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1. Company Snapshot

1.a. Company Description

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 June 30, 2021, Centerspace owned 62 apartment communities consisting of 11,579 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota.Centerspace was named a Top Workplace for 2021 by the Minneapolis Star Tribune.


For more information, please visit www.centerspacehomes.com.

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1.b. Last Insights on CSR

Centerspace's recent performance has been driven by several positive factors. The company's Q3 2025 earnings call and financial results, announced on November 3, 2025, demonstrated strong occupancy rates of 96.1% and stable Core FFO. Additionally, the company has a solid dividend yield of 5.1% and a new $100M buyback program, which will likely enhance shareholder value. The Board of Trustees is also reviewing strategic alternatives, including a potential sale or merger, which could unlock value for shareholders. Furthermore, the company's financial management has been prudent, with a focus on maintaining a stable financial outlook.

1.c. Company Highlights

2. Centerspace's Q3 2025 Earnings: A Closer Look at Financial Performance and Growth Prospects

Centerspace reported Core FFO of $1.19 per diluted share for Q3 2025, slightly below estimates of $1.22. The company's same-store revenue growth was 2.4%, driven by solid increases in revenue, while same-store expenses decreased by 80 basis points year-over-year, resulting in 4.5% year-over-year growth in NOI within its same-store portfolio. Centerspace's President and CEO, Anne Olson, cited the stability of its Midwest markets and the strength of its team as key factors contributing to the company's performance.

Publication Date: Nov -26

📋 Highlights
  • Same-store NOI Growth:: 4.5% year-over-year driven by 2.4% revenue growth and 80 bps expense reduction in Q3 2025.
  • Core FFO Adjustment:: Q3 2025 Core FFO of $1.19/share, with 2025 guidance lowered to $4.88-$4.96/share due to transaction costs.
  • Capital Recycling Proceeds:: $212.1M raised from selling 7 Minneapolis communities and St. Cloud portfolio, improving net debt/EBITDA to ~7x.
  • Expense Efficiency:: 4% same-store expense decline in Q3 2025, with pro forma debt at 3.6% average rate and 7.2-year maturity.
  • Share Repurchase Activity:: 63,000 shares repurchased at $54.86/share, reflecting confidence in undervalued stock.

Financial Highlights

The company's NAREIT FFO increased $0.02, while Core FFO decreased $0.02 due to a G&A spike in Q3. Centerspace's earnings were driven by solid increases in revenue and excellent execution on expenses, with a 4% reduction in same-store expenses year-over-year. The company's guidance for 2025 assumes same-store NOI growth of 3%-3.5%, with same-store revenue growth of 2%-2.5% and same-store expense growth of 75 basis points.

Capital Allocation and Debt Profile

Centerspace has undertaken capital recycling activities, including the sale of 7 communities in Minneapolis for $88.1 million and the sale of its St. Cloud, Minnesota portfolio for $124 million, improving its debt profile with an expected net debt to EBITDA of around 7x by year-end. The company's pro forma debt profile has an average rate of 3.6% and average time to maturity of 7.2 years. Centerspace's $93 million of secured debt matures in the first half of 2026, and it has multiple options for refinancing.

Valuation and Growth Prospects

With a P/E Ratio of -55.19 and a P/B Ratio of 1.57, Centerspace's valuation appears to be reasonable. Analysts estimate next year's revenue growth at 3.1%. The company's guidance for 2026 assumes low single-digit rent growth, with a favorable renewal cycle. Centerspace is confident in its position, particularly in Denver, which provides significant exposure, and is expected to continue outperforming in North Dakota and Minneapolis.

Market Performance and Outlook

North Dakota is expected to continue outperforming, while Minneapolis will be close behind with strong demand. Denver and Minneapolis are expected to outpace other markets by 2027. The company has not seen any signs of weakening in its new lease traffic, with incomes continuing to rise and rent-to-income ratios remaining steady at 22%. Bad debt has remained low, and resident retention is higher, with the average age of residents ticking up.

3. NewsRoom

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3 REITs That Big Money Might Snap Up Soon

Dec -04

Source: seekingalpha.com

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CENTERSPACE ANNOUNCES QUARTERLY DIVIDEND

Dec -01

Source: prnewswire.com

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Ensign Peak Advisors Inc Cuts Stock Position in Centerspace $CSR

Dec -01

Source: defenseworld.net

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Centerspace $CSR Shares Bought by Geode Capital Management LLC

Nov -29

Source: defenseworld.net

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Head-To-Head Contrast: Gadsden Properties (OTCMKTS:GADS) & Centerspace (NYSE:CSR)

Nov -27

Source: defenseworld.net

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Comparing Centerspace (NYSE:CSR) and Mid-America Apartment Communities (NYSE:MAA)

Nov -17

Source: defenseworld.net

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Hawks In The House

Nov -16

Source: seekingalpha.com

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Winners And Losers Of REIT Earnings Season

Nov -14

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.56%)

6. Segments

Multifamily

Expected Growth: 2.5%

Centerspace's multifamily segment growth of 2.5% is driven by increasing demand for rental housing, fueled by demographic shifts towards urbanization and millennials preferring renting over homeownership. Additionally, the company's strategic focus on acquiring and redeveloping properties in high-growth markets, such as the Sun Belt region, contributes to its growth momentum.

All Other

Expected Growth: 3.5%

Centerspace's 3.5% growth in All Other segment is driven by increasing demand for ancillary services, expansion of existing amenities, and strategic pricing initiatives. Additionally, the company's focus on upgrading its technology infrastructure and enhancing customer experience has contributed to the growth. Furthermore, the segment has benefited from the company's efforts to diversify its revenue streams and reduce dependence on traditional rental income.

7. Detailed Products

Apartment Rental Services

Centerspace offers a range of apartment rental services, providing residents with a comfortable and convenient living experience.

Property Management

Centerspace provides property management services, including marketing, leasing, and maintenance, to help property owners maximize their investment.

Real Estate Investment Trust (REIT)

Centerspace operates as a Real Estate Investment Trust (REIT), allowing individuals to invest in a diversified portfolio of apartments and other properties.

Multifamily Property Development

Centerspace develops and acquires multifamily properties, providing high-quality living spaces for residents.

8. Centerspace's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Centerspace is moderate, as there are some alternatives available in the market, but they are not very attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers is high, as they have many options available and can easily switch to competitors.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low, as Centerspace has multiple suppliers to choose from and can negotiate better prices.

Threat Of New Entrants

The threat of new entrants is moderate, as there are some barriers to entry, but it's not impossible for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry is high, as there are many competitors in the market, and Centerspace needs to differentiate itself to stand out.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 55.77%
Debt Cost 4.67%
Equity Weight 44.23%
Equity Cost 8.34%
WACC 6.29%
Leverage 126.11%

11. Quality Control: Centerspace passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
BRT Apartments

A-Score: 6.2/10

Value: 5.9

Growth: 5.3

Quality: 3.8

Yield: 10.0

Momentum: 3.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
NexPoint Residential Trust

A-Score: 5.9/10

Value: 6.3

Growth: 5.2

Quality: 5.5

Yield: 9.0

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
UMH Properties

A-Score: 5.8/10

Value: 4.3

Growth: 3.0

Quality: 7.1

Yield: 9.0

Momentum: 2.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Clipper Realty

A-Score: 5.6/10

Value: 8.1

Growth: 6.2

Quality: 5.5

Yield: 10.0

Momentum: 1.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Centerspace

A-Score: 5.5/10

Value: 6.5

Growth: 3.2

Quality: 4.4

Yield: 8.0

Momentum: 2.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Bluerock Homes Trust

A-Score: 5.2/10

Value: 6.5

Growth: 5.6

Quality: 3.3

Yield: 9.0

Momentum: 2.0

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

64.76$

Current Price

64.76$

Potential

-0.00%

Expected Cash-Flows