Centerspace Reports Net Loss of $1.27 per Share for Fiscal Year 2024

Centerspace, a real estate investment trust (REIT) focused on the ownership and management of apartment communities, reported a net loss of $1.27 per diluted share for the fiscal year ending December 31, 2024, a significant decline from a net income of $2.32 per diluted share in the previous year. The company's operating income also fell sharply to $20.5 million, down from $84.5 million in 2023. Despite these challenges, Centerspace achieved a 2.1% increase in core funds from operations (CFFO) per diluted share, rising to $4.88 from $4.78, driven by a 3.7% growth in same-store net operating income.

In terms of strategic developments, Centerspace completed the acquisition of The Lydian, a 129-home apartment community in Denver, for $54 million, financed through a combination of mortgage debt, common operating partnership units, and cash. The company also disposed of two non-core apartment communities for a total of $19 million. These transactions reflect Centerspace's ongoing strategy to optimize its portfolio by focusing on high-quality assets in attractive markets, particularly in the Minneapolis/St. Paul and Denver metropolitan areas.

Operationally, Centerspace owned 71 apartment communities comprising 13,012 homes as of December 31, 2024, with a total real estate investment amounting to $2.5 billion. The company reported a weighted average occupancy rate of 95.2% across its same-store communities, an increase from 94.9% in the previous year. The same-store revenue growth of 3.3% was attributed to higher average monthly revenue per occupied home and improved occupancy levels. However, property operating expenses also increased, leading to a modest overall growth in net operating income.

The company has made significant changes to its capital structure, including the redemption of all 3.9 million Series C preferred shares for $97 million, which was funded through the issuance of approximately 1.6 million common shares under its at-the-market offering program, generating net proceeds of $112.6 million. As of December 31, 2024, Centerspace had total liquidity of approximately $224.6 million, including $212.6 million available on its lines of credit, indicating a strong position to pursue future growth opportunities.

Looking ahead, Centerspace aims to enhance its financial performance by focusing on operational efficiencies, improving resident experiences, and exploring new market opportunities for acquisitions. The company plans to actively manage its existing portfolio while maintaining a strong balance sheet to support both internal and external growth initiatives. However, it remains cautious of potential economic challenges, including inflation and rising interest rates, which could impact its operations and financial results.