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DATE

Wednesday, Feb. 18, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Anne M. Olson
  • Senior Vice President, Investments and Capital Markets — Grant P. Campbell
  • Chief Financial Officer — Bhairav Patel

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TAKEAWAYS

  • Strategic Review -- Management reaffirmed that the Board's formal evaluation of strategic alternatives is "ongoing," with no further updates or assurance of a transaction as of this call.
  • Same-Store NOI Growth -- Full-year same-store net operating income increased 3.5%.
  • Q4 Same-Store NOI Growth -- Gained 4.8% year over year.
  • Same-Store Revenue -- Increased 1% year over year in Q4, driven by a 1.5% rise in average monthly revenue per occupied home, offset by a 40 basis point decline in occupancy.
  • Same-Store Expenses -- Fell 5.1% in Q4 year over year, with reductions attributed to both controllable and non-controllable categories.
  • Blended Leasing Spreads -- Up 10 basis points in Q4; new lease spreads declined 4.8%, while renewal spreads reached 3.9%, marking their highest level of the year.
  • Portfolio Transactions -- Executed $493,000,000 of transaction activity in 2025, including entering the Salt Lake City market, expanding in Fort Collins, exiting St. Cloud, and reducing exposure in Minneapolis.
  • Share Repurchases -- Repurchased 3,500,000 shares in 2025, primarily around $54 per share.
  • Unsecured Credit Facility -- Expanded by $150,000,000; assumed $76,000,000 in Fort Collins acquisition-related long-term debt.
  • Retention Rates -- Reported 55.2% for Q4 and 58.2% for the full year; guidance calls for approximately 52% in 2026.
  • Geographic Leasing Trends -- North Dakota produced Q4 blended rent increases of 4.5%; Minneapolis reached 1.1% blended growth; Denver reported a 4.3% blended rent decline.
  • Denver Supply Outlook -- Delivered 16,000 units in 2025, with a further 9,000 projected for 2026; new starts have dropped sharply, and absorption remains above historical norms.
  • 2026 Core FFO Guidance -- Midpoint target is $4.93 per diluted share, stable year over year.
  • 2026 Operating Guidance -- Same-store NOI projected to rise 75 basis points; revenue guided to an 88 basis point increase, and same-store expenses expected to rise 150 basis points at the midpoint.
  • 2026 Leasing and Occupancy -- Management expects blended leasing spreads around 2%, with occupancy in "mid-95%" range and renewal trade-offs in the high-2% range.
  • Colorado Regulatory Impact -- Expense recoveries are projected to fall by nearly $1,000,000 in 2026 due to regulatory changes.
  • Value-Add CapEx -- Expected range is $2,500,000 to $12,500,000 for 2026, with recurring CapEx per home at a $1,300 midpoint.
  • Leverage and Liquidity -- Net debt to EBITDA improved to 7.5x; liquidity stands at nearly $268,000,000 with $99,200,000 of debt maturing within two years; weighted average interest rate is 3.6% with 6.9 years average maturity.
  • Labor and Turnover -- On-site compensation was flat or slightly down in Q4, attributed to lower staff and vendor turnover and a favorable health reserve adjustment.
  • Midwest and Mountain West Markets -- Management cited no significant regulatory increases in Nebraska, North Dakota, South Dakota, or Montana and called out ongoing focus on business-friendliness in any new markets.

SUMMARY

Centerspace (CSR +0.90%) communicated steady operational and financial results for the period, maintaining guidance that prioritizes stability, cost control, and measured growth. The company made portfolio adjustments totaling $493,000,000 in 2025, expanded its unsecured credit facility, and reinforced capital management discipline through targeted share repurchases. Management cited market-by-market rent trade-out discrepancies, ongoing regulatory considerations—particularly in Colorado and Denver—and projected lower but stable retention rates and value-add activity as they balance strategic flexibility. Strength in Midwest markets and improving metrics in Minneapolis contrast with continued near-term headwinds in Denver due to elevated new supply and lingering concessions.

  • Centerspace's guidance assumes no acquisitions or dispositions for 2026, reflecting a pause as the strategic review proceeds.
  • The company expects value-add CapEx project timing to be delayed and overall spend potentially reduced as a direct function of ongoing portfolio strategy review.
  • Management indicated that additional share repurchases are on hold until the strategic review is complete, citing rules about material information.
  • Flat to slightly negative blended leasing spreads in January were reported, with renewals around 3% and occupancy regaining modest ground.
  • Management stated that rent-to-income ratios have remained stable or improved, supported by incomes rising faster than rents in key markets, notably North Dakota.
  • The company highlighted minimal impact from recent unrest or regulatory enforcement in Minneapolis, noting that net migration turned positive for Minnesota in the year.

INDUSTRY GLOSSARY

  • NOI (Net Operating Income): A measure of property-level profitability, defined as total property revenues minus operating expenses, before debt service and corporate overhead.
  • Blended Leasing Spreads: The average percentage change in rent between new leases and renewals compared to expiring leases within a reporting period.
  • RUBS (Ratio Utility Billing System): A method for allocating utility costs to residents based on an allocation formula rather than submetered usage; can be affected by regulatory changes.
  • Value-Add CapEx: Capital expenditures aimed at improving property value or income potential, beyond basic repairs and maintenance.

Full Conference Call Transcript

Anne M. Olson: Thank you, Josh, and good morning, everyone. I am here with our SVP of Investments and Capital Markets, Grant P. Campbell, and our CFO, Bhairav Patel. We are coming to you live from our annual leadership conference, where our operating team is together to celebrate our 2025 wins and prepare to meet our 2026 goals. I will start by addressing our strategic review. In November, we shared that our Board of Trustees is overseeing a formal evaluation of strategic alternatives to maximize shareholder value. This process was initiated from a position of strength, having transformed Centerspace into a pure-play multifamily REIT while improving profitability, operating scale, and our balance sheet.

Our strategic review underscores our commitment to acting in the best interest of our shareholders, and this evaluation remains ongoing. As we said when we announced this evaluation, there can be no assurance that this process will result in Centerspace pursuing a transaction or any other strategic outcome, and we do not intend to provide further details on the process in connection with the discussion of our fourth quarter earnings results today. We sincerely appreciate the thoughtful conversations we have had with shareholders thus far and thank you for your understanding today as we keep our comments focused on our results and outlook.

Centerspace's fourth quarter capped a year of progress for the company and demonstrated the health and resilience of our markets. Importantly, our results for the year showed that our portfolio and approach yield results, with our same-store NOI growth of 3.5% outpacing peers on the back of steady occupancy and expense discipline. Rent growth was strong, reflecting the durability of our resident base and our exceptional focus on resident experience and optimization of revenue. Operationally, our portfolio benefits from Midwest exposure. Blended leasing spreads in the quarter were up 10 basis points.

While new lease spreads were down 4.8%, renewal spreads showed their highest growth of the year at 3.9%, and retention of 55.2% with the blended rate in positive territory. Retention for the full year was 58.2%, demonstrating relative affordability for our residents. Favorable absorption in Minneapolis, our largest market, led to positive blended increases of 1.1%, while in our other markets, North Dakota once again led the portfolio with blended increases of 4.5% in the quarter. In Denver, supply continues to put downward pressure on rents, with Q4 blended rent trade-outs down 4.3%. Absorption in the market has continued at rates above historical norms, with 2025 the second-highest year of absorption in the post-pandemic era.

Additionally, new construction starts in the market have plummeted, tapering deliveries, and we expect Denver fundamentals to normalize as we progress through 2026 and into 2027. Before I turn it over to Grant to comment on the state of the transaction market and review our 2025 transactions, I would like to offer a special thanks to many of you for your well wishes for Minneapolis and our communities there, and also to thank our Minneapolis team and all of our teams for their dedicated service to their communities and community members. Grant,

Grant P. Campbell: Thanks, Anne, and good morning, everyone. In 2025, Centerspace executed a strategic transaction program that continued reshaping our portfolio while maintaining balance sheet strength. We executed $493,000,000 of transaction activity, which included entering the Salt Lake City market, expanding our presence in Fort Collins, exiting the Saint Cloud, Minnesota market, and pruning our holdings in the city of Minneapolis. Over time, we have undertaken initiatives to improve our portfolio, and these 2025 transactions continue that, resulting in further diversification of our cash flow and improvements to our portfolio's average monthly rent per home, homes per community, age, and operating margin. Alongside these property transactions, Centerspace disciplined balance sheet and shareholder capital management.

The company expanded its unsecured credit facility by $150,000,000, and we assumed $76,000,000 of attractively priced long-term debt in conjunction with our Fort Collins acquisition, enhancing our liquidity and improving our debt profile. At the same time, we repurchased 3,500,000 of common shares, reinforcing our belief in the value of our stock and willingness to explore multiple avenues to unlock value. Looking ahead to 2026, we expect momentum in many of our markets, driven by measured supply profiles, resident financial strength, and strong local economies. In Minneapolis, on-the-ground fundamentals are positioned well compared favorably to most markets in the country, and we anticipate this year to be a year of stability and growth.

In Denver, solid absorption is outweighed by the volume of new deliveries from late 2024 through 2025. These supply dynamics, coupled with slow job growth and recent regulatory changes, has generally put Denver's transaction market in a wait-and-see environment. Premium assets and locations are still commanding strong pricing, including recent trades at sub-5% in-place cap rates, though the divide between premium profile and the rest of the market has widened. We believe this theme will continue until growth indicators translate into hard data, providing investors more conviction in underwriting strengthening fundamentals. I will now turn it over to Bhairav to discuss our financial results and guidance. Thanks, Grant, and hello, everyone.

Last night, we reported fourth quarter core FFO of $1.25 per diluted share, driven by a 4.8% year-over-year increase in Q4 same-store NOI. Revenues from same-store communities increased by 1% compared to the same quarter in 2024, driven by a 1.5% increase in average monthly revenue per occupied home, which offset a 40 basis point decline in occupancy. On the same-store expense side, Q4 numbers were down 5.1% year-over-year with favorability in both controllable and non-controllable expenses. On the controllable side, decreases in repairs and maintenance as well as administrative and marketing costs were both drivers of the improvement. For non-controllable expenses, favorable tax assessments drove much of the improvement.

Bhairav Patel: Turning to 2026, we introduced our expectations for the year in last night's press release. We expect core FFO per diluted share to remain stable year-over-year with an expectation of full-year core FFO per share of $4.93 at the midpoint. Guidance assumes that, at their midpoint, same-store NOI increases by 75 basis points, same-store revenues increase 88 basis points, and same-store expenses increase 150 basis points. Revenue growth assumes blended leasing spreads of approximately 2% with occupancy in the mid-95% range and retention of about 52%. We expect blended spreads will again be highest in our North Dakota communities, followed by Minneapolis and Omaha.

That strength will bolster our Denver portfolio, where we expect spreads to be down for the year while improving as the year progresses. Regulatory changes are expected to temper revenue growth in our Colorado portfolio, with expense recoveries expected to be down nearly $1,000,000. Within expenses, controllables are expected to increase by 1%, while non-controllables increase by 2%, both at their midpoints. I also want to highlight our expectation for the amortization of assumed debt, which we expect to be $1,500,000 for the year. This amount will be higher in the first half of the year and then trail off in the second half upon the maturity of one of our mortgages in June.

On CapEx, we expect value-add expenditures of $2,500,000 to $12,500,000 with recurring CapEx per home of $1,300 at the midpoint. Our guidance does not include any acquisitions or dispositions. Turning to our balance sheet, following the Minneapolis dispositions we completed in November, our leverage profile improved in the quarter to 7.5 times net debt to EBITDA. We have a well-laddered debt maturity schedule with a weighted average rate of 3.6% and weighted average maturity of 6.9 years. Our liquidity remains strong with nearly $268,000,000 of cash and line of credit availability compared to $99,200,000 of debt maturing over the next two years.

To conclude, this was a successful year for Centerspace, with our results demonstrating our commitments to both operational excellence and financial discipline and positioning us well for 2026. Operator, please open the line for questions. Thank you.

Operator: 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. When preparing to ask your question, please ensure your device is unmuted locally. Our first question is from James Colin Feldman from Wells Fargo. Your line is now open. Please go ahead.

Connor Mitchell: Hi. Thank you. This is Connor on with Jamie. Can you talk us through some of your assumptions within the 2026 revenue guide? It would be helpful to understand your blended lease rate growth outlook and how that breaks out between new and renewals and any contribution from other income.

Bhairav Patel: Sure. Good morning. So let us start with the building blocks for 2026. You know, we had an earn-in of about 80 basis points at the end of the year, so that will be the first piece that goes into revenue. We expect blended rent growth to be in the mid-1% range, resulting in about half of that showing up in revenue for 2026. And that will be offset by about a 40 basis points year-over-year decline in RUBS, or about $1,000,000, due to the change in regulations in Colorado. And then our base case occupancy is a little bit lower than it was in 2025, so that contributes about 30 basis points.

So that gives you about 90 basis points of year-over-year revenue growth. From a market perspective, we expect our Midwest markets to deliver growth that is in line with what we saw in 2025, with Denver obviously remaining pressured. As the absorption of units delivered in 2024 and 2025 continues, we expect renewals to once again lead the way, with renewal trade-offs in the high-2% range. And we do expect new lease trade-offs to come in better than 2025 in most of the Midwest markets. Markets like North Dakota, Omaha, and other Mountain West are not really expected to see any supply, and the demand there remains robust.

Even in markets like Rochester that saw some pressure in the second half of the year, we seem to be coming out on the other side, and we expect a strong showing in 2026 from that market. Minneapolis has shown pretty solid absorption in 2025 as it is and is expected to improve in 2026, given that the deliveries will go down significantly. So that is what is really underpinning our revenue guidance.

Connor Mitchell: Thank you. And maybe if we could talk a little bit more about what you are seeing in Denver. How do you see that market playing out in 2026? And any thoughts on when we could see an inflection, particularly in new lease rate growth?

Bhairav Patel: Yes. So I will start off and maybe Anne can chime in. But with respect to our base case, we expect some concessionary pressure to continue into 2026. We are seeing on average about two to four weeks of concessions on a per-move-in basis, which we do expect will continue at least for the first half of the year, and that is really going to pressure year-over-year revenue growth. Another note on concessions is any concessions we give out in the second half also get amortized over the lease term, so we will see some of that pressure in 2026 as well.

But overall, we do expect things to improve as we go through the year and work through some of the supply there. The deliveries are supposed to be the lowest in the last few years. But I will hand it to Grant to comment a little bit on that in detail.

Grant P. Campbell: Yeah. Thanks, Rob. Good morning. Regarding supply dynamics, about 16,000 units were delivered in 2025. An additional 9,000 units will be coming online or delivered in 2026, so some continued lease-up activity that market will need to work through. When you look at forecasted supply pipeline, new construction starts, 2027 data, you know, really falling off in terms of new deliveries. So we do think that will provide tailwinds to the market. When you look at foot traffic in Downtown Denver based on a couple different measurements, you know, we are seeing increases at year-end 2025, foot traffic levels that are comparable to 2019 data. So that gives us some positivity that things are turning.

There have also been some significant investments in bond funding without a property tax increase that has been passed for a whole host of projects across the city—parks, bike lanes, expansions to libraries, etc. So we do feel like the wheel is incrementally turning, looking to 2027 for true tailwinds.

Anne M. Olson: Thank you, Jamie.

Operator: Our next question is from Bradley Barrett Heffern from RBC Capital Markets. Your line is now open. Please go ahead.

Bradley Barrett Heffern: Hey. Good morning, everyone. Thanks. I know we are not supposed to ask about the strategic review. This is kind of strategic review-adjacent. I am wondering, the underlying plan for the company sort of continuing in the background—obviously, the past few years, you have sold out of tertiary markets to build Denver and Salt Lake. Is that continuing on in the background while you are looking at the broader strategic plan? Or is kind of the strategy becoming you just on hold until this is completed?

Anne M. Olson: Yeah. Good morning, Brad. As you know, we feel great about what we executed on strategically in 2025. We highlighted some of those in our prepared remarks, so we feel great about that. The part of the strategic review really is reviewing what we want to do with every dollar of capital. And so it is a little early in the year to tell and still ongoing with that. So no further comments on what that might mean for us as we move in through 2026. Okay.

Bradley Barrett Heffern: And then do you have any, like, January or quarter-to-date leasing stats that you can give?

Bhairav Patel: Yeah. I can give you some details. Overall, blends were flat to slightly negative, which is not uncommon for this time of the year. Renewals remained pretty strong in the 3% range, so that is a positive. And we clawed back some occupancy. So there is weakness on the new lease trade-out side, which we expect, led by Denver.

Anne M. Olson: Really small sample size in January. We have very few leases expiring this month.

Bradley Barrett Heffern: Yeah. Okay. Okay. Got it. And then just one clarification. I feel like in the prepared remarks, you said that blends for 2026 were 2%. But then, Bhairav, I think you said one and a half later on. Maybe I heard it wrong, but just want to clarify what that number is.

Bhairav Patel: Yeah. I would say mid-1% range in our base case. You know, in certain markets, it can be in the twos. But overall, for the portfolio, we expect it to be in the mid-1% range.

Bradley Barrett Heffern: Okay. Thank you.

Anne M. Olson: Thanks, Brad.

Operator: Thank you, Brad. Our next question is from Alexander Goldfarb from Piper Sandler. Your line is now open. Please go ahead.

Alexander Goldfarb: Hey. Good morning out there. And Anne, always good to hear North Dakota leading. We like that. Two questions here. First, I guess, going to the strategic review. Are you allowed, or can you buy back stock while that process is going on? You highlighted the stock buybacks that you had performed, but are you able to go into the market, or do you have to complete the process before you can resume buying back stock?

Anne M. Olson: Yeah. At this point, we need to complete the process just given the rules about where kind of information that the company has available. We do have a current authorization for buyback. You know, as we are trading today, we think that is not the most attractive use of our capital. Our 2025 buybacks were executed more in the $54 range.

Alexander Goldfarb: And second question is, rent control regulations, legal costs—it has been a big growing topic. You outlined Denver, the situation, the contrast between St. Paul and Minneapolis has been well documented.

As you are assessing other markets, how has the experience in those two markets affected—are you seeing other markets slowly roll out, whether it is overt rent control or utility restrictions or other restrictions that mean markets that formerly were on your radar or existing markets where you were looking to expand you want to dial back given the local politics, or are those two markets that I said that are really the standouts and the other markets that you either are currently in or thinking about expanding to really do not have that political risk?

Anne M. Olson: Yeah. This is a great question, certainly a hot topic. I would say, across the nation, we are seeing either municipalities or states really start looking at everything—fee income, regulatory requirements, not just straight rent control. So while we are happy with the markets that we are in, we have great operations and good operating scale in both Denver and Minneapolis so that we can really absorb and do a great job of handling those regulatory changes.

I would say when we are looking at new markets, business friendliness is one of our key categories that we are looking forward at, and that includes things like do they have a heavy regulatory environment, what is the taxation—both property taxes and income taxes—how are they attracting new businesses, subsidies, things like that. So when we are thinking about new markets, it is definitely, I would say, one of the key categories, but we are happy with the status in our current markets.

Anne M. Olson: We have not seen any movement in states like Nebraska, North Dakota, South Dakota, Montana to enhance any of their regulatory requirements. And, you know, we have seen some pullback on the federal level, particularly around environmental regulation.

Alexander Goldfarb: Okay. Thank you.

Operator: Thank you, Alexander. Our next question is from Ami Probandt from UBS. Your line is now open. Please go ahead.

Ami Probandt: Morning. Thank you.

Operator: So far, tax refunds are trending much higher this year. So understanding that the post-COVID period is different from what we are currently having, I am wondering if there are any parallels that you can draw to 2026 in terms of tax refunds compared to 2021 and 2022 when refunds were also elevated. Do you think that this could lead to an increase in demand or pricing power? Or is it sort of a one-time boost that does not really have a big impact?

Anne M. Olson: Hi, Amy. You know, the taxation is more about the valuation cycle. You know, coming into 2021, 2020, and there is a lag between when the taxes go up.

Bhairav Patel: Sorry. I was going to say in terms of individual tax refunds, not the property taxes.

Operator: Apologize. Yeah. This is—that is an interesting question. I do not know that we think that it is going to impact demand. You know, it is going to be more of a one-time item. And our bad debt looks great, and we feel good about the resident health. So we hope when we see those tax refunds that maybe we will see a little bit more consumer demand or better consumer credit overall. I think we are going to see that disposable income on the consumer spending side, not necessarily creating any demand on the multifamily side.

Operator: Got it. Thanks. And my second question,

Anne M. Olson: We are talking about tax refunds. We are talking about property tax refunds.

Operator: Yeah. No. I thought that would be—of course.

Anne M. Olson: So, second question,

Ami Probandt: It has been a while since growth in monthly revenue per unit has been below growth in monthly rent per unit. In the fourth quarter, rent growth was ahead of revenue growth. Did the changes in Colorado rebilling impact that? What other dynamics could be driving that shift?

Bhairav Patel: Yeah. In the fourth quarter, we saw some occupancy pressure. That is contributing to it a little bit, Amy. You know, the Colorado regulations really kicked off in January, so we expect the impact from that to be in 2026, not really in 2025. But we did see some occupancy pressure in a couple of our markets. I mentioned Rochester as one, but I think we have turned the corner there, and we regained some of the occupancy back in January. So that is really what was driving the difference there.

Ami Probandt: Got it. Thank you.

Operator: Thank you, Amy. As a reminder, to ask a question, please press star followed by one on your telephone keypad. Our next question is from Mason P. Guell from Baird. Your line is now open. Please go ahead.

Mason P. Guell: Hey. Good morning, everyone. Looks like your retention rate was down both sequentially and year-over-year, and you are forecasting it to be lower in 2026. Is this due to focusing more on rate instead of occupancy? What is driving the lower retention rate?

Bhairav Patel: Yeah. You know, we have seen it come down a little bit. Overall, from a base case perspective for 2026, we are just being measured in what we expect from a retention standpoint. We expected the same level for 2025; we outperformed a little bit. We saw a little bit of a downtick in Q4, so we are just kind of building in a little bit of—I would say we are just being measured about retention, being a little conservative to start off the year, because we want to see what happens in the first couple of quarters before we adjust our assumptions there.

Mason P. Guell: Great. And then your outlook for value-add, it seems like it is a wider range than previously had in your outlook, and the midpoint is expected to be lower than 2025. I guess, why the wider range and what is driving the lower expected value-add?

Bhairav Patel: Sure. So from a value-add perspective, we are kind of holding back projects for a couple of reasons. One, just being extremely selective in the projects we greenlight due to the higher cost of capital and execution risk. We want to see some improvement in the marketplace before we do that. And secondly, we are holding back approvals due to the ongoing process of evaluating strategic alternatives. You would hate to begin a project that we cannot complete as a result of any decision that comes out of that review. So that is really driving the range there. On the low end, we have about $2,500,000, which is really completion of projects we have started in prior years.

At the very least, we will be starting to put capital out later this year than we typically do. That would drive the range lower. That is what you are seeing in that range.

Mason P. Guell: Great. Thank you.

Operator: Thank you, Mason. As a final reminder, to ask a question, please press star followed by one. We have a follow-up question from Ami Probandt from UBS. Your line is now open. Please go ahead.

Ami Probandt: Thanks. So a quick one on the consumer. You mentioned no changes in bad debt, but some of the markets where you have had consistent CPI-plus renewal growth, is there any concern about affordability?

Anne M. Olson: You know, we are seeing great affordability. I think our rent-to-income has held steady, if not lowered slightly, over the course of the year. Really, that has been driven by incomes increasing faster than we are seeing rent increases. So even in those markets like North Dakota where we are getting really great renewal spreads and seeing positive new leasing, the incomes there are growing faster than the rent amount. So we have seen really strong income growth, wage growth across our markets.

Ami Probandt: Great. Thanks. That is all for me.

Joshua M. Klaetsch: Thank you, Amy.

Operator: Our next question is a follow-up question from Alexander Goldfarb from Piper Sandler. Your line is now open. Please go ahead.

Alexander Goldfarb: Hey, thank you for taking the follow-up. Just quickly, a number of your markets—you guys always talk about the lack of labor-type markets, you know, heavy, you know, tough getting people to work on-site. And yet I saw that your on-site comp was basically flat for the year. In fact, it was a little down in the fourth quarter. But I am just curious what is going on there, just given, again, you guys have spoken about the tight labor markets in a number of the places that you operate?

Anne M. Olson: I think just like we have seen, Alex, in our company, most of our vendors have also experienced less turnover. And so across our markets, there is very strong employment, very low unemployment. There is the opposite of that. But what we have seen is a lot less turnover, more steadiness in that employment. And so in the past, when we have had vendors, they lose someone, it is very hard for them to replace it, but people are staying in the job longer. We saw that in our company as well. Tenure is up, and turnover is lower. So I think that really helped us in 2025, and we saw that trend throughout the year.

Bhairav Patel: Yeah. And specifically in Q4, Alex, there was a health reserve adjustment that came through in the last quarter when we kind of adjust our health reserves based on the projections for actual expenses. So that also contributed to that comparison on a year-over-year basis.

Alexander Goldfarb: Okay. And you expect that the low turnover to continue in 2026?

Anne M. Olson: We are expecting low turnover for us, and I think that we have seen that extrapolated out with our vendors—just more consistency in who is coming on-site and their ability to service our needs from a vendor perspective.

Alexander Goldfarb: Okay. Cool. Listen. Thank you.

Operator: Thank you, Alexander. Our next question is a follow-up question from Bradley Barrett Heffern from RBC Capital Markets. Your line is now open. Please go ahead.

Bradley Barrett Heffern: Yeah. Thanks, everybody. Thanks for taking the follow-up. On Minneapolis, you know, you mentioned the, per comments, of course, been in the headlines, a lot of turmoil, unrest over the past few months. Did leasing activity look any different as a result? I know it is not a heavy leasing time of year, but I am curious if you saw an impact. And then are you expecting any sort of longer-term impact, or did your, you know, for Minneapolis for this year change versus maybe what it would have been a few months ago?

Anne M. Olson: Yeah. Not that we have seen any real change. I think in late 2025, you know, we kind of assessed the state of the immigration enforcement action. What we saw in January had started a few months before. So we have seen very little activity at our communities. We do monitor. We have a system where that is reported, and it is really limited to just a couple of communities where we have seen some interruption. And that interruption would be from leasing all the way to, you know, residents skip. But so far, it has been really minimal impact.

And, you know, I think the thing, as you noted, is that there is very low turnover, lease expiration in January and not a lot of people looking in January anyway. So hard to tell if there is any real impact. We would see that more once we have, you know, leasing season underway. One of the things that you may have seen about Minnesota is that for the first time, we turned the corner, where we actually had good migration into the state. I think we finally cracked that U-Haul list, number 14 of people moving here. And so that really did offset this year.

Our population growth was offset by kind of the net of lack of immigrant migration in. So we think demand is going to hold up in Minneapolis. And as Grant and Bhairav have noted, very little supply there and good projected growth across the board. So not much impact that we can see right now, and we are monitoring closely things like whether or not there will be any moratoriums on evictions or things like that. I think it has settled down, and it is a little bit of a wait-and-see on that front.

Bhairav Patel: Okay. Thank you.

Operator: Thank you, Brad. We currently have no further questions, so I will hand back to Anne for closing remarks.

Anne M. Olson: Thank you. Well, thanks, everyone, for joining us today, and thank you again to our team for our tireless pursuit of Better Every Days. We are going to have a great time at our leadership conference here in Vegas, and we look forward to talking with you all very soon. Have a great day.

Operator: This concludes today's Centerspace Q4 2025 earnings call. Thank you for joining. You may now disconnect your lines.