Centerspace (NYSE:CSR) executives highlighted portfolio performance, transaction activity and 2026 expectations during the company’s fourth-quarter 2025 earnings call, while reiterating that its board’s ongoing evaluation of strategic alternatives remains in progress.
Strategic review continues, with limited commentary
President and CEO Anne Olson opened the call by noting that Centerspace filed its Form 10-K for the year ended Dec. 31, 2025, and posted its earnings materials. Olson said the company’s board is overseeing a “formal evaluation of strategic alternatives to maximize shareholder value,” which began “from a position of strength” after Centerspace transformed into a pure-play multifamily REIT and improved profitability, scale and its balance sheet.
On capital return, Olson said the company currently needs to complete the strategic review process before it can resume stock buybacks “given the rules” around information availability. She added Centerspace has a current repurchase authorization, but said that at current trading levels it is not the most attractive use of capital, noting 2025 repurchases were executed “more in the $54 range.”
Fourth-quarter and full-year operating trends
Olson said the fourth quarter “capped a year of progress,” pointing to same-store NOI growth of 3.5% for the year, which she said outpaced peers, supported by “steady occupancy and expense discipline.” She also cited strong rent growth and an emphasis on resident experience and revenue optimization.
In fourth-quarter leasing, Olson said blended spreads were up 10 basis points. New lease spreads were down 4.8%, while renewal spreads rose 3.9%, the highest renewal growth of the year. Retention was 55.2% in the quarter, bringing blended leasing into positive territory. Full-year retention was 58.2%.
By market, Olson said favorable absorption in Minneapolis, the company’s largest market, led to positive blended increases of 1.1% in the quarter. North Dakota led the portfolio again with blended increases of 4.5%. In Denver, supply continued to pressure rents, with fourth-quarter blended trade-outs down 4.3%. Olson said 2025 absorption in Denver was the second-highest in the post-pandemic era and that new construction starts have “plummeted,” which the company expects will help fundamentals normalize through 2026 and into 2027.
Transactions and balance sheet actions in 2025
SVP of Investments and Capital Markets Grant Campbell said Centerspace executed $493 million of transaction activity in 2025. He said the program included:
- Entering the Salt Lake City market
- Expanding its presence in Fort Collins
- Exiting the St. Cloud, Minnesota market
- Pruning holdings in the city of Minneapolis
Campbell said the transactions further diversified cash flow and improved portfolio metrics including average monthly rent per home, homes per community, property age and operating margin.
He also highlighted balance sheet and capital management actions, including expanding the unsecured credit facility by $150 million and assuming $76 million of long-term debt tied to the Fort Collins acquisition. Campbell said the company repurchased 3.5 million common shares in 2025.
Discussing transaction markets, Campbell said Denver’s investment environment has generally shifted to “wait-and-see,” citing supply dynamics, slow job growth and “recent regulatory changes.” He said premium assets and locations are still commanding strong pricing, including recent trades at sub-5% in-place cap rates, while the gap between premium properties and the rest of the market has widened.
Financial results and 2026 guidance
CFO Bhairav Patel reported fourth-quarter Core FFO of $1.25 per diluted share, driven by a 4.8% year-over-year increase in fourth-quarter same-store NOI. Same-store revenue rose 1% year-over-year, supported by a 1.5% increase in average monthly revenue per occupied home, which offset a 40 basis point decline in occupancy.
Same-store expenses fell 5.1% year-over-year in the quarter. Patel attributed controllable expense improvements to lower repairs and maintenance as well as administrative and marketing costs, while non-controllable savings were driven largely by favorable tax assessments.
For 2026, Patel said the company expects Core FFO per diluted share to remain stable year-over-year, with a full-year midpoint of $4.93. At the midpoint, guidance assumes:
- Same-store NOI increases 75 basis points
- Same-store revenues increase 88 basis points
- Same-store expenses increase 150 basis points
Revenue assumptions include blended leasing spreads of approximately 2% in the company’s guidance framework, mid-95% occupancy and about 52% retention. In Q&A, management clarified its base-case portfolio blended rent growth expectation as “mid-1%,” noting some markets could be in the 2% range. Management said it expects renewals to lead with renewal trade-outs in the “high 2% range.”
Patel said blended spreads are expected to be strongest in North Dakota, followed by Minneapolis and Omaha, helping offset a year of negative spreads in Denver that are expected to improve as 2026 progresses. He said regulatory changes in Colorado are expected to temper revenue growth, with expense recoveries down nearly $1 million and RUBS down about $1 million (around 40 basis points year-over-year in revenue impact, as described in Q&A).
On expenses, Patel said controllable costs are expected to rise 1% and non-controllables 2% at the midpoint. He also highlighted expected amortization of assumed debt of $1.5 million for the year, higher in the first half and trailing off after a mortgage maturity in June.
For capital spending, Patel said value-add expenditures are expected to range from $2.5 million to $12.5 million, with recurring CapEx per home of $1,300 at the midpoint. Management said guidance excludes acquisitions and dispositions. In Q&A, management attributed the wider value-add range and lower midpoint to being more selective given higher cost of capital and execution risk, and to holding back approvals during the strategic alternatives review to avoid starting projects that might not be completed.
Market color: Denver concessions, Minneapolis stability, regulatory focus
On Denver, management said it expects concession pressure to persist in the first half of 2026, averaging roughly 2–4 weeks of concessions per move-in. Campbell added that about 16,000 units were delivered in 2025 and another 9,000 units are expected in 2026, with 2027 deliveries forecast to fall materially as new construction starts decline. He also cited downtown Denver foot traffic measures nearing 2019 levels by year-end 2025 and referenced bond funding for city projects, which he said supports a more positive long-term outlook with “true tailwinds” in 2027.
In Minneapolis, Olson said the company has not seen meaningful changes in leasing activity tied to recent immigration enforcement actions, describing impacts as minimal so far and limited to a couple of communities. She said it is difficult to assess in January given seasonality and low lease expirations, and said the company will monitor potential policy changes such as eviction moratoriums.
On regulation more broadly, Olson said the company is seeing more municipalities and states examine “everything”—including fee income and utility restrictions—not only traditional rent control. She said “business friendliness,” including regulatory environment and tax structure, is a key factor when evaluating potential new markets, while adding the company has not seen movement toward enhanced regulatory requirements in states such as Nebraska, North Dakota, South Dakota and Montana.
Patel also addressed operating costs, noting a fourth-quarter health reserve adjustment that affected year-over-year comparisons for on-site compensation. Olson said the company has experienced higher tenure and lower turnover, a trend she expects to continue in 2026, and said vendor turnover has also eased.
Concluding the call, Patel said Centerspace entered 2026 positioned by “operational excellence and financial discipline,” while Olson thanked employees and shareholders as the company continues executing against its goals.
About Centerspace (NYSE:CSR)
Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of September 30, 2023, Centerspace owned interests in 71 apartment communities consisting of 12,785 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for the fourth consecutive year in 2023 by the Minneapolis Star Tribune.
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