D/B/A Centerspace

Hello everyone and welcome to the CentreSpace Q3 2024 Earnings Call. My name is Ezra and I will be your coordinator today. If you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. I will now hand you over to your host Josh Plait at CentreSpace to begin. Josh, please go ahead.

Good morning. Center Space's Form 10-Q for the quarter ended September 30, 2024, was filed with the FCC 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 with 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 third quarter earnings call. With me this morning are Bharat Patel, our Chief Financial Officer, and Grant Campbell, our Senior Vice President of Investments and Capital Markets. Before taking your questions, we will briefly cover our results and discuss our outlook for the remainder of 2024. We have a lot of good news to share, starting with earnings of $1.18 per share of core FFO for the third quarter driven by stable revenue growth and expense control initiatives. We continue to improve and simplify our balance sheet, and subsequent to quarter ends, we expanded our presence in the Denver market with the purchase of the Libyan, which we acquired with a combination of attractive long-term assumed mortgage debt and the issuance of OP units at a premium to our stock price. Graham will share more about that transaction momentarily. Rob will discuss our quarterly results, but I want to provide some details on leasing trends. For the third quarter, same store revenue increased 3% over the same period in 2023. We are proud of this growth on top of the 2023 growth we achieved, which was at the high end of the multifamily public peer group. Same store new lease tradeouts are seasonally slowing down 1.2% while renewal leases increased by 3.2%, resulting in 1.5% blended lease increases for the quarter. Importantly, We achieved these results with also increasing occupancy to 95.3%, which is a 70 basis point improvement over the same period last year. Maintaining occupancy above 95% has been an objective for us, and that focus does have a trade-off relative to new lease pricing. I'll caution against extrapolating our quarter-over-quarter leasing results, given both the seasonality and our prioritization of occupancy. Much of our portfolio footprint has experienced lower supply than national averages, and our results benefited from that during the quarter. North Dakota communities continue to lead the portfolio with blended spreads of 5.4%, while our Nebraska communities also saw strong blended growth at 3.3%. I'd like to highlight our largest market of Minneapolis, where we recognize 1.2% blended rent increases. Minneapolis once again ranked among the strongest absorption markets nationally in the quarter. After several years of outside supply here, the recent absorption and lower anticipated future deliveries should act as a tailwind for our portfolio. Resident retention remains elevated at over 58% for the quarter, which has helped drive occupancy and bolsters our blended leasing spreads during the seasonally slower months. Resident health remains strong, Though up slightly from last year, bad debt year-to-date is trending similar to historical norms, and rent-to-income levels remain sustainable at 23%. Renting, compared to the increased cost of homeownership, remains a compelling value for our residents across our market. As a reflection of our operating results and our capital market activity, we are raising the midpoint of our full-year core FFO guidance by a penny to $4.86 per share. While our revenue results have trended to the low end of our initial guidance expectations for 2024, there are offsets on the expense side that result in positive NOI growth, and we are getting that to the bottom line. These include items directly related to revenue, such as lower utility expense and turnover costs, as well as savings from leveraging technology and centralizing certain property management functions. In the third quarter, we issued approximately 1.5 million shares on our ATM. raising $105 million. Proceeds were used to redeem the entirety of our Series C preferred shares. The opportunity to both simplify our capital structure and improve our balance sheet while improving cash flow and share liquidity was attractive, but we are mindful of our valuation and intend to remain disciplined about our capital markets activities. As we sit today, we feel very well positioned to advance our vision to be a premier provider of apartment homes in vibrant communities and drive consistent earnings growth for our investors. Part of that vision includes a new community, the Lydian, and I'll turn things over to Grant to discuss that acquisition and the transaction market more broadly. Grant?