Centerspace Reports Third Quarter 2023 Financial Results and Raises Mid-Point for 2023 Core FFO Guidance
- Net income increased to $0.41 per diluted share for Q3 2023, compared to a net loss of $0.14 per diluted share for Q3 2022.
- Core FFO per diluted share increased 4.3% to $1.20 for Q3 2023 compared to Q3 2022.
- Same-store revenues increased by 5.7% for Q3 2023 compared to Q3 2022, driving a 5.4% increase in NOI compared to the same period of the prior year.
- Centerspace narrowed its 2023 financial outlook ranges for net income per diluted share and FFO per diluted share and raised the mid-point for Core FFO per diluted share.
- None.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
Per Common Share | 2023 | 2022 | 2023 | 2022 | ||||
Net income (loss) - diluted | $ 0.41 | $ (0.14) | $ 2.96 | $ (1.11) | ||||
FFO - diluted(1) | $ 1.15 | $ 1.13 | $ 3.15 | $ 3.16 | ||||
Core FFO - diluted(1) | $ 1.20 | $ 1.15 | $ 3.56 | $ 3.25 | ||||
Year-Over-Year Comparison | Sequential Comparison | YTD Comparison | ||||
Same-Store Results(2) | Q3 2023 vs. Q3 2022 | Q3 2023 vs. Q2 2023 | 2023 vs. 2022 | |||
Revenues | 5.7 % | 0.6 % | 8.3 % | |||
Expenses | 6.1 % | 7.4 % | 6.6 % | |||
NOI(1) | 5.4 % | (3.7) % | 9.5 % |
Three months ended | Nine months ended | |||||||||
Same-Store Results(2) | September 30, | June 30, | September 30, | September 30, | September 30, | |||||
Weighted Average Occupancy | 94.7 % | 95.2 % | 94.5 % | 94.9 % | 94.5 % | |||||
(1) | NOI, FFO, Core FFO, and same-store results 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 supplemental and financial operating data within. |
(2) | Same-store results are updated for disposition activity. Refer to "Non-GAAP Financial Measures and Reconciliations" in supplemental and financial operating data within. |
Highlights
- During the three months ended September 30, 2023, Centerspace successfully executed the sale of four non-core apartment communities and associated commercial space in
Minot, North Dakota for an aggregate sales price of$82.5 million $11.3 million - Net income increased to
$0.41 $0.14 - Core FFO per diluted share increased
4.3% to$1.20 $1.15 - Same-store revenues increased by
5.7% for the third quarter of 2023 compared to the third quarter of 2022, driving a5.4% increase in NOI compared to the same period of the prior year; and - Narrowed the 2023 financial outlook ranges for net income per diluted share and FFO per diluted share and raised the mid-point for Core FFO per diluted share. Refer to page S-18 in the supplemental and financial operating date within for additional detail.
Balance Sheet
At the end of the third quarter, Centerspace had
As of September 30, 2023, the Company had no outstanding variable rate debt and only
Subsequent Events
On October 11, 2023, the Company acquired Lake Vista Apartment Homes in
Revised 2023 Financial Outlook
Centerspace revised its 2023 financial outlook. For additional information, see S-18 of the Supplemental Financial and Operating Data for the quarter ended September 30, 2023 included at the end of this release. These ranges should be considered in their entirety. The table below reflects the revised outlook.
Previous Outlook for 2023 | Updated Outlook for 2023 | |||
Low | High | Low | High | |
Net income per Share – diluted | $ 2.84 | $ 3.64 | $ 2.90 | $ 3.56 |
Same-Store Revenue | 6.50 % | 8.00 % | 7.00 % | 7.50 % |
Same-Store Expenses | 4.00 % | 5.25 % | 4.00 % | 4.50 % |
Same-Store NOI | 8.50 % | 10.00 % | 9.00 % | 9.50 % |
FFO per Share – diluted | $ 4.14 | $ 4.35 | $ 4.20 | $ 4.27 |
Core FFO per Share – diluted | $ 4.55 | $ 4.75 | $ 4.63 | $ 4.71 |
Additional assumptions:
- Same-store capital expenditures of
$1,000 $1,050 - Value-add expenditures of
$30.0 million $31.5 million - Acquisitions of
$94.5 million - Proceeds from dispositions of
$226.8 million
Earnings Call
Live webcast and replay: https://ir.centerspacehomes.com | ||||
Live Conference Call | Conference Call Replay | |||
Tuesday, October 31, 2023, at 10:00 AM ET | Replay available until November 14, 2023 | |||
1-833-470-1428 | 1-929-458-6194 | |||
International Toll Free Number | 1-929-526-1599 | International Toll Free Number | 1-929-458-6194 | |
Canada Toll Free Number | 1-833-950-0062 | Canada Toll Free Number | 1-226-828-7575 | |
Conference Number | 775561 | Conference Number | 468138 | |
Supplemental Information
Supplemental Operating and Financial Data for the quarter ended September 30, 2023 included herein ("Supplemental Information"), is available in the Investors section on Centerspace's website at 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 September 30, 2023, Centerspace owned interests in 71 apartment communities consisting of 12,785 apartment homes located in
Forward-Looking Statements
Certain statements in this press release and the accompanying Supplemental Operating and Financial Data are based on the company's current expectations and assumptions, and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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. 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, uncertainties, and other factors that might cause such differences include, but are not limited to those risks and uncertainties detailed from time to time in Centerspace's 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 its Annual Report on Form 10-K for the year ended December 31, 2022, in its subsequent quarterly reports on Form 10-Q, and in other public reports. 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: 701-837-7104
Email: IR@centerspacehomes.com
Marketing & Media
Kelly Weber
Phone: 701-837-7104
Email: kweber@centerspacehomes.com
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SOURCE Centerspace
FAQ
What are the financial and operating results announced by Centerspace?
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