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Sep 30, 2023
Centerspace Q3 2023 Earnings Report
Centerspace reported results for the third quarter of 2023, with core FFO guidance raised.
Key Takeaways
Centerspace reported increased net income and core FFO per diluted share for Q3 2023 compared to Q3 2022. Same-store revenues also increased, driving NOI growth. The company successfully executed the sale of four non-core apartment communities and revised its 2023 financial outlook.
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, resulting in a gain on sale of $11.3 million.
Net income increased to $0.41 per diluted share for the third quarter of 2023, compared to Net loss of $0.14 per diluted share for the same period of 2022.
Core FFO per diluted share increased 4.3% to $1.20 for the three months ended September 30, 2023, compared to $1.15 for the three months ended September 30, 2022.
Same-store revenues increased by 5.7% for the third quarter of 2023 compared to the third quarter of 2022, driving a 5.4% increase in NOI compared to the same period of the prior year.
Forward Guidance
Centerspace revised its 2023 financial outlook, narrowing the ranges for net income per diluted share and FFO per diluted share, and raising the mid-point for Core FFO per diluted share.
Positive Outlook
- Same-store Revenue: Increased from 6.50%-8.00% to 7.00%-7.50%
- Same-store Expenses: Maintained at 4.00%-4.50%
- Same-store NOI: Increased from 8.50%-10.00% to 9.00%-9.50%
- FFO per Share – diluted: Increased from $4.14-$4.35 to $4.20-$4.27
- Core FFO per Share – diluted: Increased from $4.55-$4.75 to $4.63-$4.71
Challenges Ahead
- Net income per Share – diluted: Decreased from $2.84-$3.64 to $2.90-$3.56
- Same-store capital expenditures of $1,000 per home to $1,050 per home
- Value-add expenditures of $30.0 million to $31.5 million
- Acquisitions of $94.5 million
Historical Earnings Impact
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Avg. Return Before/After Earnings
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