Yahoo Finance Centerspace (CSR) Q1 2024 Earnings Call Transcript Highlights: Key Financial Metrics and ...
Core FFO per Share: $1.23 for Q1 2024.
Same-Store NOI Growth: 7.5% year-over-year increase.
Revenue Growth: 3.5% increase in same-store communities.
Occupancy Rate: Slight decrease to 94.6%, but improving in April.
Operating Expenses: Decreased by 2.2% year-over-year.
2024 Core FFO Guidance: Updated to $4.74 to $4.92 per diluted share.
Same-Store Revenue Growth: Projected at 3% to 4.5% for 2024.
Same-Store Expense Growth: Expected to be 4% to 5.5% for 2024.
Net Debt to EBITDA: 7.1x as of Q1 2024.
Liquidity: Approximately $230 million at quarter end.
Share Repurchase: 88,000 shares at an average price of $53.62 during Q1.
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you walk through how things look on the ground in your smaller markets like Rochester, St. Cloud, Omaha, North Dakota, etc.? A: Anne Olson, Centerspace - President, Chief Executive Officer: Our smaller markets, particularly across North Dakota, have shown real strength with good rental and renewal increases and steady occupancy, supported by very low unemployment and strong regional economies.
Q: What's driving the demand in Minneapolis, given it's one of the top net absorption markets and most searched markets for several months? A: Anne Olson, Centerspace - President, Chief Executive Officer: Minneapolis is experiencing low unemployment and a rise in the cost of housing, particularly single-family homes, coupled with high interest rates. This has led to a pent-up demand and a tapering supply pipeline, contributing to rising occupancy rates and strong renewals.
Q: At what point do you expect new lease growth to have the inflection go back below renewals? A: Bhairav Patel, Centerspace - Chief Financial Officer, Executive Vice President: Typically, new lease pricing is higher than renewals in the second and third quarters due to market rent behavior during the season. We expect this trend to slip towards the end of the third quarter into the fourth quarter.
Q: How is the acquisition market currently, and what challenges are you facing? A: Grant Campbell, Centerspace - Senior Vice President of Investments: The acquisition market is tough due to a bid-ask spread and a disconnect between public and private market valuations. High net worth and private capital types are currently the most aggressive buyers, often willing to accept negative leverage and buy all-cash.
Q: How are you managing the lighter winter's impact on RUBS and cost savings? A: Bhairav Patel, Centerspace - Chief Financial Officer, Executive Vice President: The lighter winter led to lower utilities costs, which in turn reduced RUBS revenues. This has driven a reduction in our overall revenue projections, with about 30 basis points decrease expected from RUBS.
Q: Can you discuss the current supply pipeline and market conditions in Denver? A: Grant Campbell, Centerspace - Senior Vice President of Investments: Denver currently has about 9% of existing stock under construction, representing about 25,000 apartment homes. The supply pipeline has tapered since last quarter, with forecasted deliveries consistent with 2022 and 2023 levels, indicating no outsized deliveries expected.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
