Centerspace (CSR) Q4 2023 earnings summary

Executive summary

• FY23 net income was $2.32 per diluted share, versus a $1.35 loss in FY22; Core FFO rose 7.9% to $4.78 per diluted share.

• Same-store NOI grew 9.0% on 7.2% revenue growth; the portfolio ended the year at 94.9% weighted average occupancy.

• Portfolio reshaping included a 303-home Colorado acquisition and sales of 13 communities; a quarterly common distribution increase to $0.75 was announced.

Financial highlights

• FY23 revenue was $261.3M, up from $256.7M in FY22; operating income was $84.5M versus $13.9M.

• Net income attributable to common shareholders was $34.9M, compared with a $20.5M loss in FY22; diluted EPS was $2.32 versus a $1.35 loss.

• FY23 FFO was $4.27 per diluted share, versus $4.32 in FY22; Core FFO was $4.78, up 7.9% from $4.43.

• Q4 same-store revenue rose 3.9% YoY and NOI rose 7.6%; expenses declined 1.2%.

Outlook and guidance

• FY24 diluted EPS guidance is a loss of $0.99-$1.31; FFO is $4.54-$4.80 and Core FFO is $4.68-$4.92 per diluted share.

• FY24 same-store revenue growth guidance is 3.0%-5.0%; total expense growth is 5.5%-7.0%, with NOI growth of 1.5%-3.5%.

• Assumptions include same-store recurring capital expenditures of $1,075-$1,150 per home, value-add spending of $25M-$27M, and potential disposition proceeds of $18.8M-$19.0M.