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Centerspace (CSR)
NYSE:CSR
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Centerspace
(NYSE:CSR)
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Rating:57Neutral
Price Target:
$65.00
▲(5.21% Upside)
Action:ReiteratedDate:02/18/26
The score is driven primarily by mid-range fundamentals: stable revenue and operating cash flow with improved leverage, but offset by volatile/weak net income and softer 2025 free-cash-flow momentum. The latest earnings call reinforces a measured outlook with flat 2026 core FFO guidance and market/regulatory headwinds, while technicals remain soft and valuation looks demanding despite a solid dividend yield.
Positive Factors
Improved leverage and liquidity
Centerspace materially reduced leverage in 2025 and expanded liquidity, lowering refinancing risk and increasing financial flexibility. A stronger balance sheet supports durable capital deployment, better absorption of market stress, and optionality for acquisitions or opportunistic investments over the next several quarters.
Resilient operating cash flow
Stable operating cash generation has supported distributions and operations despite earnings swings. Consistent OCF provides a durable buffer for debt service and maintenance capex, enabling the REIT to sustain property operations and fund selective value-add activity even if near-term FFO is flat.
Same-store NOI growth and Midwest market strength
Outperformance on same-store NOI and positive rent trends in core Midwest markets reflect durable operational excellence and local demand resilience. Market diversification toward affordable, high-absorption regions underpins steady cash flow and reduces dependence on any single metro's cycles over the medium term.
Negative Factors
Net income volatility
Volatile bottom-line results highlight sensitivity to non-operating items and mark-to-market impacts, undermining reliably reported earnings. This instability complicates payout coverage, planning and investor confidence, and suggests the REIT's reported earnings may remain uneven through macro or cyclical shocks.
Flat 2026 FFO guidance and expense headwinds
Management's flat FFO outlook combined with higher expense assumptions and a regulatory RUBS hit in Colorado points to constrained near-term earnings growth. Structural expense pressure and regulatory revenue reduction can limit margin expansion and reduce the pace at which operating gains convert to distributable cash.
Strategic review & curtailed value-add activity
An ongoing strategic review and paused buybacks create uncertainty around capital allocation and deprioritize growth projects. Reduced value-add investment delays rental mark-ups tied to renovations, potentially slowing NOI upside and the company's ability to capitalize on favorable submarket fundamentals over the next several quarters.
Centerspace (CSR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.09B
Dividend Yield4.58%
Average Volume (3M)225.99K
Price to Earnings (P/E)60.9
Beta (1Y)0.40
Revenue Growth36.82%
EPS GrowthN/A
CountryUS
Employees374
SectorReal Estate
Sector Strength53
IndustryREIT - Residential
Share Statistics
EPS (TTM)-1.10
Shares Outstanding16,774,338
10 Day Avg. Volume266,135
30 Day Avg. Volume225,989
Financial Highlights & Ratios
PEG Ratio-0.35
Price to Book (P/B)1.54
Price to Sales (P/S)3.16
P/FCF Ratio11.34
Enterprise Value/Market Cap1.87
Enterprise Value/Revenue5.78
Enterprise Value/Gross Profit189.63
Enterprise Value/Ebitda11.29
Forecast
1Y Price Target
$70.71Price Target Upside14.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Centerspace Business Overview & Revenue Model
Company DescriptionCenterspace 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 June 30, 2021, Centerspace owned 62 apartment communities consisting of 11,579 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for 2021 by the Minneapolis Star Tribune. For more information, please visit www.centerspacehomes.com.
How the Company Makes MoneyCenterspace generates revenue primarily through rental income from its multifamily properties. The company leases residential units to tenants, which provides a steady stream of monthly rental payments. Additionally, Centerspace benefits from lease renewals and rent increases, which can enhance revenue over time. The company may also derive income from ancillary services such as parking fees, maintenance services, and community amenities. Strategic partnerships with local businesses and service providers can also create additional revenue opportunities through referrals and joint promotions, further contributing to its earnings.
Centerspace Key Performance Indicators (KPIs)
Any
Weighted Average Occupancy
Share of leasable space that is occupied, weighted by area or revenue; higher occupancy means more consistent rent collection and better utilization of assets, while drops highlight rising vacancy risk and pressure on revenues.
Share of leasable space that is occupied, weighted by area or revenue; higher occupancy means more consistent rent collection and better utilization of assets, while drops highlight rising vacancy risk and pressure on revenues.
Data provided by:
The Fly
The FlyCenterspace Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 04, 2026
Earnings Call Sentiment Positive
The call emphasized operational resilience, solid same-store NOI performance, disciplined transactions, and stronger liquidity — offset by market-specific pressures (notably Denver), a decline in new-lease spreads and occupancy, regulatory headwinds in Colorado, and cautious near-term capital deployment during an ongoing strategic review. Management expects modest revenue growth in 2026 but higher expense assumptions and flat core FFO guidance at midpoint, reflecting a measured stance into the year.Q4-2025 Updates
Positive Updates
Strong Same-Store NOI and Q4 Performance
Q4 same-store NOI increased 4.8% year-over-year (Bhairav), and full-year same-store NOI grew 3.5% (Anne), reflecting steady occupancy and expense discipline driving outperformance versus peers.
Q4 Core FFO and FY Guidance
Reported Q4 core FFO of $1.25 per diluted share. 2026 guidance expects full-year core FFO per diluted share to be roughly stable with a midpoint of $4.93.
Revenue and Expense Dynamics in Q4
Same-store revenues increased 1.0% YoY in Q4 driven by a 1.5% rise in average monthly revenue per occupied home, while same-store expenses declined 5.1% YoY due to lower repairs & maintenance, reduced admin & marketing, and favorable tax assessments.
Leasing and Retention Trends
Blended leasing spreads up 10 basis points in the quarter; renewal spreads posted highest growth of the year at 3.9%. Renewal trade-outs expected in the high-2% range for 2026; portfolio retention was 55.2% in Q4 and 58.2% for the full year.
Active, Disciplined Portfolio Transactions
Executed $493 million of transaction activity in 2025 including entry into Salt Lake City, Fort Collins expansion, exit from St. Cloud and selective pruning in Minneapolis — improving portfolio diversification and operating metrics.
Balance Sheet and Liquidity Strengthened
Expanded unsecured credit facility by $150 million, assumed $76 million of attractively priced long-term debt, repurchased 3.5 million common shares, and ended the quarter with ~ $268 million of cash and line availability versus $99.2 million of debt maturing in the next 2 years. Net debt/EBITDA improved to 7.5x; weighted average debt rate 3.6% and maturity 6.9 years.
Measured Capital Allocation and Lower near-term CapEx
2026 value-add guidance narrowed to $2.5M–$12.5M with recurring CapEx per home ~$1,300 at midpoint; company is selectively pausing or staging projects due to cost of capital and the ongoing strategic review, preserving optionality.
Market-Level Strength in Midwestern and Select Markets
Positive blended rent increases in Minneapolis (+1.1%) and strong quarter performance in North Dakota (+4.5%) driven by favorable absorption and resident affordability; management expects Midwest momentum in 2026.
Negative Updates
Denver Market Pressure and Concessions
Denver blended rent trade-outs were down 4.3% in Q4; management is seeing 2–4 weeks of concessions per move-in on average in H1 2026 and expects continued concessionary pressure as the market works through recent deliveries (16,000 units in 2025 and ~9,000 expected in 2026).
New Lease Spreads and Occupancy Weakness
New lease spreads declined 4.8% in the quarter and same-store occupancy declined ~40 basis points YoY in Q4, partially offsetting revenue gains from rental growth.
Guidance Shows Expense Headwinds and Flat FFO
2026 guidance assumes same-store expenses increasing 150 basis points at midpoint and projects core FFO per share to be stable YoY (midpoint $4.93), indicating limited near-term earnings upside.
Regulatory Impact in Colorado
Colorado regulatory changes are expected to reduce RUBS recoveries by about $1 million (~40 basis points of revenue impact) and temper revenue growth for the Colorado portfolio in 2026.
Reduced Near-Term Value-Add Activity
Company is deliberately holding back on value-add projects due to higher cost of capital and the ongoing strategic review; midpoint of projected value-add spending is lower than 2025, which may defer revenue and NOI upside tied to renovations.
Uncertainty from Ongoing Strategic Review
Board-led strategic alternatives review remains active and creates uncertainty around capital deployment (including buybacks and potential transactions); buybacks paused pending completion of the process despite an existing authorization.
Company Guidance
Centerspace guided 2026 core FFO per diluted share to be roughly stable year-over-year with full‑year core FFO of $4.93 at the midpoint; that guidance assumes same‑store NOI up ~75 bps, same‑store revenue up ~88 bps and same‑store expenses up ~150 bps at midpoints. Revenue build includes an ~80 bps earn‑in, blended rent growth in the mid‑1% range (the prepared remarks also referenced ~2%), roughly half of which shows up in revenue, a ~40 bp headwind (~$1.0M) from RUBS/regulatory changes in Colorado and a ~30 bp occupancy drag (totaling ~90 bps), with portfolio occupancy expected in the mid‑95% range and retention ~52% (renewal trade‑outs in the high‑2% range; blended spreads strongest in North Dakota, then Minneapolis and Omaha; Denver spreads expected negative but to improve, with ~2–4 weeks of concessions in H1). Expense guidance assumes controllables +1% and noncontrollables +2% at midpoints (expense recoveries down nearly $1M in Colorado); amortization of assumed debt ~$1.5M (front‑loaded into H1), value‑add CapEx $2.5M–$12.5M, recurring CapEx per home $1,300 at midpoint, guidance excludes acquisitions/dispositions; balance sheet targets reflect net debt/EBITDA 7.5x, weighted average debt rate 3.6%, weighted average maturity 6.9 years and liquidity ~ $268M vs. $99.2M of debt maturing over the next 2 years.Centerspace Financial Statement Overview
Summary
Steady revenue growth and resilient operating cash flow support the business, and leverage improved materially in 2025. Offsetting this, reported net income has been volatile (profit in 2023 followed by losses in 2024–2025) and 2025 saw a pullback in free-cash-flow growth and weaker cash-flow coverage versus debt.Income Statement
Revenue has generally trended up (2025: +7.8% after a flat 2024), and profitability at the operating level looks solid with very high gross margin in 2025 and a strong EBITDA margin. The key weakness is bottom-line volatility: net income swung from a strong profit in 2023 to losses in 2024 and a near-breakeven loss in 2025, keeping net margin weak/unstable despite decent operating performance.56
Neutral
Balance Sheet
Leverage has improved materially, with total debt dropping sharply in 2025 and debt-to-equity moving from ~1.26–1.42 (2023–2024) down to ~0.63 in 2025, which strengthens financial flexibility. The offset is that shareholder returns have been inconsistent (negative in 2024 and not supported by positive earnings in 2025), and the balance sheet still carries meaningful debt for the size of equity.62
Positive
Cash Flow
Operating cash flow has been steady and resilient (~$84M–$98M across recent years), supporting the business through earnings swings, and free cash flow is strong in 2024–2025 at roughly the same level as operating cash flow. However, free cash flow growth turned sharply negative in 2025, and cash flow relative to debt weakened meaningfully in 2025 versus 2024, implying less cushion if refinancing conditions tighten.58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 353.13M | 260.98M | 261.31M | 256.72M | 201.71M |
| Gross Profit | 10.76M | 148.61M | 146.14M | 138.18M | 111.10M |
| EBITDA | 180.67M | 130.74M | 188.83M | 121.32M | 123.00M |
| Net Income | 17.59M | -10.69M | 41.97M | -13.47M | 611.00K |
Balance Sheet | |||||
| Total Assets | 1.93B | 1.91B | 1.93B | 2.03B | 1.94B |
| Cash, Cash Equivalents and Short-Term Investments | 12.83M | 12.03M | 8.63M | 10.46M | 31.27M |
| Total Debt | 1.02B | 955.38M | 916.02M | 1.01B | 856.05M |
| Total Liabilities | 1.08B | 1.01B | 978.78M | 1.07B | 918.45M |
| Stockholders Equity | 725.10M | 670.46M | 726.39M | 746.10M | 797.36M |
Cash Flow | |||||
| Free Cash Flow | 98.45M | 98.25M | 89.52M | 35.30M | 48.15M |
| Operating Cash Flow | 98.45M | 98.25M | 89.52M | 91.99M | 84.03M |
| Investing Cash Flow | -26.87M | -50.72M | 120.21M | -160.09M | -267.23M |
| Financing Cash Flow | -69.06M | -43.67M | -212.35M | 41.37M | 214.51M |
Centerspace Technical Analysis
Negative
61.78
Price Trends
64.69
Negative
62.97
Negative
60.39
Positive
Market Momentum
-0.65
Positive
35.09
Neutral
8.60
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSR, the sentiment is Negative. The current price of 61.78 is below the 20-day moving average (MA) of 63.65, below the 50-day MA of 64.69, and above the 200-day MA of 60.39, indicating a neutral trend. The MACD of -0.65 indicates Positive momentum. The RSI at 35.09 is Neutral, neither overbought nor oversold. The STOCH value of 8.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSR.
Centerspace Risk Analysis
Centerspace disclosed 55 risk factors in its most recent earnings report. Centerspace reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Centerspace Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.38B | 212.60 | 3.02% | 5.66% | 8.91% | -39.58% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
62 Neutral | $1.76B | 23.44 | 5.33% | 2.17% | 3.37% | ― | |
57 Neutral | $1.09B | 60.89 | 4.30% | 4.58% | 36.82% | ― | |
52 Neutral | $276.56M | -27.57 | -4.89% | 6.98% | 1.62% | 11.38% | |
51 Neutral | $736.26M | -15.09 | -12.63% | 7.06% | -4.46% | -206.19% | |
45 Neutral | $803.94M | -5.57 | 171.00% | 7.42% | -4.63% | 42.39% |
* Real Estate Sector Average
CSR
Centerspace
61.78
-0.17
-0.28%
AIV
Apartment Investment & Management
5.58
-0.82
-12.81%
VRE
Veris Residential
18.83
2.88
18.05%
UMH
Umh
16.19
-1.13
-6.55%
BRT
BRT Apartments
14.54
-2.21
-13.18%
NXRT
NexPoint Residential
28.91
-9.09
-23.92%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.