Centerspace Drops Guidance After IRT Merger Agreement

The Tip Desk · November 10, 2026 · 3 min read

Core FFO was $1.11 a share as the apartment operator sold 13 communities for $288.8 million and booked a $150.3 million sale gain.

Centerspace (CSR), an apartment owner and operator, reported net income of $7.28 a diluted share for the three months ended September 30, 2026, compared with $3.19 a year earlier, as a $150.3 million gain on sale of real estate and other investments more than doubled the $79.5 million gain recorded in the year-ago quarter.

The company said the higher gain was the primary driver of the earnings increase. Core FFO, the non-GAAP measure that strips out those sale gains, fell 6.7% to $1.11 a diluted share from $1.19, which the company attributed to dispositions in 2026 and 2025, partially offset by higher NOI from non-same-store communities, lower casualty loss, and lower interest expense.

Revenue decreased $11.9 million, or 16.6%, to $59.5 million from $71.4 million, primarily because of the sale of 14 apartment communities during the nine months ended September 30, 2026 and 12 communities in the prior year, offset by increased revenue from non-same-store communities. Same-store revenue was flat year over year. Same-store property operating expenses rose 4.2%, including a $200,000 one-time utility expense, producing a 2.7% decline in same-store NOI.

Sequentially, same-store NOI reversed a 4.8% increase in the second quarter and fell 4.9% versus the June quarter, with same-store expenses up 8.1% on that footing. Same-store weighted average occupancy slipped to 95.0% from 96.0% in the prior quarter. Effective new lease rate growth deteriorated to a 1.9% decline from a 0.8% decline. Effective renewal lease rate growth held at 3.4%, and effective blended lease rate growth eased to 1.7% from 1.8%. Resident retention was 61.5%.

In the quarter the company disposed of 13 apartment communities consisting of 1,634 homes for an aggregate sales price of $288.8 million, bringing total year-to-date disposition proceeds to $318.8 million. It fully repaid line-of-credit balances and reduced borrowing capacity by $150.0 million to $250.0 million, contributing to a $4.6 million decrease in interest expense versus the same period a year earlier and driving net debt to Adjusted EBITDA of 6.3 times.

At quarter-end, Centerspace had $366.2 million of total liquidity, consisting of $250.0 million available under its line of credit and $116.2 million of cash and cash equivalents. As of September 30, 2026, it owned 47 apartment communities consisting of 10,456 homes in Colorado, Minnesota, Montana, Nebraska, North Dakota, and Utah.

On September 8, 2026, Centerspace entered into a merger agreement with Independence Realty Trust, Inc. (IRT). Under the agreement, as amended, each outstanding Centerspace common share, other than specified excluded shares, will be converted into the right to receive 3.8 shares of IRT common stock, subject to adjustments, with cash paid in lieu of fractional shares. Completion remains subject to required shareholder approvals and other closing conditions. Centerspace scheduled a special meeting of shareholders for November 10, 2026.

In light of the proposed merger, Centerspace said it will no longer provide guidance nor is it affirming past guidance.