CSR Q1 2026 Earnings Call Summary

Core FFO: Reported at $1.12 per diluted share, reflecting a 1.1% year-over-year decrease in same-store NOI.
Revenues: Flat compared to Q1 2025, with a 1.7% increase in average monthly rental rates offset by a 40 basis point decrease in occupancy and reduced RUBS revenue in Colorado.
Same-store Expenses: Increased by 1.7% year-over-year, with controllable expenses up 3.5% and noncontrollables down 1.1%.
G&A Expenses: Rose by $1.3 million primarily due to costs associated with the strategic review.
Retention Rate: Improved to 54.1%, a 2 percentage point increase from the previous year.

Strategic Review: Ongoing since 2025, with an update expected by the second quarter earnings release. No further details provided at this time.
Leasing Trends: Seasonal pickup observed, with blended leasing spreads improving from negative 90 basis points in January to positive 140 basis points in March. April preliminary spreads are at 1.8%.
Market Performance: Strong performance in the Midwest, particularly Minneapolis, which saw blended spreads of 3.8% in April. Denver, however, continues to face challenges with a 41% drop in transaction volume year-over-year.

Full-Year Guidance: Core FFO expected at $4.93 per share, with same-store NOI growth projected at 75 basis points and revenue growth at 88 basis points.
Occupancy Expectations: Anticipated to remain in the mid-95% range with retention around 52%.
Regulatory Impact: Colorado's regulatory changes expected to temper revenue growth, particularly affecting RUBS revenue.

Regulatory Challenges: Recent changes in Colorado regulations have negatively impacted revenues and increased the use of concessions.
Denver Market Struggles: Transaction volume down significantly, with flat job growth and a high level of new supply affecting performance.
Expense Management: Higher-than-expected expenses in Q1, particularly in G&A and nonreimbursable losses, though management expects normalization as the year progresses.

Minneapolis Market: Management expressed confidence in Minneapolis, indicating it is past the inflection point for demand and supply, with expectations for continued rent increases.
Retention Rates: While retention is currently strong, there is speculation about potential decreases as the company pushes for higher rates during peak leasing season.
Capital Allocation: Management emphasized maintaining a strong balance sheet and managing line of credit debt, with ongoing considerations from the strategic review influencing future capital allocation decisions.
Job Market Dynamics: Concerns about job growth in Denver due to regulatory burdens were acknowledged, but management remains optimistic about the overall desirability of the region.

This summary encapsulates the key points from the earnings call, providing a balanced view of Centerspace's current performance and outlook.

CSR — Centerspace