MINNEAPOLIS, April 19, 2021 /PRNewswire/ -- Centerspace
(NYSE: CSR) announces 122% increase to its mid-point earnings
per share outlook and 4.2% increase to its mid-point Core FFO
outlook for 2021 based on improved first quarter leasing
activity.
Financial Outlook
With faster than anticipated vaccination rates, increased
financial stimulus, acceleration of rent growth and the expectation
of lower expense growth for the year, Centerspace has revised its
outlook for 2021 upwards and the midpoint of guidance is rising
from $3.455 to $3.60 for Core FFO. The revised outlook is:
|
Previous Outlook for
2021
|
Updated Outlook for
2021
|
|
Low
|
High
|
Low
|
High
|
Earnings per Share –
diluted
|
$(0.18)
|
$0.45
|
$0.10
|
$0.50
|
Same-Store
Revenue
|
(0.5%)
|
3.0%
|
0.0%
|
3.0%
|
Same-Store
Expenses
|
4.0%
|
7.5%
|
3.0%
|
5.0%
|
Same-Store
NOI
|
(3.5%)
|
(0.5%)
|
(1.5%)
|
1.5%
|
FFO per Share –
diluted
|
$3.17
|
$3.52
|
$3.38
|
$3.62
|
Core FFO per Share –
diluted
|
$3.29
|
$3.62
|
$3.48
|
$3.72
|
Leasing Activity
First quarter demonstrated strong leasing activity across the
portfolio as shown by the lease over lease rent growth presented
below.
|
First Quarter
2021
|
First Quarter
2020
|
January
2021
|
February
2021
|
March 2021
|
Renewal
Leases
|
4.0%
|
3.3%
|
3.6%
|
3.8%
|
4.1%
|
New Leases
|
0.7%
|
(4.2%)
|
(3.5%)
|
(0.4%)
|
4.1%
|
Blended
Leases
|
2.0%
|
(1.4%)
|
(1.5%)
|
2.1%
|
4.1%
|
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, the company currently owns 68
apartment communities consisting of 12,166 homes located in
Colorado, Minnesota, Montana, Nebraska, North
Dakota, and South Dakota.
Centerspace was named a Top Workplace for 2020 by the
Minneapolis Star Tribune. For more information, please visit
www.centerspacehomes.com.
If you would like more information about this topic, please
contact Emily Miller, Investor
Relations, at (701) 837-7104 or IR@centerspacehomes.com.
Non-GAAP Measures
This release contains certain non-GAAP financial measures. The
non-GAAP financial measures should not be considered a substitute
for operating results determined in accordance with accounting
principles generally accepted in the
United States of America ("GAAP"). The definitions and
calculations of these non-GAAP financial measures, as calculated by
us, may not be comparable to non-GAAP financial measures reported
by other REITs that do not define each of the non-GAAP financial
measures exactly as Centerspace does.
The company provides certain information on a same-store and
non-same-store basis. Same-store apartment communities are owned or
in service for substantially all of the periods being compared,
and, in the case of newly-constructed properties, have achieved a
target level of physical occupancy of 90%. On the first day of each
calendar year, Centerspace determines the composition of our
same-store pool for that year as well as adjusts the previous year,
which allows us to evaluate full period-over-period operating
comparisons for existing apartment communities and their
contribution to net income. The company believes that measuring
performance on a same-store basis is useful to investors because it
enables evaluation of how a fixed pool of our communities are
performing year-over-year. Centerspace uses this measure to assess
whether or not the company has been successful in increasing NOI,
renewing the leases on existing residents, controlling operating
costs, and making prudent capital improvements.
Net operating income, or NOI, is a non-GAAP financial measure
which the company defines as total real estate revenues less
property operating expenses, including real estate taxes.
Centerspace believes that NOI is an important supplemental measure
of operating performance for real estate because it provides a
measure of operations that is unaffected by depreciation,
amortization, financing, property management overhead, casualty
losses, and general and administrative expenses. NOI does not
represent cash generated by operating activities in accordance with
GAAP and should not be considered an alternative to net income, net
income available for common shareholders, or cash flow from
operating activities as a measure of financial performance.
Centerspace believes that FFO, which is a non-GAAP
financial measure used as a standard supplemental measure for
equity real estate investment trusts, is helpful to investors in
understanding our operating performance, primarily because its
calculation does not assume that the value of real estate assets
diminishes predictably over time, as implied by the historical cost
convention of GAAP and the recording of depreciation. Centerspace
uses the definition of FFO adopted by the National Association of
Real Estate Investment Trusts, Inc. ("Nareit"). Nareit defines FFO
as net income or loss calculated in accordance with GAAP, excluding
depreciation and amortization related to real estate, gains and
losses from the sale of certain real estate assets, and impairment
write-downs of certain real estate assets and investments in
entities when the impairment is directly attributable to decreases
in the value of depreciable real estate held by the entity. The
exclusion in Nareit's definition of FFO of impairment write-downs
and gains and losses from the sale of real estate assets helps to
identify the operating results of the long-term assets that form
the base of our investments, and assists management and investors
in comparing those operating results between periods. Due to
the limitations of the Nareit FFO definition, Centerspace has made
certain interpretations in applying this definition. The company
believes that all such interpretations not specifically identified
in the Nareit definition are consistent with this definition.
Nareit's FFO White Paper 2018 Restatement clarified that impairment
write-downs of land related to a REIT's main business are excluded
from FFO and a REIT has the option to exclude impairment
write-downs of assets that are incidental to its main business.
While FFO is widely used by Centerspace as a primary performance
metric, not all real estate companies use the same definition of
FFO or calculate FFO in the same way. Accordingly, FFO presented
here is not necessarily comparable to FFO presented by other real
estate companies. Core Funds from Operations ("Core FFO") is FFO as
adjusted for non-routine items or items not considered core to
business operations. By further adjusting for items that are not
considered part of core business operations, the company believes
that Core FFO provides investors with additional information to
compare core operating and financial performance between periods.
FFO and Core FFO should not be considered as alternatives to net
income, or any other GAAP measurement of performance, but rather
should be considered as additional supplemental measures. FFO and
Core FFO also do not represent cash generated from operating
activities in accordance with GAAP, nor are they indicative of
funds available to fund our cash needs, including our ability to
service indebtedness or make distributions to shareholders. Core
FFO is a non-GAAP and non-standardized financial measure that may
be calculated differently by other REITs and should not be
considered a substitute for operating results determined in
accordance with GAAP.
Forward-Looking Statements
Certain statements in this press release 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. 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.
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 our 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 our Annual Report on
Form 10-K for the year ended December 31, 2020, in our
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
Emily
Miller, Investor Relations
Phone : (701) 837-7104
E-mail : IR@centerspacehomes.com
View original content to download
multimedia:http://www.prnewswire.com/news-releases/centerspace-announces-improved-financial-outlook-and-first-quarter-leasing-activity-301271105.html
SOURCE Centerspace