Centerspace: Shares Remain Attractive Even As NOI Growth Moderates

Summary

• Centerspace is a residential REIT focused on apartment communities, primarily in Minnesota and Colorado.
• The company delivered a core FFO of $4.88/share in 2024, with a circa 2% increase forecast for 2025.
• NOI growth is set to moderate from 3.7% in 2024 to about 3.3% in 2025, although I estimate the underlying growth rate closer to 1.9%.
• Centerspace shows an operating performance similar to large peers but trades at a significantly lower valuation, confirming my Buy rating.
• With slower NOI growth, focus turns to cost control and growth opportunities which may be limited due to the REIT's high market-implied cap rates.

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Introduction

Over the past year, Centerspace (NYSE:CSR) has marginally outperformed the Vanguard Real Estate Index Fund ETF (VNQ), delivering a total return of ~23%:

I previously covered Centerspace back in December 2024 with a

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.