Q1 2025 Centerspace Earnings Call Transcript
Key Points
- Centerspace (CSR) reported a 120-basis point year-over-year improvement in weighted average occupancy for its same-store portfolio.
- The company achieved a strong average physical occupancy rate of 96% with April renewal retention around 57%.
- Blended leasing spreads increased by 70 basis points in the first quarter, continuing a positive trend into April.
- Centerspace (CSR) maintained a healthy rent-to-income ratio of 21.6%, with bad debt remaining low at roughly 40 basis points.
- The company reaffirmed its guidance for the full year, projecting core FFO of $4.98 per share and same-store NOI growth of 2.25%.
- Same-store expenses increased by 5.8% year-over-year, primarily driven by property taxes, creating a challenging year-over-year comparison.
- Denver market faced supply pressure, impacting new lease rates, although improvement is expected later in the year.
- Retention rates were lower in some markets, notably Denver, due to higher supply and more choices in the market.
- Omaha experienced a 220 basis point sequential decline in occupancy due to forced move-outs related to value-add projects.
- The company faces broader market volatility, impacting capital markets and creating a disconnect between public and private market pricing.
Good afternoon and thank you for attending today's Centerspace first quarter 2025 earnings call. My name is [Shezan], and I'll be your moderator today.
(Operator Instructions)
I would now like to pass the conference over to your host, Josh Klaetsch, Centerspace. You may now proceed.
Good afternoon. Centerspace's Form 10-Q for the quarter ended March 31, 2025, was filed with the SEC yesterday after the market closed. Additionally, our earnings reliefs and supplemental disclosure package, as well as an updated investor presentation, have been posted to our website at centerspacehomes.com and filed on Form 8-K.
It's important to note that today's remarks will include statements about our business outlook and other forward-looking statements that are based on management's current views and assumptions. These statements are subject to risks and uncertainties discussed in our filing under the section titled Risk factors and in our other filings with the SEC.
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