Centerspace Q2 Earnings Call Highlights

Centerspace NYSE: CSR said its second-quarter operating results were in line with expectations as the apartment real estate investment trust continued a portfolio repositioning and deleveraging program that has included sales or pending sales of 20 communities over the past 14 months. President and CEO Anne Olson said the transactions, totaling approximately $530 million, are intended to increase the company’s exposure to institutional markets, eliminate tertiary-market exposure and reduce leverage. Centerspace has exited Rapid City, South Dakota, and expects to exit Bismarck, North Dakota, through a pending transaction expected to close in August.

“Our goal is a higher quality portfolio with stronger growth potential, lower Net Debt to EBITDA, and greater financial flexibility,” Olson said.

Centerspace reported second-quarter Core FFO of $1.27 per diluted share. Same-store net operating income increased 30 basis points from the second quarter of 2025, as relatively flat revenue and expense performance was supported by cost controls. The company updated its same-store reporting pool to exclude 14 communities sold or held for sale as of quarter-end. Olson said the revised pool is more heavily weighted toward Denver and Minneapolis, and is therefore not comparable with first-quarter same-store results or prior guidance.

Same-store revenue was flat year over year, primarily because of concessions in Denver, while expenses declined 10 basis points. Olson said lower repair-and-maintenance costs, including turn expenses, accounted for most of the savings. Resident retention was 61.3% during the quarter. Renewal rent growth was 3.4%. New-lease rent growth was negative 60 basis points, an improvement of 190 basis points from the first quarter. Blended lease growth was 1.8%, a level that held through July. Olson said Denver remains softer as new supply is absorbed, though the company’s July blended lease spreads in the market turned positive. Outside the Mountain West, all of Centerspace’s markets posted blended lease growth above 3% in June. Minneapolis posted blended rent growth of 3.4% and retention of 65%. Olson said the market has absorbed elevated supply and now faces a muted delivery outlook. She characterized Minneapolis performance as in line with, or slightly better than, company expectations.

Senior Vice President of Investments in Capital Markets Grant Campbell detailed a series of asset sales completed during and after the quarter. On June 29, Centerspace sold Civic Lofts, a smaller Denver community, for $30 million. Campbell said the sale represented a mid-3% capitalization rate on trailing 12-month financials, including unstabilized vacancy and concessions, and a low-5% rate based on stabilized operations. On July 9, the company closed the sale of five Rapid City communities for $66 million, co...