D/B/A Centerspace

Welcome to the Center Space Q1 2024 earnings call. My name is Carly and I'll be coordinating your call today. During the presentation, you can register to ask a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. We will now hand you over to your host, Josh Clutch to begin. Josh, please go ahead.

Good morning. Center Spaces Form 10-Q for the quarter ended March 31, 2024, was filed with the SEC yesterday after the market closed. Additionally, our earnings release and supplemental disclosure package 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 for the SEC. We cannot guarantee that any forward-looking statements will materialize, and you're cautioned not to place undue reliance on these forward-looking statements. Please refer to our earnings release for reconciliations of any non-GAAP information, which may be discussed on today's call. I'll now turn it over to CenterSpace's President and CEO, Ann Olson, for the company's prepared remarks.

Good morning, everyone, and thank you for joining CenterSpace's first quarter earnings call. With me this morning is Gaurav Patel, our Chief Financial Officer, and Grant Campbell, our Senior Vice President of Capital Markets. Before taking your questions, we will briefly cover our first quarter results and trends, our transaction activity, and our outlook for the remainder of 2024. I'm happy to report Core FFO per share of $1.23 for the first quarter. driven by stable fundamentals across our markets paired with disciplined expense management, and a little help from a mild winter that reduced our utilities and associated expenses. While Rob will discuss our quarter results in detail, I would like to take a minute to discuss our current leasing trends. In our same-store portfolio, market rent has increased year-over-year for the first quarter, and while a moderate amount of 2.5%, this is in line with our expectations, and year-to-date, we are pleased to see that translate into positive lease-over-lease growth. For new leases, our trade-outs were flat for the quarter and renewals price stat increases averaging 3.4% for blended rate increases of 1.5%. The new lease trade-outs increased each month in the quarter. This bodes well for us as we begin the leasing season. Occupancy remains a focus and today we are slightly above 95%. Our marketing strategy aimed at the highest intent lease has led to converting more leases in this quarter than the same period last year. As we look at April, pricing is trending positively, with indications of new lease tradeouts of approximately 3.5% and renewal increases of 3.3%. We feel good about our resident retention rates, which are above 50%. Our results in Q1 and the trends we see give us confidence to bring up the low end of our guidance, raising our outlook for 2024 at the midpoint to reflect estimated annual core SFO growth year-over-year of 1%, with this growth coming in addition to the deleveraging and portfolio upgrades we achieved last year. Our confidence in this portfolio is bolstered by low bad debt of just 26 basis points in Q1, as well as continued stability in our regional economy. On the whole, our portfolio is not experiencing the high supply dynamics of Sunbelt and some coastal markets, and our supply profile remains relatively muted. Denver and Minneapolis are markets with the highest levels of supply, And we are seeing tapering of homes under construction and projected deliveries into next year. With respect to Minneapolis, our largest market concentration, it ranked eighth in the nation for most apartment absorption over the last 12 months, and according to Rent Cafe, was the number one search market for the fourth month in a row. Turning to transaction activity, all is quiet on the acquisition front. We believe some recent larger transactions could help narrow the bid-ask spread on valuations and loosen up the market for acquisition activity. During the first quarter, we closed the previously disclosed sales of two communities in Minneapolis for gross proceeds of $19 million. These proceeds were used to pay down the line of credit debt that was associated with our Q4 2023 acquisition in Fort Collins. Completing our capitalization of that transaction, advancing our capital recycling initiatives, and facilitating the purchase of $4.9 million worth of our common stock early in the quarter. We're committed to growing our business, and while the overall economic environment has limited our access to capital, we do believe we can effectively recycle portions of our current portfolio for the right opportunities. We will be well-positioned when those opportunities arise. I'm extremely grateful for all our teams do each day to deliver value to our shareholders. Our strong culture is evident in our recent diversity, equity, and inclusion reports, highlighting our advancement of and commitment to providing a great home for our team to achieve the best results. This report is available on our website. Now I'll turn it over to Barack to discuss our overall financial results and outlook for the remainder of 2024.