D/B/A Centerspace

Hello everyone. Thank you for joining us and welcome to the CenterSpace Q2 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. The presentation will now begin.

Thank you and good morning. CenterSpace's Form 10-Q for the quarter ended June 30th, 2026 was filed with the SEC yesterday after market closed. Our earnings release and supplemental disclosure package are available on CenterspaceHomes.com and were filed on Form 8-K. Today's remarks include forward-looking statements based on management's current views and assumptions. These statements are subject to risks and uncertainties discussed in our risk factors and other SEC filings. We cannot guarantee these statements will materialize and you should not place undue reliance on them. Please refer to our earnings release for reconciliations of any non-GAAP measures discussed on today's call. Joining me today are Bhairav Patel, our Chief Financial Officer, and Grant Campbell, Senior Vice President of Investments and Capital Markets. During our remarks, we will give a brief update related to our portfolio repositioning and operating trends after which Grant will elaborate on the status of our dispositions and investment activities, and we'll close out with Bhairav providing context for the guidance updates we outlined in a release last evening. In the last 14 months, we have sold or are under contract to sell 20 communities for approximately $530 million. These transactions have significantly improved the profile of our portfolio and balance sheet, increasing exposure to institutional markets eliminating exposure to tertiary markets like St. Cloud, Rapid City, and Bismarck, and reducing leverage. Executing the strategy is intentional. Our goal is a higher quality portfolio with stronger growth potential, lower net debt to EBITDA, and greater financial flexibility. Operationally, the quarter was in line with our expectations. We have updated our same-store reporting to reflect the disposition activity, and now our same-store results are more weighted to Denver and Minneapolis. This impacted our overall revenue, which was flat year-over-year, primarily due to concessions in the Denver market. However, disciplined expense management led to NOI growth of 30 basis points in the second quarter when compared to the second quarter of 2025. Expenses declined 10 basis points year-over-year as our teams controlled costs across categories. Most of the savings came from lower R&M costs, including turn expenses. Within the same store, we had an excellent quarter for retention. Of residents with lease expirations, 61.3% of our residents renewed at a renewal rate growth of 3.4%. New lease rate growth was negative 60 basis points, which was an improvement of 190 basis points over the first quarter and resulted in blended lease growth of 1.8%. And the blended lease increases have held steady through July. While Denver remains softer as new supply continues to be absorbed, It is notable that our blended spreads for July were positive, and overall the softness in Denver is offset by strong results out of North Dakota, Nebraska, and Minnesota. In particular, Minneapolis delivered blended rent growth of 3.4%, with retention at 65%, evidence that the market has absorbed the elevated supply that had challenged many markets across the country. We are capturing run increases in markets where supply has been absorbed and new supply is muted, Outside of the Mountain West, all of our markets had blended lease growth in June in excess of 3%. While we believe we have stability in operations and an opportunity as deliveries diminish in the Mountain West into 2027, we also have a strong opportunity to capture value through our portfolio repositioning. Grant, can you discuss more specifics on our disposition and capital markets activities?

Thanks, Anne. Good morning, everyone. We continue making progress on our portfolio optimization and deleveraging plan announced in early June. On June 29th, we sold Civic Lofts in Denver, Colorado for $30 million. This was a smaller community relative to our other Denver assets and no longer core to our long-term strategy in that market. The transaction represented a mid-3% cap rate on P-12 financials, including non-stabilized vacancy and concessions this particular urban Denver submarket is experiencing today. From a stabilized operations perspective, the transaction represents a low 5% cap rate. More broadly in Denver, first half of the year transaction volume is down 46% from the same time period in 2025 and 72% compared to 2024. Despite lower transaction volumes, high conviction investors have recently been active on individual community acquisitions. have seen recent acquisitions at significant discounts to replacement costs in urban submarkets with going-in cap rates at mid-4% and below, along with select newer vintage suburban communities pricing at high 4% to low 5% in-place cap rates. These investment decisions are informed by first half of 2026 absorption figures being the highest on record in Denver, markets continued high cost of homeownership and deceleration of the new construction pipeline. Moving to other portfolio markets, on July 9th, we closed the sale of five communities in Rapid City, South Dakota for $66 million. This sale exited us from the Rapid City market. In Bismarck, North Dakota, we remain in process on executing the sale of six communities for approximately $150 million, with closing expected in August. This transaction will exit us from the Bismarck market. Pricing on the Rapid City and Bismarck sales is a mid-6% cap rate, and we saw strong interest from potential buyers, including both regional and national platforms, highlighting the capital interest in secondary markets driven by healthy regional economies and measured new supply pipelines. In total, our disposition activity in Denver, Rapid City, and Bismarck includes 12 communities, two market exits, and total sale price of approximately $245 million, all consistent with pro forma outcomes described in our early June portfolio optimization plan. In addition to these initiatives, we also made the decision to sell two communities in Minneapolis. This was driven by strong asset pricing received given the strength of Minneapolis fundamentals, management of our portfolio concentrations and further advancement of balance sheet strategy. On July 14th, we closed the sale of Red 20 in Ironwood to newer vintage communities totaling 312 homes sold for $73.8 million. In aggregate, all 2026 disposition activity includes 14 communities, 1,810 apartment homes, and total sale price of approximately $320 million. These sales improve our overall portfolio quality and operating efficiency, including average rent per community increasing 1.4% and average homes per community increasing from 201 to 222. Our 2026 dispositions have allowed us to move forward with certainty and speed in executing deleveraging outcomes associated with our strategic review and manage related tax implications. All of our sales priced inside of the implied mid to high 7% portfolio cap rate our stock currently trades at. Given this valuation disconnect, we bought back shares in the quarter, repurchasing $2.5 million at an average price of 55.54 per share. While active with buybacks, we are also focused on our leverage profile, seeking to strike an appropriate balance between the two, and this quarter's initiatives achieve this. I'll now turn it over to Bhairav to discuss our financial results, balance sheet, and revised guidance.