.06 per share increase in same-store property taxes after benefiting from one-time tax refunds in the prior year. Without this non-recurring effect, the underlying FFO performance would appear more favorable.

Operational metrics reveal important trends. Occupancy improved to 95.8% from 94.6% a year ago, indicating healthy demand. However, new lease rates declined by 1.1%, while renewal rates increased by 3.5%, resulting in blended lease rate growth of 0.7% - lower than the 1.4% achieved in Q1 2024. The sequential improvement from 0.3% in Q4 2024 to 0.7% in Q1 2025 suggests improving pricing power.

Worth monitoring is the decline in resident retention from 53.4% to 49.2%, which typically increases turnover costs. Same-store expenses increased by 5.8%, outpacing revenue growth and limiting NOI margin expansion.

From a financial position standpoint, Centerspace maintains solid liquidity with $223.2 million available between cash and credit facilities. Most significantly, management reaffirmed its 2025 guidance of $4.86-$5.10 for Core FFO per share, indicating confidence that Q1 performance aligns with their full-year expectations despite the modest challenges.

MINNEAPOLIS, May 1, 2025 /PRNewswire/ -- Centerspace (NYSE: CSR) announced today its financial and operating results for the three months ended March 31, 2025. The tables below show Net Loss, Funds from Operations ("FFO")¹, and Core FFO¹, all on a per diluted share basis, for the three months ended March 31, 2025; Same-Store Revenues, Expenses, and Net Operating Income ("NOI")¹ over comparable periods; and Same-Store Weighted Average Occupancy, Lease Rate Growth, and Resident Retention for each of the three months ended March 31, 2025, December 31, 2024, and March 31, 2024.

		Three Months Ended March 31,
Per Common Share		2025		2024
Net loss - diluted		$                        (0.22)		$                        (0.37)
FFO - diluted(1)		$                          1.17		$                          1.16
Core FFO - diluted(1)		$                          1.21		$                          1.23

 

		Year-Over-Year Comparison		Sequential Comparison
Same-Store Results(2)		Q1 2025 vs. Q1 2024		Q1 2025 vs. Q4 2024
Revenues		3.5 %		0.9 %
Expenses		5.8 %		1.1 %
Net Operating Income ("NOI")(1)		2.1 %		0.8 %

 

		Three months ended
Same-Store Results(2)		March 31, 2025		December 31, 2024		March 31, 2024
Weighted Average Occupancy		95.8 %		95.6 %		94.6 %
New Lease Rate Growth		(1.1) %		(3.5) %		— %
Renewal Lease Rate Growth		3.5 %		3.1 %		3.2 %
Blended Lease Rate Growth (3)		0.7 %		0.3 %		1.4 %
Retention Rate		49.2 %		54.7 %		53.4 %

(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-GAAP Financial Measures and Reconciliations" and "Non-GAAP Financial Measures and Other Terms" in the Supplemental Financial and Operating Data below.
(2)	Same-store results are updated for annual composition change including acquisition, disposition, and repositioning activity. Refer to "Non-GAAP Financial Measures and Reconciliations" in Supplemental and Financial Operating Data within.
(3)	Blended lease rate growth is weighted by lease count.

Overview of the First Quarter

• Revenue for the first quarter of 2025 increased by $2.6 million or 4.0% to $67.1 million, compared to $64.5 million for the first quarter of 2024;
  
  
• Same-store revenues increased by 3.5% for the first quarter of 2025 compared to the first quarter of 2024, driving a 2.1% increase in same-store NOI compared to the same period of the prior year
  
  
• Net loss was $0.22 per diluted share for the first quarter of 2025, compared to net loss of $0.37 per diluted share for the same period of the prior year; and
  
  
• Core FFO per diluted share decreased 1.6% to $1.21 for the three months ended March 31, 2025, compared to $1.23 for the three months ended March 31, 2024, driven by a $0.06 per share increase in same-store property taxes in the first quarter of 2025 after experiencing one-time property tax refunds in the first quarter of 2024.

Balance Sheet

At the end of the first quarter, Centerspace had $223.2 million of total liquidity on its balance sheet, consisting of $211.3 million available under the lines of credit and cash and cash equivalents of $11.9 million.

Updated 2025 Financial Outlook

Centerspace updated its 2025 financial outlook. For additional information, see S-17 of the Supplemental Financial and Operating Data for the quarter ended March 31, 2025 included at the end of this release. These ranges should be considered in their entirety. The table below reflects the updated outlook.

	Previous Outlook for 2025		Updated Outlook for 2025
	Low	High	Low	High
Net loss per Share – diluted	$(0.71)	$(0.45)	$(0.71)	$(0.45)
Same-Store Revenue	1.50 %	3.50 %	1.50 %	3.50 %
Same-Store Expenses	2.00 %	4.00 %	2.00 %	4.00 %
Same-Store NOI	1.25 %	3.25 %	1.25 %	3.25 %
FFO per Share – diluted	$4.73	$4.97	$4.73	$4.97
Core FFO per Share – diluted	$4.86	$5.10	$4.86	$5.10

Additional assumptions:

• Same-store recurring capital expenditures of $1,125 per home to $1,175 per home
• Value-add expenditures of $16.0 million to $18.0 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 "2025 Financial Outlook" in the Supplemental Financial and Operating Data within.

Upcoming Events

Centerspace is scheduled to participate in the following conferences:

• Wells Fargo Real Estate Securities Conference, May 6-7, 2025;
• BMO North American Real Estate Conference, May 13, 2025; and
• National Association of Real Estate Investment Trusts ("Nareit") REITweek: 2025 Investor Conference, June 2-4, 2025.

Earnings Call

Live webcast and replay:  https://ir.centerspacehomes.com
Live Conference Call			Conference Call Replay
Friday, May 2, 2025, at 1:00 PM ET			Replay available until May 9, 2025
USA Toll Free	1-833-470-1428		USA Toll Free	1-866-813-9403
International	1-404-975-4839		International	1-929-458-6194
Canada Toll Free	1-833-950-0062
Access Code	591644		Access Code	484784

Supplemental Information

Supplemental Operating and Financial Data for the quarter ended March 31, 2025 included herein ("Supplemental Information"), is available in the Investors section on Centerspace's website at https://www.centerspacehomes.com or by calling Investor Relations at 952-401-6600. 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 March 31, 2025, Centerspace owned 71 apartment communities consisting of 13,012 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a top workplace for the fifth consecutive year in 2024 by the Minneapolis Star Tribune. For more information, please visit www.centerspacehomes.com.

Forward-Looking Statements

Certain statements in this press release and the Supplemental Operating and Financial Data 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. 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 Securities and Exchange Commission ("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 for the year ended December 31, 2024, in its subsequent 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
Josh Klaetsch
Phone: 952-401-6600
Email: IR@centerspacehomes.com

Marketing & Media
Kelly Weber
Phone: 952-401-6600
Email: kweber@centerspacehomes.com

 

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SOURCE Centerspace

FAQ

What were Centerspace's (CSR) Q1 2025 earnings results?

Centerspace reported Q1 2025 revenue of $67.1 million (+4.0% YoY), a net loss of $0.22 per share, and Core FFO of $1.21 per diluted share (-1.6% YoY).

What is Centerspace's (CSR) guidance for 2025?

Centerspace reaffirmed its 2025 guidance with Core FFO per share of $4.86-$5.10, same-store revenue growth of 1.50-3.50%, and NOI growth of 1.25-3.25%.

How did Centerspace's (CSR) occupancy rates perform in Q1 2025?

Centerspace's weighted average occupancy improved to 95.8% in Q1 2025, up from 94.6% in Q1 2024 and 95.6% in Q4 2024.

What was Centerspace's (CSR) lease rate growth in Q1 2025?

Centerspace reported blended lease rate growth of 0.7%, with new lease rates declining -1.1% and renewal rates increasing 3.5%.

What is Centerspace's (CSR) current liquidity position?

Centerspace had total liquidity of $223.2 million, consisting of $211.3 million available under credit lines and $11.9 million in cash and equivalents.