Dive Brief:
- As a result of its recently conducted strategic review, Centerspace will sell 12 communities, totaling approximately $240 million to $245 million, in 2026, according to a press release from the REIT.
- In the process, Centerspace will exit the Bismarck and Rapid City markets in North Dakota and sell one community in Denver. It anticipates that these property dispositions will occur in the second half of 2026.
- The sales are part of a portfolio optimization and deleveraging plan that is designed to improve portfolio quality, strengthen the balance sheet, preserve shareholder value and maximize flexibility, per the release.
Dive Insight:
In November 2025, Centerspace confirmed that its board of trustees had initiated a review of the REIT’s strategic alternatives. The Minot, North Dakota-based REIT’s board, with the support of its independent financial and legal advisors, said it would consider a range of options, including a sale, merger and other business combinations.
“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,” President and CEO Anne Olson said on the firm’s fourth-quarter 2025 earnings call in February.
Centerspace’s board and management team evaluated a “broad range of potential counterparties and assessed numerous alternatives,” per yesterday’s release.
The transactions should position Centerspace for “long-term success as multifamily fundamentals continue to recover following the elevated levels of supply delivered during 2023-2025,” according to the release.
Once the dispositions are complete, Centerspace expects:
- Total debt to decrease by $175 million to $190 million, including repayment of its line of credit balance
- Improvement in pro forma annualized net debt to EBITDA, decreasing from 8.2x in the first quarter of 2026 to an anticipated sub-7x level in the fourth quarter of 2026
- Special distributions of $45 million to $65 million, with a potential declaration of timing and amount anticipated later in the year
"We expect these actions to enhance shareholder value by capturing the discount between public and private market valuations, while materially strengthening our balance sheet and positively evolving our market exposures," Olson said in the release.
Centerspace is among a handful of smaller apartment REITs that have recently reevaluated their strategic alternatives.
In November 2025, Aimco announced plans to market its remaining assets, concluding its strategic review. After initiating a “formal evaluation of strategic alternatives” in early 2025, Elme Communities recently entered into a contract to sell its last property to CAPREIT as the REIT liquidates.
The previously announced sale of Veris Residential to an investor consortium led by Affinius Capital in partnership with Vista Hill Partners for approximately $3.5 billion was finalized on May 27.
